First-Sale Doctrine Lost Overseas 775
Max Hyre writes "In a 4-4 decision, the US Supreme court let
stand the Ninth Circuit's decision that
the First-Sale Doctrine (which says once you buy something, the maker
gets no say in what you do with it) only applies to goods
made in the US. That Omega watch you bought in Switzerland last
year? It's yours now—forever. You can't sell
it without Omega's permission."
First sale doctrine (Score:5, Insightful)
That is the most absurd and arbitrary distinction I've ever heard. A law of convenience if I ever heard of one. One step closer to stripping our rights in the name of international legal harmony.
The stupidest thing is (Score:5, Insightful)
that they based it on copyright law: an Omega logo on the watch.
I thought it would be something like a signed contract, or buying from a foreign wholesaler, then importing to the US.
But the copyright on the logo?
Only if they catch me (Score:2, Insightful)
Like speeding, just because a law exists doesn't mean I will obey it. If I want to convert my Watch to cash, I will find a way to do it.
Legitimate problem with grey market (Score:4, Insightful)
The problem with allowing third-party imports to be sold is that consumers will buy the items, expecting the manufacturer to support them (providing warranty service at a minimum). If the product in question is not sold directly domestically, then the manufacturer may not be prepared for the support. Further, the product may have been sold in a country where the cost and level of support is different.
The solution is to require that any imports not authorized by the manufacturer must be clearly advertised as not supported by the manufacturer, with all service provided by the importer.
That's Not What The Article Says (Score:5, Insightful)
There is a difference between "produced overseas" and "obtained overseas".
Re:Bradley Manning smiles and nods. (Score:1, Insightful)
So let me get this straight:
I'm a free citizen who merely wants to convert one type of property (watch) to another type of property (paper dollars), per my natural, inalienable rights as a Freeman. Your response is to compare me to a guy who is equivalent to Benedict Arnold (sharing secrets with a foreigner)??? I'd say your analogy is "fail"
Re:Bad Summary (Score:4, Insightful)
Under other provisions of copyright law, importing a copy of a protected work amounts to an infringement of the copyright if the copy was made abroad and brought back into the U.S. without permission.
Emphasis mine. What is "permission?"
So what I'm asking is whether or not Wal-Mart signs agreements with Vietnamese companies that say they can bring them into the United States and did CostCo, like, drop the ball on that one? Did they smuggle them in their coat over to the US? I assume they passed customs from both countries, what level is this illegal on?
How on Earth would this deal go down any differently for Timex watches made in China sold in CostCo? Are you telling me that CostCo was making money by purchasing Omega watches at MSRP in Switzerland and then reselling them below MSRP in the United States? I'm not an economist but something sounds really strange in that case. This is what the SCOTUS Blog said:
The case involved a company, Omega S.A., that makes watches in Switzerland and sells them around the world through authorized distributors and retailers. Costco, a membership warehouse club that sells brand-name merchandise to members at prices lower than its competitors, had bought Omega's Seamaster watch abroad and re-sold it in the U.S. Costco's price was $1,299, about a third less than Omega's suggested retail price of $1,999.
Does anyone else think this sounds like Omega struck a deal selling thousands of watches to CostCo only to find out that when people saw them for $1300 they perceived a devaluation of the one they bought at the mall for two large? I mean, it sounds like Omega is trying to force CostCo to maintain a minimum profit margin. That's not capitalism. It's becoming more and more clear that copyright and capitalism are mutually exclusive concepts. And I'm guessing that this is some bizarre abuse of copyright that any foreign manufacturer could hold over the largest retailer/reseller's head. Evidently it happens on a smaller basis [amazon.com] with Omega.
Re:The stupidest thing is (Score:4, Insightful)
It's a common way to circumvent laws which attempt to encourage competition.
Let's consider three parties: Manufacturer, Retailer and Customer.
Broadly speaking, laws governing the contracts between Manufacturer, Retailer and Consumer generally say something like:
The contracts between "Manufacturer and Retailer" and "Retailer and Customer" are wholly separate, and Manufacturer cannot impose subsequent conditions on the contract between "Retailer and Customer". (In other words, Apple can't demand their retailers sell at a specified price).
Usual Solution: Manufacturer doesn't write anything into the contract along those lines, but have internal processes that ensure if the retailer does try and do this, subsequent orders from the retailer are mysteriously "delayed" and/or include a line in the contract giving Manufacturer the right to stop selling to Retailer at any time and for no reason whatsoever.
Retailer is free to source products from anywhere in the world (the "grey market"), they're not obliged to buy from local distributors
Solutions: Sure, but most warranty law deals with the contract between Retailer and Customer. The manufacturer is under no obligation to even offer a warranty - and they often won't with grey market products (which they identify by serial number). Which means that if the product breaks, that's the retailer's problem. Of course, this isn't terribly effective for a lot of things these days - Costco deal in sufficient quantities that they can live with this quite happily.
What else can the manufacturer do? Localise products: ensure that only products destined for the US market get the necessary sticky labels showing they meet safety standards (even if they're all identical) - but this doesn't work very well for designer watches and handbags.
Copyright - ah, that's a good one. The manufacturer obviously holds copyright over their name and various aspects of their products, which means nobody else can use it without their permission. Obviously, no manufacturer in their right mind is going to sue everyone who sells their products for copyright infringement - but they can sue people who they don't want selling their product.
Re:Good luck (Score:5, Insightful)
"I don't get paid for work I did two decades ago. Why should you?"
"Um... uh... well..."
"That's what I thought. There is no justifiable reason to extend copyright beyond about 10 years. There is no reason why you should get an annual payment for the rest of your life for work you did when you were age 20 or 30. *I* don't get that privilege of lifelong income. I work. I get paid. I might get a bonus at the end-of-the-year or decade for work well done, and that's the end of it. The same should be true for you."
Re:First sale doctrine (Score:5, Insightful)
Wickard v. Filburn is easily the worst decision the Supreme Court ever made. The twisted logic that they went through to conclude that by not participating in commerce he had effected commerce and was therefore subject to regulation is absurd.
As usual (Score:2, Insightful)
Slashdot is over-sensationalizing a bit, or a lot.
This does not appear to have any impact on individual rights. You buy something in the US, is yours, you do as you please, including resell it. This covers a different situation where a company goes and buys foreign products in a foreign market, perhaps even with an agreement explicit or implicit as to what they can do with them, but then brings them over to the US for sale. That is what is at issue here. Costco said "We can do that if we want," the 9th Circuit said "No you can't," and the SC is split. That's rather different than an individual doing anything. If an individual bought one of those watches from a US store, they could then do as they liked.
So this isn't an issue for rights for you as an individual, don't worry. It is an issue for differential pricing. A company might wish to sell a product for different prices in different markets. Say a product costs $5 to make and get to a country for sale, $5 total cost, everything after that is profit. In the US, they discover they can sell it for $25, because the product is unique and people have money. In India they can't get that, people have less money, they have to sell it for $7 which they still make a little on, but not as much. These are all wholesale prices.
Well what someone like Costco might want to do is go and buy the product in India and import it. There is an arbitrage opportunity. Let's say it costs Costco $10 to buy retail, and $5/item to get them and ship them over. That still puts there per item cost at $15, well below the $25 they'd have to pay normally. That of course lets them undercut competitors.
That is what is trying to be stopped here. The companies don't want them to do that, they want to be able to have different pricing in different markets. Costco fought back arguing first sale, that after they sold it they can't tell Costco what to do.
I'm not saying the courts have made the right decision, but as the parent notes, this is not an issue for your and my individual rights. We go to a store (or online) in the US and buy something, first sale applies same as ever this has nothing to do with it.
Re:Bradley Manning smiles and nods. (Score:3, Insightful)
>>>the point is the same
No not the same. The difference is I did not sign a contract and pledge a promise to not convert the Omega watch to cash. No company nor government has any right to stop me from doing so. IN Contrast, the soldier DID sign a contract to keep quiet about classified documents, and he broke that sacred pledge. Hence breach-of-contract. Hence prosecutable.
So you see? The analogy between me and the soldier does not fit. I'm a freeman and have certain inalienable rights, including the right to convert one property (watch) to another property (dollars), and the Union government has zero authority to take-away that right. See Amendments 9 and 10.
Comment removed (Score:4, Insightful)
Re:Will this ever improve? (Score:5, Insightful)
Yep, pretty much. We've moved from a manufacturing and research economy to a purely intellectual property economy. All our wealth is going to be tied up in imaginary pieces of paper that say that people have to pay us for using computer software, or by building windshield wipers a particular way, making pharmaceuticals with a particular active ingredient, or for listening to music or watching movies (ooh, a toll on "culture"). We even get money if they record and distribute content themselves using patented h.264 video codecs. So all we need to do is just sit back and collect the money, backed by the threat of economic or conventional warfare if they don't pay up. Maybe once in a while we need to renew or trivially update our patents or copyrights to keep anyone from innovating around them, thus maintaining the status quo.
Not much different from the way things were in the colonial era, where we sent a lot of profits back to the empire, and you needed official licenses from the king to operate trade routes or the navy would sink you. Heck, they even still unabashedly call some of these payments "royalties" today. Fortunately, we know how this turned out, so we can probably count on history repeating itself eventually.
That's correct (per the 9th Circuit's decision) (Score:4, Insightful)
While the 9th Circuit's ruling [google.com] is unfortunate, it's not quite as bad as not being allowed to resell any items manufactured overseas. Whereas the 9th Circuit's decision applies to goods obtained overseas, goods legally imported into the United States would still be protected by the first-sale doctrine.
The decision still sucks, though. Not only do I think it's a perversion of copyright law to add a copyrighted logo to a watch in order to prevent importation that would otherwise be perfectly legitimate, but I also think it's a perversion of justice for copyright law to bar unauthorized importation of nonpiratical copies the way it currently does.
Re:First sale doctrine (Score:5, Insightful)
No, but we certainly need a constitutional amendment to clarify that no, corporations are not actually people.
Re:What does this mean? (Score:5, Insightful)
Why are only corporations allowed to take advantage of the 'global economy' (outsourcing), but customers should be prevented from purchasing goods where they are cheapest?
Re:First sale doctrine (Score:4, Insightful)
While that decision was very questionable and has some terrible consequences, I think it pales in comparison to the effect of the Filburn decision. The Filburn decision was a massive expansion in Federal power. Using the twisted logic of SCOTUS, Congress could basically justify any law they wanted to pass. Until United States v. Lopez, Congress had a largely limitless power under the Commerce Clause. Even using a liberal interpretation of the Commerce Clause, most federal laws in place today are probably not Constitutionally sound without the Filburn decision.
Re:First sale doctrine (Score:5, Insightful)
Under the Union Constitution, each member state had freedom to decide if blacks were Citizens or Property.
So every state gets the freedom to decide for themselves whether black people are people? What other conditions do states have the right to place on a person’s “person-hood”? Do we really need a constitutional amendment to clarify that yes, people are actually people?
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America...
Dude, wipe the foam off your chin and read some history. Yes, we did need an amendment. Yes, we have one. We did not have it at the time the Dred Scot decision was handed down.
Quoting the preamble means nothing. At the time it was written, blacks were not considered part of "We the People". Have you actually read any history, or don't they teach that at your high school any more?
Re:First sale doctrine (Score:5, Insightful)
I can top it. In Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886), the SCOTUS decided that corporations were people and thus entitled to 14th amendment protection.
Yes, Corporations, have all the benefits of being 'people', none of the drawbacks (such as finite life spans), and obey few of the laws that other 'people' must observe.
Corporations are free to merge with many other corporations, while polygamy is still illegal for 'people' in most states.
Corporations are allowed to have business practices such as "cutting off the competitor's air supply" while murder is still illegal for 'people'.
Corporations are allowed to be dissolved yet Suicide is illegal for 'people' to commit.
Corporations can have 'hostile takeovers' of other weaker corporations, but armed robbery, slavery, and blackmail are all still illegal for other categories of 'people'.
It would be pure anarchy and rule of the corrupt and powerful if real human 'people' were given the same rights as corporate entities have. Laws against things such as murder are in effect to help maintain order and security of society.
Feudalism, chaos and insecurity reign supreme among our most wealthiest 'people', the corporations; Some of us fight for less regulation and then wonder why the economic society is so chaotic and insecure...
Re:Good luck (Score:5, Insightful)
Really? What about house builders, infrastructure?
Should the people who built a highway get money from every user for the rest of their lives?
Should the painter who did the exterior of my house get a say on allowing me to repaint it in a different color?
Re:Implications are a bit more subtle (Score:4, Insightful)
Think how inconvenient it would be for companies if they prices their goods differently in different countries and then someone circumvents that by moving the goods from a cheap market back into an expensive one.
I should give a fuck why?
If you actually believe in free markets, strong property rights, and capitalism you should wholly support such reimportation. Hell, even if you don't, you should support it, unless you're some sort of fascist oligarchist.
Re:That's Not What The Article Says (Score:5, Insightful)
Unfortunately, the idea that we can enjoy our own property peacefully and privately has been under attack for quite some time now.
I recently gave up trying to explain to some mentally challenged person here on Slashdot the very simple concept of property ownership and how once somebody sells you something they literally have no rights over it. Morally, ethically, etc... no rights.
It has been this way forever. In the Wild West if you sold some guy a horse and then fucked with him 6 weeks later about a saddle he did not buy from you, your ass would have been shot. Nobody would have had sympathy for you either. Society would have considered you insane.
Now, with DRM and the DMCA companies can try telling me that I don't own my own hardware and because some mental midgets don't want to get cheated on in video games, I should not have the right to fully own my own hardware. It's all magically different because we are talking about software some how?
According to the article this twisted, disgusting, morally offensive logic now applies to non-electronic hardware!?
This is the point where, as a people, globally, we just need to stand up and kill the top 3% of the people running the planet that have these stupid ideas. There is such a thing as too far and the last straw.
The First Sale Doctrine is not just some piece of random legal logic. It was a rebuke to the sociopathic executives and marketers that had the ridiculous idea they could try to keep controlling and monetizing their products after they sold them. It recognized something we all understand to be a fundamental human right, something sacrosanct, something to be rigorously defended.
Now we are allowing Sony and these Swiss douchebags to have permanent co-ownership of our property. How the heck are we losing these arguments? It's a no-brainer. My shit is my shit. Back off.
Re:That's Not What The Article Says (Score:4, Insightful)
No. If you bring it across the border you are importing it, and the government has total control over that, including taxing it, putting a tariff on it, banning it, quarantining it, impounding it, or declaring it a felony and locking you up for it.
The solution to this is to end borders. I'm not sure why anyone thinks that's a bad idea, either. The border between Missouri and Illinois is more real than the border between the U.S. and Canada. Yet the border between San Diego and Tijuana is wider than the border between Cupertino and Shenzen. The control seems arbitrary, and creates artificial boundary conditions that result in instability and turbulence.
Read Twain. Twain will save you. (Score:5, Insightful)
If I had the power to destroy one fiendishly wrong-headed notion before I die, the following would be on the short list:
The justices did what they were supposed to do: Enforce the law as written.
Sigh. Have you seen the inscriptions over the Court? ""Equal Justice Under Law" coming, "Justice, the Guardian of Liberty" going. Maybe you've seen the statue of the blind-folded chick? Wanna take a guess what her name is?
The ultimate job of the Court is not just "to follow the rules." A third-grade hall monitor would be sufficient for that. The ultimate job of the Court is to find what is Just. It is the job of a god in the hands of flawed, fallible men. This is the reason why we are supposed to find our nine finest legal minds, our nine wisest elders.
In our finest legal traditions, we have found that the beginning of Justice, the bare minimum, is to keep the Strong from preying on the Weak, and that is why Dred Scott is such a famously reprehensible decision. We don't condemn the Sharia judges for stoning women to death because they're misapplying the rules. We condemn them for the evil they do by refusing to look beyond the rulebook. The Dred Scott Court cannot excuse themselves by crying "We were just following the rules" any more than other famously evil men can.
When we put guns in the hands of 18-year-old kids and tell them to go and kill in our name, we give them a warning. If the rules conflict with your conscience, if you do something you know is wrong by following the rules, you will one day be held accountable, and crying "I was just doing what the rules said I should," will not save you.
The job of the Court is to find Justice as best Humanity can in the year 2010. It is their black-letter job to stand in the gap and say "This rule, written by the Strong to steal from the Weak, is wrong and we will not abide it."
The Court is supposed to be the Conscience of our Nation, not nine bureaucrats bludgeoning people with the results of lobbies and politics.
The job of the Dred Scott Court was to keep men free. to be the "Guardians of Liberty" as inscribed, not to safeguard the pocketbooks of their kidnappers and rapists. The Dred Scott judges were not "Bad men, but good judges." They were evil men and bad judges as well.
Re:First sale doctrine (Score:4, Insightful)
Corporations are free to merge with many other corporations, while polygamy is still illegal for 'people' in most states.
Polygamy is not a merger. Mergers turn multiple entities into one single thing. Polygamy still retains the individual people. The appropriate analogy would be cannibalism, and even that is wrong since mergers are usually mutually beneficial.
Corporations are allowed to have business practices such as "cutting off the competitor's air supply" while murder is still illegal for 'people'.
As long as their business practices are legal, it is nothing like murder. If the business practices are illegal, then there is no argument.
Corporations are allowed to be dissolved yet Suicide is illegal for 'people' to commit.
Corporate dissolution is not like suicide. Suicide destroys the value inherent in the person, whereas dissolution only destroys the company's name. The better analogy would be more like a divorce, where the parents split up the property and change their names. Again, that's all quite legal and isn't special treatment for corporations.
Corporations can have 'hostile takeovers' of other weaker corporations, but armed robbery, slavery, and blackmail are all still illegal for other categories of 'people'.
Robbery is theft. A hostile takeover isn't theft. It is a purchase of ownership. The two are not alike at all. As for slavery, a hostile takeover has nothing like it. Slavery doesn't apply because you aren't allowed to treat people like property. Company ownership is property and is traded every day. And blackmail doesn't even apply.
You also ignore that there are many laws that apply only to businesses and not to people. When was the last time you:
There are lots of problems with how we treat companies like people -- we agree on that. But your analogies don't add to that argument.
Re:The stupidest thing is (Score:4, Insightful)
Here's the odd thing - how old is the Omega logo?
The company was founded in 1848 [wikipedia.org], meaning that any kind of copyrights claim to that logo is expired.
Re:That's Not What The Article Says (Score:4, Insightful)
I don't think we are talking about the same thing.
My arguments are very specifically about hardware. When I mention property ownership I am not referring to in any way, books, music, movies, etc.
Setting that aside for the moment, I completely recognize that IP does exist. In a meaningful sense, I have purchased "something". Under copyright law what I purchased was the right to enjoy the IP. Essentially, I purchased a legal entitlement. So you are wrong when you say I have no rights to do anything with it. In fact, I explicitly have the rights to do "something" with it and I believe that generally falls under "Peaceful Enjoyment".
As far as IP goes, my issue is that copyrights are misunderstood, and this is perverted and taken advantage of by corporations to establish rights they were never explicitly given, and rights that are outside of the spirit of IP in the first place. DRM is a prime example of taking rights well outside of the scope and intent of copyright law.
You mention Amazon specifically, but you are actually wrong. What they did is not legal. A copyright holder does not have the right to dissolve the contract and remove the legal entitlements that you purchased unilaterally. That is not just illegal, but again, outside of the scope and intent of copyright law.
The fact it is on a Kindle is not relevant. If Amazon sold me a physical book, could Amazon acting on the copyright holder's behalf enter my house and remove the book? Of course not. Then why is it correct, legally or otherwise, to enter my Kindle and remove the book from it? Money exchanged hands here. What Amazon did is to abridge my legal entitlement that I lawfully purchased. Even refunding my money does not make it legal. Otherwise Wal-Mart could leave $100 bucks on my kitchen table and take back my microwave.
Now of course I am certain there are very long legal contracts that you agree to when you activate the Kindle. That however, still does not make it legal. A contract cannot enforce just anything. It is my opinion that there is a strong foundation in the Amazon scandal for a class action lawsuit, and different than the 1984 mistake.
Keep in mind, that the courts do take into mind what the average consumer would reasonably understand. The whole interaction falls under the context of a sale, not a rental. A reasonable person would always conclude that you could read that book "forever" on their Kindle.
Bottom line is that Amazon is wrong on every level here. It's just that the government is bought and paid for at this point and won't go after them so it is up to the consumers to take a stand and start a class action lawsuit.