THE NEW MEANING OF “FIRST SALE” DOCTRINE 

By: Dr. Iman Sjahputra, SH, Sp.N., LL.M

Up until today people still question on when a creation can be reproduced, published and circulated without violating the creator’s copyright.  The question is very logical because in the copyright law perception there is no obligation to register a copyrighted work.

Copyright is a part of the Intellectual Property Rights (IPR).  The scopes of IPR include two kinds of rights, namely copyright and industrial property right.  The industrial property consisting of patent, utility models, industrial designs, trade secret, trade marks, service marks, trade names or commercial names, appellations of origin, indications of origin, protection of unfair competition, new varieties plants protection, and integrated circuit.  Copyright itself covers a wide range of creative works in the fields of art, literature and science.

If in the field of industrial property right there is a registration requirement, but it does not apply to the copyright.  As the consequences there are many copyright infringements found within the public, and it must be admitted that copyright infringements are often not known by the public.

One of the reasons of the rampant copyright infringements is due to the presence of the internet.  The excesses of information disclosure via internet have created the rampant of copyright infringements.  Through search engines such as Google, Yahoo and Bing, anyone can easily get the varieties of knowledge information derived from one's creation for free.  There is no restriction whether a reproduction or the using of someone’s creation is allowed or not.  Whereas the Copyright Law clearly regulates the rights to announce, reproduce (copy), use, duplicate and print of a creation.  The point is that any use of the copyrighted works shall be authorized by the creator.

 

As an example is what happened to the novel books written by famous author John Grisham.  The novel by John Grisham, a former lawyer from the United States, so enthused among people around the world, because some of his creation such as "The Firm" has been filmed.  As a writer Grisham indeed expect royalties from his work as it was agreed with his publisher or producer because essentially, IPR inherent material right which is entitling the creators or owners to gain profits from their intellectual creation.

One more thing that arise the problem in the field of copyright is the application of the “first sale” doctrine.  It means whether or not the creator or publisher can prohibit a third party who had bought a book to re-export the book to the creator’s home country or to any other country?  Because the price of the book in other countries are cheaper than the original country, so the purpose of the re-export is to gain profit from the price differences.  In Indonesia Grisham’s hard cover book versions is sold within Rp. 265,000.00 to Rp. 300,000.00, while the soft cover book version can be bought at a price of Rp. 80,000.00.  The prices in Indonesia are much cheaper than the prices in the United States.  These price differences open the people’s interests to re-export the book to the United States.

The question is, whether the “first sale” doctrine known in copyright law can be preserved?  Considering there is a striking difference in prices in many countries.  Whereas we also know that in copyright law there is an exhaustion right in which the right of the author or publisher is ended when the book is already in the buyer’s hand.  It means the author or publisher cannot forbid or cease the buyer to resell the books that have been purchased by the buyer.  Unless the book re-publish is not allowed because the right to produce is still in the hand of the author or publisher.  The existence of the exhaustion right doctrine can be used as an argument by the buyer that the buyer has the right to resell the copyrighted books bought by the buyer. 

It shall be understood that “first sale” doctrine is a concept that only applies to the geographical boundaries of a country.  However, by the internet presence with its borderless nature, then a creation can be circulated beyond one’s country territorial boundaries.

Meanwhile, the “first sale” concept was fading after the U.S. Supreme Court decision in Kirtsaeng v. John Wiley case.  In this case the U.S. Supreme Court allowed the books re-export offered by Kirtsaeng through eBay.  Kirtsaeng is a college student in U.S., and he saw there is a chance to gain profit from the price differences of the books in the U.S.  Then Kirtsaeng asked his relatives in Bangkok to buy the books in Bangkok and re-sell it on the internet through eBay online merchants.  Finally Kirtsaeng got the profits.  This action then was known by the publisher John Wiley, and then sued to the Court, but the Court decided to win Kirtsaeng.

From this case we can conclude that the U.S. Supreme Court considers the “first sale” doctrine not only binding limited to a state border but also applies in cross country border.

* Author is an advocate who handles many cases in Intellectual Property Rights.


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