Class 24
Copyright, Winter, 2010
International Issues
Randal C. Picker
Leffmann Professor of Commercial Law
The Law School
The University of Chicago
[email protected]
Copyright © 2005-10 Randal C. Picker. All Rights Reserved.
Organizing Domestic and
Foreign Markets

Two Examples
DVDs:
Technological Separation
Quality King: Legal Separation
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[SC: Amazon Incred US]
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[SC: Amazon Incred UK]
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Comparing Prices

Same DVD
US:
$17.99
UK: £14.99


Exchange Rate (as of April 21, 2005): $1 =
£0.510915, $1.91969 = £1
Matching Prices
$17.99
= £9.37
£14.99 = $28.77
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[SC: US Encoding]
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[SC: UK Encoding]
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[SC: Amazon on Encoding]
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601. Manufacture, importation,
and public distribution of
certain copies

(a)
 Prior
to July 1, 1986, and except as provided by
subsection (b), the importation into or public
distribution in the United States of copies of a work
consisting preponderantly of nondramatic literary
material that is in the English language and is
protected under this title is prohibited unless the
portions consisting of such material have been
manufactured in the United States or Canada.
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602. Infringing importation
of copies or phonorecords

(a)
Importation
into the United States, without
the authority of the owner of copyright under
this title, of copies or phonorecords of a
work that have been acquired outside the
United States is an infringement of the
exclusive right to distribute copies or
phonorecords under section 106, actionable
under section 501.
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501. Infringement of
copyright

(a)
Anyone
who violates any of the exclusive
rights of the copyright owner as provided by
sections 106 through 121 or of the author
as provided in section 106A(a), or who
imports copies or phonorecords into the
United States in violation of section 602, is
an infringer of the copyright or right of the
author, as the case may be.
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Quality King

Core Facts
L’anza
makes shampoo; labels are
copyrighted works
L’anza sells at higher prices in the US than
in foreign markets
Quality King acts as middleman to bring
shampoo back to US
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Quality King
Ninth
Circuit rules for L’anza, saying that
applying 109 first-sale defense would gut
602
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Making, Selling, Importing

Hypo: US Printing, Foreign Sale
I
print a copyrighted book in the US
I sell copies in the US for $50
I export copies to the UK and sell them
there myself for $25
Importer buys in the UK for $25, takes the
book to the US and sells for $35

How does Sec. 602 apply to this situation?
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Quality King Result

This is the “round trip” case
Books
started in US, left and returned
Under Quality King, 109(a) first-sale rights
“attach”
Attach based on location of printing in US—
“lawfully made under this title”
 That is independent of where the particular
copy of the book is sold (see fn. 14 on
p.661)

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Making, Selling, Importing

Hypo: Foreign Printing, Foreign Sale
I
print a copyrighted book in the US and sell
copies in the US for $50
I print copies in the UK and sell them there
for $25
Importer buys in the UK for $25, takes the
book to the US and sells for $35

How does Sec. 602 apply to this situation?
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Analysis

This is the one-way case
109(a)
doesn’t attach, seemingly, to the
books printed in the UK
602(a) should apply and should block
imports

Does this make it possible to enforce price
discrimination in this case?
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Analysis
Only
way to enforce the across-country
price discrimination is by moving the
printing overseas

Contrary to US interests?; compare Sec.
601
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602(a) Rewrite

(a)
Importation
into the United States, without
the authority of the owner of copyright under
this title, of copies or phonorecords of a
work that have been acquired outside the
United States is an infringement of the
exclusive right to distribute copies or
phonorecords under section 106, actionable
under section 501.

How would Quality King come out?
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Analysis

109 and First-Sale Doctrine
Irrelevant

under Rewrite
Overinclusive?
Would
cover US tourist buying book in
England to read on plane home
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But See 602(a)(2)

This subsection does not apply to(2)
importation, for the private use of the
importer and not for distribution,


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by any person with respect to no more than one
copy or phonorecord of any one work at any one
time, or
by any person arriving from outside the United
States with respect to copies or phonorecords
forming part of such person’s personal baggage
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Legislative History

From the Congressional Report
 Section
602(a) first states the general rule that
unauthorized importation is an infringement merely
if the copies or phonorecords “have been acquired
outside the United States,” but then enumerates
three specific exceptions … If none of the three
exemptions applies, any unauthorized importer of
copies or phonorecords acquired abroad, could be
sued for damages and enjoined from making use
of them, even before any public distribution in this
country has taken place.
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Making Copies I

Hypo: Plain Vanilla
Author
A writes and publishes book
Buyer buys it at store for $20
Buyer copies the book and sells copies

Copyright issues?
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Making Copies II

Hypo: US, then UK
Author
A, a United States citizen, writes and
publishes book in the United States
Buyer buys it at store in the US for $20
Buyer moves to the UK with the book and
copies it there and sells copies

Copyright issues?
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Answer

Chasing Buyer
Buyer
is in the UK as are his assets
Two possible strategies
Path 1: Sue in the US, get judgment there,
and take it to UK to sue to get foreign
judgment—the US judgment—enforced
there
 Path 2: Sue in the UK and get judgment
there

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Answer

Focus on the Differences
Path
1
US author will be domestic author who
published book under US law
 Central question in the US case will be one
of extraterritoriality: does US law apply to
actions taken outside of the US (here the
copying in the UK)?

• See that in Subafilms
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Answer
Central question in the follow-on UK case
will be about the recognition of foreign
judgments (what should a UK court do with
a US judgment?)
 We see a version of this in Viewfinder

• Suit brought in France under French law;
judgment then brought to the US courts for
enforcement
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Answer
Path
2
If Author goes directly to the UK, then the
question will be what rights does a foreign
author—the US author—have under
domestic UK copyright law
 That in turn is a question about how the
relevant copyright conventions and treaties
operate

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Answer
• Berne Convention
– http://www.wipo.int/treaties/en/ip/berne/
• Universal Copyright Convention
– http://portal.unesco.org/culture/en/ev.phpURL_ID=1814&URL_DO=DO_TOPIC&URL_SECTIO
N=201.html
• TRIPs
– http://www.wto.org/english/tratop_e/TRIPS_e/TRIPS_
e.htm
• WIPO Copyright Treaty
– http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.ht
ml
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Answer
• WIPO Phonograms
– http://www.wipo.int/treaties/en/ip/phonograms/
• US Bilateral Treaties
– http://www.copyright.gov/circs/circ38a.pdf
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Setting Up Viewfinder I

Hypo
Jeff
Koons makes an original sculpture
Rogers sees it and takes a photograph of it
Rogers sells the photograph to a third party

Copyright issues?
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Setting Up Viewfinder II

Hypo
Jeff
Koons sews an original dress
Rogers sees it and takes a photograph of it
Rogers sells the photograph to a third party

Copyright issues?
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Viewfinder

Start With
http://firstview.com/

French Law
http://195.83.177.9/code/index.phtml?lang=
uk
L 122-4
 L 112-2
 L 122-5(3)

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US Recognition of Foreign
Judgments

http://www.law.upenn.edu/bll/archives/ulc/f
nact99/1920_69/ufmjra62.pdf
Focus

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on Section IV(B)(3):
“A foreign judgment need not be recognized
if … (3) the [cause of action] [claim for relief]
on which the judgment is based is repugnant
to the public policy of this state;”
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Subafilms

Law Design Question
Where


should US law apply and why?
In the Making Copies II hypo, should US law
apply to the UK violation? Should we rely
instead on UK law
More Minor Question
How
does the “to authorize” language at the
top of 106 influence this?
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106. Exclusive rights in
copyrighted works

Subject to sections 107 through 121, the
owner of copyright under this title has the
exclusive rights to do and to authorize any
of the following:
(1)
to reproduce the copyrighted work in
copies or phonorecords;
(2) to prepare derivative works based upon
the copyrighted work;
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