Your right to resell your own stuff is in peril
From MarketWatch:
Tucked into the U.S. Supreme Court’s agenda this fall is a little-known case that could upend your ability to resell everything from your grandmother’s antique furniture to your iPhone 4.
At issue in Kirtsaeng v. John Wiley & Sons is the first-sale doctrine in copyright law, which allows you to buy and then sell things like electronics, books, artwork and furniture, as well as CDs and DVDs, without getting permission from the copyright holder of those products.
Under the doctrine, which the Supreme Court has recognized since 1908, you can resell your stuff without worry because the copyright holder only had control over the first sale.
Put simply, though Apple Inc. has the copyright on the iPhone and Mark Owen has it on the book “No Easy Day,” you can still sell your copies to whomever you please whenever you want without retribution.
That’s being challenged now for products that are made abroad, and if the Supreme Court upholds an appellate court ruling, it would mean that the copyright holders of anything you own that has been made in China, Japan or Europe, for example, would have to give you permission to sell it.
“It means that it’s harder for consumers to buy used products and harder for them to sell them,” said Jonathan Band, an adjunct professor at Georgetown University Law Center, who filed a friend-of-the-court brief on behalf of the American Library Association, the Association of College and Research Libraries and the Association for Research Libraries. “This has huge consumer impact on all consumer groups.”
. . . .
The case stems from Supap Kirtsaeng’s college experience. A native of Thailand, Kirtsaeng came to America in 1997 to study at Cornell University. When he discovered that his textbooks, produced by Wiley, were substantially cheaper to buy in Thailand than they were in Ithaca, N.Y., he rallied his Thai relatives to buy the books and ship them to him in the United States.
He then sold them on eBay, making upward of $1.2 million, according to court documents.
Wiley, which admitted that it charged less for books sold abroad than it did in the United States, sued him for copyright infringement. Kirtsaeng countered with the first-sale doctrine.
In August 2011, the U.S. Court of Appeals for the Second Circuit upheld a lower court’s ruling that anything that was manufactured overseas is not subject to the first-sale principle. Only American-made products or “copies manufactured domestically” were.
“That’s a non-free-market capitalistic idea for something that’s pretty fundamental to our modern economy,” Ammori commented.
. . . .
In its friend-of-the-court brief, eBay noted that the Second Circuit’s rule “affords copyright owners the ability to control the downstream sales of goods for which they have already been paid.” What’s more, it “allows for significant adverse consequences for trade, e-commerce, secondary markets, small businesses, consumers and jobs in the United States.”
Link to the rest at MarketWatch and thanks to Abel for the tip.
In terms publishers usually apply, this case has the potential for upending territorial rights.
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Interesting.
Any time I see laws that appear to be set up to restrict trade, I wonder what the real motive behind them is.
Money and control.
If this goes through, then don’t buy anything at Walmart, including clothes. Can’t give those to Goodwill or Salvation Army without getting permission first. Of course, they usually fall apart fairly quick, so this may not be a huge issue.
Seriously, though, this would cause a huge headache in this country. What can be sold used and what cannot (not everything keeps the stickers/labels)? What about garage/yard sales? If this went through, could it push to have more manufacturing in the US again?
This whole thing is over my head, I don’t understand trade and economics enough. But I appreciate the ‘heads up’, seems like it could be HUGE if it passes.
To me, this is simply ridiculous. No, I don’t understand the vagaries of law and economics. But it seems obvious that this character was acting as a retailer. He wasn’t some guy who bought a book for his own use, then resold it when he was done. He bought thousands of books for the express purpose of reselling them. That is a business, not a personal transaction.
So I don’t understand how any of this will, or should, affect the average person who buys something for himself, then decides to resell it.
Question to PG. The suit seems to be about ‘first sale’ provisions of copyright law, but from reading the Marketwatch article, the reporter seems to be extending it to other IP areas such as patents and trademarks. I mean, I can see an iPhone being patented or the brand name trademarked, but I can’t see where ‘first sale’ under copyright would apply at all to the resale of copies of other physical properties like iPhones, regardless of where they were manufactured. Am I missing something here? Does ‘first sale’ apply to physical products that are patented and not copyrighted?
The author went overboard and doesn’t understand much about IP law. This is strictly a copyright case. It applies to items like iPhones only to the extent that iPhones include copyrighted software and, perhaps, firmware.
Thanks, PG.
The comments are more interesting than the [deliberately inflammatory, IMHO] article. One comment says the following text was in each book: “Authorized for sale in Europe, Asia, Africa and the Middle EastOnly.This book is authorized for sale in Europe, Asia, Africa and the Middle East only [and]may not be exported. Exportation from or importation of this book to another region without the Publisher’s authorization is illegal and is a violation of the Publisher’s rights. The Publisher may take legal action toenforce its rights. The Publisher may recover damages and costs, including but not limited to lost profits and attorney’s fees, in the event legal action is required.”
Another points out that the defendant, by his bulk sort of purchasing, was acting as an “importer underselling the main distributor, where the distributor had specific rights and expectations that their product would not be bought overseas at deeply discounted prices and then resold for profit here in the U.S.
I think there’s a fundamental problem whenever we move away from the simple equation of “if you buy something, it is yours, end of story.” I know there are people who consider this over-simplistic, but that’s it in a nutshell for me. Software has already poisoned this well with the insistence on “licensing” instead of “purchasing,” and it seems businesses want to move there everywhere.
That’s always been true for art. I’ve read countless stories of artwork being changed or destroyed after it has been purchased, and the artist has no control over it. I read one account where the person who bought the painting cut it up into 4 pieces and sold them for thousands. None of that money ever trickles back down to the artist.
If an artist’s work can be sold for thousands of dollars in four pieces, then if the artist is still alive they are likely to be able to make that kind of money on their new works.
I graduated as an art student, and I know that most of those people I graduated with would have been excited that their works would sell for that much in the first place. The idea of getting a cut of what someone later sold their work for at some auction wouldn’t even cross their mind. You just don’t plan for your work to really make any money at all, so taking from people at charity auctions and people getting rid of the stuff in their attic is a pretty hopeful outlook.
They would all personally find and strangle the person who cut up their painting though. The guy would need the money to pay the hospital bills.
The reality is kind of sad, but the alternative is kind of insane.
Artists are artists before they’re business people. If an artist undersells themselves to someone with a better business idea, there isn’t a “redo” button. And, as Sporkdelis mentioned, if it launches the artist’s career to a level they wouldn’t have achieved by themselves, call it “value added” and try not to lose sleep over it.
The supply and demand effect is vastly different between art and merchandise, though. A single piece of art doesn’t have the same impact as a supply of merchandise.