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Supreme Court will hear appeal in textbook copyright case

WASHINGTON — The Supreme Court agreed Monday to decide a copyright case with important implications for the large and growing markets in discount and Internet sales.

The justices said they will hear an appeal from a Thai student doing graduate work in the United States who tried to make ends meet by re-selling textbooks that family and friends first purchased abroad. A jury awarded textbook publisher John Wiley & Sons $600,000 after deciding that math graduate student Supap Kirtsaeng infringed on the company’s copyrights.

The issue at the Supreme Court is whether U.S. copyright protection applies to items that are made abroad, purchased abroad and then resold in the U.S. without the permission of the manufacturer. The high court split 4-4 when it tried to answer that question in a case in 2010 involving Costco and Swiss watch maker Omega.

Justice Elena Kagan sat out the Costco case, but will join the other justices in hearing the new dispute.

Discount sellers like Costco and Target and Internet giants eBay and Amazon help form an estimated $63 billion annual market for goods that are purchased abroad, then imported and resold without the permission of the manufacturer. The U.S.-based sellers, and consumers, benefit from the common practice of manufacturers to price items more cheaply abroad than in the United States. This phenomenon is sometimes called a parallel market or gray market.

The high court already has ruled that copyright protections do not apply when the goods are made in the U.S., sold abroad and reimported. This case concerns only foreign-made items.

Federal judges have come to different conclusions about whether copyright law applies in Kirtsaeng’s and other cases.

Kirtsaeng returned to Thailand in 2010 after doing graduate work at the University of Southern California, said his lawyer, Joshua Rosenkranz. Earlier, he received his undergraduate degree from Cornell University in Ithaca, N.Y.

While at USC, Kirtsaeng arranged for family and friends living abroad to purchase textbooks and ship them to him. He resold the copies on eBay. Eight textbooks sold by Kirtsaeng were published by Wiley’s Asian subsidiary. The company sued the student in federal court in New York.

eBay was among the outside parties urging the court to hear the case and decide it in Kirtsaeng’s favor.

The case will be argued in the fall.

The case is Kirtsaeng v. John Wiley & Sons, 11-697.

Other action

Also on Monday, the Supreme Court:

— Rejected another appeal from Jeffrey Skilling, the ex-CEO of disgraced energy giant Enron.

The high court refused to hear his appeal of a lower court’s rejection of his theory that a flaw in his earlier trial meant that the whole thing should have been thrown out.

Skilling was convicted in 2006 of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of the once-mighty Houston-based energy giant. The company collapsed into bankruptcy in 2001 under the weight of years of illicit business deals and accounting tricks. Skilling is serving a sentence of more than 24 years at a minimum security prison outside Denver, although he is awaiting resentencing.

In 2010, the Supreme Court said one of his convictions was flawed when it sharply curtailed the use of the “honest services” fraud law, and told the 5th U.S. Circuit Court of Appeals in New Orleans to decide whether he deserved a new trial.

The lower court said no, but Skilling’s resentencing can move forward.

— Declined to get involved in the Cleveland Browns’ attempt to force former center LeCharles Bentley to arbitrate his claims over a career-ending staph infection. Monday’s denial keeps the lawsuit in Cuyahoga County court in Cleveland.

The team had appealed a July ruling by an Ohio appeals court that said the issue isn’t related to the NFL collective bargaining agreement and can be handled in county court.

Bentley says he contracted the infection while rehabbing from a 2006 knee injury at the team’s suburban Cleveland facility. The team is accused of failing to tell Bentley about unsanitary conditions and other players who contracted staph.

The team argued that state and federal laws support arbitration over litigation.

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