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The Stevens Papers Part II: A Peak Behind the Scenes at the Making of Quality King, Tasini, and Dastar

A previous DisCo post discussed what the recently released files of the late Associate Supreme Court Justice John Paul Stevens revealed about development of the Court’s decisions in Lotus v. Borland, MGM v. Grokster, and Eldred v. Ashcroft. This post looks at the disclosures contained in the files for Quality King v. L’anza, New York Times v. Tasini, and Dastar v. Twentieth Century Fox. Most significant are Justice Stevens’ rejection of Justice Ginsburg’s efforts to prevent parallel imports of grey market goods in Quality King.

Quality King v. L’anza

This case posed the question of whether the importation right in 17 U.S.C. § 602(a) is subject to the first sale doctrine codified in 17 U.S.C. § 109(a). L’anza affixed a copyrighted label to its haircare products manufactured in the United States. It sold the products overseas at a lower price than in the United States. Quality King purchased the products in Malta and then imported them back to the United States. L’anza sued Quality King for infringing its right under section 602(a) to prohibit the importation of copies of its work without authorization. The district court ruled against Quality King and the U.S. Court of Appeals for the Ninth Circuit affirmed. 

On March 9, 1998, Justice Stevens delivered the unanimous opinion of the Court that, as a matter of statutory interpretation, the importation right in section 602(a) is subject to the first sale doctrine. Under the first sale doctrine, the owner of a copy of a work “lawfully made under this title” does not infringe the distribution right by selling or lending that copy. In effect, the distribution right in that copy is exhausted by the first authorized sale of that copy. Because the products at issue here were “lawfully made under this title,” as required by section 109(a), Quality King did not infringe the importation right when it imported L’anza’s products. 

Justice Ginsburg wrote a short concurring opinion stressing that this case involved a product manufactured in the United States. She joined the Court’s opinion “recognizing that we do not resolve today cases in which the allegedly infringing imports were manufactured abroad.” She then cited William Patry’s statement in his treatise that “the words ‘lawfully made under this title’ in the ‘first sale’ provision, 17 U.S.C. § 109(a), must mean ‘lawfully made in the United States.’”

The cover sheet for Justice Stevens’ case file indicates that all nine Justices voted in favor of cert. Six of the Justices voted at the December 10, 1997 conference to reverse. Chief Justice Rehnquist and Justice Ginsburg had question marks by their names, while Justice Kennedy seemed to have supported affirmance. According to Justice Stevens’ difficult to read notes, Justices O’Connor and Ginsburg mentioned fair use at conference, while Kennedy indicated he was “troubled by fair use.”

Justice Stevens was assigned the task of writing the majority opinion. He circulated the first draft on February 10, 1998. On February 12, Justice Ginsburg sent him a letter stating that “although I voted the other way at Conference, I am rethinking my position based upon the main line of your opinion” concerning the relationship of sections 602(a), the first sale doctrine, and the distribution right. However, Justice Ginsburg suggested several revisions to the opinion, most notably about the place of manufacture. “This case is about ‘roundtrips,’ as you recognize…, U.S.-manufactured goods sent abroad, then imported back. I don’t think we have before us the case of goods manufactured abroad, then imported. To keep the opinion focused on this case,” Justice Ginsburg recommended emphasizing in several places in the opinion that L’anza’s products were manufactured in the United States. 

On February 16, Justice Stevens responded to Justice Ginsburg’s letter. While he accepted several of her proposed modifications, he refused to focus on the site of the manufacture. “I do not think, however, that it is necessary or desirable to emphasize that we are concerned only with products made in the United States. This case does involve U.S.-made products, of course, as the opinion already makes clear, but I see no reason to go out of our way to incorporate an express place-of-manufacture limitation.”

On February 20, Justice Ginsburg more explicitly pushed for a place-of-manufacture limitation. “Following up on my suggestion on limiting the opinion to U.S.-made products, I enclose the most relevant pages” from William Patry’s copyright treatise. Throughout, Patry “distinguishes between works ‘made outside the United States’ and works ‘lawfully made in the United States.’”

Later that day, Justice Stevens wrote back, 

You are … correct that Patry would distinguish between goods lawfully made in the United States and goods made outside the United States. I have considered Patry’s argument, however, and I am not persuaded by it. Nothing in the statute suggests that the place where either the products or the copyrighted labels were manufactured is relevant. Indeed, petitioner, respondent, and the United States agree that the place of manufacture is not dispositive of the question presented in this case. I see no justification in the statute or the case law for distinguishing between a copy made abroad with the authorization of the U.S. copyright holder and a U.S.-made copy sent abroad with the authorization of the U. S. copyright holder. In my view, both would be “lawfully made under this title.” Otherwise, L’anza could make the copyrighted labels in Mexico, affix them to their U.S.-made hair products, sell them abroad, and claim entitlement to protection from unauthorized importation under § 602(a) despite the first-sale doctrine.

Justice Stevens added,

This case involves only U.S.-made products, of course, and our holding is necessarily limited by the facts presented here. The absence from the opinion of any discussion of place of manufacture does not foreclose our consideration of that issue in a future case. The problem with emphasizing the place of manufacture now is that such emphasis would imply that place of manufacture is important to our analysis. I do not think that it is important, however, and I do not think our opinion suggests any answer to the question whether place of manufacture is relevant. If it were to do so, I would prefer to suggest an answer contrary to Patry’s.

By resisting Justice Ginsburg’s attempt to include a place of manufacture limitation, Justice Stevens kept the issue open for future consideration. The Court granted cert on this question in Costco v. Omega, but split 4-4 with Justice Kagan recusing herself. The Court granted cert. on this question again in Kirtsaeng v. Wiley. By then, Justice Stevens had retired from the Court. But Justice Breyer, in an opinion for a 6-3 majority, echoed the position articulated by Justice Stevens in his correspondence with Justice Ginsburg: that the first sale doctrine applies to copies made abroad with the authorization of the U.S. copyright owner. 

The Stevens papers also contain a February 27, 1998 letter from Justice Kennedy. He stated that Justice Stevens’ draft opinion addressed the concerns he had with L’anza’s argument and that “in all respects your opinion is convincing….” Justice Kennedy was willing to join it, provided that Justice Stevens resolved two matters. First, the second to the last sentence of the draft opinion stated that “We owe no deference to the State Department’s interpretation of the Act because it has no responsibility for enforcing or administering it.” Justice Stevens wrote this sentence in the context of declaring the irrelevance of executive agreements prohibiting the unauthorized importation of copies of the works of U.S. copyright owners. Justice Kennedy noted that “it is likely correct that, since the State Department does not have the responsibility to enforce the copyright act, it has no expertise in interpreting it.” However, he feared “the statement will be quoted out of context in those numerous instances where State is required to make certain representations about American law.” For this reason, Justice Kennedy suggested deleting the sentence or rewriting it.

Second, in support of his point that section 602(a) did not create a right separate from the distribution right in section 106(3), and thus a right not limited by the first sale doctrine, Justice Stevens contrasted the wording of section 602(a) with that of 106A, which created moral rights in visual works distinct from the exclusive economic rights in section 106. Justice Stevens included a footnote explaining that section 106A was adopted in response to the U.S. accession to the Berne Convention. Footnote 21 originally contained this sentence: “Thus, Congress made a considered choice in drafting § 106A and did not simply import the provisions of the Berne Convention wholesale into U. S. copyright law.” Justice Kennedy’s “concern is that the sentence could be read to suggest the U.S. is not in compliance with this aspect of the Berne Convention.” Accordingly, he suggested deleting the sentence. Justice Stevens made the two deletions requested by Justice Kennedy, and Justice Kennedy joined his opinion. (Justice Ginsburg requested another deletion to footnote 21 for a similar reason, which Justice Stevens also made).

New York Times v. Tasini 

17 U.S.C. § 201(c) provides that the owner of a copyright in a collective work is presumed to have acquired the privilege of reproducing and distributing the individual contributions to the work in “any revision of that collective work.” This had long been interpreted to permit a newspaper publisher to authorize the making of a microfiche version of back-issues of the newspaper without seeking the permission of all the freelance journalists whose articles appeared in the newspaper. The New York Times and other newspaper publishers licensed LexisNexis to create an electronic database of the back-issues of their newspapers, from which articles could be accessed individually. A group of freelance writers sued the publishers, claiming that the database was not a “revision” of the collective work within the meaning of section 201(c). Then-district court Judge Sotomayor found for the publishers. The Second Circuit reversed, and the publishers petitioned for cert. On June 25, 2001, the Supreme Court affirmed the Second Circuit by a 7-2 margin with the majority opinion written by Justice Ginsburg. Justice Stevens wrote a dissent, which Justice Breyer joined.

The cover sheet for the case file indicates that Justices Stevens, Breyer, and Kennedy supported the grant of cert., with Justice O’Connor voting “J-3,” meaning she supported the grant of cert. if three other Justices voted in favor. Accordingly, cert. was granted. The cover sheet also indicates that at the March 30, 2001 Conference seven Justices supported affirmance of the Second Circuit’s decision, with Justices Stevens and Breyer favoring reversal.

Justice Stevens’ files reveal few changes in the development of both the majority and dissenting opinions. After Justice Ginsburg distributed her first draft, Justice O’Connor raised an interesting concern with one sentence. At the beginning of her analysis of the case’s core legal issue in section III of her opinion, Justice Ginsburg stated: “The Copyright Act’s ultimate concern is the way works are presented to, and comprehensible by, the human reader, viewer, or listener.” In a letter dated June 6, 2001, Justice O’Connor wrote that she understood “the point of this sentence to be that, while the parties make arguments concerning how the Articles exist in the Databases in a technological or metaphysical sense, the proper focus of the inquiry is on the works as presented to and perceived by the Database users.” Justice O’Connor agreed with this focus, but had two concerns about the sentence as written. First, 

the “ultimate concern” of the Copyright Act is actually the protection of original expression so as “[t]o promote the Progress of Science and useful Arts,” U.S. Const., Art. I, § 8, cl. 8. While perceptibility is one concern of the Copyright Act in a functional sense, it seems to me that the “ultimate concern” claim is too sweeping and not quite accurate. 


the sentence is somewhat misleading in that the Copyright Act is not at all concerned with the way in which works are presented to and perceived by human beings. Indeed, the purpose of the 1976 Act’s elaboration of § 102’s fixation requirement is to ensure that the manner of presentation has no effect on copyrightability. […] Section 102’s fixation requirement ensures that works enjoying copyright protection are capable of perception from a tangible medium, but it does not matter how they are perceived for purposes of copyrightability. A sentence that links the Copyright Act’s “ultimate concern” to the “way” in which works are presented might be used to attack medium neutrality or for some other misleading purpose. The risk of misuse seems particularly great because the sentence is eminently quotable and appears at an important juncture in the opinion.

On this basis, Justice O’Connor proposed replacing the troubling sentence with a more neutral one: “In determining whether the Articles have been reproduced and distributed as part of a revision of the collective works, the proper focus of our inquiry is that which is presented to and perceived by the users of the Databases.” Justice Ginsburg responded later that day, telling Justice O’Connor, “[y]ou are absolutely right.” Justice Ginsburg went on to propose slight modifications to Justice O’Connor, which she included in the final opinion: “In determining whether the Articles have been reproduced and distributed ‘as part of’ a ‘revision’ of the collective works in issue, we focus on the Articles as presented to, and perceptible by, the user of the Databases.”

Justice O’Connor was correct that Justice Ginsburg’s original formulation would have been susceptible to misuse for the reasons she stated. Additionally, the exchange between Justice O’Connor and Justice Ginsburg reflects the care the Justices exercised to ensure that their opinions were not misconstrued.

The case file also contained correspondence relating to Justice Stevens’ dissent. On April 25, 2001, Justice Stevens sent a letter to Justice Breyer confirming an agreement they had reached in an earlier telephone conversation that Justice Stevens would draft a dissent in Tasini while Justice Breyer would draft a dissent in Tyler v. Cain, a case then pending relating to the Antiterrorism and Effective Death Penalty Act of 1996. They each ultimately joined the other’s dissenting opinion.

Further, on June 15, 2001, Justice Breyer sent Justice Stevens a lengthy letter containing “a rough version of a few ideas” Justice Breyer had for the dissent. Justice Breyer acknowledged that “I think you already say most of what is in there,” but invited Justice Stevens to “use any additional material that you find useful.” Justice Breyer added that “I do think we should say something about the need for Congress to address this issue.” 

Justice Breyer’s letter stated that “Macaulay wrote that copyright is ‘a tax on readers for the purpose of giving a bounty to writers.’ That tax restricts the dissemination of writings, but only insofar as necessary to encourage their production, the bounty’s basic objective.” Justice Stevens used this precise language in section IV of his dissent. Justice Breyer subsequently employed the Macaulay quotation in his dissents in Eldred v. Ashcroft and Golan v. Holder and his opinion for the majority in Google v. Oracle

Likewise, Justice Breyer noted that the Court’s decision would lead to incomplete electronic databases, which might necessitate congressional intervention.

If the problem is genuine and important (as amici now tell us that it is), congressional action may well be necessary to preserve present databases in their entirety. Compare 17 U.S.C. § 108(d) (1). At the least, Congress can determine the nature and scope of the problem and fashion any necessary licensing remedy far more easily than can courts. 

Justice Stevens included similar language in footnote 18 of his dissent: 

If the problem is as important as amici contend, congressional action may ultimately be necessary to preserve present databases in their entirety. At the least, Congress can determine the nature and scope of the problem and fashion an appropriate licensing remedy far more easily than can courts. Compare 17 U.S.C. §108(d)(1).

Dastar v. Twentieth Century Fox Films 

Dastar distributed without attribution copies of a television series owned by Twentieth Century Fox that had entered into the public domain. The Ninth Circuit found that this constituted reverse passing off in violation of the Lanham Act. On June 2, 2003, the Supreme Court reversed by an 8-0 vote with an opinion written by Justice Scalia; Justice Breyer took no part in the consideration or decision of the case. 

The Stevens case file confirms that Justice Breyer did not participate in the case because his brother sat on the Ninth Circuit panel below. (Charles Breyer is a U.S. district court judge for the Northern District of California. He participated in the Ninth Circuit panel in this case by designation.) According to the case file cover sheet, Justices Stevens, O’Connor, and Kennedy supported the grant of cert., with Justice Ginsburg voting J-3. The cover sheet indicates that seven of Justices voted at the April 4, 2003, Conference to reverse the Ninth Circuit, and Justice Ginsburg was undecided. The file contains no substantive correspondence among the Justices concerning Justice Scalia’s opinion, nor what convinced Justice Ginsburg to support reversal. Evidently, the Justices saw this as an easy case.

What Influences Decisions

The case file for Dastar underscores the importance of the parties’ counsel, at least for the decision whether to grant cert. A memo from a clerk to Justice Stevens on the cert.-worthiness of the case noted that “Petr has good counsel (Professor Nimmer is on the brief) as do resps.” Later in the memo, the clerk repeated that “the lawyering is good.” Significantly, the clerk expressed concern with addressing this issue without Justice Breyer’s participation. “Not only would that make it an 8-member Ct, it would also take away Justice Breyer in a case that he would likely have a keen interest as well as a distinctive view.” Although Justice Breyer may have had a “distinctive view” on IP matters, it was one shared by Justice Stevens, and the clerk may have anticipated that Justice Stevens would be reluctant to grant cert. without his most reliable copyright ally. 

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.