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eBay Bargains Soon To Be A Thing Of The Past? 488

ScaredOfTheMan writes to mention that, as expected, companies are utilizing the decision in Leegin Creative Leater Products v. PSKS to force the take-down of auctions on eBay because auctions are priced too low or even stating the auction itself is an infringement of their intellectual property rights.
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eBay Bargains Soon To Be A Thing Of The Past?

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  • by Anonymous Coward on Wednesday July 18, 2007 @05:53PM (#19907319)
    Uh. Rigging is the whole point of intellectual monopoly law. It's antithetical to free market capitalism. I don't know why you're surprised, america - you're about as capitalist as the soviets were communist.
  • Re:Fair Use? (Score:4, Interesting)

    by GizmoToy ( 450886 ) on Wednesday July 18, 2007 @05:58PM (#19907383) Homepage
    Yes, that appears to be what they're trying to say. I hope they're prepared for a lawsuit, because somebody's going to see an opportunity to win a lawsuit against them. Interpreting any law to mean your customers can't resell their property is bound to get either the law overturned, you sued, or both.
  • by brxndxn ( 461473 ) on Wednesday July 18, 2007 @06:10PM (#19907511)
    With all these bullshit patent, copyright, and now 'intellectual property' lawsuits pooping all over the place.. and the greedy lawyers earning their greedy reputations, I predict a new kind of legal letter...

    It's called the 'Fuck Off Response.'

    See.. it goes like this... Company A sends Person B a cease and decist letter. Person B sends a letter back saying, 'Fuck Off!'

    This letter back symbolically represents the hours and hours of time consulting a licensed attorney, paying a licensed attorney tons of undeserved money at exhorbitant prices, that Person B is not afraid of large Company A, and that person B is willing to go through all the trouble to fight the original letter - without all the actual trouble.. just symbolically.

    So, in other words.. a huge company with an army of lawyers may only choose to use what I have available to defend myself. If that is only myself and a public attorney, then said company may only use equal or lesser - or otherwise lose by default since company is not stooping low enough to reach me in order to even take a swing.

    Little guy (or girl) says 'Fuck off.' (but en masse)

  • by Volante3192 ( 953645 ) on Wednesday July 18, 2007 @06:11PM (#19907533)
    Now, here's where I get confused about this. If this company that's selling goods for cheaper is, in fact, buying them from you, isn't that still a sale?

    Honestly, this isn't clicking for me. Sounds to me like they'd just be selling it at a loss...
  • DRM (Score:3, Interesting)

    by zymano ( 581466 ) on Wednesday July 18, 2007 @06:19PM (#19907601)
    This could blow a hole in DRM too

    You can't interfere in commerce like this.

    Companies don't own their product after it's sold to someone.
  • by Threni ( 635302 ) on Wednesday July 18, 2007 @06:22PM (#19907639)
    > With all these bullshit patent, copyright, and now 'intellectual property' lawsuits pooping all over the place.. and the greedy
    > lawyers earning their greedy reputations, I predict a new kind of legal letter...
    > It's called the 'Fuck Off Response.'

    There's similar precedent, in the UK at least:

    http://en.wikipedia.org/wiki/Private_Eye [wikipedia.org]

    An unlikely piece of British legal history occurred in the case Arkell v. Pressdram. The plaintiff was the subject of an article relating to illicit payments, and for a change the magazine had ample evidence to back up the article. Arkell's lawyers wrote a letter in which, unusually, they said: "Our client's attitude to damages will depend on the nature of your reply". The response consisted, in part, of the following: "We would be interested to know what your client's attitude to damages would be if the nature of our reply were as follows : Fuck off". This caused a stir in certain quarters. In the years following, the magazine would use this case as a euphemism for an obscene reply: In subsequent cases, instead of using the obscenity, Private Eye (and others) would say something like "We refer you to the reply given in the case of Arkell v Pressdram", or perhaps "His reply was similar to that given to the plaintiff in Arkell v. Pressdram ". Like "tired and emotional" this usage has spread far beyond the magazine.

  • by StarvingSE ( 875139 ) on Wednesday July 18, 2007 @06:29PM (#19907715)
    Not exactly. Auctions that follow the Vickrey auction [wikipedia.org] scenario are much closer to the "right" market price. Basically, everyone posts a secret bid, and the person who bids the highest wins, paying the price of the second highest bid. I've read numerous studies (too lazy to link to them) that conclude the Vickrey auction to set a much fairer and true price than traditional auctions.
  • by StarvingSE ( 875139 ) on Wednesday July 18, 2007 @06:33PM (#19907743)
    Perhaps the whole problem is that companies expect^H^H^H^H^H believe it is their right to make billions. Maybe profits are way too skewed towards the big corporate players that a totally free market is needed to put balance in the system. If someone wants to sell a comparable product at a fraction of the cost, so be it. Leave the courts out of it.
  • by Moraelin ( 679338 ) on Wednesday July 18, 2007 @06:39PM (#19907845) Journal
    It's more complex than that.

    E.g., what if it's a counterfeit product? It's damn easy to undercut someone's prices when you don't have to invest a cent in research (even if it's "what are people willing to wear this season") or even in marketing (since you're piggy-backing on someone else's brand image and using their own marketing investment against them.) Often you can cut more corners too, because, hey, if the product malfunctions spectacularly or even hurts someone, it's not _your_ brand image that goes down the drain.

    Or what about stolen goods? Or defective goods which someone was supposed to dispose of, but made a bit of money on the side auctioning them? It's damn easy to undercut prices when you're selling stuff you got, essentially, for free by illegal means.

    Or the case comes to mind which saddled us all with frequency- or multiplier-locked CPUs. A bunch of dishonest fucks figured out that they can take, say, a cheap 100 MHz CPU and overclock it to 133 MHz, make a computer with it, and sell it for quite a bit of profit. Remember that at the time most of the ID of a CPU was what was printed on it, and it was up to you to set the motherboard jumpers right. So, being that the CPU in a complete computer was under a heatsink, there wasn't even much way to see if you got defrauded without taking the computer apart, which Joe Average didn't usually do. But some went as far as to erase what was printed on the CPU and actually print the higher CPU frequency on it.

    It was something which actively damaged Intel's reputation, and later AMD's when they were the last to sell unlocked CPUs. People were buying computers which kept crashing, or only worked as long as the temperature in your room was under 20C. Summer comes and your computer is a dysfunctional piece of shit. You'd maybe take it back to the shop and they'd tell you some "yeah, we've had a lot of problems with bad Intel CPUs lately." (When the only problem was that they had defrauded you of a lot of money.) There was a _lot_ of "Intel CPUs are shit and crash all the time" bad reputation built at the time. And later it was "AMD CPUs are shit and crash all the time."

    Just, you know, in case you were wondering why CPUs are locked nowadays.

    So basically it's trivial to have some auction where the whole point is that it's _not_ fair and open, you're not even buying what you think you're buying. And it might not be a price that a normal, honest seller would ever accept.

    Plus, just because Slashdot has _yet_ _again_ a lopsided and inflammatory story, it doesn't mean you can jump to a conclusion based on it. There used to be a time when the stories actually had anything to do with technology, and it was exciting new stuff, not "version of Product X released, people advised to patch their version." Nowadays it seems that lopsided "company X is violating your rights if they don't buy me a pony" astroturfing is more common than anything even remotely related to computing.

    So basically, if a story seems like a clear-cut "side X is 100% right, side Y is 100% wrong and are evil fucks to boot", that's usually your clue that you're spoon fed an astroturfing story. Reality is rarely that neat, and the devil often is in the details you're not getting, or are getting a cherry-picked slightly-warped version. If you can cherry-pick only the details you like, you'd be surprised how far reality can be warped. (E.g., think, "Hitler was buying roads and factories and the allies attacked him for it." If you conveniently omit such details as, you know, that three continents were plunged into all out war at the time and the ethnic cleansing part, the whole story takes a very different angle.)
  • Re:Too late... (Score:4, Interesting)

    by vux984 ( 928602 ) on Wednesday July 18, 2007 @06:42PM (#19907871)
    Just how are they going to punish a suicide for breaking the law? Extra nails in the coffin?

    Of course, if the person committing suicide succeeds the laws against it are irrelevant.

    However, like many crimes you can also be punished for 'attempting it'.

    By making suicide illegal, police are allowed to intervene when someone attempts it. Courts are allowed to prescribe mental health evaluation, rehab, etc.

    Personally I support a persons right to die... but I also agree that 'the right to die' shouldn't be extended to every distraught teen with a drug problem who just caught her boyfriend cheating on her. The decision to die is permanent, and you shouldn't be allowed to make that decision without proper consideration, or simply because you are suffering from treatable depression.
  • by Anonymous Coward on Wednesday July 18, 2007 @07:00PM (#19908075)
    No, you make perfect sense.

    What I don't understand is why did Merle not just terminate it's sales to the supplier who sold these to the woman, and then just buy the products from the woman at the reduced price? (Cutting off her supplier, and then buying her inventory) I can't imagine how it wouldn't be cheaper for them. And there's no negative publicity.

    And of course they could sue their supplier for breach of contract.

  • by MagikSlinger ( 259969 ) on Wednesday July 18, 2007 @07:25PM (#19908299) Homepage Journal

    What you missed here, actually, is that they can only do it if the State gives them such power.

    Very close! When ever I've heard of some law that screws the consumer over, in the guise of "good market intervention", it seems like there's private business behind it. E.g., DMCA, local anti-gas price war statutes.

    But even with contract law, we can get screwed, and as history has shown us, the private sector has no problem ganging together to ensure we can't negotiate our way out of restrictive contract laws. E.g., software EULA. The only reason they don't seriously harm us is the State did protect us from some of the aspects of the EULA (but not all!)

    In an ideal world, we wouldn't need the State to protect us from the marketplace, but since it is not ideal, maybe government regulation should limit itself to preventing bad contract conditions and nothing else?

    But good point about pointing out the State aiding and abetting them.

  • by trolltalk.com ( 1108067 ) on Wednesday July 18, 2007 @07:33PM (#19908383) Homepage Journal

    "Uh. Rigging is the whole point of intellectual monopoly law. It's antithetical to free market capitalism. I don't know why you're surprised, america - you're about as capitalist as the soviets were communist."

    People keep forgetting that the Internet routes around damage. There is no such thing as a monopoly when the whole operation can be moved to servers in another country. You're a seller in the US, and you want to sell to someone else in the US - just auction it off on ebay in the UK [ebay.co.uk] or Canada [www.ebay.ca] or france [ebay.fr].

  • Short Reply (Score:3, Interesting)

    by Nom du Keyboard ( 633989 ) on Wednesday July 18, 2007 @07:40PM (#19908451)
    Although Merle Norman does not claim that the eBay seller ever contracted with the company, it contends that the seller's act of purchasing the makeup from a salon that had entered such an agreement and then selling "at discount prices" on the Internet constituted unfair competition, interference with its contracts, and civil conspiracy (see complaint). In other words, the eBay seller, according to the company, is guilty of breaching somebody else's contracts and unfairly competing by selling to consumers on the Internet at prices that are too low.

    The short reply to this is: Doctrine of First Sale. [wikipedia.org] I would argue that once a product is legally acquired, that the manufacturer cannot control what you do with it afterwards.

    How long before the RIAA tries to take down used CD sales under this SCOTUS ruling? It's as bad as the eminent domain debacle of last year - and you can't blame just one political party for this pair of rulings.

  • by Wylfing ( 144940 ) <brian&wylfing,net> on Wednesday July 18, 2007 @08:01PM (#19908653) Homepage Journal

    My head asplode.

    This is not insightful. This is evil, and demonstrably so. You are driving inefficiencies into the market, which ends up raising prices for everything for no reason. Everybody ends up with less. I shall endeavor to explain:

    The function of the economy (pick a model, any model) is to distribute goods as efficiently as possible. Now suppose the natural equilibrium price for a good is 100 zorkmids, and you artificially constrict the market so that you can charge 300 zorkmids for it. What this does is cause 200 zorkmids worth of inefficiency in the marketplace. That 200 zorkmids more or less disappears. Instead of spending that 200 zorkmids on other things, the customer, well, can't. He no longer improves his house. He no longer buys new clothes.

    So of course your answer is "Aha! But those zorkmids don't disappear! I have them in my pocket!" Quite. But because your customer buys fewer goods due to your unscrupulous overcharging, all those vendors have fewer zorkmids, and they buy fewer goods. And so it propagates across the entire economy, all the way back to you. Everyone ends up with less. This gets substantially worse when a lot of vendors start artificially constricting supply chains in order to (as they think) make more money. We all end up with much less then.

    Conclusion: knock it off, you creep. You're hurting everyone.

  • by h0mee ( 106847 ) on Wednesday July 18, 2007 @08:02PM (#19908659) Homepage
    So if the economists argue a "free rider problem", what that suggests to me is that the solution is not anti-competitive agreements on fixed pricing, but rather we need "look and feel" shops that serve as a front to internet only ordering.

    Picture it: you walk downtown or to the (disgusting) strip mall, and you enter a "shop" (in which you either pay a nominal fee [say $5 in 2007 dollars], or the store is subsidized by corporate sponsorship). The shop contains a dynamic and broad array of products waiting you to try out. Provided are free internet terminals, as well as pads of pen and paper. When you have "window shopped" you are encouraged to go home and order on the internet for the cheapest price.

    Personally, I think a *lot* of consumers would go hog wild over an outlet like this: I'm somewhat surprised it hasn't already happened....
  • by Eric in SF ( 1030856 ) on Wednesday July 18, 2007 @08:17PM (#19908799) Homepage
    Are you kidding me? I can't WAIT for a world with no stores. No more surly sales clerks, no more snake-oil sales clerks, no more presumption of criminality (papers! Ve need your papers upon exit!), I could go on and on.

    I buy as much as I can online now and as imaging and bandwith increase, it will be easier and easier to buy more and more things online.

    Gives me more time to spend time with friends and family and to do the things I enjoy, whatever they may be.
  • by toddestan ( 632714 ) on Wednesday July 18, 2007 @09:04PM (#19909157)
    FUD. Nothing (nothing) stops you from selling the physical CD that you physically bought.

    It's not FUD. The RIAA has gone after used CD sales. They lost, which is why used CD stores still exist, but I wouldn't put it beyond the RIAA to try again (and again) until to they get a ruling in their favor.
  • by waferthinmint ( 1051350 ) on Wednesday July 18, 2007 @09:29PM (#19909351)

    So they hit back with every legal weirdness they can find. You can't use their trademarked names. You can't use photographs of their products. Etc.

    It's stupid and it should be shot down.
    No, I do not think it is stupid. Manufacturers have invested in their brands and reputations. For example, a large part of Brand awareness comes from quality assurance. In the case of third party sales (be they flea markets or ebay), the manufacturer has no control over the merchandise.

    If I produce a digital scale, for example, and it is intended for precision work, I will probably be expected to service it. if it gets sold by a third party who has not signed any handling agreements and introduced the scale to shock or extreme environments the customers will still expect my scale to be supported by me.

    As the producer I am hurt by this reseller; not because he has sold my product below MFSR, but because he sold it as new. He is benefiting from my brand's reputation for quality assurance without paying for the cost of maintaining the standard. I would have no legitimate complaint if it were sold as used.
  • by Bombula ( 670389 ) on Wednesday July 18, 2007 @10:39PM (#19909813)
    Your transparent spoon-fed rhetoric confuses demand inelasticity with competition for market share. In the tiny minority of markets which are both highly localized and which have highly inelastic demand, there is invariably a monopoly - local utilities are a prime example.

    In other markets, companies cease to compete for market share irrespective of demand elasticity when the field is narrowed to just a handful of sellers via mergers, acquisitions, and initial predatory pricing. The equilibrium point you allude to when you say "there's a disincentive to lower prices beyond that except as a zero-sum game with competition" is one that is either tacitly or overtly agreed to by the remaining sellers. When sellers set 'minimum retail prices' that are all at this equilibrium point, the market is unequivocally rendered minimally competitive, just as I said in my original post.

    In the minority of markets where price is not the only consideration, there is also an inherent lack of competition. You will agree that there is only one Apple computer company and only one iPhone at present (though I hear there is already a Chinese clone). If your utility is drawn from the brand and not from the functions of the product, then there are no real alternatives available, and again there is no real competition. This is common for two types of products: luxury items (clothing, jewelry, shoes, etc where brand is the primary consideration and price is secondary - something that only applies to people with discretionary income, which excludes about 90% of the world's population), and innovative technology items which, when first introduced, have no available alternatives. These markets, you will notice, are profitable because each seller is unique and there are therefore no alternatives.

    The whole point of the article here is that companies are getting upset when folks on eBay sell identical products for a lower price. When one seller offers you a real alternative for a lower price, that is genuinely competitive, and that is why there is such a fuss here.

  • by Alexei ( 548402 ) on Thursday July 19, 2007 @01:45AM (#19910963)
    Salon has an agreement not to sell at all, only to use on their customers, and thus gets the products at a discount.
  • by advocate_one ( 662832 ) on Thursday July 19, 2007 @02:56AM (#19911249)
    using a different ebay doesn't work... stuff gets taken down on those for the same reasons. A friend on mine has had to give up selling his replica Fender Bass guitar as every time he lists it, it gets taken down. He's not mis-selling it, he actually describes exactly what it is, a Replica Fender Bass made from Warmoth parts... he believes the problem is Fender has people policing ebay looking for what they consider trademark abuse... and he's falling foul of them as he's got a genuine Fender logo on the headstock...

    the annoying thing is that they aren't going after the real fakes... the ones that people are actually misrepresenting as actual vintage Fenders.
  • by Fantastic Lad ( 198284 ) on Thursday July 19, 2007 @03:52AM (#19911535)
    I really expected an uproar from the Libertarians about this but they are strangely silent. Maybe they don't really believe what they say about things they are against and actually support the monoply/oligopoly form of capitalism we have now with government controls of free trade. I am really dissapointed with the non-response from the Libertarians. They must be "only if it benifits me" hypocrites!

    You called it.

    The Free Market totally works. People with the best ideas and the best implementation WIN WIN WIN in a Free Market! The Free Market Decides it so!

    Heck, it allowed the ruling elite to compete their way to the top and hold onto everything forever. They got there by the sweat of their brows and the shrewdness of their schemes! (Then by the sweat of their slaves and the governments they own). The Free Market gave them the freedom to win! Rah Rah! --Too bad the Free Market isn't like a board game which gets reset every time you put it back in the box.

    In effect, we've been playing the same game of Monopoly for over 3000 years. --Longer if some conspiracy theorists are correct.

    And you know how it goes. When your little brother has hotels on all the good properties, all the money ends up in his hands and you have to mortgage yourself to kingdom come just to stay viable until pay day while the little devil squeaks at you with infuriating glee.

    The Rothschildes and their brethren must be a gleeful people.


  • by metacell ( 523607 ) on Thursday July 19, 2007 @05:03AM (#19911825)
    Let me guess: the interest rates are very low in the UK right now?

    Here in Sweden, real estate prices are also ridiculously inflated. This is very clearly linked to the low interest rates. People bid more on houses than they should be worth, just because they can borrow large amounts of money very cheaply from the banks.

    If the economy changes and interest rates go up, a lot of people will find they can no longer afford the payments. And as the interest rates go up, house prices will go down, so they will be forced to sell their houses at a huge loss.

    It's not the first time this happens, and it will not be the last.

Things are not as simple as they seems at first. - Edward Thorp