VICTORY: You Can Sell Your Stuff!
The little guy won big in a U. S. Supreme Court decision this week, which affirmed the right to resell a legally purchased item. That's right... you almost lost the right to sell (or give away) a used item at your own yard sale. Read on to learn the incredible story behind this ruling, and why you still need to be vigilant...
Supreme Court Expands First Sale Doctrine
On March 19th, the U. S. Supreme Court ruled in a 6-3 decision http://www.supremecourt.gov/opinions/12pdf/11-697_d1o2.pdf that the “first sale” doctrine, which permits legitimate buyers of copyrighted works to resell or give away their copies, does apply to works manufactured and purchased overseas. Publishers of everything from books to games, software, music, movies, and more are very upset by the decision, which threatens so-called “regional pricing” schemes.
But it's a pretty big deal for consumers. Last fall, a U.S. appellate court ruling effectively abolished the 1908 "First Sale Doctrine" which had allowed people to resell goods they had legally purchased. Happily, the Supreme Court just overruled that bizarre decision of the lower courts. But if the high court had ruled the other way, you would have needed "permission" to resell any foreign-made product.
To be clear, it would have been illegal to resell certain books, music, software, video games, antiques, or electronic gadgets at a flea market, garage sale, or online auction. The onus would have been on the consumer to determine if the item (or part of it) was manufactured overseas, and then to beg the copyright holder for permission to resell it. And that "permission" probably would have involved taking a cut of the proceeds. Can you imagine what a nightmare that would have been?
The decisive case involved a small-time Thai entrepreneur and textbook publishing giant John Wiley & Sons. Wiley manufactures and sells textbooks in Thailand, forbidding importation of such copies to the U. S. Nonetheless, the entrepreneur bought textbooks at the Thai prices and resold them via eBay in the U.S. at higher prices that still undercut Wiley’s U. S. prices for the same works. Wiley sued, claiming infringement of its copyright restrictions.
At trial, the District Court found in Wiley’s favor and the jury awarded damages to the company. The Second Circuit Court of Appeals affirmed the verdict, finding that the first-sale doctrine did not apply to American copyrighted works manufactured abroad. The Supreme Court overturned the lower courts and a similar decision in the Ninth Circuit, finding that the relevant section of American copyright law “says nothing about geography.” Copies of works made and acquired in accordance with American copyright law are subject to the first-sale doctrine no matter where they are made or acquired.
What Could Have Been (Or Might Be...)
If the Court had upheld Wiley’s position, the result could have been dramatic. Rights owners would have every incentive to move manufacturing out of the U.S., an outcome that Congress surely did not intend. Libraries would have to get permission to circulate foreign-made books. Used book stores would be severely impacted, and even garage sales of foreign-made paperbacks and old video games could be barred.
The first-sale doctrine applies not only to books, but to everything protected by copyright. That includes software, music, video, art, and all other creative works. It’s a critical consumer protection that was threatened by globalization. This ruling protects it, for now.
The Court acknowledged that Congress may well have intended to give rights owners geographic control over their works and pricing; that intention simply didn’t find expression in the law. Copyright law can be rewritten to overcome the Court’s ruling. The extremely powerful industries that have an interest in extinguishing the first-sale doctrine will surely lobby Congress to do so. And when that happens, you'll need to do the same. Or you'll lose a fundamental right to buy and sell as you please.
Some suggest that publishers will move their operations overseas entirely to escape this ruling. That would eliminate U. S. jobs for authors, editors, programmers, and many other occupations. It’s much more likely that publishers will attempt to change the law so they can have their cakes and eat them.
But for now, at least, anyone can do what the Thai eBay seller did: play the international arbitrage game and win. And more importantly, you can sell your stuff without worrying that you're breaking the law. Consumers also benefit from this price competition.
Now, if only a similar legal opinion applied to pharmaceuticals, Americans could buy prescription drugs made overseas at a fraction of the prices charged in the USA. We can dream, right?
Your thoughts on this topic are welcome. Post your comment or question below...
This article was posted by Bob Rankin on 21 Mar 2013
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Article information: AskBobRankin -- VICTORY: You Can Sell Your Stuff! (Posted: 21 Mar 2013)
Copyright © 2005 - Bob Rankin - All Rights Reserved