Libraries' ability to lend books could be severely impaired if the U.S. Supreme Court doesn't squelch a new interpretation of copyright law in next term's Kirtsaeng v. John Wiley & Sons, according to an amicus brief filed last week by groups that represent more than 100,000 U.S. libraries.

The Kirtsaeng case, as we've reported, asks the court to decide whether the first-sale doctrine applies to works manufactured abroad or only to those made in the United States. The doctrine is usually interpreted to mean that owners of a lawfully produced work may resell it without the authority of the original copyright owner. But in its Kirtsaeng ruling in August 2011, the 2nd Circuit Court of Appeals held that Supap Kirtsaeng, a University of Southern California graduate student and highly successful eBay seller, was not protected by the doctrine when he used the auction site to sell John Wiley books manufactured in Asia to U.S. buyers. Kirtsaeng's lawyer, Joshua Rosenkranz of Orrick, Herrington & Sutcliffe, told us in April that the 2nd Circuit's decision had the peculiar effect of conferring more copyright protection on foreign-made goods than on those produced here. (Rosenkranz did not immediately respond to a request for comment today.)

That's not exactly what the libraries are worried about, though. The first-sale doctrine also permits libraries to lend out the lawfully produced works they have purchased. But if the Supreme Court agrees with the 2nd Circuit's Kirtsaeng reasoning, according to the libraries' brief, libraries may no longer be legally permitted to lend books that were manufactured outside the United States, whether they be foreign-language books or books from U.S. publishers that are printed overseas. It's not clear just how many library-owned books come from overseas, but the number could exceed 200 million, according to the brief, which was filed by Jonathan Band, an adjunct professor at Georgetown University Law Center, on behalf of groups including the American Library Association and the Association of College and Research Libraries.

The library brief concedes that copyright owners "probably would not sue a library for lending a lawfully-acquired copy of a foreign printed book" but argues that a low probability of litigation isn't going to convince libraries to engage in unlawful conduct. A publishing industry group, the Association of American Publishers, said in a statement that libraries won't be at risk even if the Supreme Court sides with the 2nd Circuit. Publishers' "stated objectives have been to influence future purchases, strengthen legitimate channels and discourage gray goods transactions," said an AAP spokesperson. (John Wiley & Sons, represented by Gibson, Dunn & Crutcher, declined to comment.)

In addition to telling the justices about the headache the case could cause them, the libraries also provided the high court with some useful suggestions for how to deal with the first-sale conundrum. (Leave it to librarians -- and their lawyers -- to offer readers helpful tips!) The big issue, the brief said, is the Copyright Act phrase "lawfully made under this title." The 2nd Circuit interpreted "lawfully made" to apply only to works produced in the United States. But the library groups argue that the Supreme Court should extend the reading to all works manufactured with the permission of the party that holds the U.S. reproduction and distribution rights. In this case, that interpretation would mean Kirtsaeng is entitled to first-sale protection, since he was selling books that were made with the permission of John Wiley, which holds the rights to distribute the books in the United States.

If the court declines to adopt that interpretation, the library brief suggests it opt for a compromise, the so-called Denbicare exception. That exception, which was first outlined in a 1996 case at the 9th Circuit, would allow parties to raise a first-sale defense "in cases involving foreign-manufactured copies when an authorized domestic sale had occurred," the brief said. Though the library associations filed their brief in support of Kirtsaeng, that interpretation would favor John Wiley because Kirtsaeng was not authorized to sell books in the United States that his family sent him from Thailand.

Where the court ends up on that sliding scale of first-sale interpretations is of importance not just to your local library. CostCo Wholesale Corp, represented by Roy Englert of Robbins, Russell, Englert, Orseck, Untereiner & Sauber, and the National Association of Chain Drug Stores, represented by Seth Greenstein of Constantine Cannon, have also submitted amicus briefs in support of Kirtsaeng. The gray market, which relies heavily on the first-sale doctrine, is an approximately $63 billion business.

(Reporting by Erin Geiger Smith)

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