The First-Sale Doctrine: Parallel Importation and Beyond
| Jurisdiction | South Africa |
| Author | S Karjiker |
| Published date | 27 May 2019 |
| Citation | (2015) 26 Stell LR 633 |
| Date | 27 May 2019 |
| Pages | 633-661 |
633
THE FIRST-SALE DOCTRINE: PARALLEL
IMPORTATION AND BEYOND
S Karjiker
BSc LLB LLM LLD
Associate Professor, Department of Mercantile Law, Stellenbosch University
1 Introduction
In 2013, the United States (“US”) Supreme Court gave its judgment in
Kirtsaeng v John Wiley & Sons Inc,1 which appeared t o fundamentally change
the US’ position in relation to copyright law and par allel importation. The
aforementioned judgment serves as an ideal opport unity to reect on the
corresponding legal p osition in South Africa. As wil l be illustrated, not only
is the South Africa n position very different from that wh ich now exists in
the US, but it is striki ng how different the US legal analysis is from that
under South Afr ica n law. This ar ticle will use the Kirtsaeng case to highlight
the shortcomings i n our current approach to c opyright law and parallel
importation, a nd the need to re-evaluate our legal p osition. Consideration of
the legal position relating to paral lel importation is not an esoter ic, academic
indulgence. The law in this a rea helps to determine the t ype of market which
may exist for a particular p roduct, and could affect consumer welfare.
This art icle will illustrate that our app roach to parallel importat ion is a
rather narrow, literal one – base d on questionable authority. It is an approach,
which fails to properly consider the approp riate domain of copyright law, and
fails to have regard to its pur pose. What we require is a more far-reaching
analysis of parallel import ation, based on principles, and the effec ts on
consumer welfare, which will p rovide a proper basis for future challenges that
will be posed in this eld by developments such a s the emergence of digital
copyright work s.
It is submitted that the rst-sale doctrine,2 also known as the do ctrine of
exhaustion, is an issue wh ich is central to parallel impor tation (although it
potentially goes beyond parallel imp ortation), but it has received no serious
consideration in our law. Briey, the rst-sale doctrine serves to prevent a
copyright owner from c ontrolling the sales of copies of its copyright work
beyond their initial, author ised distribution. Th is article will consider the
origin and legal ba sis of the rst-sale doctrine, with sp ecic reference to
copyright law. As will be illustr ated, while our courts have refus ed to consider
it as a legal principle, it features prom inently in US (and European) case law.
The failure t o consider the rst-sale doctr ine when dealing with the question
1 Kirtsaeng v Joh n Wiley & Sons Inc 2013 133 S Ct 1351.
2 Although in mo st literatur e the term “f irst sale doctr ine” (that is, withou t the hyphen betwee n “first” a nd
“sale”) is used , the hyphen is gra mmatically requ ired.
(2015) 26 Stell LR 633
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of parallel importat ion in South African law has, a rguably, led to our rather
supercial treat ment of subjec t.
At the outset, it is import ant to make it clear that this art icle’s focus on US
law should not be construed as s uggesting that we should simply follow its
legal position, due to the import ance of that jurisdiction in matt ers concerning
intellectual prope rty law. There are two reasons for consideri ng the
comparative position in US law. First, it was US law which initially developed
the rst-sale doctrine in relation to intellectu al proper ty, and to demonstrate its
common-law origin. In ot her words, the US legal position is merely indicative
of how signicant t he rst-sale doctrine could be in relation to a n issue such
as parallel import ation. Second, it also illustrat es what could happen if the
rationale for a legal principle is forgotten, and when it is t hen subsequently
simply applied in a rigid and inst itutionalised manner. As wil l be illustrated
below, even though legal analysis in the US has generally included an acut e
awareness of the economic conseque nces of legal reg ulation, it has, arguably,
failed to appropriately apply the rst-sale doctrine in relation to digital works,
appropriately. Although the focus of this work is not the application of the
rst-sale doct rine to digital works , it does illustrate how having a developed
legal principle such as the rst-sale doct rine would enable us to address futu re
challenges, which will be posed t o copyright law as a consequence of the
emergence of digital copyrig ht work s, in a principled manner. In other words,
far from suggesti ng that our law should be based on the legal interpretat ion of
a single jurisdiction, the focus on US law relating to the rst-sale doctrine also
serves as a cautionar y tale.
After an int roduction to the relevant copyright law, this article will provide
an outline of parallel impor tation, and the reason for its existence. The or igins,
purpose, and effect of the rst-sale doctrine will then be intr oduced. This will
be followed by a consideration of the respective copyright-law positions in
the US and South Africa conce rning parallel impor tation, and a critique of
the South African legal p osition. Central to the criticism of our muddled legal
position concerning pa rallel importation has been the refu sal by our courts to
consider the rst-sale doctrine. For completeness, further developments in the
US and Europe concerning the rst-sale doctrine in relation to digital works
will also be considered.
2 Copyright law
Copyright protection on ly exists by virtue of the rights gra nted pursuant to
the Copyright Act 98 of 1978 (“SA Copyright Act”).3 Our copyrig ht law has
its origins in English law, and, al ready back in the 18th century, the House
of Lords rejected the notion of any common-law copyr ight in Donaldson v
Becket.4 Copyright protec tion, therefore, cannot extend beyond the right s
expressly provided for by st atute. The SA Co py right Act species the
types of works, which are eligible for copyr ight protection, and determ ines
3 Northern Of fice Microcomp uters (Pty) Ltd v Rose nstein 1981 4 SA 123 (C) 128.
4 17 Parl Hist Eng 953 (HL 1774).
634 STELL LR 2015 3
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