supreme court right of first sale transcript

7/28/2019 Supreme Court Right of First Sale Transcript

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1 C O N T E N T S

2 ORAL ARGUMENT OF PAGE

3 E. J OSHUA ROSENKRANZ, ESQ.

4 On behal f of t he Pet i t i oner 3ORAL ARGUMENT OF

6 THEODORE B. OLSON, ESQ.

7 On behal f of t he Respondent 24

8 ORAL ARGUMENT OF

9 MALCOLM L. STEWART, ESQ.

For Uni t ed St at es, as ami cus cur i ae, 4211 suppor t i ng t he Respondent

12 REBUTTAL ARGUMENT OF

13 E. J OSHUA ROSENKRANZ, ESQ.

14 On behal f of t he Pet i t i oner 51

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1 P R O C E E D I N G S

2 ( 11: 05 a. m. )

3 CHI EF J USTI CE ROBERTS: We' l l hear ar gument

4 next i n Case 11- 696 - - 697, Ki r t saeng v. J ohn Wi l ey &Sons.

6 Mr . Rosenkr anz.

7 ORAL ARGUMENT OF E. J OSHUA ROSENKRANZ

8 ON BEHALF OF THE PETI TI ONER

9 MR. ROSENKRANZ: Thank you,

Mr . Chi ef J ust i ce, and may i t pl ease t he Cour t :11 Thi s case pr esent s a st ar k choi ce bet ween

12 t wo pl ausi bl e def i ni t i ons of t he phr ase, "l awf ul l y made

13 under t hi s t i t l e. " Our def i ni t i on i s t he mor e

14 consi st ent wi t h t he Engl i sh l anguage, and i s t he onl y

def i ni t i on t hat does not do mi schi ef wi t h t he same use

16 of t hat phr ase each t i me i t ' s r epeat ed.

17 Our s i s t he onl y one consi st ent wi t h a

18 400- year common l aw hi st or y, and 65- year - ol d r i ght t hat

19 was i n t he st at ut e t hr ough 1976, and consi st ent wi t h t he

pr i nci pl e t hat Congr ess doesn' t abol i sh t hose t hi ngs

21 wi t hout bei ng cl ear .

22 Our s gi ves t he copyr i ght owner s much of what

23 t hey asked f or when t hey wer e seeki ng an i mpor t at i on

24 pr ovi si on, j ust not ever yt hi ng; wher eas, Wi l ey' s gr ant s

t hem r i ght s f ar beyond anyt hi ng t hat anyone coul d have

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1 i magi ned aski ng f or back t hen.

2 Our s - -

3 J USTI CE GI NSBURG: But your r eadi ng - - your

4 r eadi ng i s essent i al l y, once a copy i s sol d anywher e,t he copyr i ght owner l oses cont r ol of di st r i but i on

6 ever ywher e.

7 That i s essent i al l y your ar gument .

8 MR. ROSENKRANZ: That i s cor r ect ,

9 Your Honor . And t o put a f i ner poi nt on i t , our s i s

t hat " l awf ul l y made under t hi s t i t l e" means made11 wher ever , i n a way t hat sat i sf i es U. S. copyr i ght

12 st andar ds, made i n accor dance wi t h - -

13 J USTI CE GI NSBURG: So - - but - - so t hi s

14 not i on of sol d anywher e, end of di st r i but i on r i ght s

ever ywher e, t hat has been cal l ed, I t hi nk, t he uni ver sal

16 exhaust i on pr i nci pl e.

17 MR. ROSENKRANZ: I nt er nat i onal exhaust i on.

18 Yes, Your Honor .

19 J USTI CE GI NSBURG: And we ar e t ol d t hat no

count r y has adopt ed t hat i nt er nat i onal exhaust i on

21 r egi me, t hat most count r i es adher e t o t he nat i onal

22 exhaust i on r egi me, whi ch nobody i s cont est i ng her e.

23 That i s, i f i t ' s manuf act ur ed i n t he Uni t ed St at es and

24 sol d i n t he Uni t ed St at es, t hat copy bel ongs t o t he

per son who pur chased i t , end of case. But i f t he

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1 exhaust i on doct r i ne appl i es onl y nat i onal l y, t hen your

2 ar gument i s aski ng f or somet hi ng t hat r uns agai nst t he

3 r egi me t hat i s accept ed i n most pl aces.

4 MR. ROSENKRANZ: Your Honor , I have a f ewanswer s t o t hat . The f i r s t i s i t i s not t r ue t hat no

6 count r y adopt s nat i onal exhaust i on. Congr ess adopt ed

7 nat i onal exhaust i on i n sect i ons 905 and 906 6 year s

8 af t er t he st at ut e was passed, as t o mi cr ochi ps.

9 But second, Wi l ey i s maki ng t he poi nt t hat

t her e i s now a nor m. They say most St at es - - most11 count r i es, t hat i s. Back i n 1976 Wi l ey i s not even

12 ar gui ng t hat t her e was any i nt er nat i onal nor m, much l ess

13 t hat t he dr af t er s of t he st at ut e wer e f ocused on

14 i nt er nat i onal nor ms; and t he t r ut h i s t hat t her e i sn' t

an i nt er nat i onal consensus ar ound nat i onal exhaust i on.

16 We know t hat f or a f act . I n 1994 when 125 nat i ons got

17 t oget her , t hey - - t hey agr eed t o di sagr ee on

18 i nt er nat i onal copyr i ght exhaust i on pr i nci pl es, and t hey

19 codi f i ed t hat di sagr eement , t o each hi s own, i n t he

TRI PS agr eement .

21 J USTI CE GI NSBURG: Wel l , l et ' s t ake, f or

22 exampl e, t he Eur opean Uni on, t he posi t i on i n - - i n t hose

23 count r i es. Suppose we - - we j ust t r ansf or med - -

24 t r ansf er r ed t hi s case t o one of t hose count r i es, t he

exact same case; and my under st andi ng i s t hat t hey woul d

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1 f ol l ow t he nat i onal exhaust i on.

2 MR. ROSENKRANZ: No, Your Honor , not t o

3 qui bbl e; t hey don' t f ol l ow nat i onal exhaust i on. They

4 f ol l ow r egi onal exhaust i on. So - - J USTI CE GI NSBURG: Yes, but not - - not

6 exhaust - - you sel l a copy i n - - i n Thai l and; t hen i t ' s

7 home f r ee al l over t he wor l d.

8 MR. ROSENKRANZ: Agr eed, Your Honor , but i t

9 i s r egi onal , i t ' s not nat i onal . And - - and t he poi nt

her e i s we' ve got t o of cour se r ead what Congr ess wr ot e.11 What Congr ess wr ot e was " l awf ul l y made under t hi s

12 t i t l e, " not "l awf ul l y made i n t he Uni t ed St at es, " or not

13 " l awf ul l y made under t hi s t i t l e and made i n t he Uni t ed

14 St at es. " When Congr ess want s t o say t hat , Congr ess says

t hat ver y expl i ci t l y.

16 J USTI CE SCALI A: Do you mean by " l awf ul l y

17 made under t hi s t i t l e, " si mpl y l awf ul l y made i n a manner

18 t hat does not vi ol at e Uni t ed St at es copyr i ght l aw?

19 MR. ROSENKRANZ: No, Your Honor . J ust , I - -

I woul d say " l awf ul l y made under t hi s t i t l e" means

21 l awf ul l y made i n a manner t hat does not vi ol at e t he

22 st andar ds ar t i cul at ed.

23 J USTI CE SCALI A: The st andar ds, okay. So - -

24 so i t coul d be l awf ul l y made i n Engl and, l et ' s say; i n a

count r y t hat has compul sor y l i censi ng, i t coul d be

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1 l awf ul l y made t her e, but i t woul d not be l awf ul l y made

2 under our - - under our copyr i ght l aw, because we don' t

3 have t hat .

4 MR. ROSENKRANZ: Yes, Your Honor . Let megi ve a - - an exampl e t hat act ual l y i s consi st ent wi t h

6 what - -

7 J USTI CE SCALI A: So - - so at l east t hey ar e

8 cor r ect i n cont endi ng t hat what you ar e ar gui ng f or i s

9 - - i s not l awf ul l y made under - - l awf ul l y made i f t he

Uni t ed St at es copyr i ght l aw had appl i ed wher e i t was11 made; i s t hat what you ar e sayi ng?

12 MR. ROSENKRANZ: No, Your Honor . And t he

13 r eason i s - -

14 J USTI CE SCALI A: No?

MR. ROSENKRANZ: - - t hat t hat s t at ut e t hat

16 you j ust descr i bed woul d onl y do a t hi r d of t he j ob of

17 t he f i r st - sal e doct r i ne. Ever yone agr ees t he f i r st - sal e

18 doct r i ne appl i es at a mi ni mum t o pr oduct s made i n t he

19 Uni t ed St at es. And i f you use t hat count er f act ual , i f

U. S. l aw had appl i ed, i t woul d i ndi cat e t hat i t , t he

21 f i r st - sal e doct r i ne, does not appl y i n si t uat i ons wher e

22 i t was made i n t he Uni t ed St at es. So t he

23 count er f act ual - -

24 J USTI CE SCALI A: I don' t - - I don' t f ol l ow

t hat .

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1 MR. ROSENKRANZ: So t he f i r st - sal e doct r i ne

2 appl i es t o goods made i n t he Uni t ed St at es - -

3 J USTI CE SCALI A: Ri ght .

4 MR. ROSENKRANZ: - - and t o goods madeout si de of t he Uni t ed St at es, i s our ar gument .

6 J USTI CE SCALI A: Okay.

7 MR. ROSENKRANZ: I f i t appl i es i n t he Uni t ed

8 St at es, i f we' r e t al ki ng about goods made i n t he Uni t ed

9 St at es , t he count er f actual " i f t hi s t i t l e had appl i ed"

woul d not wor k, because t hi s t i t l e does appl y t o t he11 goods made i n t he Uni t ed St at es, and t hat ' s t he cor e of

12 t he f i r s t - sal e doct r i ne.

13 J USTI CE KAGAN: So, Mr . Rosenkr anz, i s

14 what - - i s your t heor y of t hi s st at ut e essent i al l y t hat

t hi s l anguage means non- pi r at i cal copi es as t hat i s

16 def i ned by U. S. copyr i ght l aw?

17 MR. ROSENKRANZ: Yes, Your Honor , i f I may

18 j ust change one wor d, because " pi r at i cal " i s a

19 mi schi evous wor d. Back i n t he day when t he - - when t he

1976 st at ut e was passed, " pi r at i cal " meant unl awf ul

21 under t he l aws of ot her count r i es.

22 J USTI CE KAGAN: No.

23 MR. ROSENKRANZ: Yes. So - -

24 J USTI CE KAGAN: I sai d as def i ned by U. S.

copyr i ght l aw.

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1 MR. ROSENKRANZ: Absol ut el y. And - - and t he

2 key - -

3 J USTI CE KAGAN: So t hat ' s , t hat ' s what t he

4 st at ut e means. I t ' s - - t he st at ut e i n your vi ew i sset t i ng up a di st i nct i on bet ween pi r at i cal , pi r at ed,

6 what ever t he t er m i s - - copi es - -

7 MR. ROSENKRANZ: Count er f ei t .

8 J USTI CE KAGAN: - - and ot her copi es, and

9 sayi ng t hat t hat di st i nct i on shoul d be measur ed by U. S.

copyr i ght l aw?11 MR. ROSENKRANZ: That i s r i ght . And Your

12 Honor , t he r eason was - - what was dr i vi ng copyr i ght

13 owner s cr azy was t hi s not i on t hat t her e wer e l awl ess

14 st at es out t her e t hat had no si gni f i cant copyr i ght

pr ot ect i on. And we wer e appl yi ng t hei r s t andar ds t o

16 pr oduct s t hat wer e i nf i l t r at i ng t he U. S. mar ket . And

17 one of t he most i mpor t ant t hi ngs t o under scor e her e,

18 whi ch I t hi nk got l ost i n t he Cost co ar gument , i s t hat

19 t he space - - t hat 602 does an enor mous amount of wor k

even wi t h 109, t he f i r st - sal e doct r i ne, car ved out of

21 i t .

22 Copyr i ght owner s want ed t hr ee t hi ngs out of

23 t he 1976 Act wi t h r espect t o i mpor t at i on, and t hey got

24 t wo and a hal f of t hem. The f i r st was what we' ve j ust

been t al ki ng about , Your Honor . I t was dr i vi ng t hem

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1 cr azy t hat t her e wer e l awl ess st at es out t her e; t hey

2 gave t he exampl e of Russi a, whi ch - - wher e an agency

3 appr oved t he maki ng and di st r i but i on wi t hi n Russ i a of

4 cl assi c Engl i sh l anguage wor ks. They got i mpor t ed t ot he U. S. and t hey wer e compet i ng wi t h U. S. wor ks, U. S.

6 copi es wi t hi n our domest i c mar ket . And t hey got t hei r

7 wi sh t o shut t hat down, t o use U. S. l aw as t he st andar d

8 f or t hose wor ks.

9 Secondl y, t hey got cover age f or copi es t hat

wer e l awf ul l y made, but st ol en. And t hi s was t he one11 ask t hat t he f i l m i ndust r y had. We see i t i n t he

12 col l oqui es. They r ent ed f i l ms abr oad. The f i l ms - -

13 t hat was t hei r busi ness model . The f i l ms woul d get

14 st ol en; and t he U. S. mar ket woul d be awash wi t h st ol en

f i l ms. And so t hey want ed t o shut down, wi t h t he

16 i mpor t at i on pr ovi si on, t hose st ol en goods comi ng i nt o

17 t he U. S. mar ket .

18 And t he t hi r d t hi ng t hat t hey want ed i s - -

19 i s what ' s been domi nat i ng t hi s debat e. But i t ' s onl y

t he t hi r d t hi ng, and t hat was hel p di vi di ng geogr aphi c

21 mar ket s, so t hat t hey coul d go af t er t he r ogue

22 di st r i but or s, yes, but al so go af t er t he downst r eam

23 sal es. They got hal f of t hat . They got a cause of

24 act i on agai nst t he r ogue di st r i but or s. They di d not get

a cause of act i on t hat went downst r eam.

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1 J USTI CE SOTOMAYOR: Mr . Rosenkr anz, can I

2 ask you, j us t - - i t i s a pr act i cal ques t i on, but I t hi nk

3 i t has a t heor et i cal i mpact . A manuf act ur er can choose

4 t o cont r act or a copyr i ght hol der choose t o cont r actwi t h someone her e t o manuf act ur e t hei r goods. They

6 coul d cont r act wi t h someone abr oad, anywher e i n t he

7 wor l d, di r ect l y. They can choose t o l i cense t hei r

8 t r ademar k and per mi t a di st r i but or abr oad t o manuf act ur e

9 under t hei r U. S. copyr i ght ; or t hey can per mi t t he

l i censee t o r egi st er t he copyr i ght abr oad and11 di st r i but e. I n your def i ni t i on of "l awf ul l y made under

12 t hi s t i t l e, " does "l awf ul l y made under thi s t i t l e" appl y

13 t o al l of t hose s i t uat i ons , i . e. - -

14 MR. ROSENKRANZ: Yes.

J USTI CE SOTOMAYOR: - - I t hi nk cl ear l y t o

16 t he manuf act ur er who manuf act ur es abr oad - -

17 MR. ROSENKRANZ: Yes.

18 J USTI CE SOTOMAYOR: - - cl ear l y t o t he

19 manuf act ur er who l i censed a di st r i but or t o do i t f or i t .

But does i t al so appl y t o t he - - t o t he copyr i ght owner

21 who basi cal l y gi ves t he copyr i ght t o a f or ei gn

22 di s t r i but or and l et s t he f or ei gn di s t r i but or - - regi s t er

23 i t abr oad?

24 MR. ROSENKRANZ: Yes, Your Honor . The onl y

quest i on under our def i ni t i on i s, was t he maki ng l awf ul ,

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1 whi ch i s t o say, was i t aut hor i zed, whet her i t ' s by

2 t r ansf er of l i censi ng or by t r ansf er of copyr i ght or i n

3 any ot her way? I s i t l awf ul as measur ed by U. S.

4 st andar ds? And - - and t he - - J USTI CE SOTOMAYOR: That i s - - t hat i s

6 br oader t han I t hought . Then I ' m not qui t e sur e why you

7 don' t mean i f t hi s t i t l e appl i ed. Because i f t he - -

8 MR. ROSENKRANZ: I f - -

9 J USTI CE SOTOMAYOR: - - t he manuf act ur er who

i s manuf act ur i ng under t he Engl i sh copyr i ght , because11 t he di st r i but or has an Engl i sh copyr i ght , i s not

12 manuf act ur i ng under t he U. S. copyr i ght , t hey ar e

13 manuf act ur i ng under t he Engl i sh copyr i ght .

14 MR. ROSENKRANZ: Ri ght . And, Your Honor ,

t he r eason t hat t he l anguage wor ks t he way we' ve

16 descr i bed i s because we ar e not f ocusi ng on whet her t he

17 maki ng was under t hi s t i t l e; we' r e f ocusi ng on whet her

18 i t was l awf ul under t hi s t i t l e. Does t hi s - - woul d t hi s

19 t i t l e, when you appl y i t t o wher ever i t happens t o be,

whet her i n t he Uni t ed St at es or abr oad, woul d t hi s t i t l e

21 say t hat t hi s i s aut hor i zed?

22 Now, l et me j ust ci r cl e back agai n. The

23 r eason i f t hi s t i t l e had been appl i cabl e doesn' t wor k i s

24 because t her e ar e enor mous number s of si t uat i ons,

pr obabl y t hr ee- quar t er s of t hem, t hat t he Fi r st Sal e

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1 Doct r i ne appl i es t o wher e t hi s t i t l e does appl y.

2 And so t r yi ng t o say wher e - - you know, i f

3 t hi s t i t l e had appl i ed woul d wor k f or f or ei gn goods

4 comi ng i n, but not f or U. S. goods, whi ch i s t he cor e of t he Fi r st Sal e Doct r i ne.

6 J USTI CE BREYER: But you don' t have t o

7 say - - you can say bot h, ei t her i t was manuf act ur ed

8 di r ect l y and r ecei ved an Amer i can copyr i ght and

9 sat i s f i ed al l t he condi t i ons , or , i f t hat wasn' t t he

case, i t was manuf act ur ed i n a way t hat sat i sf i ed t he11 condi t i ons of t he Amer i can st at ut e, even t hough, f or

12 t echni cal r easons, i t di dn' t appl y.

13 MR. ROSENKRANZ: Yes, Your Honor . And, i n

14 f act , ( a) ( 2) - -

J USTI CE BREYER: That ' s what your ar gument

16 i s , I t ake i t .

17 MR. ROSENKRANZ: Yes. I n 2008 - -

18 J USTI CE BREYER: So we ar e of f on a ki nd of

19 cur l y cue her e.

MR. ROSENKRANZ: Yes, Your Honor . But - - so

21 what Congr ess di d was t o f i nd a much si mpl er , mor e

22 ef f i ci ent way t o say al l of t hat .

23 I n 2008, i t f i gur ed t hat out and put - -

24 J USTI CE BREYER: I t ake i t t hat t he r eason

t hey wr ot e - - or changed t he st at ut e was j ust because

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1 t hey wer e wor r i ed about bai l ees or l essees or somebody

2 under t he ol d st at ut es not sat i sf yi ng t he f i r st - - t hey

3 wer e wor r i ed about t hat - - s omebody - - a pr i nt er

4 l awf ul l y obt ai ns a book, and he shoul dn' t have advant ageof t he Fi r st Sal e Doct r i ne.

6 MR. ROSENKRANZ: Wel l , Your - -

7 J USTI CE BREYER: He' s i n t he mi ddl e of

8 pr i nt i ng i t . And t her ef or e you have t o change t he

9 l anguage. So t hey changed t he l anguage t o " l awf ul l y

made under t hi s t i t l e. "11 MR. ROSENKRANZ: Cor r ect .

12 J USTI CE BREYER: Am I r i ght ; or , i f I am

13 wr ong, why di d t hey change i t ?

14 MR. ROSENKRANZ: Your Honor , t hat i s exact l y

r i ght . And j ust not t o di mi ni sh i t - -

16 J USTI CE GI NSBURG: I s i t al l r i ght ? Wasn' t

17 t her e al so t he quest i on of al l owi ng manuf act ur er s t o

18 segment mar ket s so we' d have t he copyr i ght by abr oad,

19 gover ned by f or ei gn l aw, copyr i ght i n t he Uni t ed St at es

gover ned by U. S. l aw? Wasn' t segment at i on of t he mar ket

21 al l owi ng peopl e t o do j ust what t hese peopl e ar e doi ng?

22 MR. ROSENKRANZ: So, J ust i ce Gi nsbur g, my

23 answer t o J ust i ce Br eyer was about why t he l anguage i n

24 109 was changed, t hat i s, f r om " obt ai ned possessi on" t o

" l awf ul l y made. "

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1 And t hat was - - what J ust i ce Br eyer poi nt ed

2 out was exact l y why, because - - and not t o mi ni mi ze

3 bai l ees, bai l ees was t he movi e i ndust r y pr obl em.

4 Bai l ees was st eal i ng t hi ngs f r om t he manuf act ur er s'l oadi ng docks or f r om shi pper s. But , yes, Your Honor ,

6 t her e was al so a segment of t he publ i shi ng i ndust r y t hat

7 want ed t hat t hi r d t hi ng.

8 J USTI CE BREYER: I coul dn' t f i nd a wor d. I

9 coul d not f i nd a wor d of t hat i n t he l egi sl at i ve

hi st or y. I r wi n Kar p, who was t he st r ongest11 r epr esent at i ve f or t he publ i sher s, sai d you coul dn' t do

12 t hat t en year s ear l i er .

13 So i s t her e - -

14 MR. ROSENKRANZ: No.

J USTI CE BREYER: No, but you j ust sai d yes

16 i n answer t o J ust i ce Gi nsbur g' s quest i on. So she' l l

17 f i nd exact l y what t her e i s t her e, so I woul d l i ke t o

18 know what i t i s.

19 MR. ROSENKRANZ: Your Honor , I - - I was

answer i ng yes t o was t hi s a mot i vat i on of t he

21 publ i sher s. And i f I mi sunder st ood t he quest i on, Your

22 Honor - -

23 J USTI CE KAGAN: But a mot i vat i on f or 109, or

24 a mot i vat i on f or 602?

MR. ROSENKRANZ: A mot i vat i on f or 602.

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1 When t he conver sat i on t ur ned t o 109,

2 Your Honor , not a wor d was ut t er ed about di vi di ng

3 di st r i but i on or di vi ded mar ket s. I t was al l about t hi s

4 pr obl em - - J USTI CE KAGAN: So on 602, you sai d t hat one

6 of t he t hi ngs t hat t hey want ed was t he segment at i on of

7 mar ket s. They got hal f of i t . They got t he r ogue

8 di s t r i but or s ' hal f .

9 And I guess Mr . Ol son makes t he poi nt , and

i t seems a good one, i t ' s l i ke t hat ' s a crazy hal f t o11 have got t en. That ' s t he ki nd t hat t hey don' t need

12 because t hey have a cont r act ual r emedy about - - agai nst

13 t he di st r i but or s.

14 And t hen t hey don' t get peopl e l i ke,

f r ankl y, your cl i ent , who ar e rogue somet hi ng el ses,

16 wi t h no cont r act ual pr i vi t y. And what sense does t hat

17 make?

18 MR. ROSENKRANZ: Wel l , i t makes per f ect

19 sense, Your Honor . Obvi ousl y, you know, t he i ndust r y,

at l east back i n 1976, di d not get ever yt hi ng t hat t hey

21 want ed. What t hey got was a much mor e power f ul weapon

22 t han a cont r act .

23 I mean, a copyr i ght weapon gi ves you

24 i nj unct i ve r el i ef , gi ves you mul t i pl es of damages whi ch

you don' t get out of a cont r act r emedy.

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1 But t o J ust i ce Br eyer ' s poi nt , because I

2 t hi nk i t ' s an i mpor t ant one, when you go t o t he

3 hi st or y - - and I t hi nk you ar e r i ght , Your Honor , t hat

4 t her e i s exact l y one spot i n t he dr af t i ng hi st or y wher et he r el at i onshi p bet ween 602 and 109 was di scussed. I t

6 was t hat conver sat i on bet ween Cl ar k and Gol dman, who was

7 t he gener al counsel of t he copyr i ght of f i ce.

8 I t ' s on pages 11 t o 12 of our r epl y br i ef .

9 I t ' s r eci t ed i n ext ensi ve det ai l i n t he ami cus br i ef

t hat Cost co submi t t ed. And her e' s what happened. They11 got t hei r i mpor t at i on pr ovi si on. And Kar p says, now,

12 wai t a mi nut e, I don' t get i t . You have got t hi s

13 i mpor t at i on pr ovi si on, and you' ve got t hi s Fi r st Sal e

14 Doct r i ne. They ar e at war wi t h each ot her . Whi ch one

wi ns?

16 They seem t o be agr eei ng t hat f i r st sal e

17 wi ns, but t hey r eal i ze t hat t her e i s t hi s pr obl em. And

18 what t hey do, t he gener al counsel of t he copyr i ght

19 of f i ce says, we obvi ousl y haven' t t hought t hi s t hr ough.

We need t o do mor e wor k on t hi s, says t he l i br ar i an of

21 Congr ess. And t he next t hi ng t hat happens, you see i t

22 i n a r ed l i ne on page 13 of our r epl y br i ef , i s t hat f or

23 t he f i r st t i me i n t he dr af t i ng hi st or y, t he t wo ar e

24 r econci l ed by maki ng 602 subor di nat e t o 109, i n exact l y

t he way t hat Qual i t y Ki ng f ound i t t o be.

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1 So t he copyr i ght owner s got hal f t he l oaf .

2 I t may not have been t he hal f t hat was mor e i mpor t ant t o

3 t hem, but t hey got a l ot mor e f r om t he ext ensi on of t he

4 - - t he i mpor t at i on pr ovi si on.J USTI CE KAGAN: Mr . Rosenkr anz, t her e i s

6 t hat passage i n Qual i t y Ki ng, whi ch i s, I t hi nk i t ' s

7 f ai r t o say, unf or t unat e t o your posi t i on. I s your

8 basi c vi ew of t hat passage t hat i t was si mpl y

9 i l l - consi der ed di ct a t hat we shoul d i gnor e?

MR. ROSENKRANZ: To put i t bl unt l y, yes.11 That ' s my ul t i mat e posi t i on. But I do t hi nk i t can be

12 r econci l ed wi t h our posi t i on.

13 Let ' s st ar t wi t h t he quest i on pr esent ed i n

14 Qual i t y Ki ng i s exact l y t he quest i on t hat i s pr esent ed

her e, and t he Cour t answer ed i t yes, t hat i s, do

16 i mpor t s - - i s 109 appl i cabl e t o i mpor t s.

17 The whol e dr i vi ng l ogi c of Qual i t y Ki ng i s

18 about 109 t r umpi ng 602. And i t ' s onl y i n t hat par t I V,

19 wher e t he cour t i s r ebut t i ng var i ous at t acks on i t s

posi t i on, t hat i t get s t o t hat di ct um, and t hat di ct um

21 i s i n t he t hi r d t i er expl anat i on t o one of f i ve

22 r ebut t al s.

23 I bel i eve i t can be r econci l ed, cer t ai nl y i n

24 r esul t . What you had t her e was t he f or ei gn di st r i but or

who had onl y Br i t i sh r i ght s i mpor t i ng di r ect l y i nt o t he

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1 Uni t ed St at es. Ther e was never a f i r st sal e.

2 J USTI CE KAGAN: Wel l , i n r esul t , but not i n

3 r easoni ng. The passage speci f i cal l y says t hi s was

4 pr esumabl y not t o be l awf ul l y made under t hi s t i t l e.MR. ROSENKRANZ: And I have an - - I agr ee

6 wi t h you, Your Honor . I have an expl anat i on. I of f er

7 i t t ent at i vel y. I ' m not sur e whet her i t ' s r i ght or not ,

8 ei t her as t o what t he Cour t i nt ended or under t he

9 st at ut e.

My hunch i s t he Cour t was t hi nki ng about a11 scenar i o wher e t he Br i t i sh publ i sher onl y needs 10, 000

12 copi es t o cover Br i t ai n; but , i nst ead, what i t does i s

13 t o pr i nt 100, 000 copi es. Ever yone woul d know t hat t hat

14 i s not aut hor i zed, i t ' s not l awf ul l y made under t hi s

t i t l e, because t he i nt ent i s t o send i t over t o t he

16 Uni t ed St at es. So i t ' s not l awf ul l y made at t hat

17 moment .

18 Let me al so j ust ment i on an i mpor t ant

19 under gi r di ng t o our posi t i on, whi ch i s t hat our posi t i on

i s t he onl y one t hat does not make a compl et e hash out

21 of ever y uses of t he same phr ase - - ever y use of t he

22 same phr ase i n t he r est of t he st at ut e. Wi l ey' s r eadi ng

23 makes al most al l of t hem nonsensi cal .

24 So l et me j ust gi ve you an exampl e. Sect i on

110, t he cl assr oom pr ovi si on. Wi l ey acknowl edges t hi s

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1 i s t he r esul t , but doesn' t expl ai n why Congr ess woul d

2 ever have want ed i t . The r esul t i s t hat a t eacher can

3 go and buy a Beet hoven r ecor d and pl ay i t t o her cl ass

4 i f i t was made i n t he Uni t ed St at es. But i f she f l i psone past i t t o t he next Beet hoven r ecor d t hat happens t o

6 have been made i n Asi a, she can' t pl ay t hat f or her

7 cl ass.

8 Or sect i on 109( c) , t he publ i c di spl ay, t he

9 Buf f al o Caf e owner i s al l owed t o pur chase somet hi ng i n

t he Uni t ed St at es and put i t up on her wal l s, you know,11 say, a pi ct ur e of Ni agar a Fal l s. That i s per mi ssi bl e,

12 i f i t was made i n t he Uni t ed St at es. But of f t he same

13 r et ai l r ack, she f l i ps one past ; i f i t was made i n Asi a,

14 i t ' s not per mi ssi bl e.

Nor does Wi l ey expl ai n why Congr ess woul d

16 adopt an except i on t o t he Fi r st Sal e Doct r i ne t hat i s

17 not at al l about sal es, t hat i s onl y about wher e copi es

18 wer e made.

19 So a U. S. manuf act ur er who want s t o sel l

i nt o t he U. S. mar ket has t hi s i ncent i ve t o go and send

21 j obs over seas . I t ' s an i r r es i s t i bl e i ncent i ve i f t he

22 l aw i s - - i f t hi s Cour t says t he l aw i s what Wi l ey says.

23 J USTI CE GI NSBURG: Has t hat ever happened?

24 I mean, t he Ni nt h Ci r cui t cases have been ar ound f or

some t i me. Has any manuf act ur er ever moved abr oad?

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1 MR. ROSENKRANZ: Your Honor , I ' m sur e i t

2 has. They haven' t announced i t . Now, l et me j ust be

3 cl ear . The Ni nt h Ci r cui t came out wi t h i t s opi ni on,

4 t hi s Cour t has i nt er vened t wi ce, so t he l aw has neverbeen set t l ed i n Wi l ey' s f avor . The cour t s wer e spl i t .

6 The moment t hat a manuf act ur er l ear ns t hat

7 t hi s Cour t says you get what we' ve cal l ed t he Hol y Gr ai l

8 of manuf act ur i ng, endl ess et er nal downst r eam cont r ol

9 over sal es and r ent al s, you can r ui n secondar y mar ket s

t hat ar e compet i ng wi t h you, t he moment t hat happens,11 t hat wi l l be yet anot her r eason f or manuf act ur er s

12 si l ent l y t o deci de t hat t hey' r e headed - - t hat t hey' r e

13 sendi ng t hei r manuf act ur i ng over seas.

14 J USTI CE SCALI A: Of - - of t hose - - of t hose

cour t s t hat di d hol d t he way your - - your opponent

16 woul d - - woul d have i t , am I cor r ect t hat onl y one of

17 t hem adopt ed t he absol ut i st r ul e?

18 MR. ROSENKRANZ: Wel l , Your Honor , t her e ar e

19 onl y t hr ee cour t s of appeal s t hat have wei ghed i n, but

yes, t he Second Ci r cui t i s t he onl y one t hat has adopt ed

21 t he absol ut i st r ul e, and t hat ' s yet anot her pr obl em wi t h

22 Wi l ey' s posi t i on. Wi l ey ur ges i t s posi t i on as a mat t er

23 of st at ut or y i nt er pr et at i on, but i s r ef usi ng t o st and by

24 i t . The moment i t get s past t he l anguage of t he

st at ut e, ever y ar gument i t makes i s an ar gument t hat i s

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1 as a mat t er of copyr i ght t heor y, I had al ways under st ood

2 copyr i ght t o - - a copyr i ght hol der has a ki nd of a

3 bundl e of r i ght s. I t ' s not one r i ght t hat appl i es

4 ever ywher e i n t he wor l d. I t ' s you have your U. S. r i ght sand you have your Chi nese r i ght s, you have your r i ght s

6 under each j ur i sdi ct i on' s l aw.

7 And your posi t i on i s essent i al l y t o say t hat

8 when I sel l my Chi nese r i ght s t o somebody, I ' m al so

9 sel l i ng my U. S. r i ght s t o t hat s ame per son, because t he

per son who has t he Chi nese r i ght s can j ust t ur n ar ound11 and i mpor t t he goods. I mean, t hat ' s t he nat ur e of your

12 posi t i on, i sn' t i t , t hat your U. S. r i ght s ar e al ways

13 at t ached when you sel l mor e - - your r i ght s under t he

14 j ur i sdi ct i on of anot her count r y?

MR. ROSENKRANZ: Wel l - - so f i r st , Your

16 Honor , back i n 1976, t hi s not i on of geogr aphi c di vi si on

17 was ver y, ver y new, so i t ' s not at al l cl ear what

18 Congr ess was t hi nki ng wi t h t hat - - wi t h r espect t o t hat .

19 But secondl y, no, we' r e not - - we' r e not sayi ng t hat

when t he owner sel l s hi s Chi nese - - i t s Chi nese r i ght s

21 t o t he Chi nese company, i t i s sel l i ng al l r i ght s.

22 Cer t ai nl y, t he Chi nese company cannot sel l ever ywher e,

23 but af t er t hat f i r s t sal e, al l of t he manuf actur er ' s

24 r i ght s ar e cut of f .

I f I may r eser ve t he r est of my t i me f or

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1 r ebut t al .

2 CHI EF J USTI CE ROBERTS: Thank you, counsel .

3 MR. ROSENKRANZ: Thank you, Your Honor s.

4 CHI EF J USTI CE ROBERTS: Mr . Ol son.ORAL ARGUMENT OF THEODORE B. OLSON

6 ON BEHALF OF THE RESPONDENT

7 MR. OLSON: Mr . Chi ef J ust i ce, and may i t

8 pl ease t he Cour t :

9 Pet i t i oner ' s commer ci al ent er pr i se i s

pr eci sel y what Sect i on 602( a) ( 1) was enact ed t o addr ess ,11 an i nt er nat i onal gr ay mar ket i n copyr i ght ed wor ks. Thi s

12 Cour t unani mousl y r ecogni zed i n t he Qual i t y Ki ng case

13 t hat 602( a) ( 1) encompasses copi es of books t hat wer e

14 l awf ul l y made not under t he Uni t ed St at es' Copyr i ght

Act , but under t he l aw of some ot her count r y.

16 602( a) i s br oader t han 6 - - 109( a) , because

17 i t encompasses copi es not subj ect t o t he f i r st - sal e

18 doct r i ne, f or exampl e copi es made under t he l aw of

19 anot her count r y. These ar e t he wor ds of ever y member of

t hi s Cour t i n t he Qual i t y Ki ng case.

21 Now, r ef er r i ng t o i t as di ct a mi sst at es what

22 was goi ng on i n t he Qual i t y Ki ng case. The ar gument was

23 t hat i f you i nt er pr et 602( a) and 109( a) as al l owi ng a

24 def ense, a f i r st - sal e def ense, you emascul at e Sect i on

602( a) , and so t he Cour t was expl ai ni ng on page 147 and

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1 J USTI CE BREYER: Your - - 602( a) has pl ent y

2 of meani ng. I mean, an Amer i can copyr i ght hol der

3 l i censes a Br i t i sh company t o publ i sh t he wor k under

4 Br i t i sh copyr i ght l aw. 602( a) says he can' t i mpor t t hebooks i nt o t he Uni t ed St at es, per i od.

6 MR. OLSON: That ' s - -

7 J USTI CE BREYER: Now, t he onl y - - so t her e' s

8 pl ent y of meani ng t her e. The quest i on i s what happens

9 when he sel l s i t t o hi s bookst or e and you or I go i n and

buy i t and we want t o gi ve a copy t o our wi f e when we11 get back t o t he Uni t ed St at es. The quest i on i s, di d - -

12 i s t hat unl awf ul ?

13 MR. OLSON: Wel l , we' r e - - wel l , i f we' r e

14 r eadi ng t he pr ovi si ons of t he st at ut e, i s t hat copy - -

now, t her e ar e except i ons f or t he books t hat ar e br ought

16 i n - -

17 J USTI CE BREYER: No, no except i on I t ake i t

18 once I br i ng back f i ve copi es and I gi ve one t o my son.

19 MR. OLSON: Wel l , t her e ar e f ai r use

except i ons and t her e' s - -

21 J USTI CE BREYER: Oh, f ai r use.

22 MR. OLSON: - - ot her except i ons and - - and

23 t her e ar e except i ons f or t he one t hat you br i ng back f or

24 your wi f e and your - -

J USTI CE SOTOMAYOR: I ' m sor r y. I s your

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1 r eadi ng now t hat when t he l i br ar y i mpor t s i n a book or a

2 f i l m or what ever i t ' s i mpor t i ng i n, i t goes t o t he

3 cust oms agent and i t says t o t he cust oms agent : I don' t

4 have t he expr ess aut hor i zat i on of t he copyr i ght owner ,but I ' m a l i br ar y, so I can i mpor t t hi s book i n?

6 MR. OLSON: I t says - -

7 J USTI CE SOTOMAYOR: I ' m - - I ' m a per son

8 who' s bought t he book i n Engl and and I ' m br i ngi ng i t t o

9 my wi f e? What pr ovi si on gi ves me t he r i ght t o do t hat ?

MR. OLSON: The pr ovi si ons i n t he st at ut e11 t hat deal wi t h t he l i br ar i es t al k about br i ngi ng - -

12 i mpor t i ng books f or l endi ng - -

13 J USTI CE SOTOMAYOR: So deal wi t h t he wi f e.

14 MR. OLSON: - - f or l endi ng pur poses.

J USTI CE SOTOMAYOR: How does t he wi f e get

16 her book?

17 MR. OLSON: What I ' m - - what I ' m - -

18 J USTI CE SOTOMAYOR: No, no. I s t her e - -

19 what pr ovi si on gi ves t he wi f e a r i ght under your

r eadi ng?

21 MR. OLSON: Wi t h r espect t o t he copy br ought

22 i n, i n t he sui t case f or - - t o gi ve t o a - - a f ami l y

23 member or t o t ur n over t o someone el se?

24 J USTI CE SOTOMAYOR: No, t o keep f or

your sel f . As f ar as I under st and - -

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1 MR. OLSON: Oh, t o keep f or your sel f - -

2 J USTI CE SOTOMAYOR: - - your r eadi ng, I

3 br ought i t abr oad, I can' t i mpor t i t i n.

4 MR. OLSON: What - - I bel i eve t hat t hat i scover ed by t he var i ous pr ovi si ons of t he copyr i ght

6 st at ut e. And t he quest i on i s, i s i t cover ed by sect i on

7 2 - - 602( a) ( 1) ? Yes, i t ' s an i mpor t of an acqui r ed

8 copy. Do you have a def ense under t he f i r st - sal e

9 doct r i ne? And I go t o t he exact expl i ci t l anguage of

t he st at ut e. Ther e may be except i ons under ot her11 pr ovi si ons of t he copyr i ght l aw, but t he f i r st - sal e

12 doct r i ne, 109( a) speci f i cal l y says " l awf ul l y made under

13 t hi s t i t l e. "

14 J USTI CE BREYER: The r eason - - what I was

t r yi ng t o br i ng up and I di dn' t do i t ar t f ul l y - -

16 MR. OLSON: Wel l , and t hi s - -

17 J USTI CE BREYER: - - i s , i magi ne Toyot a, al l

18 r i ght ? Mi l l i ons sol d i n t he Uni t ed St at es. They have

19 copyr i ght ed sound sys t ems. They have copyr i ght ed GPS

syst ems. When peopl e buy t hem i n Amer i ca, t hey t hi nk

21 t hey' r e goi ng t o be abl e t o r esel l t hem.

22 Now, under your r eadi ng - - now, t hi s i s one

23 of t hei r hor r i bl es, I gat her , and I want t o know your

24 answer t o i t . Under t hei r r eadi ng, t he mi l l i ons of

Amer i cans who buy Toyot as coul d not r esel l t hem wi t hout

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1 get t i ng t he per mi ssi on of t he copyr i ght hol der of ever y

2 i t em i n t hat car whi ch i s copyr i ght ed.

3 MR. OLSON: Ther e may be - -

4 J USTI CE BREYER: I s t hat r i ght ?MR. OLSON: Ther e may be j ust - -

6 J USTI CE BREYER: Am I r i ght or am I wr ong?

7 Am I of f base or am I wr ong - - am I r i ght ?

8 MR. OLSON: Ther e ar e ot her def enses, but

9 t hat i s not t hi s case. Thi s case i s not - -

J USTI CE BREYER: Wel l , how do you11 di st i ngui sh? How do you di st i ngui sh?

12 MR. OLSON: The gover nment - - t he gover nment

13 woul d ar gue f or a br oader i nt er pr et at i on under what was

14 made under t hi s st at ut e, whet her t hat woul d i ncl ude t he

i mpor t at i on or t he di st r i but i on i n commer ce. That ' s an

16 ar gument t hat t he gover nment makes, but i t ' s not

17 necessar y t o deci de t hi s case.

18 J USTI CE BREYER: Now, expl ai n t o me, because

19 t her e ar e hor r i bl es i f I summar i ze t hem, mi l l i ons and

mi l l i ons of dol l ar s ' wor t h of i t ems wi t h copyr i ght ed

21 i ndi cat i ons of some ki nd i n t hem t hat we i mpor t ever y

22 year ; l i br ar i es wi t h t hr ee hundr ed mi l l i on books bought

23 f r om f or ei gn publ i sher s t hat t hey mi ght sel l , r esel l , or

24 use; museums t hat buy Pi cassos t hat now, under our l ast

case, r ecei ve Amer i can pr ot ect i on as soon as t hat

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1 sense, ask about t he consequences of t hat r ul e. And

2 t hat ' s what we ar e aski ng.

3 MR. OLSON: And - - exact l y, J ust i ce Kennedy.

4 And t hat ' s what you wer e doi ng i n t he - - i n t he Qual i t yKi ng, when we wer e - - we wer e di scuss i ng wi t h

6 J ust i ce Al i t o whet her thi s i s di ct a or not . The Cour t

7 was speci f i cal l y sayi ng what i t woul d appl y t o, and

8 i t - - what - - what t he Cour t was t al ki ng about i n t hat

9 case was books made not pur suant t o t i t l e, but pur suant

t o some ot her count r y' s copyr i ght l aw. Thi s copyr i ght11 l aw pr ovi si ons - -

12 J USTI CE SOTOMAYOR: Why i s i t t hat a U. S.

13 copyr i ght owner who cont r act s i n Engl and t o make

14 books - - he doesn' t have an Engl i sh copyr i ght , he j ust

si mpl y chooses t hat pl ace t o manuf act ur e as opposed t o

16 t he U. S. - - why i s he maki ng t hat copy under Engl i sh l aw

17 and not under hi s r i ght s of U. S. copyr i ght ?

18 MR. OLSON: Wel l , i f he i s doi ng - - i f he i s

19 manuf act ur i ng t he book i n Engl and, he' s not - - because

t he copyr i ght l aw does not have ext r at er r i t or i al

21 appl i cat i on, he i s not maki ng t hose copi es under t hi s

22 t i t l e. And t hi s Cour t - -

23 J USTI CE SOTOMAYOR: But he' s sel l i ng i t

24 no - - no di f f er ent l y t han Qual i t y Ki ng was - - or t he

Qual i t y Ki ng - -

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1 MR. OLSON: But t he pr obl em i s - - t he

2 st at ut es may not be per f ect wi t h r espect t o t hi s, and

3 t her e may be hor r i bl es t hat occur under one set of

4 i nt er pr et at i ons of t he st at ut e, and t he ot heri nt er pr et at i on of t he s t at ut e i s t o i nt er pr et i t as - -

6 as t he pet i t i oner - -

7 J USTI CE SOTOMAYOR: Mr . Ol son, we know f r om

8 t he Kar p exchange t hat t he r esponse was, t hi s i s

9 somet hi ng t hat we have t o st udy wi t h car e, i n 1976.

The par ade of hor r i bl es i s now causi ng t he11 Sol i ci t or Gener al and at l east one, i f not t wo, cour t s

12 of appeal s t o wr i t e except i ons i nt o t he l anguage t o t ake

13 car e of what t hey per cei ve as hor r i bl es.

14 I sn' t i t i ncumbent upon us t o gi ve t he

st at ut e what i s pl ai nl y a mor e r at i onal pl ai n meani ng

16 t han t o t r y t o gi ve i t a meani ng and t hen f i x i t because

17 we under st and t hat t he meani ng doesn' t make sense?

18 MR. OLSON: I - - t her e - - t her e i s a body of

19 t he gover nment of t he Uni t ed St at es t hat i s ent i t l ed and

capabl e of f i xi ng t hi s. These par ade of hor r i bl es have

21 been - - peopl e have been ar gui ng about t hese f or year s.

22 For 30 year s, t he st at ut e has been i nt er pr et ed t he way

23 t hat we ar e suggest i ng t hat i t shoul d be under t hi s

24 t i t l e, whi ch t hi s Cour t ear l i er t hi s year , i n anot her

case, i n t he Novo Nor di sk case, speci f i cal l y sai d, under

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1 t hi s t i t l e means pur suant t o t he pr ovi si ons of t hi s

2 t i t l e.

3 Thi s Cour t sai d t hat bef or e i n - - i n t he

4 Ar dest ani case. The under t hi s t i t l e occur s not onl y i nsect i on 109( a) , but under t hi s t i t l e occur s i n 602( a)

6 i t sel f ; and t hen under t hi s sect i on appear s t wi ce i n

7 sect i ons 602( a) - -

8 J USTI CE GI NSBURG: Mr . Rosenkr anz t ol d us

9 t hat under t hi s t i t l e means di f f er ent t hi ngs i n ot her

sect i ons, and he gave a number of exampl es.11 MR. OLSON: Yes, and - - and i n each case - -

12 f i r s t of a l l , i f t he i nt er pr et at i on t hat my opponent i s

13 ar gui ng f or was t he l aw, t hat - - t hose ar e t he wor ds

14 t hat ar e i n 602( b) and 602( a) ( 2) . So Congr ess coul d

have used t hose wor ds t hat our opponent s ar e ar gui ng

16 f or , and di d use t hose wor ds, one of whi ch was wr i t t en

17 on t he same t i me i n t he same - - passed i n t he same t i me,

18 i n 1976, t hat 602( a) ( 1) was.

19 J USTI CE KAGAN: Wel l , Mr . Ol son, can I j ust

t ake you t o - -

21 MR. OLSON: Wi t h r espect t o t hose ot her - -

22 J USTI CE KAGAN: Pl ease.

23 MR. OLSON: Wi t h r espect t o t hose ot her

24 pr ovi si ons, J ust i ce Gi nsbur g, t he - - t he gover nment

speci f i cal l y goes over each one of t hose, but each one

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1 of t hose, i f you i nt er pr et t he st at ut e as under t hi s

2 t i t l e as pur suant t o t hi s t i t l e, each one of t hose

3 pr ovi si ons makes sense i n t he cont ext i n whi ch t hat t er m

4 i s used t her e.And - - and t her e i s onl y one r eal way t o

6 i nt er pr et under t hi s t i t l e i n t he pr ovi si ons i n 109( a)

7 i n - - i n conj unct i on wi t h 602( a) ( 1) , and t hat i s t he way

8 t he Cour t deci ded i t i n t he Qual i t y Ki ng case,

9 speci f i cal l y l ooki ng at t hi s quest i on.

Now t he f act s wer e sl i ght l y di f f er ent i n t he11 sense t hat t hat was a r ound t r i p; t hi s i sn' t a r ound

12 t r i p.

13 J USTI CE KAGAN: Can I t ake you back t o t he

14 wor ds her e, " l awf ul l y made under t hi s t i t l e, " whi ch you

say cl ear l y means what you say i t means.

16 So, I f i nd t hi s l anguage a l i t t l e bi t

17 per pl exi ng, and I can ki nd of see i t bot h ways. So what

18 you say i s made under t hi s t i t l e, t hat must mean made i n

19 t he Uni t ed St at es , and " l awf ul l y, " j ust as t hi s l i t t l e

wor d t hat ' s - - t hat modi f i es t hat basi c phr ase, " made

21 under t hi s t i t l e, " whi ch means made i n t he Uni t ed

22 St at es.

23 But what Mr . Rosenkr anz essent i al l y says - -

24 he doesn' t s ay i t i n t hese wor ds, but he says, " The

f ocus of t hi s pr ovi s i on i s on ' l awf ul l y made. ' " That i s

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1 what t he f ocus i s on. I t ' s on " l awf ul l y made" as

2 opposed t o " unl awf ul l y made. "

3 Now, when we j ust say l awf ul l y made, you

4 know, we need somet hi ng t o measur e, wel l , how do we knowwhet her i t ' s l awf ul l y made? Wel l , you l ook t o t he r ul es

6 i n t he copyr i ght l aw.

7 So i f you j ust - - i f you f ocus mor e on t he

8 l awf ul l y wor d, l awf ul l y made, and t hen under t hi s t i t l e

9 doesn' t mean made i n t he Uni t ed St at es, i t means

l awf ul l y made under t he r ul es of t hi s t i t l e.11 MR. OLSON: Lawf ul l y made under t hi s t i t l e

12 i s l awf ul l y made under t he copyr i ght l aws of t he Uni t ed

13 St at es. I t can' t say, ' l awf ul l y made i n t he Uni t ed

14 St at es, ' because t hen somet hi ng mi ght - -

J USTI CE KAGAN: Wel l , l awf ul l y made, under

16 t he r ul es of t he Uni t ed St at es, r egar dl ess wher e t he

17 t hi ng was manuf act ur ed, i s what I ' m sayi ng. That ' s t he

18 way - - i t j ust seems t o me as t hough - -

19 MR. OLSON: I t - -

J USTI CE KAGAN: - - you ar e sayi ng made must

21 be manuf act ur ed. But l awf ul l y made i s a l awf ul l y made

22 copy. How do we know i f i t ' s l awf ul l y made? We l ook t o

23 t hi s t i t l e.

24 MR. OLSON: I t hi nk under t hi s t i t l e means

t hat i t was made pur suant t o t he pr ovi si ons of t he

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1 copyr i ght l aw. I can' t i magi ne t he di f f i cul t i es t hat

2 woul d ensue wi t h l i t i gat i on over whet her or not

3 somet hi ng made i n anot her count r y, made under anot her

4 count r y' s di f f er ent l aws - - and t hey var y enor mousl yt hr oughout t he wor l d - - whet her t hat was somehow

6 compat i bl e wi t h t he l aws of t he Uni t ed St at es.

7 J USTI CE BREYER: But what about l i t i gat i on

8 i n t hi s r espect ? I want t o br i ng you back t o t he

9 hor r i bl es.

MR. OLSON: Because t he - -11 J USTI CE BREYER: The mai n poi nt i s t hat

12 hor r i bl es haven' t occur r ed. Ri ght ?

13 MR. OLSON: The mai n - - mai n - -

14 J USTI CE BREYER: Somet i mes hor r i bl es don' t

occur because no one can bel i eve i t .

16 Now, f or exampl e, I bel i eve t her e i s goi ng

17 t o be a st or m, but i t hasn' t st ar t ed yet .

18 So I woul d l i ke t o know - - I woul d l i ke t o

19 know, i f you wer e t he l awyer f or t he Toyot a di st r i but or ,

and i f you wer e t he l awyer f or t he Met r opol i t an Museum

21 of Ar t , or you ar e t he l awyer f or a uni ver si t y l i br ar y,

22 and your c l i ent comes t o you and says, my God, I j ust

23 r ead t he Supr eme Cour t opi ni on. I t says t hat we can' t

24 st ar t sel l i ng t hese ol d books or - - or l endi ng t hem or

put t i ng t hem i n our wor d pr ocessor or r esel l i ng t he

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1 Toyot a wi t hout t he - - wi t hout l ooki ng - - di spl ayi ng t he

2 Pi casso wi t hout t he per mi ssi on of t he copyr i ght hol der ,

3 who may or may not be Toyot a i t sel f .

4 What , as t hei r l awyer , do you t el l t hem? Doyou t el l t hem, hey, no pr obl em; or , do you t el l t hem,

6 you mi ght become a l aw vi ol at or ; or , do you t el l t hem, I

7 bet t er l i t i gat e t hi s? What do you t el l t hem?

8 MR. OLSON: Wel l , each one of t hose

9 si t uat i ons t hat you posi t , J ust i ce Br eyer , has a whol e

panopl y of set of f act s.11 Wi t h r espect t o t he museums, wi t h r espect t o

12 t he per son br i ngi ng books i nt o t he Uni t ed St at es, t her e

13 ar e ot her def enses, i ncl udi ng f ai r use. Ther e ar e ot her

14 def enses under t he copyr i ght l aw. But - - and one of t he

t hi ngs i s t hat , t o a cer t ai n ext ent , i f you' r e goi ng t o

16 use t he pr oduct cr eat ed by someone el se i n a way t hat ' s

17 cont empl at ed by t he copyr i ght l aws, maybe i t ' s r equi r ed

18 t hat you act ual l y compl y wi t h t he copyr i ght l aws by

19 goi ng t o t he owner of t he copyr i ght and sayi ng, l ook,

her e' s what I pr opose t o do, can I have a l i cense t o do

21 t hi s? I t ' s a nonpr of i t . I t ' s a museum. And I ' m - -

22 CHI EF J USTI CE ROBERTS: Counsel , you sai d

23 t her e ar e ot her def enses, i ncl udi ng f ai r use. I n - - i n

24 t he cat al ogue t hat J ust i ce Br eyer r eci t ed, ar e al l t hose

f ai r uses?

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1 MR. OLSON: No. And some of - - but - - but

2 t hey' r e - -

3 CHI EF J USTI CE ROBERTS: Wel l , whi ch ones

4 ar e - - I mean, I ' m - - i t seems unl i kel y t o me t hat , i f your posi t i on i s r i ght , t hat a cour t woul d say, i t ' s a

6 f ai r use t o r esel l t he Toyot a, i t ' s a f ai r use t o

7 di spl ay t he Pi casso.

8 MR. OLSON: I t may be a f ai r use. I t may be

9 an i mpl i ed l i cense, f or exampl e, wi t h r espect t o

copyr i ght ed i t ems or t r ademar ked i t ems t hat appear i n a11 pr oduct t hat was l i censed abr oad. The gover nment has

12 of f er ed anot her al t er nat i ve i nt er pr et at i on of t he wor d

13 " made, " as put t i ng i t i n t he f l ow of commer ce. That

14 mi ght deal wi t h some of t hese si t uat i ons.

But t he poi nt I guess I am maki ng,

16 Mr . Chi ef J ust i ce, i s t hat Congr ess was cl ear l y

17 i nt endi ng t o t al k about t he vast gr ay mar ket pr obl em.

18 Thi s pr ovi si on - -

19 J USTI CE KAGAN: Wel l , i nt endi ng wher e? I

mean, I - - you spend a l ot of t i me t al ki ng about t he

21 l egi sl at i ve hi st or y and t he pur poses behi nd 602. But

22 t he l anguage t hat we' r e supposed t o be i nt er pr et i ng i s

23 t he l anguage i n sect i on 109. And t he l anguage i n

24 sect i on 109, as f ar as I can see, t her e' s r eal l y not hi ng

t o suppor t your ar gument t hat t hat l anguage was i nt ended

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1 t o addr ess t hi s gr ay mar ket pr obl em.

2 I sn' t t hat cor r ect ?

3 MR. OLSON: Wel l , no. I t hi nk t hat sect i on

4 109 and 602( a) wer e adopt ed i n t he same st at ut e. Theywer e put i n t he dr af t of t he st at ut e at t he same t i me,

6 i n 1964.

7 J USTI CE KAGAN: But you know, sect i on 109 i s

8 j ust a r ewor di ng of a pr i or pr ovi si on t hat you woul d

9 cl ear l y l ose under , wher e t he pr i or wor di ng had not hi ng

t o do wi t h wher e any pr oduct was manuf act ur ed. And what11 you' r e suggest i ng i s t hat we shoul d r ead t hi s change i n

12 wor di ng - - whi ch act ual l y, t her e' s a r eal t heor y behi nd

13 what t he change i n wor di ng meant t hat has not hi ng t o do

14 wi t h t he pl ace of manuf act ur e, t hat we shoul d r ead i t as

i ncor por at i ng a pl ace of manuf act ur e r equi r ement ,

16 because t her e was a separ at e debat e goi ng on i n sect i on

17 602 about t hat quest i on.

18 MR. OLSON: But t he - - but t he t wo pr o - -

19 what I ' m - - I guess what I ' m t r yi ng t o expl ai n i s t hat

t he t wo wer e enact ed at t he same t i me. They wer e out

21 t her e and avai l abl e t o t he publ i c f or 12 year s bef or e

22 t hey wer e f i nal l y adopt ed. These par ade of hor r i bl es

23 coul d have been addr essed by Congr ess i n a di f f er ent way

24 at t he t i me, and t he i nt er pr et at i on - - t hi s i s a - - 109

i s a def ense - - i s of f er ed as a def ense t o sect i on - - t o

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1 sect i on 602( a) ( 1) .

2 So what does i t mean? What pr ovi de - - what

3 i s t he def ense t hat ' s pr ovi ded? And you t hen have t o

4 i nt er pr et , " made under t hi s" - - " l awf ul l y made undert hi s t i t l e. " What does t hat mean?

6 And you have done t hat i n t he Qual i t y Ki ng

7 case. You expl ai ned i n t he Qual i t y Ki ng unani mousl y

8 t hat i t makes a di f f er ence because you ar e exhaust i ng - -

9 Congr ess i nt ended t o al l ow segment at i on of t he mar ket .

I t onl y makes sense t o i nt er pr et t hi s way i f you al l ow11 segment at i on of t he mar ket pur suant t o t hese pr ovi si ons,

12 because i t i s exhaust i ng t he copyr i ght under t he l aws of

13 t he Uni t ed St at es once you make a sal e of a pr oduct

14 pr oduced i n t he Uni t ed St at es subj ect t o t he Uni t ed

St at es' copyr i ght l aws.

16 You ar e not exhaust i ng your U. S. copyr i ght

17 when you make somet hi ng, or al l ow somet hi ng t o be made

18 abr oad. You ar e not exhaust i ng t hat copyr i ght . You

19 have not done t hat yet . So t he f i r st sal e i s not

somet hi ng t hat happens abr oad t hat uses up t he copyr i ght

21 l aws - - of t he pr ot ect i on under t he copyr i ght l aws of

22 t he Uni t ed St at es.

23 So i t seems t o me t hat t hi s does make

24 per f ect sense. And i t makes - - t her e i s not goi ng t o be

a per f ect sol ut i on i n ever y case. The Cour t has deal t

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1 wi t h t hat f r equent l y wi t h r espect t o copyr i ght l aws.

2 But i f you i nt er pr et i t as my opponent i nt er pr et s i t ,

3 you ar e openi ng t he door t o commer ci al ent er pr i ses

4 pr eci sel y l i ke t hi s .I t ' s not necessar y i n t hi s case t o deci de

6 ever y si ngl e per mut at i on of a pr obl em t hat someone

7 cr osses a bor der wi t h a pr oduct , but t hi s sect i on 602

8 speci f i cal l y cont empl at es pr oduct s t hat ar e acqui r ed

9 abr oad and t hen br ought back i nt o t he Uni t ed St at es.

Her e, we have a commer ci al ent er pr i se doi ng exact l y what11 i s cont empl at ed by t he peopl e who wer e t al ki ng about

12 602( a) and sect i on 109 when t he t wo wer e adopt ed at t he

13 same t i me.

14 J USTI CE GI NSBURG: Mr . Ol son, do you have an

answer t o t he out sour ci ng pr obl em and t he char ges t hat

16 i f you r ead t he st at ut e as you ar e ur gi ng, t hen you ar e

17 i nvi t i ng t he out sour ci ng of manuf act ur i ng j obs?

18 MR. OLSON: Ther e ar e sever al answer s t o

19 t hat . One, t hat ' s Congr ess' s concer n. And - - and t her e

i s no evi dence t hat t hat woul d r eal l y act ual l y happen.

21 And Congr ess was concer ned wi t h cr eat i ng a segment at i on

22 of t he mar ket . But i t ' s ent i r el y specul at i ve as t o

23 whet her or not peopl e ar e goi ng t o st ar t manuf act ur i ng

24 books or ot her i t ems out si de t he Uni t ed St at es.

Congr ess can addr ess t hat i f t hat shoul d

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1 become a pr obl em, but i t ' s not somet hi ng t hat was

2 suggest ed as a par t of what was t aki ng pl ace at t hat

3 t i me.

4 CHI EF J USTI CE ROBERTS: Thank you,Mr . Ol son.

6 Mr . St ewar t .

7 ORAL ARGUMENT OF MALCOLM L. STEWART,

8 FOR UNI TED STATES, AS AMI CUS CURI AE,

9 SUPPORTI NG THE RESPONDENT

MR. STEWART: Mr . Chi ef J ust i ce, and may i t11 pl ease t he Cour t :

12 I woul d l i ke t o di scuss - - begi n by

13 di scussi ng our Bobbs- Mer r i l l ar gument , because i t ' s a

14 par t of our br i ef t hat ' s di f f er ent f r om bot h t he

par t i es' submi ssi ons, and I do t hi nk i t ' s ver y i mpor t ant

16 t o under st andi ng t he pr act i cal i mpl i cat i ons of t he

17 Cour t ' s deci si on.

18 J USTI CE GI NSBURG: Mr . St ewar t , may I ask

19 you a pr el i mi nar y quest i on? I n Qual i t y Ki ng t he

gover nment t ook t he posi t i on t hat t he Pet i t i oner i s

21 t aki ng her e. What l ed t he gover nment t o change i t s

22 mi nd? Was i t j ust what has been cal l ed " di ct um" i n

23 Qual i t y Ki ng, or i s t her e anot her r eason why t he

24 gover nment has swi t ched si des?

MR. STEWART: I t hi nk t her e ar e t wo r el at ed

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1 r easons, and one of t hem i s t he di ct um, but I ' l l get t o

2 t hat second.

3 I t hi nk i n bot h cases, our over r i di ng

4 obj ect i ve was t o of f er a r eadi ng of sect i on 109( a) t hatwoul d not super sede, or woul d not ef f ect i vel y negat e t he

6 i mpor t at i on pr ohi bi t i on i n sect i on 602( a) ( 1) , because

7 f r om t he Copyr i ght Of f i ce' s per spect i ve, we agr ee wi t h

8 Mr . Ol son t hat t he pr i mar y r eason f or t he enact ment of

9 602( a) ( 1) was t o f aci l i t at e mar ket segment at i on. And

t he ar gument we made i n Qual i t y Ki ng was you can11 accompl i sh t hat ; you can pr event sect i on 109( a) - -

12 J USTI CE SOTOMAYOR: Coul d you poi nt t o

13 somet hi ng i n t he l egi sl at i ve hi st or y t o suppor t t hat ?

14 MR. STEWART: I t hi nk t he best t hi ng I coul d

poi nt t o i s a r epor t of t he Regi st r ar of Copyr i ght s t hat

16 was i ssued i n 1965, i n whi ch t he Copyr i ght Of f i ce

17 i dent i f i ed as one of t he ci r cumst ances t hat woul d be

18 cover ed by t he i mpor t at i on ban, t he si t uat i on i n whi ch,

19 quot e, " t he copyr i ght owner had aut hor i zed t he - - t he

manuf act ur e of copi es i n a f or ei gn count r y f or

21 di st r i but i on onl y i n t hat count r y. "

22 I t di dn' t use t he phr ase " mar ket

23 segment at i on, " but cl ear l y, t he poi nt was t he same. You

24 ar e aut hor i zi ng copi es t o be made abr oad f or

di s t r i but i on onl y i n t hat pl ace, not f or r edi s t r i but i on

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1 her e.

2 And so - -

3 J USTI CE KAGAN: So Mr . St ewar t , i f I

4 under st and your ar gument , bot h her e and i n Qual i t y Ki ngyou want t he copyr i ght hol der t o have some cont r ol over

6 i mpor t at i on, but at t he same t i me you don' t want t he

7 copyr i ght hol der t o have cont r ol over al l downst r eam

8 sal es.

9 MR. STEWART: That ' s cor r ect .

J USTI CE KAGAN: And t hat ' s what your11 Bobbs- Mer r i l l ar gument i s desi gned t o do. I t ' s desi gned

12 t o pr event t hat .

13 MR. STEWART: That ' s cor r ect .

14 J USTI CE KAGAN: Comi ng back t o J ust i ce

Gi nsbur g' s quest i on, do you t hi nk t hat t r ul y t he way t o

16 do t hose t wo t hi ngs, t o gi ve t he copyr i ght hol der

17 cont r ol over i mpor t at i on, but not over downst r eam sal es,

18 t hat our pr obl em r eal l y i s, do you t hi nk i n your hear t

19 of hear t s t hat we got i t wr ong i n Qual i t y Ki ng?

MR. STEWART: Wel l , we l ost t hat case 9- 0,

21 and so I am not ar gui ng t oo voci f er ousl y t hat t he Cour t

22 shoul d change i t s opi ni on. But yes, we t hi nk t hat we

23 st i l l woul d adher e t o our vi ew t hat sect i on 109( a)

24 shoul d not be r ead as a l i mi t at i on on sect i on 602( a) ( 1) .

I f t he Cour t had gone t hat pat h, i t coul d r ead "l awf ul l y

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1 made under t hi s t i t l e" t o encompass bot h f or ei gn- made

2 and domest i c- made copi es, wi t hout doi ng damage t o t he

3 copyr i ght hol der ' s abi l i t y t o segment mar ket s.

4 On t he ot her hand - - J USTI CE SOTOMAYOR: So you get what you

6 want ed anyway? That ' s r eal l y t he bot t om l i ne. We undo

7 Qual i t y Ki ng, except t hat t he pr i ce i s t hat peopl e have

8 t o shi p t hei r manuf act ur i ng abr oad.

9 MR. STEWART: Wel l , we' r e not ur gi ng t he

Cour t t o t ake t hat cour se, but yes, t hat woul d have been11 one way t o accompl i sh t he same obj ect i ve. And so - -

12 J USTI CE KAGAN: So you ar e essent i al l y

13 sayi ng t hat t he appr opr i at e way t o r ead t hi s st at ut e, t o

14 make sense of al l of i t s pr ovi si ons, i s t o gi ve t he

copyr i ght hol der cont r ol over t he i mpor t at i on, t o gi ve

16 Wi l ey t he abi l i t y t o go af t er t hi s i mpor t er , Mr .

17 Ki r t saeng, but t o f i nd a way t o st op i t t her e?

18 MR. STEWART: I t hi nk t hat ' s cor r ect , but I

19 t hi nk our Bobbs- Mer r i l l ar gument does pr ovi de a ver y

pr i nci pl ed way t o st op i t t her e wi t hout goi ng back on

21 what t he Cour t sai d i n Qual i t y Ki ng. That i s,

22 Bobbs- Mer r i l l was a 1908 case i n whi ch t he publ i sher

23 sol d books t o r et ai l er s on t he pr ovi so t hat t hey not be

24 sol d at r et ai l f or l ess t han a speci f i ed amount . One of

t he r et ai l er s vi ol at ed t hat r esal e r est r i ct i on and was

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1 sued f or copyr i ght i nf r i ngement .

2 And t hi s Cour t i n Bobbs- Mer r i l l sai d - -

3 par sed t he st at ut or y l anguage, whi ch at t hat t i me gave

4 t he copyr i ght owner t he excl usi ve r i ght t o vend copi esof t he wor k.

6 J USTI CE ALI TO: But you' r e sayi ng

7 Bobbs- Mer r i l l means somet hi ng beyond sect i on 109, but

8 when - - t he 1909 Copyr i ght Act s ai d t hat i t was

9 codi f yi ng t he hol di ng i n Bobbs- Mer r i l l , and t he 1976

st at ut e, whi ch i s now bef or e us, sai d i t wasn' t changi ng11 t he meani ng of t he ear l i er l aw. So I don' t know how - -

12 Bobbs- Mer r i l l wasn' t a const i t ut i onal deci si on, i t was a

13 quest i on of st at ut or y i nt er pr et at i on.

14 So how does some sl i ver of Bobbs- Mer r i l l

s t i l l sur vi ve al l of t hi s?

16 MR. STEWART: Maybe I can put i t t hi s way:

17 I f I buy a pi r at i cal copy of a book, one t hat was

18 i l l egal l y made wi t hout t he consent of t he copyr i ght

19 owner , and al l I do i s r ead i t and put i t on my shel f , I

can' t r el y on 109( a) because t he copy was not l awf ul l y

21 made under t hi s t i t l e. But I st i l l coul dn' t be hel d

22 l i abl e f or copyr i ght i nf r i ngement because t her e i s no

23 excl usi ve r i ght t o r ead t he book or t o own i t . I

24 woul dn' t have been i nf r i ngi ng any of t he copyr i ght

owner ' s r i ght s.

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1 And so i n or der t o have a val i d cl ai m f or

2 copyr i ght i nf r i ngement , t he copyr i ght owner woul d have

3 t o show bot h t hat 109( a) was i nappl i cabl e, and t hat what

4 t he def endant was doi ng was a vi ol at i on, an i nf r i ngementof one of t he excl usi ve r i ght s.

6 And Mr . Rosenkr anz seems t o post ul at e a

7 si t uat i on i n whi ch a cagey manuf act ur er woul d l ocat e i t s

8 f aci l i t i es over seas, make t he copi es t her e, i mpor t t hem

9 i nt o t he Uni t ed St at es, sel l t hem i n t hi s count r y,

subj ect t o condi t i ons on r esal e.11 And i f t he goods wer e r esol d i n vi ol at i on of

12 t hose r est r i ct i ons, t he copyr i ght owner woul d sue f or

13 i nf r i ngement . And I t hi nk t he f i r st ar gument t he

14 def endant woul d make i s t hat i s exact l y t he conduct t hat

t he Cour t i n Bobbs- Mer r i l l sai d di d not i nf r i nge t he

16 excl usi ve r i ght t o vend.

17 Now - - namel y t he r esal e i n vi ol at i on of

18 r est r i ct i ons on r esal e. How can you now say i t ' s now an

19 i nf r i ngement of t he excl usi ve r i ght t o di st r i but e? And

i t woul d be a par t i cul ar l y di f f i cul t ar gument f or t he

21 copyr i ght owner t o make because what t he House Repor t

22 sai d i n 1909, i t di dn' t say exact l y t hat i t was

23 codi f yi ng t he hol di ng of Bobbs- Mer r i l l ; i t sai d t hat i t

24 was amendi ng t he st at ut e i n ot her r espect s, and i t

want ed t o make cl ear t hat t her e was no i nt ent t o enl ar ge

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1 t he excl usi ve r i ght t o vend.

2 And so t he Pl ai nt i f f , i n Mr . Rosenkr anz' s

3 hypot het i cal , woul d i n ef f ect be ar gui ng t hat by

4 codi f yi ng sect i on 109( a) , Congr ess had i mpl i ci t l yexpanded t he scope of t he i mpl i ci t - - of t he excl usi ve

6 r i ght t o vend or di st r i but e, even t hough i t sai d i t was

7 doi ng t he var i ous opposi t e.

8 CHI EF J USTI CE ROBERTS: That ' s an awf ul l y

9 di f f i cul t maze f or somebody t o - - t o get t hr ough. You

have t o st ar t wi t h t he di f f i cul t y of t he l anguage her e,11 and t hen you have t o pr oceed and put t he Qual i t y Ki ng

12 gl oss over i t ; and, when you f i nal l y get t o t hat poi nt ,

13 you say, wel l , now you' ve got t o r ead Bobbs- Mer r i l l and

14 f i gur e out how t he common l aw gover ns al l t hat .

MR. STEWART: But I t hi nk t hat woul d be t r ue

16 under anybody' s r eadi ng. That i s, once a cour t i n a

17 case det er mi ned f or what ever r eason t hat sect i on 109( a)

18 was i nappl i cabl e, i t di dn' t pr ovi de a saf e har bor , t he

19 next s t ep coul d never be si mpl y t o pr oceed t o j udgment

and say t hat t her e was i nf r i ngement . The next s t ep

21 woul d al ways have t o be t o l ook at what t he def endant

22 had done - -

23 CHI EF J USTI CE ROBERTS: Wel l , i t ' s not t hat

24 compl i cat ed under t he Pet i t i oner ' s appr oach. I t says

once you' ve you had a f i r st sal e, t hat ' s i t .

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1 MR. STEWART: The ot her poi nt I woul d make

2 about t he Pet i t i oner ' s appr oach i s t hat i t - - i t real l y

3 has no gr oundi ng i n t he st at ut or y t ext . That i s, t he

4 Pet i t i oner i s ar gui ng t hat i f t he publ i sher i n Thai l and,i f t he manuf act ur er of t he books had shi pped t hem

6 di r ect l y i nt o t hi s count r y, t hat per son coul d have been

7 sued f or i nf r i ngement f or t he i mpor t at i on and - -

8 J USTI CE BREYER: Wel l , t he wor d has

9 gr oundi ng. I t i s Coke upon Li t t l et on, 1628, wher e i t

says t hat i f a man be possessed of a chat t el and gi ve or11 sel l hi s whol e i nt er est upon a condi t i on, t hat condi t i on

12 i s no good. And Coke says, and t hat ' s how i t shoul d be.

13 And now t hat ' s pi cked up i n Bobbs- Mer r i l l ;

14 i t ' s pi cked up i n Dr . Mi l es. I t ' s been t he l aw.

Now i f , i n f act , t her e ar e t wo ways of

16 i nt er pr et i ng t he st at ut e, and one i s consi st ent wi t h

17 t hat basi c pr i nci pl e of commer ci al l aw, and t he ot her

18 pr oduces some of t he compl exi t i es t hat you have j ust

19 ment i oned, i sn' t i t bet t er t o go wi t h t he common l aw and

si mpl y r eaf f i r m a pr i nci pl e t hat ' s been i n t he

21 commer ci al l aw al most f or ever ?

22 MR. STEWART: I - - I gi ve t wo answer s f or

23 t hat . And t he f i r st i s t hat Coke was sayi ng t hat , i n

24 most ci r cumst ances at l east , a sal e i s suf f i ci ent i n

or der t o di vest t he owner of hi s pr i or r i ght t o cont r ol

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1 di s t r i but i on, but i t doesn' t say t hat a sal e i s

2 necessar y.

3 And my poi nt i s t hat when Mr . Rosenkr anz

4 says t he hypot het i cal f or ei gn publ i sher who makes copi eswi t h aut hor i zat i on but shi ps i t i nt o t he - - t hem i nt o

6 t he Uni t ed St at es wi t hout coul d be hel d l i abl e f or

7 i nf r i ngement , t her e i s not hi ng i n sect i on 109( a) t hat

8 woul d al l ow a cour t t o dr aw t hat di st i nct i on; t hat i s,

9 al t hough 109( a) i s somet i mes r ef er r ed t o as a

codi f i cat i on of t he Fi r s t Sal e Doctr i ne, i t doesn' t11 r equi r e an ant ecedent f i r st sal e.

12 So as l ong as t he f or ei gn publ i sher was t he

13 owner of t he books at t he t ype - - t i me t hey wer e

14 manuf act ur ed, i f t hose books wer e l awf ul l y made under

t hi s t i t l e, under Pet i t i oner ' s r eadi ng t hey coul d be

16 i mpor t ed and di st r i but ed.

17 We know al s o t hat t hi s was not an over si ght ,

18 t hat Congr ess di dn' t i nt end t he pr ovi si on t o be subj ect

19 t o a sor t of i mpl i ci t f i r st aut hor i zed sal e r equi r ement ,

because t he l anguage was i nt ended t o cover copi es t hat

21 wer e made pur suant t o a compul sor y l i cense.

22 J USTI CE ALI TO: Whi ch of t he f ol l owi ng i s

23 wor se: Al l of t he hor r i bl es t hat t he Pet i t i oner

24 out l i nes t o t he ext ent t hey ar e r eal i st i c, or t he

f r ust r at i on of mar ket segment at i on, t o t he ext ent t hat

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1 woul d occur , i f Pet i t i oner ' s posi t i on wer e accept ed?

2 MR. STEWART: Wel l , i f t hey act ual l y

3 happened, t hen I t hi nk t he - - t he hor r i bl es woul d be

4 wor se. But , as I say, we - - we f eel t hat we haveof f er ed a r eadi ng of al l t he st at ut or y pr ovi si ons

6 t oget her t hat woul d avoi d bot h.

7 The ot her coupl e of t hi ngs I woul d say as t o

8 why a f i r s t sal e by i t sel f - -

9 J USTI CE ALI TO: I f t he - - i f t hat mi ddl e

gr ound i s - - wer e f ound t o be not vi abl e, whi ch of t he11 t wo set s of consequences i s wor se f r om t he gover nment ' s

12 per spect i ve, or can you not say?

13 MR. STEWART: I woul d say t hat t he

14 consequence t hat al l f or ei gn- made goods, even i f

i mpor t ed i nt o t he Uni t ed St at es wi t h t he aut hor i zat i on

16 of t he U. S. copyr i ght owner , ar e subj ect t o cont i nui ng

17 l i censi ng r equi r ement s, et c. , I woul d say t hat woul d be

18 wor se t han t he f r ust r at i on of mar ket segment at i on t hat

19 woul d occur under Pet i t i oner ' s vi ew.

CHI EF J USTI CE ROBERTS: Thank you, counsel .

21 Mr . Rosenkr anz, you have f our mi nut es.

22 REBUTTAL ARGUMENT OF E. J OSHUA ROSENKRANZ

23 ON BEHALF OF THE PETI TI ONER

24 MR. ROSENKRANZ: Thank you,

Mr . Chi ef J ust i ce.

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1 I j ust want t o st ep back and t ake a l ook at

2 what t he gover nment ' s doi ng her e. Af t er el oquent l y

3 ar gui ng i n Qual i t y Ki ng i n t he l ast t wo pages of i t s

4 br i ef t hat our posi t i on on t he meani ng of t hi s l anguagei s r i ght , i t ' s sayi ng our posi t i on i s wr ong. And t hen,

6 i t ' s t r yi ng t o come up wi t h a mi ddl e gr ound t hat has

7 absol ut el y no basi s i n t he st at ut e.

8 I f Bobbs- Mer r i l l pr ovi des t he cont ent f or

9 t he Fi r st Sal e Doct r i ne, t hen what does sect i on 109 do?

And so t he gover nment i s cr eat i ng a scenar i o i n whi ch,11 i n or der t o save 602 f r om bei ng super f l uous i n t he way

12 i t i s descr i bed, al t hough we bel i eve i t ' s not

13 super f l uous at al l , i t i s maki ng 109 super f l uous.

14 J ust i ce Kagan asked a quest i on about

essent i al l y sent ence di agr ammi ng. Our vi ew i s t hat

16 ' under t hi s t i t l e' modi f i es ' l awf ul l y. ' You use t he

17 U. S. met r i c of U. S. l aw t o f i gur e out whet her i t ' s

18 l awf ul . The gover nment ' s and Wi l ey' s posi t i on i s t hat

19 ' under t hi s t i t l e' modi f i es bot h ' made' and ' l awf ul l y. '

And at l east t he way I l ear ned gr ammar , you can' t use

21 t he same phr ase t o modi f y bot h t er ms.

22 I want t o cor r ect somet hi ng t hat I sai d t o

23 J ust i ce Gi nsbur g because I sai d i t backwar ds. 905 and

24 906 ar e exampl es of t he Uni t ed St at es Congr ess i n a

copyr i ght cont ext appl yi ng nat i onal exhaust i on, and t hat

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1 was si x year s af t er t hi s st at ut e was passed.

2 To J ust i ce Br eyer ' s quest i on, t he bear i s

3 t her e. I t i s ver y much t her e. The onl y r eason no one

4 has ever pur sued t hese l egal ar gument s i s t hat t he l egalar gument s t hat ar e t he basel i ne f or al l of t hi s have yet

6 t o be accept ed by t hi s Cour t . But I have not hear d any

7 ar gument f or why t he vast maj or i t y of t hem wi l l not

8 necessari l y obt ai n, and t hey ar e not i n any of t he

9 br i ef s. To use t he Toyot a exampl e, t her e si mpl y i s no

ot her def ense. Ther e i s none. Fai r use doesn' t appl y11 t o t he vast maj or i t y of t he scenar i os t hat I ' ve j ust

12 descr i bed.

13 Fi nal l y, out sour ci ng: Congr ess di d not want

14 U. S. j obs t o go over seas. Congr ess i n t he ver y same

st at ut e i n sect i on 601 was hoar di ng manuf act ur i ng j obs

16 t o t he Uni t ed St at es; and as t he gover nment s ai d on t he

17 l ast page of i t s Qual i t y Ki ng, " i t i s hi ghl y unl i kel y

18 t hat t he same Congr ess t hat hoar ded j obs i n t he Uni t ed

19 St at es was pr epar ed t o t ol er at e a si t uat i on i n whi ch

t her e was et er nal downst r eam cont r ol " t hat t he copyr i ght

21 owner s woul d be encour aged t o sei ze by sendi ng j obs

22 over seas.

23 So unl ess t her e ar e f ur t her quest i ons f r om

24 t he Cour t - - I saw, I j ust r eal i zed I sai d t he same

t hi ng t wi ce i ncor r ect l y t o J ust i ce Gi nsbur g. 905 and

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1 906 ar e exampl es of i nt er nat i onal - - exhaust i on.

2 Unl ess t her e ar e f ur t her quest i ons, I t hank

3 t he Cour t and r espect f ul l y r equest t hat t he Cour t

4 r ever se t he j udgment bel ow.CHI EF J USTI CE ROBERTS: Thank you, counsel ,

6 counsel .

7 The case i s submi t t ed.

8 ( Wher eupon, at 12: 05 p. m. , t he case i n t he

9 above- ent i t l ed mat t er was submi t t ed. )

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agrees 7:17 8:2,7 13:1 23:3 12:21 19:14 46:7A Alito 25:11,15 apply 7:21 8:10 43:19 50:19 bit 34:16ability 45:3,16

31:6 46:6 11:12,20 12:19 authorizing BLUECHRIS...able 28:2150:22 51:9 13:1,12 30:13 43:24 1:4abolish 3:20

allow 40:9,10,17 30:17 31:7 available 39:21 bluntly 18:10above-entitled 50:8 53:10 avoid 51:6 Bobbs-Merrill1:12 54:9

allowed 20:9 applying 9:15 aware 30:23 22:7,13,17,20abroad 10:12allowing 14:17 52:25 awash 10:14 42:13 44:1111:6,8,10,16

14:21 24:23 approach 48:24 awfully 48:8 45:19,22 46:211:23 12:20alternative 49:2 a.m 1:14 3:2 46:7,9,12,1414:18 20:25

38:12 appropriate 47:15,23 48:1328:3 38:11 Bamending 47:24 45:13 49:13 52:840:18,20 41:9B 1:18 2:6 24:5America 28:20 approved 10:3 body 32:1843:24 45:8back 4:1 5:11American 13:8 Ardestani 33:4 book 14:4 27:1,5absolutely 9:1

8:19 12:2213:11 26:2 argue 25:12 27:8,16 31:1952:716:20 22:2529:25 29:13 46:17,23absolutist 21:1723:16 26:11,18Americans argues 22:5 books 24:1321:21 26:23 34:1328:25 arguing 5:12 7:8 26:5,15 27:12accepted 5:336:8 41:9amicus 1:22 25:20 32:21 29:22 30:1451:1 53:644:14 45:202:10 17:9 42:8 33:13,15 44:21 31:9,14 36:24accomplish 52:1amount 9:19 48:3 49:4 52:3 37:12 41:2443:11 45:11

backwards45:24 argument 1:13 45:23 49:5acknowledges 52:23announced 21:2 2:2,5,8,12 3:3 50:13,1419:25

bailees 14:1 15:3answer 14:23 3:7 4:7 5:2 8:5 bookstore 26:9acquired 28:715:3,4 25:415:16 28:24 9:18 13:15 border 41:741:8

ban 43:1841:15 21:25,25 24:5 borrowingAct 9:23 24:15base 29:7answered 18:15 24:22 29:16 22:2046:8baseline 53:5

answering 15:20 38:25 42:7,13 bottom

45:6action 10:24,25 basic 18:8 34:20answers 5:5 43:10 44:4,11 bought 27:825:3

49:1741:18 49:22 45:19 47:13,20 29:22adaptation 22:7basically 11:21antecedent 51:22 53:7 Breyer 13:6,15address 24:10basis 52:750:11 arguments 53:4 13:18,24 14:739:1 41:25bear 30:6,8 53:2anybody's 48:16 53:5 14:12,23 15:1addressed 39:23Beethoven 20:3anyway 45:6 Art 36:21 15:8,15 25:24adhere 4:21

20:5appeals 21:19 artfully 28:15 26:1,7,17,2144:23behalf 1:17,1832:12 articulated 6:22 28:14,17 29:4adopt 20:16

2:4,7,14 3:8appear 38:10 Asia 2

supreme court right of first sale transcript

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