Score one for the math-geeks. Supap Kirtsaeng just made history by succeeding before the Supreme Court. The former doctoral student in mathematics won’t have to pay the $600,000 in damages that a jury in New York awarded publisher Wiley & Sons.
That decision had been upheld on appeal before it was reversed by the Supreme Court in a 6-3 decision this week.
What had the citizen of Thailand done to earn the wrath of the publishing industry? After arriving in the U.S. and experiencing sticker shock when looking for textbooks, he had asked friends and family abroad to buy international versions of various books (legally produced and distributed at much lower prices) and to send them to him.
As a professor and former student, I can attest that this is not uncommon. However, this student took things a bit further. According to trial testimony, he started a thriving business re-selling hundreds of imported books online, earning an estimated $100,000 in profit.
Not surprisingly, he was sued by the publisher, and that’s where it gets interesting. It is a joy to read the ruling by the Supreme Court (available at: http://1.usa.gov/149xKz0). This topic is so far away from loaded social issues that we actually had a decision where Justices Ruth Bader Ginsburg and Antonin Scalia found themselves arguing for the losing team together (Justice Kennedy joined in Justice Ginsburg’s dissenting opinion).
Moreover, Justice Samuel Alito joined with Justice Elena Kagan in a concurring opinion.
The question turned on whether the law limited the resale (“First-Sale Doctrine”) of legally produced and purchased products to those that were produced and sold inside the U.S. The court’s majority rejected that interpretation, which had been forcefully made by many copyright holders.
Not surprisingly, this not being a constitutional issue, some justices suggested that those unhappy with the decision could take their arguments to Congress and have the law changed.
The arguments on both sides were refreshingly rational and straightforward.
Justice Ginsburg wrote: “Because economic conditions and demand for particular goods vary across the globe, copyright owners have a financial incentive to charge different prices for copies of their works in different geographic regions. Their ability to engage in such price discrimination, however, is undermined if arbitrageurs are permitted to import copies from low-price regions and sell them in high-price regions.”
That passage alone would be worth quoting in an economics textbook, no matter whether it be produced here or abroad.
Of course, there are competing interests in this case that have to do with consumer welfare.
The copyright holder alliance does not make a spurious argument when they say many students abroad currently gain access to textbooks they could otherwise not afford. But the court was not supposed to weigh the profit motives of the producers or the welfare impact of consumers here versus in other countries.
The court was asked to interpret what the law stated, and they got it right.
Now, it is up to lawmakers to decide whether the statute needs changing.
In the meantime, Kirtsaeng has completed his doctoral studies at USC. A monograph of his thesis, titled “Embedded contact homology of a unit cotangent bundle via string topology,” is available at Amazon for $69.
One wonders whether he had the good sense not to make it available for less in his native Thailand.
Dr. Michael Reksulak teaches economics and public finance in Georgia Southern University’s College of Business Administration. He may be reached by email at mreksula@georgiasouthern.edu.