There’s an interesting case before the Supreme Court which, if decided in favor of manufacturers, would make it illegal to sell anything you own that was made outside the United States. (Yes, it’s worth reading that sentence again!)
The case of Kirtsaeng v. John Wiley & Sons has already made it through the appellate courts, and the Supreme Court will decide it this fall. In a nutshell, here’s what happened. A Cornell University student named Supap Kirtsaeng noticed it was cheaper to buy his university textbooks in his native Thailand than in New York. After having his family ship his Thai-purchased textbooks to the USA, Supap saw a moneymaking opportunity and began selling more Thai-purchased textbooks on Ebay. The books were identical to the ones sold in the USA, but it was much cheaper to buy them outside of the country.
The book publisher, Wiley, was upset and sued Supap, even though they admitted that they do sell the same textbooks in Thailand for a lower price than they sell the books for in the USA. (Well, they didn’t think anyone would eventually have figured this out?) Supap countered saying his right to resell was protected under the First Sale Doctrine, which maintains that once you’ve purchased something, it’s yours to resell.
Unfortunately, the appellate court determined that Supap was in the wrong, claiming that the First Sale Doctrine only applies to items made in the USA. The case is moving to the Supreme Court now, and if the decision is upheld, anyone reselling something that was made abroad will need the permission of the original copyright holder to resell it! Can you imagine the ramifications this will have for Ebay, Craigslist, resale shops, garage sales and rummage sales? Further compounding things is the issue that the original manufacturer will also want a cut of the resale value.
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.
… 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. Another likely result is that it would hit you financially because the copyright holder would now want a piece of that sale.
It could be your personal electronic devices or the family jewels that have been passed down from your great-grandparents who immigrated from Spain. It could be a book that was written by an American writer but printed and bound overseas, or an Italian painter’s artwork.
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.
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.
This is a particularly important decision for the likes of eBay and Craigslist, whose very business platform relies on the secondary marketplace. If sellers had to get permission to peddle their wares on the sites, they likely wouldn’t do it.
The entire article is definitely worth a read, but seriously – a huge portion of nearly everything we buy, from electronics to clothing to books are made outside of the USA. How wasteful of a society will we be if it is no longer legal to resell things that we own, because we don’t truly “own” them anymore?
My kids and I spent part of this morning at the Goodwill store bargain-hunting. I’m trying to wrap my head around Goodwill having to get permission to resell the used kids’ books my children bought today, or the Talbots dress I bought for $5 to cut up and turn into my own Halloween costume. (“No, we won’t allow our items to be resold for that price”… or “yes, you can resell that, but we want a 25% cut.”)
This will definitely be a case to watch…
If you’re interested in following this case, here’s the link to all of the briefs and replies at the Supreme Court’s blog:
https://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/
soapboxtray says
Very interesting. I will have to read the whole article. Thanks!
CouponClipper says
I’ve been following this case for a couple months and I hope that the Supreme Court judges think long and hard before making this decision. Our economy can’t take a hit of this magnitude….and neither can our environment.
theresa1740 says
Poor grandma having a garage sale is going to be arrested. I don’t think so. There needs to be a line somewhere. Come ON!!!!
saver2 says
Still trying to wrap my brain around why the publisher charges a lot more for the textbook in the USA and not in Thailand….
llamalluv says
This case is about not just copyright infringement, but also the right of a manufacturer to control the import of its goods.
This should not affect clothing, as “useful items” are not subject to copyright protection in the United States, and only special marks (like logos or licensed characters) are covered under trademark. https://www.copyright.gov/fls/fl103.html I suppose it could affect clothing that has logos on it, but I think it will get extremely expensive for Levi and Ralph Lauren to chase down every church rummage sale or mom’s group selling or trading blue jeans and polo shirts.
It will definitely have an effect on written materials. For instance, if I invented a funny hat, and wrote a pattern to knit up that hat, my written pattern would be covered by copyright protection, and I’m the only one that could sell copies of it. But anyone could look at photos of my hat, or knitted samples of my hat, and “reverse engineer” the pattern and write their own pattern to sell. Another thing that is currently allowed under the first sale doctrine: A customer buys my pattern from me, knits his hat, and then sells his copy of the pattern (that he bought from me) to a friend. As long as he doesn’t make a photocopy of the original to keep, he can sell his one copy that he bought from me. He could also lend out his copy to someone (again, provided that it isn’t being duplicated.) He could do this within the U.S. or any other country. Even if I had an unreasonable dislike of the U.K. and refused to sell my patterns to anyone in Britain, I cannot legally prevent him from buying a copy of my pattern and mailing it to his English mother. These are his legal rights as the purchaser of one copy of my pattern.
It’s the same with books, which as far as I can tell is what Kirtsaeng v. John Wiley & Sons is about, in addition to the dispute over the right to control imports and exports of copyrighted materials. What Kirtsaeng did was use the First Sale Doctrine to become an importer of grey market goods. Wiley believes that they should have the authority to determine which of their goods are to be imported or exported.
This came up in Omega v. Costco. Costco purchased watches stamped with a copyrighted logo made by Omega outside of the U.S. and resold them in the U.S. without the permission of Omega. https://www.dailyfinance.com/2010/11/10/omega-vs-costco-gray-market-goods/
This case could overturn the 9th Circuit decision in favor of Omega.
DavidCooper says
It is not. I don’t think the copyright act mentioned about anything about this. It is absolutely legal to sell your own goods anywhere. There is no such rule mentioned.
christina23 says
I see the scenarios mentioned differently. It is, in my opinion, a very different thing to have a yard sale to clean out the attic, closets, etc. than to purchase brand new items in bulk in an effort to make a profit (i.e. stock pile sales). This guy purchased multiple copies of these textbooks for the sole purpose of reselling them at a profit.
It is going to be interesting to see how this comes out and the ramifications of it should the Supreme Court uphold the Appellate Court’s decision. It is going to be even more interesting to see who will enforce it and how they will manage to do so.
As far as the different prices, it happens in the US all the time. Fast food restaurants are notorious for charging different prices in different locations within even the same regional area. Sadly it seems the prices are slightly higher in the lower socioeconomic areas.
Coupon Maven says
While this is an old post, the Supreme Court finally ruled on this.
https://www.scotusblog.com/2013/03/opinion-analysis-justices-reject-publishers-claims-in-gray-market-copyright-case/
The Supreme Court ruled in FAVOR of student Supap Kirtsaeng. The First Sale doctrine stands, and there is now no longer a possible threat of not being allowed to resell your own items if they were made outside the USA. The Supreme Court ruled 6-3, and I’m a little disturbed that three of the justices ruled the other way all, but that’s my opinion. :)
From the decision:
Among other things, he noted the absurdity of thinking that libraries must obtain licenses to allow the lending of books printed overseas, that owners of foreign-manufactured telephones, laptops, and tablets must obtain consent from software publishers to resell them, or that museums that own painting of foreign artists need the consent of the artists to display the paintings publicly.