Meet the Thai math prof whose copyright case is headed for SCOTUS – again

April 11, 2016

(Reuters) – In the eight years since the publisher John Wiley & Sons first sued him for copyright infringement, almost all of the particulars of Supap Kirtsaeng’s life have changed. Back then, he was an unmarried graduate student in mathematics at the University of Southern California with a side business reselling Asian-produced versions of American textbooks. Today, after nearly a decade of litigation setbacks and advances, Kirtsaeng is back in Thailand. His textbook business is shuttered and he and his old girlfriend broke up, but he found a job as a professor, married a colleague and is finally feeling financially secure.

What has not changed, Kirtsaeng told me Monday, in his first print interview, is his conviction that he wasn’t doing anything wrong by reselling those textbooks, and that the lawyers who helped him prove it are entitled to be paid for their work.

The U.S. Supreme Court has already sided with Kirtsaeng on the first point. In a 2013 decision considered a boon to the $63 billion gray market, the justices ruled that Kirtsaeng was not liable for copyright infringement because the “first sale” doctrine, which allows the resale of copyrighted material, extends to legitimate goods manufactured abroad and imported into the U.S.

Kirtsaeng and his lawyers contend that he was only able to establish this critical copyright precedent because he found counsel willing to represent a grad student and small business owner against a global company with billions of dollars in annual revenue. The Copyright Act permits litigation winners to ask for losers to pay their legal fees. After his Supreme Court win in 2013, Kirtsaeng and his counsel, Sam P. Israel PC and Orrick Herrington & Sutcliffe, asked for about $2 million from John Wiley. Their fee request was denied by the trial court and the 2nd U.S. Circuit Court of Appeals, which focused in a terse unpublished opinion on Wiley’s “objective reasonableness” in bringing an infringement case against Kirtsaeng.

In January, the Supreme Court granted Kirtsaeng’s second petition for certiorari, this time to resolve uncertainty among the federal appellate courts on the appropriate standard for fee-shifting in Copyright Act litigation. Next week, the Thai professor will have the rare distinction of being the subject of a second oral argument at the Supreme Court. His lawyer Joshua Rosenkranz of Orrick will go up against John Wiley counsel Paul Smith of Jenner & Block and the U.S. solicitor general’s office, which filed an amicus brief backing the textbook publisher.

Kirtsaeng has not previously discussed the long-running case, but in advance of next week’s arguments, reached out to tell his side of the story.

According to the professor, “money has never been my primary objective.” If it were, he said, he would never have come to the U.S. to study math at all. His plan as a boy was to go into computers, but then, Kirtsaeng said, he was offered a scholarship to go to college and graduate school in the U.S., as long as he pledged to return to Thailand to teach for 10 years. Kirtsaeng told me professors’ salaries in Thailand are not as high as those of engineers, but he “saw this as an opportunity to do something for my country.”

Kirtsaeng began reselling textbooks in 2004, when he was at Cornell. He got the idea, he said, from a friend was already taking advantage of the price difference between the high cost of textbooks printed and sold in the U.S. and the lower cost of virtually the same books manufactured and sold abroad. (John Wiley’s latest Supreme Court brief calls the resale business “textbook arbitrage.”) Kirtsaeng’s friends and relatives would buy desirable textbooks in Thailand and ship them to him in the U.S. He sold the books on eBay, paid back his friends and family and pocketed the difference.

Wiley’s brief said his eBay accounts showed revenue of nearly $1.2 million between 2005 and 2009. (Kirtsaeng’s Supreme Court brief, by contrast, said he earned a mere $37,000 in revenue from reselling John Wiley books.) Kirtsaeng told me he is pained by Wiley’s implication that he was driven by greed. He was just thinking of his future, he said. He and his then-girlfriend anticipated that Kirtsaeng’s salary as a math professor would be their sole source of income when Kirtsaeng returned to Thailand, and, according to him, that salary did not seem like enough money to support a family.

And besides, Kirtsaeng said, his research showed there was nothing wrong with reselling textbooks purchased overseas. The textbooks contained a prohibition against resale in the U.S., but, according to Kirtsaeng, his Internet research on copyright law indicated the warning had no effect. No textbook resellers he knew had been sued for infringement, and, after a year or so in the resale business without a peep from publishers, Kirtsaeng said, he figured the publishers didn’t have a problem with his business model.

They did. Beginning in about 2008, textbook publishers began suing small textbook resellers, many of whom, like Kirtsaeng, were graduate students running side businesses. Kirtsaeng found out about John Wiley’s infringement case against him when eBay shut down his seller’s accounts. According to John Wiley, Kirtsaeng quickly wired nearly $200,000 to an account in Thailand; Kirtsaeng said the transfer was unrelated to the litigation and was a routine reimbursement to relatives who had laid out money to buy and ship books.

Kirtsaeng resolved to defend himself. He found a lawyer, Sam Israel, through Google, and paid him tens of thousands of dollars to work up a defense in federal trial court in Manhattan. “The thing that made me do this is, I am an honest seller,” he said. “I said, ‘It’s okay if I lose all the money from selling textbooks.'”

John Wiley won a $600,000 judgment against Kirtsaeng after a jury trial in 2009. Kirtsaeng said that judgment followed him like a black cloud all the way to Thailand when he returned to the country in 2010. He had almost no assets anymore, so the problem was not John Wiley’s motion to execute judgment. It was the gossip in Thai academic circles.

Kirtsaeng said that after two universities near his hometown declined to offer him a faculty post, friends told him it was because of the textbook reselling case. “People were saying I ran away from the lawsuit,” he said. Even when he found a professorship, he said, he worried about John Wiley coming to Thailand to seize his salary.

Kirtsaeng paid a total of about $125,000 to his first lawyer, Israel. That wasn’t enough to cover Israel’s work appealing the trial court judgment but the lawyer stuck with the case. When Kirtsaeng lost at the 2nd Circuit, Israel brought in Orrick, which agreed to pro bono representation.

All along, Kirtsaeng told me, he believed that if he won, John Wiley would have to pay his lawyers and he would get back the money he had paid Israel. He didn’t understand the American rule of litigation, in which each side generally pays its own costs, Kirtsaeng said, and he and Israel didn’t discuss the special fee-shifting provision in the Copyright Act. To Kirtsaeng, fee shifting was a question of fairness: John Wiley should pay his defense costs because the textbook company forced him to spend tens of thousands of dollars to prove he was right all along.

Kirtsaeng’s position was that John Wiley owed not just the money he had paid out of pocket to Israel but the additional fees Israel and Orrick generated during his Supreme Court case – a total of about $2 million. Even if Wiley offered to repay his out-of-pocket fees in court-ordered mediation after the Supreme Court remanded the case, Kirtsaeng said, he would not settle for less.

In the new case at the Supreme Court, both sides’ briefs debate exactly what the court meant in its 1994 decision in Fogerty v. Fantasy Inc, which established that defendants are just as entitled to legal fees as plaintiffs under the Copyright Act. Orrick argued for Kirtsaeng that without the prospect of fee-shifting, defendants like Kirtsaeng do not have the resources to litigate over the boundaries of copyrights. John Wiley and the Justice Department said that Kirtsaeng’s self-serving, ad hoc standard would impede the development of copyright law by discouraging plaintiffs from bringing objectively reasonable claims.

Kirtsaeng said he has not read the briefing, but his argument for why he should prevail sounds like a boiled-down version of his lawyers’ reasoning. “If the court doesn’t find in favor of my side,” he told me, “it will be hard for any individual or small business to go into a case against a big company.”

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