Supreme Court To Consider First Sale of Imports 259
Posted
by
kdawson
from the copyright-because-i-say-so dept.
from the copyright-because-i-say-so dept.
Animaether passes along a legal tale that "doesn't involve the kind of cutting-edge issues that copyright lawyers usually grapple with in the digital age [and] sounds like the kind of lawsuit that should have been resolved 200 years ago," yet still "is very much a product of the Internet-driven global economy." "Can copyright owners assert rights over imported goods that have already been sold once? That is the issue before the Supreme Court in Costco Wholesale Corp v. Omega, S.A. (backstory here). What's at stake is the ability of resellers to offer legitimate, non-pirated versions of copyrighted goods, manufactured in foreign nations, to US consumers at prices that undercut those charged by the copyright holders."
Free market, right? (Score:5, Insightful)
What's good for the goose must be good for the gander, no?
Re:Free market, right? (Score:5, Insightful)
Why does this even need to be discussed? (Score:2, Insightful)
Copyright weirdness (Score:4, Insightful)
Well, this was pretty clear 200 years ago: Property was real and tangible. Copyright existed to protect the authors of works from publishers and printing presses using their work without paying for it. Fast forward 200 years and now we have copyright being applied to something that's intangible, can be copied for effectively zero cost, and has been hob-cobbled together to encompass intangible things like phrases, lines of code, even the "likeness" or "appearance" of something is not copyrightable. Given this vast expansion of the definition of copyright (for better or for worse, depending on who you ask), of course there's going to come a day when the tangible thing -- a legitimate CD purchased through legitimate channels could be declared illegal because it's being used incorrectly.
Copyright no longer covers just possession of a thing -- it's now been expanded to include the use of a thing as well, and that latter definition is what's causing most of the problems.
Global economy baby ! (Score:5, Insightful)
Re:Free market, right? (Score:5, Insightful)
If you wish to engage in a little arbitrage of your own, then "grey market" is about the most polite term. It is Vital to uphold Safety Standards and Preserve Market Stability, after all...
Re:Why does this even need to be discussed? (Score:5, Insightful)
Bit by bit towards corporate feudalism (Score:5, Insightful)
Re:Global economy baby ! (Score:4, Insightful)
Rediculous interpretation of law (Score:5, Insightful)
Re:Only one solution to all these problems. (Score:3, Insightful)
There is a class of activity that consists more or less exclusively of making bets about the relative movements of currencies, and there is probably some behavior in "real" markets that is affected by currency movements; but most of this stuff is just about price discrimination, which will be economically rational for sellers as long as there are multiple buyers willing to pay different amounts more than the marginal cost of production.
National borders happen to be one convenient mechanism for price discrimination; but there are many others. The idea that such techniques deserve the protection of law, against the doctrine of first sale, though, is disgusting.
Re:How does copyright come into play here? (Score:5, Insightful)
If ever there was a rationale for "misuse of copyright", this is it.
Re:Free market, right? (Score:5, Insightful)
Actually you're right. Contraband is the perfect example, the epitome, of the free market. Totally unregulated.
Re:Sorry, but copyright does control imports (Score:5, Insightful)
The fact that the Supreme Court took the case suggests that it isn't black-letter law, doesn't it?
Re:Free market, right? (Score:4, Insightful)
They tend toward being somewhat decentralized, socially structured, and based on direct violence(rather than centralized, bureaucratic, and based on potential violence); but they are definitely there.
Re:Why does this even need to be discussed? (Score:0, Insightful)
You do realize that the reason other countries (ie Canada) have lower prices for prescription drugs is because of price controls, right? If you let people import from Canada you are essentially importing their price controls.
Price Controls --> No Research --> No New Drugs
The bulk of health research is conducted in the United States, and the bulk of that is funded by the private sector. Regulate the US Market and its bye bye medical research.
Re:Rediculous interpretation of law (Score:3, Insightful)
I believe with eBay, to be able to resell that item as an Omega watch, you have to jump through countless flaming hoops to prove that it is not a counterfeit (effectively provide a notarized affidavit signed in triplicate, sent in, sent back, lost, found, lost again, recycled as firelighters, and buried in soft peat for six months).
Without such proof, you would not be able to mention the Omega name or show the logo on the item if you want to sell it.
And that would be a trademark violation, not copyright. Or just to cover everything, call it an imaginary property violation.
Re:Free market, right? (Score:2, Insightful)
...but they virtually always have nontrivial regulatory systems.
Then a free market truly is nothing more than a neo-liberal's dream. Because there will always be some third party attempting to skim something off the transaction, through tax, regulation, prohibition, etc
Re:Why does this even need to be discussed? (Score:3, Insightful)
Unless I'm mistaken this is at least a violation of the Berne treaty, you can't treat domestic and international copyrights from the signatories differently... maybe we should put them on some sort of copyright watchlist ;)
Re:Already against the law in the UK (Score:3, Insightful)
That case is just plain absurd. The argument in that case being that Importing and selling a branded item may violate the trademark rights of the brand holder? That argument could only possible be valid in the case of counterfeit goods. Otherwise trademark law just does not work like that. As long as I am selling genuine levi's jeans, I am using the trademark (the Levi's tag on the product) in a purely descriptive manner, which is part of what trademark law explicitly does not prohibit.
Unless I am missing something, I must conclude that the judge was clearly unfamiliar with the law, and depending on the lawyers to properly argue both law and fact, which is something judges do all too often despite the fact that that is forbidden. The results are verdicts that are inconsistent with the law itself.
Re:Law and Precedents (Score:1, Insightful)
Precedent can be overruled, if it is flawed. In practice, I think this happens rather less often than it should. But here's the argument in favor of (some degree of) adherence to precedent.
Laws will never be precise enough that all judges will interpret them exactly the same way, so their will be corner cases where legitimate differences of judgement arise. If each judge makes a determination from scratch, then anyone unlucky enough to fall into one of these edges will get a different outcome depending what judge presides over his trial, which is bad. Also, consider the effect on people trying to obey the law unclear -- obviously, you stay out of the corners, since you can't be sure how your judge would interpret it, effectually broadening the law to the broadest reasonable interpretation (which is the wrong bias), and yet randomly failing to punish some incursions because you "got lucky" wrt judges.
By relying on precedent, the first judge who rules on some vague provision of a law lays out an interpretation, and after that everyone knows how it will be interpreted at their trial. Same justice for everyone, and if that interpretation turns out to be wrong, it may be corrected both by later judges, who can overturn bad precedent at will, and by the legislature, who can amend/replace the legislation to make it more specific and eliminate the misinterpretation.
Re:Only one solution to all these problems. (Score:2, Insightful)
This explains why a given item costs the same in Oklahoma and New York City.
Re:Sorry, but copyright does control imports (Score:4, Insightful)
No, it is an indicator of a worse problem. We used to have the Rule of Law. Now we have the Rule of Men. Problem is what I wrote above is so self evidently correct that this case shouldn't have made it into a courtroom at all. In a sane world, any competent attorney would have explained the law, charged the client for an hour and that would have been that. But because both sides correctly understand the bizarro reality we actually live in they are rolling the dice; since justice is now whatever a judge says and their views are randomly distributed.
The difference is when you have the Rule of Law the laws are knowable and mostly predictable. Courts are mostly occupied with determining the facts of the particular case and then applying the law to them. The occasional case will test an unexpected corner of the law but it an exception. Now the written laws mean little and judges apply their opinions of 'justice' to cases and their rulings are thus mostly unknowable beforehand. This of course means everyone take a try at court as soon as they have nothing left to lose.
Re:Only one solution to all these problems. (Score:2, Insightful)
Re:Bit by bit towards corporate feudalism (Score:3, Insightful)
Re:Why does this even need to be discussed? (Score:3, Insightful)
Re:Copyright weirdness (Score:1, Insightful)
Re:Free market, right? (Score:5, Insightful)
Copyright holders should control the market? (Score:4, Insightful)
It has long been held as illegal to engage in price fixing. Region coding for DVDs, for example, is most often used for the purpose of controlling initial distribution (which is their right) to release certain things in certain areas at certain times (which is not their right entirely). Once something is legally sold, they no longer own the rights to anything about it excepts for its duplication which includes various forms of duplication such as public playback or performance. But to individually sold items are no longer under the control of the publisher and the disc or tape or book can be transported and sold anywhere else. All of this is established in precedent or is otherwise understood as common law. You can buy a book, sell a book or even lend a book. Why this wouldn't apply to DVDs or other media defies logic. To make this truly the case, they will have to redefine copyright law to disallow someone to resell that which they have bought. This would be a very bad move for copyright holders as fewer people would be interested in buying something they couldn't later liquidate if some unfortunate event occurs in the future. Instead, people would do only rental and, of course, illegal copying.
Copyright holders have long wanted to be able to control the resale of their goods. Take, for example, the diamond trade -- they really have it the way they want it. Diamonds are super expensive new but if you try to sell one, you will find you will not get much for it... and further, you will find their prices "used" as more than inexpensive. (Wanna buy an engagement ring? Go to a pawn shop.... seriously) But law all around the planet have made this sort of control over the market illegal. This is why DeBeers cannot operate in the U.S. and many other countries legally. If copyright holders want that level of control, they will find themselves unable to operate legally in the very countries they do business. It's conceivable that they would simply buy laws that exclude their own products, but buying laws are a tricky thing and subject to constitutional rules.
Research happens outside the US too (Score:5, Insightful)
Regulate the US Market and its bye bye medical research.
While it is true that the US does a good bit of the heavy lifting in medical research, it is FAR from true that all medical research depends on the US. Many medical companies and research institutions exist and are headquartered outside the US including some of the biggest pharmaceutical companies. Plenty of research goes on across the world without the US being involved.
Please note that I'm not dismissing your general thesis completely - price controls are something to be approached with great caution. However it is not fair to say that all price regulation is a bad idea. Access to medicine is a moral issue as much as it is an economic one. Many medicines are sold for profit margins that are hard to justify to anyone with a conscience. It's fine for drug companies to make a profit, a handsome profit even. But resources for medical care are finite and just because a drug company is able to charge a lot doesn't always mean they should.
Re:Free market, right? (Score:5, Insightful)
This is what bothers me most. Free trade is only good when corporations can take advantage of emerging economies. But when it comes to selling their wares in emerging economies for 5% of what they charge in the US or Europe, well that is just people being unfair.
Perfect discrimination is the epitome of regulated trade. They can't have it both ways. Either free trade is good and we should embrace it, or it isn't and we should close the borders.
Personally, I think a company should have zero control of a product after it's been sold, other than to prevent said consumer from reproducing copyrighted portions of that product. This simple rule would render mod chips legal across board(at least for those designed to remove region coding, as opposed to those that allow you to use CDR media), as well as the used market for all games, even those with online content.
I also think we need a national law spelling out what software publishers may not put in a EULA. Too bad the legislators would name it something like "Consumer Rights Enforcement Act" and it would be 100% pro-corporations.
How to challenge the copyright argument (Score:2, Insightful)
I would challenge the argument that the Omega is copyrighted by pointing out that it was put on the product by the manufacturer, and the right to use the product was acquired by a legal purchase, and moreover exerting that right is indivisible from the product and thus the logo.
Re:Why does this even need to be discussed? (Score:4, Insightful)
Next time don't ask a rhetorical question unless you already know that the answer is not devastating to your argument.
Drug company advertising budgets are greater than drug company research budgets, both in total.
Applied globally, exhausted nationally? (Score:3, Insightful)
You have to pretty much throw away any pretense of fairness for a doctrine which holds that every copyright applies in every country, but first sale rights (copyright exhaustion) only apply in the country of first sale.
Re:Why does this even need to be discussed? (Score:2, Insightful)
Re:Why does this even need to be discussed? (Score:2, Insightful)
Actually, no those costs do NOT have to be norne by anyone.
The fact is you have big pharma releasing verion 223 XL of the exact same drug or something that works 3% better because the want to maintain market dominance and get around patent limits.
If we did not subsidize the R&D so damn much then maybe, just maybe, we would get the drugs we need instead of the same drug over and over again.
This has been going on for years (Score:3, Insightful)
In the past, I owned / operated a small electronic sales / service store in a smaller American town. Life was good, but the revenue from TV repairs wasn't quite enough to keep the business going. People were asking for high-end car stereos so I looked into becoming a dealer for a Japanese manufacturer. The requirements and restrictions they wanted were unacceptable and the wholesale pricing they offered was far too high.
What ended up being the solution was to purchase this company's products in Britain at retail and have them shipped to this country. Even after the currency exchange fees and shipping the cost was about half of what the company wanted me to pay for those items. That was fine with me and I sold them on to end customers at just under what that company wanted me to pay them as the wholesale cost.
It wasn't too many months until an electronics dealer in another town discovered that I was selling these car stereos for less than he was paying for them. He contacted the manufacturer and complained and they sent me a letter demanding that I conform to the minimum selling price or face losing their wholesale pricing. In my reply to them, I believe I suggested that they do something sexually improbable to themselves. When they threatened to sue, I just put their letters in the trash - I had no contract with them and didn't purchase anything from them so they could just go F themselves as far as I was concerned. I never revealed where I was getting their products and a lot of happy customers bought and enjoyed them.
Was I doing something wrong? I suppose it would depend on who you ask. I was happy; the additional profits were most welcome. And the customers were happy because they got a great deal on their new car stereo. Anyway, those stereos were what is commonly called "gray market" goods. That's a curious designation - the only "law" that was being violated was a dealer agreement that I wasn't a party to. If that manufacturer would have had their own way, my customers would have paid twice as much for their car stereos. Some might say that the stereo manufacturer was engaging in price fixing.
The whole idea of a producer of goods being able to dictate what those goods sell for at retail is a curious concept. It's legal and American law allows "minimum selling price" agreements. But is it good for consumers? Or is it just another way that corporations take advantage? That stereo manufacturer was happy to take the British price for those stereos but somehow when I sold them in the USA at a profit they felt that they were being harmed.
These anti-consumer agreements are everywhere - but nobody will tell you about them. Next time you're shopping for a deal on some item and notice that it's exactly the same price at every dealer you check - you're looking at a "minimum selling price" item. Nobody will give you a discount because if they do their source of supply will be cut off. So when you buy an Apple product - or a Timex watch - or hundreds of other items you're paying a higher price than the dealer might offer you. What does it mean for competition when all competitors have to sell at the same price?
There's no such thing as a "free market" when a third party to a sales transaction can dictate the terms of that transaction. Look around you and you'll see this kind of consumer abuse everywhere. We've been putting up with this for a long time - it's time for a change and I hope Costco can make a start at changing this situation.
Re:Why does this even need to be discussed? (Score:1, Insightful)
Oh Dear;
Time to drag out the Heinlein again....
"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."
from his first published story "Lifeline" (1939) http://en.wikiquote.org/wiki/Robert_A._Heinlein [wikiquote.org]