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Supreme Court To Decide Whether Or Not You Own What You Own 543

Posted by Unknown Lamer
from the industry-argues-"ownership"-hurts-revenues dept.
Jafafa Hots writes "The Supreme Court is set to decide, in the case of Kirtsaeng v. John Wiley & Sons, whether or not First Sale Doctrine applies to products made with parts sourced from outside the United States. If the Supreme Court upholds an appellate ruling, it would mean that the IP 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. Your old used CDs, cell phone, books, or that Ford truck with foreign parts? It may not be yours to sell unless you get explicit permission and presumably pay royalties. 'It would be absurd to say anything manufactured abroad can't be bought or sold here,' said Marvin Ammori, a First Amendment lawyer and Schwartz Fellow at the New American Foundation who specializes in technology issues."
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Supreme Court To Decide Whether Or Not You Own What You Own

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  • by Anonymous Coward on Tuesday October 09, 2012 @07:20AM (#41594979)

    Here is a website that tracks what products are still made in the US of A [stillmadeinusa.com]

    They seem to be pretty good about differentiating between actually made and assembled. Now as far as raw materials are concerned or sub-assemblies, I don't know.

  • by Sique (173459) on Tuesday October 09, 2012 @07:21AM (#41594995) Homepage

    Please remember, if the ruling is uphold, it works only for the imaginary parts of the product (e.g. trademarks, copyrights, patents) and not the physical ones. As long as you don't have patented screws or copyrighted sheet metal in the object you sell, the sale might be ok.

  • by Anonymous Coward on Tuesday October 09, 2012 @07:22AM (#41595007)

    The case is regarding items manufacturered in foreign countries and intended for sale in those countries. NOT items manufactured in foreign countries intended for sale in the United States. At issue is having someone buy things cheaper overseas and resell them cheaper here in the US than the manufacturers intended US price.

    That's still horrible - but not nearly as bad as the article summary would have you believe.

  • by concealment (2447304) on Tuesday October 09, 2012 @07:24AM (#41595017) Homepage Journal

    The guy who's being brought to trial seems to have imported enough textbooks to earn $1.2 million. That means this isn't really a case about reselling your car, but about whether private citizens can buy a bunch of stuff abroad and re-sell it here for profit because it's cheaper abroad.

    You can track the legislation here:

  • by Albanach (527650) on Tuesday October 09, 2012 @07:26AM (#41595025) Homepage

    So having read the article, it doesn't say the same thing as the summary. To be fair, I haven't read any of the court paperwork, so the publisher could indeed be claiming that you cannot sell something with foreign parts.

    This case, however, stems from a student buying textbooks at lower cost overseas and then selling them in the US on eBay.

    I'm not saying it's good, right or proper that the publisher wishes to restrict these sales. I simply want to highlight that it's a very different proposition saying you cannot resell in the US a complete product purchased in a developing market where the manufacturer sells at a lower cost as opposed to being unable to sell anything that contains a foreign part.

    I believe the situation the publisher supports is already the case in Europe, where Levi Strauss won a battle against supermarkets who were importing grey market denims and selling them at a lower cost than licensed distributors could buy the jeans in the UK.

  • by rollingcalf (605357) on Tuesday October 09, 2012 @07:34AM (#41595071)

    What matters is where the authorized "first sale" occurred, not where it was manufactured.

    So if a book publisher has books printed outside the US, then imports them and sells them retail for the first time in the US, you can freely resell it because the first sale occurred within the US.

    What is being disputed in this court case is whether you can resell a copyrighted item in the US if the first sale occurred outside the US.

  • by 91degrees (207121) on Tuesday October 09, 2012 @07:47AM (#41595147) Journal
    Copyright law recognises that publishers may well want to publish the same item at a different price in another country. A textbook in the US or Europe can be sold at quite a high price. In poorer countries, there's no way they can sell for these markups, so they're a lot cheaper.

    The law allows the copyright holder to licence distribution to another party for distribution in another territory. To prevent a companies own products from competing with their domestic sales, the law makes it an infringement of copyright to sell a copy licensed for sale in another country. Whether you think this is right or not, this is what the law recognises, and what the Supreme court will be basing its decision on.

    Of course, the lawmakers don't want to prevent you from taking a book with you when you're travelling, nor do they think that you should buy an entire new library if you move to another country. So you're allowed to bring the foreign copy to your country if you have no intention of selling it.

    So what happens if you change your mind? Do you have the right to sell something that you legally brought into the country? Is the "first sale" the first time the item was sold, or is it the first time the item is sold in the US?

    The article is highly misleading. This has no effect on something that just happens to have been made in another country, as long as it was originally sold by the copyright holder. Only items where the item has not yet been sold in the US.
  • by jellomizer (103300) on Tuesday October 09, 2012 @07:53AM (#41595203)

    This is messing with the capitalistic economic model people will still want those goods, and people will be willing to sell them, but they will do it over the black market. Because the legit way is too costly.

    The black market isn't always for shady product, but products that you cannot obtain legally.
    For example in New York the biggest Black Market Activity is in unpasteurized milk. Why because there is a good number of "organic" lovers who would rather have their milk unprocessed and they say it tastes better, and is better for you, and by New York Law milk can only be sold pasteurized. Hence black market activity.
    So saying you cannot resell a product and people wants it. It will be done under the table.

    Now the problem with black market is the buyer and seller loose legal protection. So the seller can rip you off and you have no legal recourse. Or the buyer can do something else to you and in order to get the guy in trouble you will need to admit to breaking the law. This is a problem with prostitution because it is illegal if the women are mistreated they do not have many options for them.

  • The case (Score:5, Informative)

    by 140Mandak262Jamuna (970587) on Tuesday October 09, 2012 @08:02AM (#41595273) Journal
    Many book publishers license their books to be published in India, Thailand etc cheaply. I have bought many "Eastern Economy Edition" (EEE) in IISc Bangalore and IIT Madras when I was a student there. Though the price is very cheap compared to the dollar prices, it is still comparable on purchasing power parity exchange rate. For example the the book Engineering Statics and Dynamics by Shames cost me 65 Rupees or about 8 USD (exchange rate was 8 Rs per USD back in the 80s). My dad, a civil servant comparable to a sergeant in the US armed forces, had a take home pay of about 500 Rs then. Imported books, not reprinted as EEE, would easily run into 50 USD to 60 USD. It would have beeen one month pay for my dad.

    Some student from Thailand imported the EEE books from Thailand, sold them on E-Bay and made 1.2 million dollars. He is claiming immunity under First Sale doctrine. The EEE contract with the Asian publishers prohibit them from selling it to the lucrative western markets. But once the book has been bought in those markets, can they be imported and sold in USA? The appellate court ruled it can't be brought in sold.

    I am not a lawyer, but I expect the Supreme Court to rule more narrowly. "When a copyright/intellectual property right originating from USA, is licensed to foreigners under some restrictive license, the foreigners can not use first sale doctrine and third parties/subsidiaries to circumvent the license restrictions". That is the kind of ruling I expect. That is, not all foreign made objects would be exempted from first sale doctrine. Those items made abroad under restrictive licenses from ip-holders in USA alone would be exempted. But I am not sure they will rule this way. I am an engineer most comfortable calculating intersections between triangles and tetrahedrons. I find them very easy compared to US laws.

    One interesting tit bit was that, when I came to USA as a student with F-1 Visa, I was scared by the EEE books I was bringing in. I used some 75% of my baggage allowance with books. I knew how serious copyright law was in USA. I knew my books are cheaper in India. I was worried the immigration officer would reject my visa and send me back! Seriously. I was worried about everything from the turmeric powder in my hand baggage to the loose staple on the sealed I-20 form issued by the university attached to my passport! Once inside the USA, I was just relieved. I never even thought for a moment to buy millions dollars worth of EEE books and selling them cheap in the USA. There have been hundreds of thousands of students from Asia who knew the price differentials. None of us thought of exploiting it by arbitrage, because we knew it was "wrong". This creep from Thailand did just that. If the courts do not rule narrowly and uphold first sale doctrine for these EEE books, the publishers will simply stop licensing EEE books under cheap terms. Millions of Asian students will be affected.

  • by Fr33z0r (621949) on Tuesday October 09, 2012 @08:22AM (#41595487)

    ...this isn't really a case about reselling your car, but about whether private citizens can buy a bunch of stuff abroad and re-sell it here for profit because it's cheaper abroad.

    And yet this is the core of how most companies operate these days. Buy cheap abroad (labour, manufacturing, components etc) and sell at home for profit.

    It's sad that what has long been considered business as usual for companies is legally questionable for individuals.

  • by Zontar_Thing_From_Ve (949321) on Tuesday October 09, 2012 @08:34AM (#41595639)
    You do not seem to understand the significance of what you read. Basically it is this - immigrant student from Thailand goes to buy university text books and thinks "Wow. These prices are a lot more than I would pay back home for the same books. Maybe there is a business opportunity here." Then he recruits relatives to buy the books in Thailand at Thai prices and ship them to the USA, where he sells them on Ebay for over a million dollars in profit. John Wiley & Sons sues. Thai student invokes "first sale" as a legal defense, so it broadens the scope to include basically every manufactured good.sold in the USA. It is his invoking of "first sale" that has made this potentially into a gigantic nightmare.
  • by adonoman (624929) on Tuesday October 09, 2012 @08:37AM (#41595673)
    Hunting weapons are still weapons... Every time you kill a deer with a bow you are using is as a weapon. The fact that bows are almost never used against people doesn't change the meaning of weapon.
  • by MobyDisk (75490) on Tuesday October 09, 2012 @08:55AM (#41595885) Homepage

    The linked Marketwatch article is complete BS. Clearly the author had no idea what they were talking about, and just took one sentence and expanded it into massive hyperbole. Here are some choice examples from the article:

    Put simply, though Apple Inc. AAPL -0.15% has the copyright on the iPhone

    I don't think so. They have patents, not copyrights.

    It could be your personal electronic devices or the family jewels that have been passed down from your great-grandparents who immigrated from Spain.

    No, those things also cannot be copyrighted.

    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.

    Also nothing to do with copyright.

    He himself once bought an antique desk from a Supreme Court justice.

    Yet another example.

    It sounds like the author just made stuff up as they went along. Here are some better articles:
    SCOTUS! eBay! Cert and Other Sundries [abovethelaw.com]
    Summary of Kirtsaeng v. John Wiley & Sons, Inc. at the Supreme Court's own blog [scotusblog.com]

  • Building locally (Score:4, Informative)

    by sjbe (173966) on Tuesday October 09, 2012 @09:03AM (#41595959)

    Otherwise, you would not be able to afford that "all American made" vehicle.

    There is no such animal. Some vehicles are majority sourced in the US but no vehicle is sourced exclusively from one country.

    That's right. The simple fact is that it costs more to build a car in the U.S. than it does to build, and deliver, a car made in Japan or Korea.

    That is not true at all. A lot of cars are made in the US precisely because it is too expensive to build them overseas. Cost of labor is not much cheaper in Japan than it is in the US. Korea isn't especially cheap when it comes to labor either. Much auto assembly can be automated with sufficient volume so the labor differential is further reduced. You also have to account for where the parts for the vehicle are made - the number of auto parts made in the US is huge and shipping them elsewhere would be expensive. Furthermore you have to account for exchange rates. The Yen is quite strong at the moment which makes exporting from Japan expensive. Honda and Toyota build a LOT of cars in the US precisely because it is cheaper to build them in the US.

  • Re:Let them do it. (Score:5, Informative)

    by mabhatter654 (561290) on Tuesday October 09, 2012 @09:32AM (#41596319)

    This will be a boon to US "companies" ... You know the "designed in California" "built in China" guys....

    This is about books... So the company wants its USA copyright to apply everywhere, but sell the same book for $20 outside the US and for $100 inside the US. Basically they want "shrink wrap" license on books similar to region coding on DVDs.

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