Resale Law Case at Supreme Court Could Radically Change Commerce

By Catholic Online (NEWS CONSORTIUM)
10/8/2012
Catholic Online (www.catholic.org)

Law would restrict the private sale of products made overseas

A little known case could shortly change how all Internet auction sites are run and every last garage sale across the U.S. is conducted. The case in question is the Kirtsaeng v. John Wiley & Sons, the first-sale doctrine in copyright law. The law allows the individual to buy and then sell things like books, artwork, CDs and DVDS without getting permission from the copyright holder of those products. This could change --

There are heavy implications for a variety of wide-ranging U.S. entities, including libraries, musicians, museums and even resale juggernauts eBay Inc., Amazon and Craigslist. Even the friendly neighborhood garage sale would be effected.

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LOS ANGELES, CA (Catholic Online) - A Supreme Court case could limit the resale of goods made overseas but sold in America. The Supreme Court has recognized the law, since 1908, you can resell your items 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 anyone without retribution.

The law is now being challenged now for products that are made abroad. 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 Japan, China or Europe -- 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," Jonathan Band, an adjunct professor at Georgetown University Law Center says. Band 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."

This would greatly impact the independent seller financially, as the copyright holder would now desire a piece of that sale.

These personal items would theoretically extend from your personal electronic devices or the family jewels that have been passed down from your ancestors who emigrated from Romania.

There are heavy implications for a variety of wide-ranging U.S. entities, including libraries, musicians, museums and even resale juggernauts eBay Inc., Amazon and Craigslist. U.S. libraries, for example, carry some 200 million books from foreign publishers.

"It would be absurd to say anything manufactured abroad can't be bought or sold here," Marvin Ammori says, a First Amendment lawyer and Schwartz Fellow at the New American Foundation.

The case stems from Supap Kirtsaeng from Thailand who 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 asked his relatives in his homeland to buy the books and ship them to him in the U.S.

Kirtsaeng then sold them on eBay, making upward of $1.2 million, according to court documents.

Wiley then admitted that it charged less for books sold abroad than it did in the U.S. and 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.

The Supreme Court is scheduled to hear oral arguments on the case on Oct. 29.

� 2012, Distributed by NEWS CONSORTIUM.

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Keywords: Resale, Internet auctions sites, garage sales, Kirtsaeng v. John Wiley & Sons, lawsuit

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1 - 7 of 7 Comments

JustAGirl
6 months ago
Although I agree with B.E. Singer to a point, one could also argue that this could apply to foreign-made automobiles as well. Therefore, your 4 year old Mercedes-Benz would also be illegal for you to sell...
Wake Up!!!
7 months ago
Re. the case before the Supreme Court, Kirtsaeng v. John Wiley & Sons

A decision that is contrary to the established doctrine of 'First Sale' would have devastating economic impact throughout the economy, as noted below.

In normal commerce, a manufacturer sells a product in large bulk quantity to a wholesale distributor, who then divides it into smaller bulk quantities and sells it to retailers. The retailers further divide the bulk and then sell the product to consumers.

If 'First Sale' is not upheld, it would destroy the supply chain, requiring consumers to purchase goods directly from manufacturers, which would be extremely costly for manufacturers, retailers and consumers.

As an example, A consumer wanting a $20 memory module for their PC could not buy it from a company in Texas, the consumer would have to get on a plane to Taiwan to purchase the module.

The media unfortunately have failed to note this, seeing only the impact on for example yard sales.
Joseph
7 months ago
This is absolutely wretched. How a case like this can even be considered is ludicrous to the point of disbelief, and profoundly dangerous thinking. This decision, for the most deeply rooted and fundamental reasons, cannot be allowed to pass. It is a transgression not only against the framework of free trade, but against the rights of the American people.
Linda Day
7 months ago
The publisher intentionally sells his product for less money overseas and complains when someone buys the overseas product and resells it? Hogwash! Wiley made their intended profit on the Thai books, they should have no more right to complain then if the books had been purchased in the U.S. before being resold.
joe schmoe
7 months ago
but why is the guy who made 1.2 mil a 'transgressor?' Pretty smart move if you ask me! This thing will never fly. who would police it? how could you regulate it? this would place too onerous a burden on commerce.
A.S.
7 months ago
I am no lawyer, but have been reading about this case and was astonished by the the harsh implications it could bring to the economy.

I usually never post any comments, but think that there is a lot going on and that the public is not aware of.

The law in question is about the first sale doctrine or patent exhaustion.
That means that the patent or copyright owner loses his ability to control the product, once he sells it for the first time and puts it on the downstream of commerce making a profit.
It doesn't matter if the product was first sold in Timbuktu or somewhere else in the world, and that how it should be. The manufacturer already made his profit on the product the first time he sold the item! How many times does a manufacturer want to make profit on the same product?
What the manufacturers want, is to get rid of the gray market and eliminate their competitors, so they can regulate the market, potentially with a price spike in products.
The big losers at the end of the day in my eyes would be the consumers, because it is them, who will potentially have to pay more for a product that they want to purchase.
Millions of people sell items every day over the internet, now imagine that before you sell the item, you would have to be very sure that it was first sold in the US or ask the manufacturer for permission, otherwise there could be a potential copyright lawsuit, if they feel they have the right to do so.
Read some of the amicus briefs on the Wiley v Kirtsaeng case, which will give a better perception and offer more explanation about this case.
B.E. Singer
7 months ago
Solution: Incorporate the "diminimus" aspect to the restriction to sell a "copyrighted" item produced in China et al.....that it apply only to transactions over $10,000. This leaves libraries and "average joes" out of the picture and only goes after the egregious transgressors making i.e. $1.2 million. --B. E. Singer

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