Is Motorola Trying To Ban Reselling Phones?
from the hopefully-not dept
We've seen video game execs freaking out about the second-hand sales market, and apparently that may be expanding to other arenas. The Register has an unnamed source (so make of that what you will) claiming that Motorola is asking people to sign contracts on a new phone that ban the buyer from reselling the phone to anyone, other than back to the manufacturer. Of course, this is an economically dumb argument. The resale market helps add value to the primary market, and allows the company to charge more for its product initially. As Mathew Ingram points out, some are suggesting that this move would violate the first sale doctrine, though that could depend on a variety of factors. I would imagine that the terms could establish the situation as a "lease" of the phone rather than a purchase, but that might be difficult to get the courts to accept. Also, my understanding of first sale doctrine was that it only applied to intellectual property -- not physical goods, so I'm not sure it would really apply here. Either way, it would seem to be dumb, whether or not it's legal. If you want to decrease interest in your product, adding such a clause seems like a reasonable way to do so.
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Filed Under: economics, first sale, phones, resale
Companies: motorola
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Setting up for a fall
then a "friend" sells the phone after "finding" it.
or they phone is simply _given_ to a friend for resale.
sounds more like an attempt at gaining publicity
* not sure what "offence" has been committed if they tell the company it was lost, but don't claim on anything.
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Re: Setting up for a fall
If a manufacturer is going to try to tell me what I can and cannot do with a product I have legally purchased and own, then you can safely bet the farm that I won't buy that product. If it's the only one on the planet, then I'll just do without. I don't want anything that badly.
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Re: Re: Setting up for a fall
In short, they can afford to make this dumb mistake.
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Its an expensive phone...
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Common 50 years ago.
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IP vs physical goods
Actually, it applies only to physical goods, not IP. I can sell you my used CD, but not my iTunes files...
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Re: IP vs physical goods
If I purchase non-DRMed MP3s, is there a legal barrier that stops me from reselling them, provided I permanently delete them from my own computer?
Last, I think what Mike is saying is that the first sale doctrine is laid down as a part of copyright law. Therefore, it would have no application to a phone. However, I think that the first sale doctrine is an assumed part of commerce for physical goods.
As far as the phone being a lease, technology leases do exist. If it is a lease, though, they better be prepared to cover it with a warranty and/or replacement phone for defects throughout that lease period. And, they better be prepared to guarantee a buy-back price after a specified period of time. Otherwise, the "if it looks like a sale and smells like a sale" argument would be tough for them to overcome in court, no matter what they call the transaction.
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re: IP vs physical goods
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motorola banning their market
ah, we know you so well.
whether you actually sell off your old kit or not, knowing that you can if you want to adds some value to the original purchase. value, not necessarily price, you may be willing to deal on feature set. but hey, if you're lucky you can at least break even on shipping the junk to its new owner.
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??????
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This all happened...
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you miss the point
then they can say that it was an "honest mistake".
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huh?
Granted maybe i'm the wrong person to talk to about this. I use phones until they crap about (about 3-4 years depending on the build of the phone)
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unlocked
Remember the customer doesn’t come first the bottom line dose!
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unlocked
Remember the customer doesn’t come first the bottom line dose!
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Things to ponder?
In the cell phone industry, service providers choose the types of phones that are being used, thus the suppliers also have a controlling interest in this piece of the money pie. This is a very interesting financial endeavor which is taking place. This will also fall over into other markets if successful.
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Now is the lease free and indefinite aslong as you have the same service plan/carrier, or are you charged a monthly rental fee that your carrier credits out? or when you "buy" the phone its a 2 year lease, and then you must return the phone or face stolen property charges or pay damages (2 year lease or more perhaps) for the phone if you loose it?
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It'll be to stop terrorists
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