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Supreme Court To Consider First Sale of Imports 259

Posted by kdawson
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."
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Supreme Court To Consider First Sale of Imports

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  • by rolfwind (528248) on Tuesday April 27, 2010 @04:31PM (#32004344)

    What's good for the goose must be good for the gander, no?

    • by Anonymous Coward on Tuesday April 27, 2010 @04:33PM (#32004358)
      The only free market in America is hookers and blow. Just kidding, there is no free market in America.
      • by countertrolling (1585477) on Tuesday April 27, 2010 @04:50PM (#32004564) Journal

        Actually you're right. Contraband is the perfect example, the epitome, of the free market. Totally unregulated.

        • by fuzzyfuzzyfungus (1223518) on Tuesday April 27, 2010 @04:55PM (#32004616) Journal
          Quite the contrary. Black markets often suffer from relatively weak, corrupt, or inconsistent governance(gang warfare isn't going to find its way into the dictionary under "due process" any time soon); but they virtually always have nontrivial regulatory systems.

          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: (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: (Score:3, Interesting)

            by SydShamino (547793)

            I disagree with your analysis. You claim that they tend towards being somewhat decentralized. On the contrary, I think they start out as decentralized "entrepreneurships" and then tend towards becoming centralized "organized crime".

            We call these centralized units "the Mob" or "cartels" or something.

            Without firsthand knowledge, I'd bet that Somalia's pirate business has consolidated in this fashion in the last few years as well. It's highly unlikely that each pirate vessel and crew act on their own withou

        • by timeOday (582209) on Tuesday April 27, 2010 @05:58PM (#32005262)
          "Free market" is an oxymoron in the first place (when taken to the logical extreme of "totally unregulated", anyways). It's like asking what basketball would be like without any rules; it wouldn't be basketball. Without property rights, and contract enforcement, and currency, the forces of supply and demand still exist but can't develop into anything like the byzantine sophistication of Wall Street. So you can't just wish all the complexities away. This case is ultimately about a conflict of property rights - ownership of intellectual property vs ownership of the media holding copies of the intellectual property.
      • by tunapez (1161697)

        I realize it's AC, but please, someone mod this +1 Funny, if not +5 Insightful.

      • by Nadaka (224565)

        Free? Have you seen the prices on hookers and blow recently?

      • Freedom's just another word for nothing left to sue.
    • by fuzzyfuzzyfungus (1223518) on Tuesday April 27, 2010 @04:37PM (#32004426) Journal
      Of course not. When a corporation needs cheap labor/materials/lax laws/no taxes, then "Free Trade" is what makes the world go round.

      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...
      • by digitalunity (19107) <digitalunityNO@SPAMyahoo.com> on Tuesday April 27, 2010 @06:18PM (#32005454) Homepage

        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.

  • Surely this should be a foregone conclusion
    • by Locke2005 (849178) on Tuesday April 27, 2010 @04:39PM (#32004442)
      Free market is free market. Once you sell something, you should have zero authority to dictate where it is shipped to and resold (with the exception of munitions, of course). Oh, and we should be able to import prescription drugs at much lower prices from other countries too!
      • Re: (Score:3, Insightful)

        by Kjella (173770)

        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 ;)

      • Oh, and we should be able to import prescription drugs at much lower prices from other countries too!

        That settles it then. Whatever about small fry like video game companies and DVD distributors, there is no way that the US Supreme Court is going to upset the gravy train of something so massive as the pharmaceutical industry. No imports for you!

    • by tomkost (944194) on Tuesday April 27, 2010 @04:41PM (#32004462)
      Yes, it is a foregone conclusion, but not in the way you probably are thinking. You see, the rights of corporations must be protected at all costs. They can not be restricted by silly concepts like the sovereignty of nations, fair use, personal property rights, or any other fundamental concept of our legal systems. Don't worry, the Supreme Court will help them achieve their profits at any cost. I sure hope I'm wrong, but let's watch and see.
    • Re: (Score:3, Interesting)

      by NewWorldDan (899800)
      The problem is that Congress did a lousy job of writing section 602 of the copyright code. It's clear to me that the intent of the law is that this should apply to goods manufactured abroad without the consent of the copyright holder. It calls it a violation of the copyright holder's right to produce and distribute something. Except, of course, that the copyright holder has already exercised that right.

      Interestingly enough, if I read it correctly, this doesn't apply to people importing things for their
  • by girlintraining (1395911) on Tuesday April 27, 2010 @04:36PM (#32004412)

    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.

     

    • Re: (Score:3, Informative)

      by rubycodez (864176)

      wrong, copyright 200 years ago applied to the information, the data, in a book. You could in 1790 copy a book by hand, sell the copy you made,and be in violation of copyright law.

      • by girlintraining (1395911) on Tuesday April 27, 2010 @04:46PM (#32004520)

        wrong, copyright 200 years ago applied to the information, the data, in a book. You could in 1790 copy a book by hand, sell the copy you made,and be in violation of copyright law.

        Citation needed! And I'll provide. You want the Copyright Act of 1790, which was created to "securing authors the 'sole right and liberty of printing, reprinting, publishing and vending' the copies of their 'maps, charts, and books' for a term of 14 years, with the right to renew for one additional 14 year term should the copyright holder still be alive."

        So you could make a handwritten copy for personal use and not be in violation of copyright law. You could also re-sell anything protected by copyright law that you lawfully purchased without any strings. Neither is true today, which is what this case is all about.

        • by ais523 (1172701)
          Wow, 14 plus another 14 is the sanest time limit for copyright law I've heard mentioned in a while (should be plenty of time to make money on whatever you've done...) Also, your sig, despite being a quote from an entirely different context, seems to describe copyright law pretty accurately. (I misread it as being part of your comment to start with...)
        • by jmorris42 (1458) *

          > Neither is true today, which is what this case is all about.

          Nope, that is exactly what this case is about. You can't go to some third world pesthole, print up a bunch of books and then import them into the US. The rights holder of course can outsource the printing. Every book/CD/DVD/etc offered for sale in the US must have a chain of authority tracable to the author, and only through US connections. Some of the newer treaties get a little more complex but the idea is still the same as a practical m

          • by cgenman (325138)

            Why not? Say that virgin records produces 2 batches of records. They're both produced side-by-side in the same factory, with the same proper authorization from the same people. Batch 1 is sold in the US for 15 dollars a copy. Batch 2 is sold in Brazil for 5 dollars a copy.

            The chain of authority is completely traceable, and perfectly clean. The only difference is whether or not virgin records earmarked a particular piece for sale in one country or another. And that falls to the interpretation of the la

          • by Altus (1034)

            I believe this is about buying books in a third world pesthole from the original publisher, but at a much lower cost than what they sell them for in the US and then shipping those books back to the US for sale to customers.

            It isn't about illegal copies (black market) it is about buying from one market and shipping to another (gray market).

          • Re: (Score:3, Informative)

            by Fluffeh (1273756)

            You can't go to some third world pesthole, print up a bunch of books and then import them into the US.

            Read the backstory properly [theiplawblog.com]. You are way off the mark here. What this is about is basically this (Using roughly your example):

            CompanyA prints books. They do so in the US and also in thirdWorldPesthole.
            CompanyB sells books in the US bought from CompanyA.
            CompanyB finds CompanyC that buys the books from CompanyA that are printed in thirdWorldPesthole, and CompanyB buys these books from CompanyC and also sells them in the US.

            Becuase CompanyA sells the books much cheaper in thirdWorldPesthole, CompanyA n

        • by BKX (5066)

          You must speak a different language than the rest of us. A handwritten copy would most certainly qualify as "reprinting". Remember that the spirit (intent) of the law is often as important as the actual wording. Take the word "vending" in that excerpt. At first you may think that only copyright holders could sell their own works (or at least control the sale thereof) and that second-hand sales would be prohibited. But you'd be wrong. The doctrine of first sale had existed in commonlaw for many, many years b

        • by rubycodez (864176)

          not so, both still true today but for "exceptions", this court case is about an exception to the general rule, which include imported foreign first sale.

          You can make a handwritten copy or photocopy today, as long as for legal use: Libraries have copy machines for that purpose. Try to sell that copy and you're in trouble

      • by Grishnakh (216268)

        How is his statement wrong? You're not even contradicting it. You're talking about copying and selling something, which is exactly what copyright is about: the right to copy.

        What this case about isn't copying at all: it's about buying a legitimate item from the publisher (through its distributor and retailer), then taking it somewhere else and reselling it as second-hand. Normally, publishers don't complain too loudly about this, because there's no profit in buying a CD at Wal-Mart and then driving to yo

        • by Intron (870560)

          What this case about isn't copying at all: it's about buying a legitimate item from the publisher (through its distributor and retailer), then taking it somewhere else and reselling it as second-hand.

          Not true. If Costco was calling the watches second-hand I don't think Omega would have a problem with it. They're selling brand new watches. So the question is: Does copyright law allow control of sale and distribution? (yes) and is Costco violating that? (hmmm)

          Maybe Costco should claim that all watches are second-hand (also hour and minute-hand).

    • by fuzzyfuzzyfungus (1223518) on Tuesday April 27, 2010 @04:44PM (#32004510) Journal
      It's even nastier than that, in some cases, because some "real and tangible" property is now complex enough to enforce(against all but extremely sophisticated individuals) its own rules about use.

      CSS is pitifully weak; but it was perhaps the first demonstration of this concept that gained huge market traction. Thanks to CSS licensing requirements, adding technologically enforced region coding became trivial.

      As the cost of computing power continues to fall, and the number of devices that have embedded firmware and/or unique serial numbers continues to increase, there is virtually no area of "real property" over which the DMCA and copyright law will not eventually exert de facto control.
      • by selven (1556643)

        I'm pretty sure the first sale doctrine forbids using legal tricks (like slapping a license agreement onto a book) to prevent resale of a copyrighted work. Not much of a stretch to extend that to technological protections.

  • by aepervius (535155) on Tuesday April 27, 2010 @04:37PM (#32004414)
    You decide to outsource your programmer in bengladore, your sale rep in ireland, your telephonic support in china ? Welllll we decide to buy our game from import from the global market. Too bad they undercut your local monopoly price. Global market baby. You outsource our job, we outsource our buying. Fair is fair.
    • by Killer Orca (1373645) on Tuesday April 27, 2010 @04:43PM (#32004500)
      And here is the answer people, Costco found a way to keep their prices low and still buy products legitimately; but the manufacturer cries foul because of copyright of all things? No, no, It was sold to a U.S. distributor, don't act like you didn't know it wasn't going to be sold in the U.S. and claim First Sale doctrine violation.
    • by Dunx (23729)

      Hence all that lovely region coding - ensuring geographic market segmentation so there will not be a single global market.

      I often wonder if Philips and the other CD standard signatories regret not inserting region coding into that first digital media standard.

      • by HTH NE1 (675604) on Tuesday April 27, 2010 @05:53PM (#32005220)

        Imagine: Omega watches which sync up with the radio signal from an atomic clock, but refuse to configure themselves for any timezones other than those for which it was authorized for sale.

        Of course, they'd lose the lucrative international traveler market. Or they'll have temporary time zone support, but if you stay too long in a foreign timezone it will reset or disable itself.

        And then comes the question: what if I, as an (American) international traveler, buy one of their manufactured-in-Switzerland watches cheaply in an authorized country, travel back to the US, and then decide I don't like it (or need the money) and want to sell the watch on eBay? Apparently they want to bar me from selling the watch because it wasn't authorized for sale in the US.

        Will they have their goons patrolling the US looking for people wearing imported watches and harass them to show their receipts showing they personally purchased the watch overseas or give up who sold them the watch under threat of prosecution? "Product's papers, please?"

        • Re: (Score:3, Interesting)

          by WillDraven (760005)

          I just got this horrific image of a dystopian future in which you have to carry on your person licenses for every piece of hardware, software, content, fashion accessory, haircut, tattoo, etc. that you have on your person. Don't have your license? Pay the fine or go to jail. The scariest thing about that is I can see it coming true.

          I think I need to go lie down...

    • Fair is not necessarily legal.

  • by CRCulver (715279) <crculver@christopherculver.com> on Tuesday April 27, 2010 @04:37PM (#32004424) Homepage
    I thought I had a decent understanding of the three legal spheres grouped under "Intellectual Property": patents, copyright and trademarks. But I don't understand why copyright is involved in this specific case. Wouldn't Omega's logo stamped on products be something protected as a trademark, not as a copyrighted work?
    • by Attila Dimedici (1036002) on Tuesday April 27, 2010 @04:49PM (#32004546)
      If I understand the backstory article correctly, Omega registered a copyright on its logo in order to fall under this exception to the First Sale Doctrine. I believe Costco made a mistake in not challenging the copyright. The Omega logo does not appear to me to be something that is copyrightable. I don't know if they can change their tactics at this point, but if they can, they should. The Omega logo is not distinct from hundreds of other expressions of Omega that have been used for years. When I did a search of "Omega logo" I found a computer company that uses almost exactly the same logo except with the word "Systems" added. Additionally I saw several other similar logos that I did not bother to follow to see what company they were for (but it wasn'tthe watch company).
      • Re: (Score:3, Informative)

        by $criptah (467422)

        It is not the Omega logo that is being questioned. Omega has a symbol on the back of the watch that has nothing to do with the Greek letter. It is a symbol that was designed to allow the company to enforce the copyright law. From the article:

        Costco lawyers at Robbins, Russell, Englert, Orseck & Untereiner write in their brief that in 2003, Omega began to stamp its Seamaster watches with a small globe design, less than 5 millimeters across, "for the express purpose of invoking the Copyright Act to re

      • by reverseengineer (580922) on Tuesday April 27, 2010 @06:27PM (#32005544)
        Want to know what the copyright is really being asserted on? Here's a picture of the back of an Omega Seamaster watch [watchhunter.ca], the article in question. (No affiliation with the site, just what Google turned up first). Omega isn't asserting copyright on their main logo; they've been using it for over a century. Also, it's the Greek letter omega, not exactly a highly stylized and unique design. They aren't asserting copyright on the Seamaster seahorse that dominates the back, though you'd think that desgin qualifies as the best example of artistic authorship on the watch. Omega has been making Seamasters for about 60 years, so I would think that image could still be copyrighted. But that's not what Omega is claiming infringement on either.

        The artwork Omega is enforcing a copyright on is that pattern of circles with an omega in it, just to the right of the pronounced Omega logo and above the "825" in the linked picture. That little doodle is about 0.5 centimeters in diameter, and apparently Omega is arguing that when you buy an Omega Seamaster, you are buying an authorized reproduction of that triumph of human artistic endeavor for the agreed-upon price of two thousand dollars. Omega just happens to be so generous as to frame your purchase with a diving watch.
    • by pem (1013437) on Tuesday April 27, 2010 @04:50PM (#32004554)
      The only reason copyright comes into play is because Omega copyrighted this logo for the _specific_ reason of trying to use copyright as a legal market segmentation tool.

      If ever there was a rationale for "misuse of copyright", this is it.

      • by poena.dare (306891) on Tuesday April 27, 2010 @05:11PM (#32004794)

        This is just epic fail for Omega. They should have learned from the much more savvy software publishing industry: don't sell your watches; license them.

      • If ever there was a rationale for "misuse of copyright", this is it.

        Copyright is quickly become the big business go-to concept for invalidating constitutions everywhere. Wiretapping, prior restraint, first sale rights, presumption of innocence, parody and satire, academic freedoms, etc, etc. People have rights that are getting in your way? Then get yourself some Copyrights!; Ten times more potent than the average right.

    • Re: (Score:3, Informative)

      In this case, the stamp on the watch is being considered as "artwork," which falls under copyright. From the FAQ [copyright.gov] on the US Copyright Office page:

      Copyright does not protect names, titles, slogans, or short phrases. In some cases, these things may be protected as trademarks. Contact the U.S. Patent & Trademark Office, 800-786-9199, for further information. However, copyright protection may be available for logo artwork that contains sufficient authorship. In some circumstances, an artistic logo may also

  • by unity100 (970058) on Tuesday April 27, 2010 @04:39PM (#32004444) Homepage Journal
    in which you will buy everything, but own nothing ...
    • Re: (Score:3, Insightful)

      by Locke2005 (849178)
      I have no problem with that, as long as I'm one of the owners that everybody else is paying a monthly stipend to.
  • Who cares (Score:2, Funny)

    by Anonymous Coward
    Easier to steal everything off internets.
  • by Locke2005 (849178) on Tuesday April 27, 2010 @04:47PM (#32004524)
    So, if I live in England, legally buy an Omega watch there, then legally immigrate to the US, it is now a copyright violation to resell that watch on eBay?!? This flies in the face of common sense!
    • by tsm_sf (545316)
      'Common Sense' and 'Law' are two totally distinct entities. Tears of frustration and rage will ensue if you continue to conflate them.
    • Re: (Score:3, Insightful)

      by Scarletdown (886459)

      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. O

    • Re: (Score:3, Informative)

      by mybecq (131456)

      So, if I live in England, legally buy an Omega watch there, then legally immigrate to the US, it is now a copyright violation to resell that watch on eBay?!? This flies in the face of common sense!

      See USC TITLE 17 > CHAPTER 6 > 602 (a) (3) (B) [cornell.edu]. That is not an infringement.

      • by Locke2005 (849178)
        The cited section appears to apply only to "phonorecords". A watch manufactured under license from Omega cannot be considered a "copy" of an Omega watch; it IS an Omega watch!
    • by pilgrim23 (716938)
      Consider the antiquarian collector. A First Folio Shakespeare might be covered by a copyright issued for a new printing, edition, revised font, scholarly criticism edition of say the Tempest. Thus, a $12.95 modern paperback now can be used to halt the sale of a 6 figure valued volume? Are they really trying this hard to create a new black market for every sale possible? "Psst! I have some food.. Cheap!"
  • Law and Precedents (Score:2, Interesting)

    by zero_out (1705074)
    I read the article, and I have to say that I am still baffled by how much US law relies on precedents. Judges are fallible humans. Even after several rounds of appeals, erroneous judgements happen. Prior to emancipation, the US Supreme Court issued rulings in favor of owning slaves. If the court followed precedent, then it should have ruled against Lincoln's emancipation proclamation. Ruling on precedent is the same as answering the question "why do we do this?" by saying "because we always have." Why
    • by Tanman (90298)

      Stability.

    • Re: (Score:3, Interesting)

      by Obfuscant (592200)
      Ruling on precedent is the same as answering the question "why do we do this?" by saying "because we always have."

      No, it's the same as saying "because the supreme court decided that way in a similar situation, and it's a real waste of time to try to reverse the supreme court with our own fanciful rulings". That doesn't seem to stop the Ninth Circuit, however.

      It's also a way of adding inertia to the system, which in the long run is a good thing. It's very hard doing anything under a system that flip-flops

    • by nomadic (141991)
      The idea is that it's just the courts' job to interpret the law; if they interpret it incorrectly chances are that it was the legislators fault for drafting it poorly, or not anticipating certain issues. And unfortunately before the Emancipation Proclamation there was no federal legal impediment to the existence of slavery.
  • by thisissilly (676875) on Tuesday April 27, 2010 @04:53PM (#32004582)
    Tesco (think British Wal-mart) was legal purchasing Levi's jeans in Europe from wholesalers, and then reselling them in the UK for lower price than Levi's wanted them sold there. Levi's sued them, and won [bbc.co.uk]. We can only hope the US Supreme Court sees things differently.
    • Re: (Score:3, Insightful)

      by Tacvek (948259)

      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 s

    • by PCM2 (4486)

      But the Tesco/Levi's case didn't hinge on copyright, if I understand it, but on trademark law and trade regulations. Tesco was free to buy Levi's from Italy or Spain, for example, but was importing them from countries outside the EU, which is forbidden without the consent of the manufacturer.

      What I don't understand is that the fact that Levi's were available at a much cheaper price in Eastern Europe sounds like classic dumping on Levi's part, which should mean Tesco can bring a complaint to the European Com

      • by MoonBuggy (611105)

        Tesco [...] was importing them from countries outside the EU, which is forbidden without the consent of the manufacturer.

        What's the logic behind making that illegal?

        • by chrb (1083577)

          What's the logic behind making that illegal?

          The actual act of importing goods isn't illegal - there are thousands of EU companies that make a living from importing goods from outside the EU. The logic in the Tesco vs Levi case was that trademark law enables a manufacturer to dictate how that trademark is used in commercial retail environments. Each item of clothing contains a distinctive trademarked logo - hence the trademark owner can dictate how each item of clothing is sold within a commercial retail environment. The finding may be annoying for th

    • If that's the case, couldn't you now sue Levi directly for Price Fixing?

      • by chrb (1083577)

        If that's the case, couldn't you now sue Levi directly for Price Fixing?

        Price fixing is only illegal within a legal jurisdiction that makes it illegal. It is legal for companies to charge varying amounts to customers in different nations of the EU (there may be varying distribution costs etc.). However, that doesn't apply to the Levi case, since Tesco were apparently buying from outside the EU, and there is no law that stops a company charging different prices in, say, the US, the EU, or the rest of the world.

  • "Grey Market" (Score:4, Informative)

    by tlhIngan (30335) <slashdot AT worf DOT net> on Tuesday April 27, 2010 @04:56PM (#32004632)

    I don't know why it's a copyright issue, since it's a physical item, but usually we call such legitimate imports "grey market" goods. They're not officially for sale ("white market") nor are they illegal to sell ("black market"), but they're legally sold goods for distribution elsewhere that's re-imported for local sale.

    Happens all the time even with IP materials like books, CDs and DVDs. Hell, Amazon and Walmart are probably the biggest "offenders" - I can buy two CDs, one locally and one from Amazon (or Walmart) and the local one is from the Canadian distributor, while the one I got from Amazon (or Walmart) comes from the US.

    Ditto books - sometimes the US-Canadian book pricing is so out of whack, it's cheaper to get it from Amazon.com than Amazon.ca even with shipping charges.

    Camera manufacturers used to be the biggest PITA regarding grey market goods - if you imported a camera, they would insist that warranties and such were only honored in the purchasing country - buy it in the US, service is done in the US, other countries would not touch it. Oh yeah, and the return shipping, to that address in the country.

    Thankfully, for most products this doesn't happen (it's not strictly illegal, but it's a great way to piss off customers) anymore - I figure most companies gave up trying to track serial numbers and points of origin, and lets them move inventory around as needed by demand.

    Of course, importation of such products is perfectly legal.

    • by Kjella (173770)

      Been there, done that... actually I'm picking up my new video camera tomorrow. No wonder when the US model costs 999$ and the EU model 999E. Plus I get another 10 fps going from 50 to 60 fps as a bonus, as long as it doesn't break.

    • Re: (Score:2, Interesting)

      by phorm (591458)

      Thankfully, for most products this doesn't happen

      It does for a lot of laptops. That's why many companies seem to have - for example - a model that ends in -US or CA. The major model number on the top may say DX8200, but the stamp on the bottom is more specifically a DX8243CA...

    • by LWATCDR (28044)

      And as a motorcyclist I find it really annoying that Canada gets more and better motorcycles than we get in the US!
      There are several models of Honda that are not imported to the US but are available in Canada! The logic from Honda is that they wouldn't sell enough of them in the US!
      I mean really? There are how many people in Canada?
      Oh well at least we get cheap books here.

  • The first-sale doctrine doesn't apply to copyright? Does the Copyright Act have a parallel provision to s. 526 of the Tariff Act of 1922?
  • Or am I missing something?

    If the importer imported it, he/she purchased it (or obtained it on consignment, which is probably unlikely), and can do with it what they wish.

    As far as controlling a use of a thing, that would be a matter for a license, not a copyright.

    I do recall a case in Canada, though, where an importer of toy cars obtained them legitimately, but was barred from selling them and competing with an "official" agent, on the basis of the copyright on the packaging, but I think that was a differen

  • by 0xdeadbeef (28836) on Tuesday April 27, 2010 @05:12PM (#32004804) Homepage Journal

    At what point was the watch disassembled at a molecular level and then reproduced in bulk by a nano-lathe?

  • As an aside, what's with the unauthorized "lending" restrictions printed on some DVD covers and inside some books? Reselling? Hmmm....
  • by erroneus (253617) on Tuesday April 27, 2010 @05:59PM (#32005284) Homepage

    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.

  • by russotto (537200) on Tuesday April 27, 2010 @10:13PM (#32007928) Journal

    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.

  • by Whuffo (1043790) on Wednesday April 28, 2010 @07:30AM (#32012244) Homepage Journal

    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.

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