The Economics of Kirtsaeng v. John Wiley & Sons, Inc : The Efficiency of a Balanced Approach to the First Sale Doctrine

Can a buyer of copyrighted works abroad import them into the United States or resale them? This question is currently pending before the Supreme Court in Kirtsaeng v. John Wiley & Sons.The parties' positions in this case as well as the Justices' questions during oral argument included extensive inquiry of economic effects of the Court's possible rulings. This Essay shows that this economic analysis is incomplete. The defendant's position, if adopted, will make geographic market segmentation difficult and thus decrease the incentives to create. The plaintiff's position, if adopted, will increase transaction costs in resale markets, which will create an inefficiently chilling effect on these markets. The Essay suggests that a more balanced approach, which is similar to the approach of the Solicitor General and requires a license from importers but not resellers can better promote the public welfare