New York University Public Law and Legal Theory Working Papers

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The U.S. Supreme Court’s recent ruling in Kirtsaeng v. John Wiley & Sons would seem no trivial event for stakeholders in content-reliant industries. The upshot of the Court’s decision — that the Copyright Act cannot be used to prevent the unauthorized importation of copies of works, even if manufactured abroad, whose “first sale” has already occurred — will, at least initially, throw a wrench into many companies’ existing business models.

As one would expect, commentary on the decision has been extensive. With few exceptions, however, commentators attempting to predict the impact of Kirtsaeng have not looked beyond copyright law to understand the broader legal landscape in which so-called “gray goods” are situated. That landscape includes, among other features, the Federal Circuit’s doctrine on rights exhaustion in patent law, the growing number of state laws regulating retailers’ sales of gray goods, and the now-widespread use of licenses to restrict the transferability of goods — especially of the digital variety.

As these examples show, the Kirtsaeng ruling does not exist in a vacuum. Indeed, when one examines what is arguably the most significant feature of the gray-goods landscape in the United States — federal trademark law — it is difficult not to wonder if the Supreme Court’s ruling will have much of an impact at all. Even a cursory examination of trademark law’s gray-goods jurisprudence reveals that it has become untethered from both its supposed consumer protection and brand-goodwill rationales, opting for an approach that unduly favors trademark owners. Kirtsaeng notwithstanding, trademark law is where the action is.

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Kirtsaeng, Wiley, gray goods, grey goods, trademark, copyright, first sale