Administrative Law

(by Peter Hirtle)

One wouldn?t normally expect a lawsuit between a watch manufacturer (Omega) and a big-box retailer (COSTCO) about the scope of ?gray-market? sales of manufactured goods to have much of an impact on libraries and archives, but the upcoming Supreme Court case of Costco v. Omega is the exception.  At stake are some of the core activities of libraries and archives. 

The case centers on the ?first sale? doctrine in copyright law codified in Section 109: the idea that once a copyright owner has sold a work, its ability to control further distributions and uses of that work end.  In the Appeals Court decision now before the Supreme Court, the court found that works made and sold overseas did not have 109 protections.  As Kevin Smith noted in an earlier posting on the case, if 109 does not apply to books manufactured abroad, it raises the issue of whether libraries can legally lend foreign items.

The threat that the Appeals Court decision poses to traditional library lending, according to Brandon Butler of ARL, led the Library Copyright Alliance to file an amicus brief that argues that right of libraries to lend foreign material should be protected.  For similar reasons, several library associations joined the amicus brief authored by EFF and summarized here. 

Unfortunately, the excellent LCA brief by Jonathan Band doesn?t go far enough.  It is focused on library lending.  And it notes that Section 602(a)(3)(c) of the Copyright Act does allow a library to import up to 5 copies of a foreign work ?for its library lending or archival purposes,? activities that would be unaffected by a decision in this case (though Band has identified a neat little technicality of concern). 

Section 109 is about more than just the lending of copyrighted materials, however.  Section 109(c) also authorizes the public display of a copyrighted work, ?either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located.?  In most archival repositories, foreign manuscripts are not lent to individuals, but rather they are allowed to look at them in a reading room.  Similarly, foreign art works legally acquired from individuals other than the copyright owner are publicly displayed on museum walls.  The decision of the Appeals Court that the phrase ?lawfully made under this title? does not apply to foreign goods acquired from someone other than the copyright owner puts both of these practices in jeopardy.

Imagine the situation at a place like the Harry Ransom Center.  Because it acquired the Tom Stoppard Archives from Stoppard, the copyright owner, it would still be able to use Section 109 to display Stoppard?s own material from the collection.  It would not, however, be able to use Section 109 to show to users any 3rd party copyrighted material created abroad and included in the collection.   Nor would it be able to use Section 109 to put non-Stoppard-created material on exhibit.  It might find itself in a similar situation to the Irish National Library, which had to secure a special act of Parliament to exhibit physical copies of some James Joyce manuscripts (as I discuss on p. 72 of Copyright and Cultural Institutions).

The situation for archives isn?t entirely dire if the decision is upheld.  A repository could still develop a fair use rationale for the public use of foreign manuscripts.  Alternatively, if the LCA?s request that library lending be acknowledged in a decision is accepted, an archives could argue that it is ?lending? a manuscript to a patron in a reading room, even if the work is not allowed to leave the room.  It would be much harder, however, for a library or museum to argue that public exhibition is a fair use.  We might not be able to display publicly foreign works without the permission of the copyright owner.

Big thanks, therefore, to the library associations for speaking out on the need to have first-sale apply to items purchased abroad as well as in the U.S.  This is a case that we will all follow closely.