General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsIt could become illegal to resell your iPhone 4, car or family antiques
JENNIFER WATERS'S CONSUMER CONFIDENTIAL Archives | Email alerts
Oct. 7, 2012, 2:00 p.m. EDT · CORRECTED
Your right to resell your own stuff is in peril
It could become illegal to resell your iPhone 4, car or family antiques
CHICAGO (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.
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.
Both Ammori and Band worry that a decision in favor of the lower court would lead to some strange, even absurd consequences. For example, it could become an incentive for manufacturers to have everything produced overseas because they would be able to control every resale.
It could also become a weighty issue for auto trade-ins and resales, considering about 40% of most U.S.-made cars carry technology and parts that were made overseas.
http://www.marketwatch.com/story/your-right-to-resell-your-own-stuff-is-in-peril-2012-10-04?pagenumber=2
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Response to dkf (Original post)
Post removed
OrwellwasRight
(5,170 posts)It has to do with a Supreme Court decision--the Supreme Court is not an arm of the Obama Administration.
villager
(26,001 posts)Not every overreach of the corporate state demands a reflexive defense of Obama.
BlueStreak
(8,377 posts)It is about a court ruling THAT HAS ALREADY occurred, and is apparently going to be heard by the SCOTUS.
While the initial issue might have been narrow, there is always a chance that pro-fascism courts will use that as an opening to give corporations even more power than they have today.
villager
(26,001 posts)Rhetorical question, no doubt, considering how collectively bovine we've become...
Johonny
(21,049 posts)because there is no way people will stop reselling stuff.
TreasonousBastard
(43,049 posts)Yes, there is the possibility that things could get really screwed up, but the real problem is three lower courts disagreeing and the Court took the case to straighten it all out.
One court says you can never resell foreign goods without permission, another says you always can, and the third says it depends. Wanna guess which way the Court will go?
Anyway, this particular case is pretty easy-- some kid bought cheap textbooks in Thailand and resold them at his school. Sounds pretty sneaky and the publisher never got anything for the sale here although he got paid something in Thailand. It could easily be decided on the narrow case of no royalties paid here on the possibly illegal importation of the books. That would hurt sellers of black market Nikons, but cause no major disruption, since black market Toyotas aren't all that common.
Another possibility is that since first sale doctrine is in legislation, Congress could just tweak the law.
Ms. Toad
(34,200 posts)The price difference is enormous. The books cost 10%-30% of US books. They are brand new (purchased only with the intent of reselling them to US & Canadian students) and identical to the US versions except for being paperback. We have two in our house and my daughter has a third at college.
It isn't a black market issue, since the books are all (both US and International) published by the same company. Black market is when the product itself is ripped off - gray market is when the goods are authentic, but product is taken into a market the manufacturer doesn't want it to go into.
Odin2005
(53,521 posts)
aquart
(69,014 posts)And, I imagine, that could provide an interesting loophole.
As for buying an item I didn't really have rights to? Why would I?
diabeticman
(3,121 posts)buying from the thrift store. So they can claim copyright infringement.
Take some books and donate them to like Good Will. Good Will will sell them for 1.00 or 25 cents.
aquart
(69,014 posts)Pretty sure they were a publisher's donation and DEDUCTION. Ain't no one gonna mess with that.
sharkman25
(143 posts)
Bjorn Against
(12,041 posts)The economic consequences of this are enormous, if the Supreme Court were to accept this the whole economy could potentially collapse and that is no exageration. Just the used cars industry alone is a huge economic power, if they were to go under it would cost our economy billions of dollars and tens or even hundreds of thousands of jobs. Home sales could also be impacted in a nasty way because even though the house itself is built in the US many of the components that are built into it are not made in the USA. Would you have to get permission to sell the kitchen sink with your house? Would you have to get permission from a different company to sell the furnace?
The Supreme Court may be occupied by five corporate stooges but I would think at least one of those five would be smart enough to see the potential this has to throw the economy into chaos and they will vote this down. They may be tools but they are smart enough to know the public would be seriously pissed if they did this.
dkf
(37,305 posts)There is now a three-way split among the Circuit Courts: the Second Circuit declaring that foreign-made works can never be resold in the U.S. without the copyright owner’s consent, the Ninth Circuit ruling that such a foreign-made product sometimes can be sold in the U.S. without permission, but only after the owner has approved an earlier sale inside the U.S., and the Third Circuit deciding that such a product can always be re-sold without permission, so long as the copyright owner had authorized the first sale that occurred overseas.
It was the Ninth Circuit’s approach that the Supreme Court had agreed to review two years ago, in the case of Costco Wholesale v. Omega. Justice Kagan was recused from that case (docket 08-1423), and the other eight Justices split 4-4. That always results in affirming the lower court decision at issue, but without setting a precedent. The case was affirmed by the split vote on December 13, 2010.
http://www.scotusblog.com/?p=143279
Comrade_McKenzie
(2,526 posts)
Initech
(100,213 posts)Ms. Toad
(34,200 posts)Publishers often create two versions of textbooks - usually identical (to the page numbering), except for the binding (typically soft cover v. hardcover. The international version is typically a fraction of the cost of the US version.
My daughter's organic chemistry book cost ~$250 for the US version, and $25-$40 for the international version, depending on whether it was printed in color or black and white.
Buyers in overseas locations are purchasing the cheap international versions and reselling them in the US under the first sale doctrine. Once you buy it, it is yours to resell. Obviously the publishers aren't happy and are trying to limit the application of the first sale doctrine so they aren't competing against themselves and losing. Pretty much the opposite of the suggestion that it is a motivation to move manufacturing overseas - the intent is to stop their own overseas books form being imported to compete in the US against their own overpriced US versions.
Unfortunately the article didn't identify the case - I'll see if I can track it down.
ETA I was correct - it is the textbook case.
dkf
(37,305 posts)The Second Circuit initially looked to the plain text of the Copyright Act, which states that the first sale doctrine applies only to copyrighted goods “lawfully made under this title.” The court found that “lawfully made under this title” referred only to goods manufactured in the United States. Section 602(a)(1) of the Copyright Act states that “mportation into the United States … of copies . . . of a work that have been acquired outside the United States is an infringement of the [owner’s] exclusive right to distribute copies.” The Second Circuit reasoned that applying the first sale doctrine to works made abroad would give “no force” to § 602 “in the vast majority of cases.” The court also applied the Supreme Court’s dicta from Quality King Distributors, Inc. v. L’anza Research International, Inc., 523 U.S. 135 (1998), which suggested that copies made under the law of another country are not subject to the first sale doctrine. In holding as it did, the Court went further than the Ninth Circuit in Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008), which found that the first sale doctrine applied to foreign-manufactured copies if that copy was imported into the United States with the copyright owner’s permission. Here, the Second Circuit included no such exception.
Judge Garvan Murtha dissented, reasoning that since the statutory text does not make reference to the place of manufacture, but instead focuses on whether that copy was manufactured lawfully, a copy authorized by the U.S. rightsholder is lawful under the Copyright Act and thus subject to the first sale doctrine. Judge Garvan also found it unrealistic that Congress would provide more copyright protection to foreign goods than domestic ones. He further noted that the additional restraint on trade and alienation, along with the incentive to drive manufacturing outside of the United States, amounts to bad policy and was likely not Congress’ intent.
How the first sale doctrine applies to international works, if at all, remains unsettled. As Judge Murtha pointed out in his dissent, by restricting the first sale doctrine to works created in the United States, the court’s decision creates a strong incentive for copyright owners to manufacture their goods abroad, harming American workers.
Ms. Toad
(34,200 posts)So goods, in general, aren't at risk - only works of authorship. The impact would not be as broad as the article implies (And manufacturers already have the means to prohibit the resale of anything containing software, like the iPhone via the license agreement. I write licenses like that all the time.)
Response to Ms. Toad (Reply #22)
AnotherMcIntosh This message was self-deleted by its author.
Ms. Toad
(34,200 posts)First sale doctrine has traditionally only been applied to things which are primarily or exclusively protected by copyright (music, books, for example). Distribution rights are reserved to the owner of the copyright - first sale doctrine is an exception to that. You can own a copy of the work, without the underlying rights. The distribution right to that copy was exhausted by the first sale, and beyond that the owner of the copy is permitted to "distribute" his or her own copy.
Copyright can't protect functionality. In something I find exceedingly odd, copyright doesn't protect the artistic appearance of clothing because it is deemed to be functional (even when there is no functional reason for it).
So when you have objects - like the antiques - which are mostly functional but have artistic elements which are protected by copyright it is not clear to me, without research, how it would apply. Even the first case in this line of cases was based on an artistic feature that was added to a watch solely to attempt to prevent distribution of international versions in the US. They added a very small artistic engraving to the back of the watch, to claim the entire watch then http://online.wsj.com/article/SB10001424052748703977004575393160596764410.html
The watch manufacturer won, but it was a 4-4 decision so it is not binding on subsequent cases. In both the watch case and the book case, it isn't manufacturing overseas though - it is the first sale. That should limit the impact of the case, even if it goes badly.
kentauros
(29,414 posts)tells me that they never lose. Authors get, at best, 17.5% royalties, and the publishers get the rest. Sure, they have overhead costs, but they still end up getting several times what the author does. They aren't hurting from overseas sales or from "competing with themselves". They're winning no matter what. We're the ones getting screwed.
I also don't see how this decision could end up being enforceable. It would eliminate all the big online resellers (eBay, Craiglist, iOffer) and I don't think any of those would take such a decision without effort to either strike it down or change it for the better.
dkf
(37,305 posts)kentauros
(29,414 posts)Read Joe Konrath's blog to learn more 
http://jakonrath.blogspot.com/
aquart
(69,014 posts)Not seriously?
Ms. Toad
(34,200 posts)But by and large, the cost of enforcement against will be far higher than it is worth.
On college textbooks (the market this case hits), the average cost of a textbook is $100-$500. The average cost of an international edition is less than $100. So they lose tremendously when marketers like http://www.textbooksrus.com/ uses its online presence to supply the college market with international editions every fall. (Just click on the International Edition section on the bottom left and you'll see what I'm talking about.) It started as a single enterprising individual, but once the case was decided larger, better capitalized, ventures came in and are now making a significant dent in the textbook market.
Any enforcement against vendors on eBay, for example, would need to be brought by the copyright owner against the vendor - so you would have to have a single copyright owner who is being hurt enough by a single eBay vendor to be worth it to sue that individual vendor.
Amazon might be concerned - but I don't think I've seen them in the international textbook market.
kentauros
(29,414 posts)about why this wouldn't be all that enforceable. I don't see yard sales, thrift stores, online resellers, and so on, having to worry. There's far too many of them for one publisher to take to court, and aren't likely to be taking enough sales from them to begin with.
Plus as you or someone else pointed out, there would likely be legislation created to prevent it applying to anything but print media and/or publishers.
I do remember reading in the past year or so of state school boards beginning to publish their own ebook textbooks and bypassing the publishers (and the TxSBOE) entirely. If I recall correctly, they were saving money doing that and the students were either given or sold some kind of eReader (I think they were Kindles) that they would use throughout their stay at the district.
I know the publishers don't like that, but again, they only have themselves to blame for this situation they've put us in.
Ms. Toad
(34,200 posts)My understanding is that they started creating significantly cheaper textbooks for foreign markets that couldn't support US pricing. Not entirely a humanitarian effort - but it was at least a concession to the need to provide quality textbooks at an affordable price in countries where wages are a fraction of what ours our.
If they lose (and can't prevent the import of international versions of textbooks), their solution may be to just stop serving those markets - and the people in those countries will suffer because they will be unable to obtain "affordable" textbooks. (Affordable being a relative thing - I don't particularly think $300 dollar textbooks are affordable - but they are as affordable as $30 textbooks are in the target international markets.)
kentauros
(29,414 posts)that they can self-publish and even get POD (print on demand) books for a fraction of the publishers' costs anyway. All it takes is someone to show them how to do that 
Ms. Toad
(34,200 posts)self-publishing is a lot of work. I've done it. When a decent textbook is available, it is a lot better at providing solid background material that is way too voluminous to fit in the lecture (but is needed for a thorough understanding of the subject. I would not recommend it unless there are no other options.
As for POD, I expect the substantive quality of textbooks available is not up to the level of traditionally published textbooks - or at a minimum not as consistent. In at least the math/sciences area there are a handful of classic textbooks for each subject matter which do what they do extremely well. In large part, it is these books which are being made available in third world countries at a fraction of the cost they are available in the US.
Initech
(100,213 posts)
Hayabusa
(2,135 posts)a lot of stores are going to go out of business, I feel.
AverageJoe90
(10,745 posts)Next thing you know, It'll be illegal to write fanfiction if these crooks have their way.......
Ms. Toad
(34,200 posts)if the copyright owners felt like enforcing their copyrights in the characters they have created.
neverforget
(9,439 posts)Who knows how the corporate court will rule? 
jsr
(7,712 posts)Zalatix
(8,994 posts)diabeticman
(3,121 posts)anything anymore?
No yard sales.
Can someone now not own their house fully because IF this is passed can now construction companies basically say since they built the house they now own the right to get re-sell value?
I serious wonder IF some part of this came about when Amazon "Took off" the Orwell books from kindle because of Copyright issues a few years back.
Kind of reminds me of the "Company Town" from the early 1900s. I live in Western PA where basically cities developed from the company town.
You Hope logic is used by the court BUT considering some of the rulings in the past 2 years one really does wonder.
Enrique
(27,461 posts)
LTR
(13,227 posts)Talk about irony!
Chipper Chat
(9,727 posts)Or Gucchi handbags.
Aerows
(39,961 posts)Is because a guy started buying cheap textbooks from Thailand and started selling them to other students. The textbooks were cheaper because they were made with cheaper bindings, cheaper paper, and less color, etc than the American ones, but had the same content.
John Wiley Inc, the textbook manufacturer got mad because this guy made about a million in profit selling these cheaper versions of their books that he imported. They got their piece of the pie when they sold the cheaper versions in Thailand, but they don't want American students to be able to buy the cheaper versions - they want American students to buy the expensive versions.
In other words, this student did something smart to help other students be able to buy cheaper books, but John Wiley Inc. is mad because the students aren't buying the more expensive books. (International Editions, which are no different from US versions in content, just cheaper). A $30 book vs. a $100+ book can make a huge difference.
All this amounts to is the same old thing of companies that want to maximize their profits by screwing over Americans through legislation that other countries won't put up with.
kentauros
(29,414 posts)As I said above, the publisher isn't losing. They got their cut, whether from international sales or domestic. They're simply greedy, as they've been from the beginning. And our laws enable (or even encourage) them to be that way.
I hope textbooks all go to ebook format eventually. They won't then be able to easily justify $100 textbooks if there are no printing/storage/shipping costs
gollygee
(22,336 posts)by saying very little of the cost of a book is printing and shipping. I am afraid e-textbooks would probably cost at least just about as much as a regular textbook. (Not saying that's fair.)
kentauros
(29,414 posts)will justify anything that gets them a higher price. What is changing the tide that way are authors self-publishing and thumbing their collective noses at the publishers while making a livable life for themselves.
What will change for textbooks is when the states or large school districts begin self-publishing their own textbooks electronically, as some have already begun to do. The publishers seem to excel at shooting themselves in the foot when it comes to embracing the current technology and competing.