Supreme Court Justices Worry About 'Parade Of Horribles' If They Agree You Don't Own What You Bought
from the can't-resell-that-toyota dept
As we were discussing, on Monday, the Supreme Court heard the oral arguments in the Wiley v. Kirtsaeng case over whether or not you have the right to resell (or even display) a product you bought that was made outside of the country, which contains content covered by copyright. First off, a big caveat that needs to be mentioned every single time we write about oral arguments in a court case: it is not uncommon for what is discussed, and the questions asked, to really have almost nothing to do with the final decision. Everyone loves to read the tea leaves based on the questions the Justices ask, but, quite often, the questions (and answers) don't necessarily have much bearing on the final decision. The written briefs usually have a much bigger impact. That said, it doesn't mean the questions are meaningless, or that we can't learn a little bit from them.It shouldn't be much of a surprise that the Justices were pretty pointed in their questions (pdf) for all three presenters (Wiley gave some of its time to the US government, who actually argued for a "middle ground" interpretation between the positions of both Wiley and Kirtsaeng). Justice Ginsburg, who in my opinion tends to get awfully confused when it comes to copyright cases, definitely led the attack on the lawyer representing Kirtsaeng, Joshua Rosenkranz, though he appeared to handle himself well. Still, there were clear concerns by Ginsburg and some of the other Justices over how far Kirtsaeng's interpretation of copyright law might go. The key issue there was the definition of "lawfully made under this title." If you haven't followed the case closely, that line is a key part of the first sale doctrine -- with Wiley (and various copyright holders) arguing it means that the first sale doctrine only applies to works made in the US, but not to those made elsewhere and imported. Kirtsaeng argues, instead, that the important part is "lawfully made" -- such that works, that are legally made elsewhere and which fit under the general characteristics of US copyright law, get first sale doctrine support when imported into the country. That is infringing copies (the Justices refer to "piratical" copies) wouldn't get such rights, but "lawfully made" products would.
What really comes up is that, depending on how you read it, there could be a significant conflict between two parts of copyright law: Section 109, which discusses first sale rights and Section 602, which talks about importation of copyright covered works. The argument is what to do when those two collide. Kirtsaeng argues that 109 is the key, and when it comes to first sale, we allow it. Wiley argues that 602 is more important since Congress wanted to allow for market segmentation and stop gray markets. The government advocated for a bizarre middle ground based on effectively ignoring the actual language of 109 and going all the way back to a century old ruling, from which the language in 109 eventually came (sort of).
The reality appears to be that Congress really did not think much about the possibility of this issue being a problem. In the one case where the possibility of a conflict was discussed, the discussion was that thought needed to be put into how to deal with it... but none really was. And that brings us to the arguments by Wiley's lawyer, former Solicitor General Ted Olson (a favorite lawyer for copyright maximalists). The Justices hit him pretty hard on a number of points, focusing mainly on a "parade of horribles" that might occur should his interpretation be accepted by the Court, and Olson seemed woefully unprepared to deal with these questions. Seriously, Wiley should be pretty upset by Olson's handling of the case here. The Justices kept bringing up examples, and Olson hit back weakly with "well, perhaps fair use fixes that" as an argument for why some absolutely ridiculous scenario might not apply should he win. This happened over and over again. There's a discussion on giving a book bought overseas to family members, and then a bunch of other examples. In one key exchange, Justice Breyer pointed out that under Wiley's interpretation, people wouldn't be able to resell their own Toyotas, since they have software covered by copyright:
JUSTICE BREYER: Imagine Toyota, all right? Millions sold in the United States. They have copyrighted sound systems. They have copyrighted GPS systems. When people buy them in America, they think they're going to be able to resell them. Now, under your reading -- now, this is one of their horribles, I gather, and I want to know your answer to it. Under their reading, the millions of Americans who buy Toyotas could not resell them without getting the permission of the copyright holder of every item in that car which is copyrighted?That feels like the key exchange here, because the Justices recognize that Wiley's interpretation can lead to some really crazy results. Olson's repeated attempts to argue that such concerns are overblown because we haven't seen that "parade of horribles" yet doesn't seem to have convinced the justices. Later in the conversation, Justice Breyer explained that there's a plausible explanation for not seeing the "parade of horribles:" the fact that companies haven't yet seen a bright line from the Supreme Court that allowed them to commence said "parade of horribles:"
MR. OLSON: There may be -
JUSTICE BREYER: Is that right?
MR. OLSON: There may be just -
JUSTICE BREYER: Am I right or am I wrong? Am I off base or am I wrong -- am I right?
MR. OLSON: There are other defenses, but that is not this case. This case is not
-JUSTICE BREYER: Well, how do you distinguish? How do you distinguish?
MR. OLSON: The government -- the government would argue for a broader interpretation under what was made under this statute, whether that would include the importation or the distribution in commerce. That's an argument that the government makes, but it's not necessary to decide this case.
JUSTICE BREYER: Now, explain to me, because they're horribles if I summarize them, millions and millions of dollars' worth of items with copyrighted indications of some kind in them that we import every year; libraries with three hundred million books bought from foreign publishers that they might sell, resale, or use; museums that buy Picassos that now, under our last case, receive American protection as soon as that Picasso comes to the United States, and they can't display it without getting permission from the five heirs who are disputing ownership of the Picasso copyrights.
Those are some of the horribles that they sketch. And if I am looking for the bear in the mouse hole, I look at those horribles, and there I see that bear.
So I'm asking you to spend some time telling me why I'm wrong.
MR. OLSON: Well, I'm -- first of all, I would say that when we talk about all the horribles that might apply in cases other than this -- museums, used Toyotas, books and luggage, and that sort of thing -we're not talking about this case. And what we are talking about is the language used by the statute that does apply to this case. And that -
JUSTICE BREYER: But we need -
JUSTICE SOTOMAYOR: Don't those horribles -
JUSTICE BREYER: -- interpretation -
JUSTICE KENNEDY: But you have to look at those hypotheticals in order to decide this case.
MR. OLSON: Well, and that's -
JUSTICE KENNEDY: You're aware of the fact that if we write an opinion with the -- with the rule that you propose, that we should, as a matter of common sense, ask about the consequences of that rule. And that's what we are asking.
JUSTICE BREYER: The main point is that horribles haven't occurred. Right?Olson responded that each scenario has different sets of facts, and then went back to his "well, there's fair use" routine, which Chief Justice Roberts finally called him on, asking Olson to expand on what else there is besides fair use, and wondering if it makes sense for all of these kinds of situations (i.e., displaying a Picasso or reselling your Toyota should rely on fair use law). Olson stammered around for a bit before trying out "implied license" also, which doesn't seem like a very strong answer. And, from there, much of the Justices' concern appeared to be that Wiley/Olson's reading of the law just doesn't make much rational sense. As per the clash between sections 109 and 602, Justice Sotomayor pointed out that since it seems obvious there's a conflict, shouldn't the court look for what makes the most sense, rather than come out with an obviously ridiculous ruling and leave Congress to fix it?
MR. OLSON: The main -- main -
JUSTICE BREYER: Sometimes horribles don't occur because no one can believe it.
Now, for example, I believe there is going to be a storm, but it hasn't started yet.
So I would like to know -- I would like to know, if you were the lawyer for the Toyota distributor, and if you were the lawyer for the Metropolitan Museum of Art, or you are the lawyer for a university library, and your client comes to you and says, my God, I just read the Supreme Court opinion. It says that we can't start selling these old books or -- or lending them or putting them in our word processor or reselling the Toyota without the -- without looking -- displaying the Picasso without the permission of the copyright holder, who may or may not be Toyota itself.
What, as their lawyer, do you tell them? Do you tell them, hey, no problem; or, do you tell them, you might become a law violator; or, do you tell them, I better litigate this? What do you tell them?
Isn't it incumbent upon us to give the statute what is plainly a more rational plain meaning than to try to give it a meaning and then fix it because we understand that the meaning doesn't make sense?Justice Kagan also pointed out that Olson keeps going back to Section 602 (about importation of copyrighted goods) as the crux of his argument, but that's actually not the part of the law up for discussion. The whole point of the case is the interpretation of Section 109, and Justice Kagan pointed out that Wiley/Olson's interpretation there leaves much to be desired:
I mean, I -- you spend a lot of time talking about the legislative history and the purposes behind 602. But the language that we're supposed to be interpreting is the language in section 109. And the language in section 109, as far as I can see, there's really nothing to support your argument that that language was intended to address this gray market problem.Olson hit back by saying that 109 and 602 were passed together in the same law (1976 Copyright Act), but that ignores the fact that most of 109 is actually just a holdover from the 1909 Act, and thus it's not like the two pieces were written together. And, as noted earlier, there was at least some awareness that the two might conflict and something should be done to clarify that.
One final interesting tidbit. Wiley gave some of its time over to the US government, whose brief in the case tried to chart out this "middle ground" between the two sides. Wiley must have felt that the government's argument would favor it in the end, since it gave over its time to the US government, but when the US's lawyer, Malcolm Stewart, was asked point blank which would be worse, he was finally pushed into a corner and admitted that things would probably be worse if Wiley got its way.
Once again, you shouldn't read too much into what's said at the oral arguments, as the final decisions often turn on very different issues, but at least there is some clear skepticism of Wiley's argument that you can't possibly really own anything purchased overseas.
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Filed Under: copyright, first sale, kirsaeng
Companies: wiley
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Not difficult: copyright is the right to control copies.
Doesn't seem so very sweeping to me, let alone "horrible".
'we haven't seen that "parade of horribles" yet' -- Means there's "no evidence of real harm", Mike. Why is your standard test not applicable here? Where's the sky falling, Chicken Little?
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Why are you an idiot?
That's because you're an idiot and didn't see what the Supreme Court was talking about.
Even if the SCOTUS made a VERY narrow definition and said that Wiley is in the wrong on copyright infringement, all it would do would be to open the doors for WORSE copyright laws.
And THAT is what the SCOTUS is saying will happen if they rule badly on this.
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Re: Why are you an idiot?
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Re: Not difficult: copyright is the right to control copies.
~ Martin Luther King, Jr.
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Re: Not difficult: copyright is the right to control copies.
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Re: Not difficult: copyright is the right to control copies.
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Re: Not difficult: copyright is the right to control copies.
The reason horrible outcomes haven't happened yet is because there is no clear view of the law.
If the supreme court says first sale rights are gone for imported goods you will get to watch companies line up their lawyers and file their cases to take our right to resell _everything_ away from us.
Imagine how happy the car companies could be if they could completely shut down the used car markets. Now everyone will always need to buy a new car....
If Wiley wins this case our economy is screwed. One only needs to look as far as the mess we have with patents to realize that this could get really really bad.
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Re: Re: Not difficult: copyright is the right to control copies.
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Re: Re: Re: Not difficult: copyright is the right to control copies.
He said, "Then, it didn't authorize the importation of those, and logically, right to control copies includes this area."
This kind of authorization of importation is not a part of the government-granted monopoly of copy"right". The publisher's "intent" in why or for whom they manufactured a product is irrelevant.
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Re: Re: Re: Not difficult: copyright is the right to control copies.
I'm wondering if Wiley believes imported works are copyrighted at all in this country.
You can have a lack of a right to resell without reselling being illegal. That's two separate arguments ... isn't it? I'm confused.
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Re: Not difficult: copyright is the right to control copies.
I am surprised that you, OOTB, are arguing for Corporate interest. I thought corporations were the root of all evil?
Also, the "no evidence of real harm"? You are taking that out of context and applying it in the wrong direction. That test applies to Copyright holders arguing that the market is harmed by piracy. The arguement goes to show that the statement by rightsholders is demonstratibly false.
Does not apply to whether or not this action is legal. Evidence of market harm has already been shown. The textbook market has been depressed, causing 'harm'. The question is whether that 'harm' was done legally, and is therefore is actually competitive practices rather then actual harm, or is illegal and therefore actual harm. Techdirt, Kirtsaeng, and I all agree that this is the result of competition in an overly inflated market.
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Re: Re: Not difficult: copyright is the right to control copies.
I many post as I have read, I think he doesn't have any convictions of his own. He is just against anything that is posted on Techdirt.
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Re: Re: Re: Not difficult: copyright is the right to control copies.
Argument for the sake of arguing.
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Re: Not difficult: copyright is the right to control copies.
Those copies were made outside the US. Those copies were sold outside the US. At that point, Wiley no longer has any rights to control what happens to those copies. End of case.
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Re: Not difficult: copyright is the right to control copies.
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Re: Not difficult: copyright is the right to control copies.
I love how you bring up an argument a fucking Supreme Court Justice already addressed:
JUSTICE BREYER: Sometimes horribles don't occur because no one can believe it.
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Re: Not difficult: copyright is the right to control copies.
You, sir, are clearly wrong.
Know the law so you don't blow the law.
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It's the same as always with the MAFIAA (copyright industry in general mind you). They can't support their assumptions with facts so they resort to bogus statistics, lies and when they don't stick they just stutter. Typical.
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Re:
That hasn't stopped them in the past from making terrible decisions. They've made terrible rulings recently where they acknowledge the detrimental nature of their decision, but say that they have to because that's what the law says. Like the ruling about corporations being people.
I can see that happening here as well. I think they may do it just to sort of force Congress to address the issue. Which is what I hope they were doing in the Citizens United case.
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Kagan scared me a bit
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Re: Kagan scared me a bit
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Re: Re: Kagan scared me a bit
If this is not the case then maybe specifying that it ONLY applies to end users and specifying what "end users' (and it can mean both commercial and non commercial user.. but MUST be a user of the goods) and therefore the ability to resell goods under first sale can only then apply to the end user gifting/selling the goods onwards. This would not preclude a commercial entity like Kirtsaeng purchasing the goods from end users and then reselling them into the USA but would stop manufacturers/distributors selling to third parties (Kirtsaeng) directly without the goods actually being used in first place.
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Re: Kagan scared me a bit
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Magic Words
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What is that... I don't even...
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That made me laugh so hard I can do nothing but rinse and repeat.
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Basically saying that the potential complication is so large and obvious that it can't just simply be ignored.
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copyrighted sound systems? Huh??
Does he mean the software that runs the sound systems and GPS systems? That could be the only thing that could be copyrighted.
If we are going to go to THAT place, then essentially 100% of electronics (mp3 players, microwave ovens, cell phones, computers, alarm clocks, digital watches, Xboxes, cars, alarm systems in HOUSES, etc.) will not be able to be re-sold without agreement of the copyright holder on the firmware/BIOS/ROM or whatever.
Yow! That would be simply a new and far worse world. Me no likey.
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Re: copyrighted sound systems? Huh??
So many companies would go out of business as a result.
How is that good for anyone?
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Re: copyrighted sound systems? Huh??
First Sale Rights ! I buy a product I have the Right to Sell it or to Will it to my Son.
I am watching this case closely and if it is decided that Corporations are favored over people then I will just never buy a physical film, music, or book again.I will steal what I want and I will not feel guilty about it.
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JUSTICE THOMAS: ?...?
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Fair Use as an answer?
Briefly:
§602 : Importation is an infringement of the exclusive right to distribute codified in §106
§106 : Except for the limitations specified in §107 through §122, copyright holder has the exclusive right to distribute.
§107 : Fair Use limitation
§108 : Libraries and archives limitation
§109 : First Sale limitation
§110-122 : more limitations
The argument that §602 should recognize the exclusive rights of §106 but without its Fair Use limitation would be the same for all of the other limitations called out by §106 (which is why libraries and museums weighed in with their concern). Fair Use would not resolve the dilemma presented by Chief Justice Roberts.
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Errata
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Goodwill out of business?
Pawn shops, same thing. Craigslist and ebay in general, same thing.
The forest for the trees here is not the inability to resell imported copyrighted goods - it's the cost of protecting yourself against liability for accidentally doing so. It effectively ends resale of ANY kind.
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Re: Goodwill out of business?
Every single item that was donated to them, rather. Derp.
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Fair Use
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Re: copyright is the right to control COPYING
Wiley wants to make this about the copies. It jumps into the sec106 quagmire but wants sec 109 struck out on a semantic quibble concerning the words 'lawfully made under this title' (which Scotus screwed up dealing with Omega v Costco inho).
Wiley wants 'lawfully made' to modify 'under this title', so that something not made in the USA with the consent of the US copyright owner is 'not lawfully made under this title'.
I have not seen any mention of the Berne Convention. But that Convention effectively means that *any* copyrighted work, produced by a national of a Convention country and subject to copyright in his country, is granted copyright protection in all other Convention countries.
I presume that Wiley published first in the US, and possibly in other places within 30 days of the US publication.
So Wiley's publication of the book in Thailand, is with Wiley's consent. That consent pursuant to the Berne Convention is good worldwide: the Convention countries agreed to accept and uphold minimum mutual standards.
Thus those books were 'lawfully made under this title': they were made with the consent of the copyright owner.
Wiley is trying to say that the copyright it (or its subsidiary) holds is a different copyright, but it has to argue that it is for the same book (otherwise there would be no question: 2 different books/copyrights, Wiley cannot object).
I am surprised that the effect of the Berne Convention was not mentioned, since that Convention, which expands the extent of a US copyright's 'aura' also extends the owners' consent when view in this manner.
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No more US manufacturing
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Re: No more US manufacturing
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Re: Re: No more US manufacturing
The problem here is that it won't be legal to buy used things anymore without the consent of the original seller.
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Sadly, I can see this decision possibly destroying what's left of the economy, if they rule in favor of Wiley. Every one will start moving all their business overseas, along with all the jobs it entails.
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common sense
I really see an easy way out of this for the Court. They simply adopt the above and eliminate the issue completely. Since the copyright protection exists, so does the First Sale Doctrine.
Am I missing something?
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More Refined Common Sense?
Section 109 states: “Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to…”
The wording of the statute is "lawfully made under this title". There are 2 arguments I can see:
1. A copy made outside of the US is “lawfully made under this title” if
a. the original copyright existed in the US and the copy was lawfully made. The location of the duplication is unimportant to the analysis here because the Act merely reserves exclusive rights to the holder of the copyright. The fact that the US copyright holder consented to the duplication makes the copy lawful. The fact that the license was granted by the US copyright holder means it was lawfully made “under this title”;
b. there was no original copyright when the copy was made. It would seem in this case there was no way that the duplication could have been “unlawful”. Since the Act merely proscribes acts in connection with US copyrights, the duplication was in fact “lawful under this title”.
2. Although a weaker argument IMO, history also supports the 1st sale in such cases. Back in the day there was no copyright unless it was registered prior to publication. That was abolished so that copyright applies automatically UPON publication. If that is the case then ANY work that is "published" in the US is in fact protected under "this Act" as of the date of publication. If the duplication was made lawfully – under any of the 2 examples above – then it seems that it was “lawful under this title”.
I really see an easy way out of this for the Court. They simply adopt the above and eliminate the issue completely. Since the copyright protection exists, so does the First Sale Doctrine.
Again, am I missing something?
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Re: More Refined Common Sense?
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This says it all
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That would include the Statue of Liberty in New York Harbor! The US would effectively lose ownership of the most iconic symbol of our nation!
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Spanking!
Back upthread, commenter aliasundercover was onto something. If I had to try to make Wiley's argument, I'd try my best to separate content from object. Copyright law extends certain protections to digital content, especially content that's not delivered via physical media like a CD or DVD.
That might not be any more successful than Olsen's attempt anyway. Thankfully, I don't have Olsen's job.
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Re: Spanking!
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