Two And A Half Minute Video Explains How The Ability To Sell Stuff You Legally Purchased Is At Risk
from the you've-been-owned dept
As we wait patiently for the Supreme Court to decide the Kirtsaeng case, concerning whether or not you can resell goods that were made outside the US but that can be covered by copyright inside the US, the folks at Demand Progress have put together a nice two and a half minute video highlighting the possible consequences of a ruling that goes against first sale rights and limits your ability to freely sell items you legally purchased. While it may seem premature to be discussing this before the eventual ruling, having more people understand why this is a vitally important issue is helpful, so that we can either push for legislation to fix a bad ruling, or (hopefully) resist a push in the other direction by companies seeking to stomp out first sale rights.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: copyright, first sale, kirtsaeng, supreme court
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If Wiley loses, rather than have to compete in the US against its own discounted foreign merchandise- they'll simply raise foreign prices to keep grifters like Kirtsaeng from undercutting the market, and the losers will be students in Third World countries. But as long as Kirtsaeng is allowed to profit, I guess that's all that matters here.
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I am curious what your economics background is?
Because your scenario is extremely unlikely. If that is actually what happens, the IMMEDIATE reaction would be for others to swoop in and target third world countries with cheaper, better offerings. Wiley jacking up prices would just cut themselves out of that market and open it up to smarter firms.
You act like there are no competitors in the market, which is a bizarre and simply incorrect assumption.
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Speculation, sure, but not so crazy as you seem to be suggesting. I base this both on the history of price increases in one market due to things like trade barriers (an equivalent scenario in which all providers from another country may suddenly be forced to raise prices) as well as the rise of new internet-focused publishing houses that are attacking the text book market on the low end with VERY high quality products.
It appears that Wiley has a significant market for these types of texts in the US.
Mostly due to legacy issues, but that's another rant for another day.
So they'd have to make all of their money on the slim Third World markets. If they have no current, acceptable substitute for the Wiley text- then production costs would likely be huge.
Again, there's been an amazing growth in the world of cheap textbooks from a variety of upstarts. If you don't think they'd jump into developing nations as the big guys jack up their prices even higher, you're not paying attention. :)
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I don't know. US textbooks are pretty much the international gold standard. I have a hard time believing that a company operating in a Third World economy could:
a) develop a competitive alternate text
b) make any inroads into the N. American market where the big money is
c) profit on the relatively few, low dollar sales in such market
Remember, they'd not only have to develop a world-class text, profit from a low-margin, low density market- but also have to be prepared to fend off an aggressive reentry by Wiley and companies like it.
It would certainly cure the grey market issue as it's very unlikely that such a book would ever be used as a text in the US.
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I didn't say the company would be operating in a third world country. I'm saying these upstarts would happily supply to third world countries.
a) develop a competitive alternate text
Already done in many cases.
b) make any inroads into the N. American market where the big money is
Again, there are a number of companies who have jumped into the space recently, and seem to be doing pretty well. Flat world knowledge may be the most well known but there are a bunch of others.
c) profit on the relatively few, low dollar sales in such market
Welcome to the business model of disruption. Charge a hell of a lot less, make it up in volume and on ancillary products and services. Stock photos used to cost $1,000. Now they're $2. Market disrupted. It happens all the time.
Remember, they'd not only have to develop a world-class text, profit from a low-margin, low density market- but also have to be prepared to fend off an aggressive reentry by Wiley and companies like it.
Again, this is *ALREADY HAPPENING*. Now all that would be happening is that Wiley would effectively be ceding the 3rd World market to them by jacking up their prices.
If Wiley were to then "reenter the market" they'd have to do so at that low price again, thereby disproving your original premise that Wiley will jack up the price.
It would certainly cure the grey market issue as it's very unlikely that such a book would ever be used as a text in the US.
Would suggest you look up what's been happening in the education space lately. It's being reinvented from the ground up with a number of new providers offering free or cheap online courses, along with free or cheap texts. And most of that is happening in the US.
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You know, you don't even have to go this far to show that the A.C. is wrong. Producers can't increase prices arbitrarily, even in a perfectly monopolistic market.
Wiley (and other publishers) don't lower their prices is foreign markets out of the goodness of their hearts. Those prices are already at the maximum that they can set to maximize their marginal revenue. If those prices were higher, fewer people would buy them, and the loss in marginal revenue from sales would be greater than the gain made from the higher price.
If they increased the price of books in third-world countries to something even approaching the prices in the U.S., Wiley would price themselves out of the market entirely, even without any competition whatsoever.
So, they have two choices. They can either leave the third-world market entirely, or they can lower the price of books in the U.S. Since lower U.S. prices would still result in marginal revenue - even if not optimal for a monopolist - they stand to make much more money overall from that second option.
And that's not even considering competition. Not just from "upstarts," but from well-established first-world publishers. If Wiley chose to leave the market, or price themselves out of it, other publishers would do the math, take that second option, and make a killing. They'd outsell Wiley in the foreign market by default; and, due to their lower prices, they'd crush Wiley in the U.S. market as well.
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Why is it when a corporation uses a loophole in the law to create a business model for "personal enrichment", it's called "a successful, money-making business", but when an unincorporated individual does the same thing, it's a no-good, terrible, bad thing? And also evil, evil, evil?
But really, how much of a loophole is it that he purchased some books at the price they were being offered for sale, and then he sold the books elsewhere for a price that that market could bear? What he did seems very straightforward to me: you're supposed to buy low and sell high.
I have to take issue with your very odd use of the word "grifter"? Are you aware that a grifter is "a person who swindles you by means of deception or fraud" -- who did he swindle? He didn't stiff the company he purchased the books from, he paid the price they asked. What deception did he commit when they took his money? What swindle occurred when he offered the books to potential buyers and quoted a price, and they either paid it or said, "no thank you."
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I think the fact that Omega sued Costco claiming it couldn't resell their watches because Omega inscribed a tiny, almost impossible to notice "copyrighted" image on the underside of the watch suggests that the above scenario is not quite as far-fetched as you claim.
The ability to engrave something, claim copyright, and then stop the resale of physical goods is not FUD or some far-fetched idea. It's actually being done in practice.
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It is an extreme scenario, but not one out of the realm of possibility -- which is the point. If the law were clear that it only applied to mass resellers, you might have a point, but that's not a distinction in the law.
And perhaps the reason no buyers of watches or books have been sued is because they didn't try to resell them...
But in this age when we see crazy copyright trolling like Prenda, do you REALLY think no one will try to make this argument in court one day soon?
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But in this age when we see crazy copyright trolling like Prenda, do you REALLY think no one will try to make this argument in court one day soon?
Not unless they enjoy peals of derisive laughter.
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First sale applies to trademark too. I don't see how it's a trademark issue at all since it properly identifies that the watch is from Omega.
Not unless they enjoy peals of derisive laughter.
Has that really ever stopped anyone before?
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"First sale" doctrine doesn't apply to just literally "the first sale." It just means that you can resell what you've bought without having to get approval.
Not sure your familiarity with the law, but it's basically a form of "exhaustion."
But the issue with trademark is that you can, for the most part, legitimately resell something with someone's trademark on it, so long as it's not done in a way to confuse people about the origins or to harm the brand (loosely speaking).
So, really not an issue in the Omega case.
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With reference to trade in tangible merchandise, such as the retailing of goods bearing a trademark, the first sale doctrine serves to immunize a reseller from infringement liability. Such protection to the reseller extends to the point where said goods have not been altered so as to be materially different from those originating from the trademark owner.
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So you're argument is that it's not FUD to worry about being able to resell your house because, even though no one's ever been sued for it before, there were a couple of copyright trolls who unsuccessfully tried something similar. Do you hear yourself?
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The ability to engrave something, claim copyright, and then stop the resale of physical goods is not FUD or some far-fetched idea. It's actually being done in practice.
And yet they lost on a copyright misuse defense.
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For people like him copyright law is only bad because it could last another 20 years longer than it already does.
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Or, he simply doesn't understand that if the SC bans resale of foreign manufactured goods, he won't be able to even sell a used BIC lighter, since it has the © symbol on it (applied to the specific shade of red the plastic is dyed or other such nonsense.)
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The faucets thing was a little out there, but it's arguably possible to have a decorative design on a faucet which is separable from the functional part of the faucet, and thus get through the utility doctrine.
Is there some specific example that they mentioned which could not be impacted by a bad decision here?
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The Corporate America Mantra.
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FTFY
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The competition created by true Capitalism is being destroyed by Napoleon and his ilk - Bloomberg's "purchased" dictatorship is a perfect example.
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Be silly that reseller rights are more than the creators.
IF you say that licensing terms in this clear instance don't extend to obvious degree, then you really do undermine all copyright, even the Creative Commons terms.
Copyright isn't just physical possession of media. The rights of a reseller can't possibly even exist until a creator has put the content onto media. Therefore, EVEN IF the media is already in existence, the reseller's rights are always secondary.
Take a loopy tour of Techdirt.com! You always end up at same place!
http://techdirt.com/
Where arrogance meets ignorance to discuss what they'll do with someone else's 100 million dollar movie.
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Restricting a purchaser's ability to resell diminishes the value of the work itself. Ironically of course, if you removed the right of first sale from products, the prices for those products would go up because the copyright holders would have even more of a monopoly on their products than they already do.
Tell me this: even if it could be argued that creator's should have more control over their works as you contend, would that amount of control be worth the further impoverishment of the poor and middle classes in our society? After all, when prices go up, only the wealthy copyright holders will be profiting. If I have to pay more for groceries because my carton of soy milk has copyrighted images on it, I'm not going to start giving more money to artists or patronizing luxury goods and services like movies and music.
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Just because the cost of one good is incurred on a population doesn't mean it's a net economic gain.
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What's that you say? ... I am no longer allowed to donate things to a charity?
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Taks a loopy tour of OOTB's comments Where logic need not apply (im sure parody laws protect this)
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But yes, everything OOtB says is horseshit, and we might as well ignore him/her/it(most likely). Although the things it says does, form time to time, spur intelligent people to say interesting things and make a cogent argument we can use with people IRL. I suppose OOtB might even be a valuable resource in order to keep us sharp on the day-to-day drill of refuting idiotic ramblings of syphilitic, unthinking minds that have bought into copyright maximalism as a "Good Thing" hook line and sinker.
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They make maximalists look like pathological liars ... but the PR campaigns already do that.
But worse, they make maximalists look like bullies and thugs who will say and do anything if they think it will get me to give them my computer and its contents. I don't actually think that's fair to the RIAA and MPAA. They are dazzled by that possibility but at the end of the day I think just want to keep the cash coming in.
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> opportunity to undercut prices in the US.
That's called competition and there's nothing sleazy or grifting about it. It's the way the free market is supposed to work, dumbass.
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The fact that after all these years, you still won't admit that these discussions are about OUR property, not "someone else's," invalidates every post you make.
I was actually ready to agree with one of your points about this case until you reminded me who you are - someone whose only agenda is to trick us into believing copyright means a person can still own my property after he sells it to me.
You are why I "pirate."
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The Supreme Court wasn't able to realize how terrible corporate money would be in politics/campaign's either; 'Corporations are people' and 'Money is the same as free speech/voting'. Welcome to the new Orwellan world.
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Where's the argument?
How exactly does the reseller have more rights when he has to pay to ship the property?
And I think what you call "licensing restrictions" is actually being charging more depending on your geographical location. How can you justify this for digital works?
What you describe is not what copyright was intended for.
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Don't Abolish For Sale Law
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http://itlaw.wikia.com/wiki/Red_Baron_v._Taito
“Taito’s initial sale in Japan of the circuit boards for Double Dragon extinguished all rights that it had under copyright laws.”
Even the stricter final appellate ruling that claimed that the defendant had no right of public performance admitted that first sale waived the distribution aspect of that right:
“the first sale doctrine has no application to the rights of the owner of a copyright guaranteed by §106, except the right of distribution."
So yeah, first sale brought up as being valid in a case regarding goods manufactured and marketed abroad. How was this not brought up before?
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What about agriculture?
so are any crops certified for legal sale, that effectively contain resold energy resources from abroad?
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1908 was not the beginning
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Remember kids when facts are not on your side calling people names makes you a winner.
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"Signed, out_of_the_blue/average_joe/bob/hurricane head/darryl"
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"[It's a balance.] A creator's work is valuable because people want it. A reseller might purchase a book (or even a car) with the thought in mind that the price is more than they prefer to pay, but might be worth it if they can resell it later for a not-too-diminished value once they're done using it.
Restricting a purchaser's ability to resell diminishes the value of [each copy of] the work itself. Ironically of course, if you removed the right of first sale from products, the prices for [each copy of] those products would go up because the copyright holders would have even more of a monopoly on their products than they already do. [But some buyers could get their copy second hand, so the copyright holder would sell less new copies, which means it's not clear whether they would benefit overall.]"
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My point was that allowing purchasers to freely resell increases the value of each copy of a good, but reduces the need to buy new copies, so it's not clear whether copyright holders benefit.
Didn't spot that you switched between saying the right to resell makes items more valuable (in one paragraph) to saying that an increased monopoly increases the value (as measured by sale price, in the next).
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Wrong
This isn't an attack on the First Sale Act, it's an attack on loop holes around international copyright.
While i think the publishers are wrong, this is the same as region 0-6 DVDs, you can't play a region 1 (America) DVD in Region 2(Europe) due to copyright and other rights. Which probably comes down to price eventually. We all know region 3-8 are dirt cheap, but we have to put up with buying our correct region DVD. Books do not have this protection
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No, it's not.
This isn't an attack on the First Sale Act
There is no "First Sale Act" but it is absolutely an attack on the first sale doctrine.
it's an attack on loop holes around international copyright.
That is not true. There are no "loop holes" that you are talking about. What there is is greater access to a global market, leading to arbitrage.
While i think the publishers are wrong, this is the same as region 0-6 DVDs, you can't play a region 1 (America) DVD in Region 2(Europe) due to copyright and other rights. Which probably comes down to price eventually. We all know region 3-8 are dirt cheap, but we have to put up with buying our correct region DVD. Books do not have this protection
Um. You are correct that books do not have that protection. But that has nothing to do with copyright law.
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You have a right to TRY, you don't get to force that and make it law, that is just wrong.
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You're wrong on this. Your analogy breaks down quite quickly. What you are talking about is illegal importation (moving a DVD region to region). This case is about reselling something that is legitimately or legitimately brought into a region.
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> importation (moving a DVD region to region).
There's nothing illegal about bringing a DVD from another region into the U.S. (I can't comment on whether the reverse is true.)
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No, YOU are wrong, categorically. Region locks on DVD players and media
IS
NOT
A
LAW
at least not in the USA. Once again, for the cheap seats, it
IS
NOT
ILLEGAL
to have/buy/use/watch/obtain/get/import a DVD or player from another part of the world.
Region locks are a pure invention of Hollywood, and are NOT codified in any law here whatsoever.
Please stop spreading FUD and lies, and know what you are talking about before you open your yaphole.
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> we have to put up with buying our correct
> region DVD.
No, we don't. We can buy a DVD player that will play DVDs from any region. And such players are not illegal.
Circumventing some media company's marketing scheme is not a crime no matter how much they want to pretend that it is.
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No, you don't.
I don't think price alone is worth giving up the convenience of buying within my region, but a lot of quality work is never released i our part of the country, and when I seek it out, I can buy it, no problem.
This case will not affect that.... but it will affect your right to buy or resell Region One DVDs that happen to be made in whole or in part outside the United States.
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I'm tired of manufacturers telling me how I have to use their stuff after I buy it. It's mine. I should have the right to do with it what I want (save copy and resell the copies). Why the heck do you care? I'm not hurting you, the thing you're selling, or decreasing the value.
Reselling stuff is so common the ramifications from this ruling could be so drastic it's stupid. Flipping houses (yea I know it's manufactured here), collecting items, concession sales, you name it. Resale is a common part of everyday life. Why should it be any different because it was manufactured overseas? Why should some foreigner restrict my basic rights? Why is this even an issue?
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2) Every business reliant upon selling used products would have to police every item for foreign-made goods, then give a cut of the profit to each individual distributor.
3) Corporate entities would become middle-men on all private transactions via non-expirable, corporate-imposed taxation.
4) Selling products would have to be 'authorized'; this paves the ground for the auditing of all personal effects. IOW, government intrusion into your personal affairs.
I could go on but why bother? It's too depressing.
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well then..
Sorry, can't have your cake and eat it too. You can sell your widget, but you have to have a background check first to make sure you aren't a pirate.
Doesn't sound so fun, does it?
yeah. didn't think so.
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