Kirtsaeng and books from the UK marked "not for sale in the U.S.A."

Question

Many older books printed for the UK market (most notably The Great Gatsby) had text on the back cover resembling the following:

For copyright reasons this book is not for sale in the U.S.A.

Under Kirtsaeng v. John Wiley, I'm pretty sure this has no legal meaning in the US any more, but I have some questions:

• What was the historical basis for this notice?
• Is this notice indeed legally void in the United States under Kirtsaeng (assuming the book was lawfully acquired in the UK or its territories)? In other works, could I legally sell such a book in the US?

Answer 1

What was the historical basis for this notice?

This is a hypothesis but a likely one: price discrimination. The market in the US was willing to pay more for textbooks than the UK market is and the publisher makes greater profits as a result. This is more likely in the case you cite.

For older publications it is usually because different publishers were licensed by the rights holder in different jurisdictions. The "multi-national" corporation is a largely late 20th century creation, particularly in book publishing. Also, prior to the 1990s the US was not a signatory to the Berne Convention on copyright: during the late 19th and early 20th century the US was regarded as something of an IP "pirate" nation.

Is this notice indeed legally void in the United States under Kirtsaeng (assuming the book was lawfully acquired in the UK or its territories)? In other works, could I legally sell such a book in the US?

It is legally void to the extent that it contravenes the first sale doctrine, that is a copyright owner cannot enforce their rights on a physical copy once it is legally no longer their property. However, there is a growing trend to licence copies rather than sell them - in such a case the first sale doctrine is not relevant - the ownership of the physical copy never passes from the copyright owner. Such rights can also be waived in a contract, however, in such a case the cause of action is breach of contract not breach of copyright.

Answer 2

When an author writes a book, it is frequently licensed to one company in the United States and another company in the U.K.

If the publishing company Bathroom Books gets permission to print and sell the books pursuant to a license from the author in the U.S., that contract will usually include a non-compete clause that prohibits Bathroom Books from selling books it prints to retail customers in the U.K. or to wholesale customer that intend to sell the books at retail in the U.K., where the permission to print and sell the books pursuant to a license from the author has been granted to WC Books (and vice versa).

The clauses are about enforcing the peace between distributors given different territories, because different publishers have better sales networks in different places.

The first sale doctrine, clarified for purposes of U.S. copyright law in Kirtsaeng v. John Wiley, makes the "not for sale in the U.S." language inapplicable under U.S. law to a consumer who purchases the book in the U.S. and then resells it used to someone in the U.S.

Whether it bars someone who purchased the books on a wholesale basis in the U.K. from reselling the books in the U.S. depends to some extent on the nature of the contract between the wholesaler and the publisher. For example, if the wholesaler is selling the books on a consignment basis for the publisher and has a right to return the unsold books without payment to the publisher and doesn't have to pay for the books sold until they are sold at retail, the first sale doctrine likewise does not apply.

It also isn't entirely obvious that the "first sale doctrine" makes it illegal to count U.S. sales towards the amount due to the U.S. publisher rather than the U.K. publisher, even if they are sold by WB Books instead of Bathroom Books. (Re the faux names of the publishers, one of the first books I every handled copyright and licensing for, a year out of law school, involved bathroom humor.)

Also, if the case ends up in a U.K. court before it reaches a U.S. court, the first sale doctrine may or may not apply, but Kirtsaeng v. John Wiley will not be binding precedent, so the applicable rule of law might be different. And, it isn't hard to write a binding forum selection clause that insures that the case would be resolved in a U.K. court rather than a U.S. court if the law in the U.K. were more favorable.