Supreme Court Gets It Right In Kirtsaeng: You Can Resell Things You Bought Abroad Without Infringing

from the phew dept

Tue, Mar 19th 2013 10:04am — Mike Masnick

For a few years now, we've been following the Kirtsaeng case, in which a student was sued by publisher John Wiley & Sons for buying cheap (legal) textbooks abroad, and then reselling them in the US for profit. Wiley claimed this was copyright infringement, while the student, Sudap Kirtsaeng, argued that the first sale doctrine applied. First sale gives you the right to resell, say, a book that you legally bought without having to get permission from the copyright holder. Under copyright law, it says that the first sale doctrine applies to any product "legally made under this title." Wiley argued that goods made abroad were not legally made under US law since they were made abroad (even though, obviously, it wanted the rest of copyright law to apply to it once those works came to the US). We were guardedly optimistic after the oral hearings at the Supreme Court, in which the Justices explored the "parade of horribles" that might happen if Wiley won. And while what happens at oral arguments frequently doesn't seem to have any bearing on the eventual situation, in this case, the Supreme Court has ruled in favor of Kirtsaeng, saying that it is silly to interpret the first sale doctrine the way Wiley does, and that there is no evidence that such "geographical restrictions" make sense, or that Congress intended such a result.

In our view, §109(a)’s language, its context, and the common-law history of the “first sale” doctrine, taken together, favor a non-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities.... We consequently conclude that Kirtsaeng’s nongeographical reading is the better reading of the Act.

To get technical, the key issue in the dispute was that two different sections of copyright law could be read to conflict. Section 109 defines the First Sale doctrine while Section 602 defines importation of works. Kirtsaeng focused on 109, while Wiley insisted that 602 is more important. The Supreme Court -- by a six to three margin -- side strongly with Kirtsaeng. The majority was written by Justice Breyer, who is consistently good on intellectual property issues, while the dissent was led by Ginsburg, who is consistently bad on copyright issues (Scalia and Kennedy sided with Ginsburg). Thankfully the "good" side won out today.

The language of §109(a) read literally favors Kirtsaeng’s nongeographical interpretation, namely, that “lawfully made under this title” means made “in accordance with” or “in compliance with” the Copyright Act. The language of §109(a) says nothing about geography. The word “under” can mean “[i]n accordance with.” 18 Oxford English Dictionary 950 (2d ed. 1989). See also Black’s Law Dictionary 1525 (6th ed. 1990) (“according to”). And a nongeographical interpretation provides each word of the five-word phrase with a distinct purpose. The first two words of the phrase, “lawfully made,” suggest an effort to distinguish those copies that were made lawfully from those that were not, and the last three words, “under this title,” set forth the standard of “lawful[ness].” Thus, the nongeographical reading is simple, it promotes a traditional copyright objective (combatting piracy), and it makes word-by-word linguistic sense.

The geographical interpretation, however, bristles with linguistic difficulties. It gives the word “lawfully” little, if any, linguistic work to do. (How could a book be unlawfully “made under this title”?) It imports geography into a statutory provision that says nothing explicitly about it. And it is far more complex than may at first appear.

To read the clause geographically, Wiley, like the Second Circuit and the Solicitor General, must first emphasize the word “under.” Indeed, Wiley reads “under this title” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Brief for Respondent 15. Wiley must then take a second step, arguing that the Act “is applicable” only in the United States. Ibid. And the Solicitor General must do the same. See Brief for United States 6 (“A copy is ‘lawfully made under this title’ if Title 17 governs the copy’s creation and the copy is made in compliance with Title 17’s requirements”). See also post, at 7 (GINSBURG, J., dissenting) (“under” describes something “governed or regulated by another”).

One difficulty is that neither “under” nor any other word in the phrase means “where.” See, e.g., 18 Oxford English Dictionary, supra, at 947–952 (definition of “under”). It might mean “subject to,” see post, at 6, but as this Court has repeatedly acknowledged, the word evades a uniform, consistent meaning. See Kucana v. Holder, 558 U. S. 233, 245 (2010) (“‘under’ is chameleon”); Ardestani v. INS, 502 U. S. 129, 135 (1991) (“under” has “many dictionary definitions” and “must draw its meaning from its context”).

A far more serious difficulty arises out of the uncertainty and complexity surrounding the second step’s effort to read the necessary geographical limitation into the word “applicable” (or the equivalent). Where, precisely, is the Copyright Act “applicable”? The Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad. But that fact does not mean the Act is inapplicable to copies made abroad. As a matter of ordinary English, one can say that a statute imposing, say, a tariff upon “any rhododendron grown in Nepal” applies to all Nepalese rhododendrons. And, similarly, one can say that the American Copyright Act is applicable to all pirated copies, including those printed overseas. Indeed, the Act itself makes clear that (in the Solicitor General’s language) foreign-printed pirated copies are “subject to” the Act.

The ruling goes on to lay out historical and logical reasons why first sale should apply. It's a good read. It looks like Breyer relied, in part, on the American Library Association's concern for how a ruling against First Sale would cause serious harm to libraries, which would have to somehow figure out ways to get permission on any book they had that was printed outside the US. He similarly cites concerns of used book dealers and the tech industry that this would get in the way of all sorts of reasonable transactions.

Technology companies tell us that “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers” contain copyrightable software programs or packaging. Many of these items are made abroad with the American copyright holder’s permission and then sold and imported (with that permission) to the United States. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and Wiley did not indicate to the contrary when asked. Without that permission a foreign car owner could not sell his or her used car.

Breyer dismisses the idea, presented by Wiley, that because this "parade of horribles" hasn't happened yet, it won't happen in the future if the ruling had gone the other way. The ruling notes that this is still somewhat unsettled law, but that large parts of the economy clearly rely on the first sale doctrine, and upsetting that apple cart could have dramatic impact. It also rejects other spurious arguments, including a favorite of copyright maximalists, that the first sale doctrine on such works prevents copyright holders from doing differential pricing. The court rightfully questions what this has to do with copyright:

Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.

[....] the Constitution’s language nowhere suggests that its limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain. Neither, to our knowledge, did any Founder make any such suggestion.We have found no precedent suggesting a legal preference for interpretations of copyright statutes that would provide for market divisions.

To the contrary, Congress enacted a copyright law that (through the “first sale” doctrine) limits copyright holders’ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid market divisions.

The dissent obsesses over this issue of differential pricing, despite it having little to do with copyrights and simple serves to reinforce the idea -- as seen in previous copyright rulings, including Eldred -- that Justice Ginsburg seems to have a bit of a blindspot in copyright cases, such that anything that helps copyright maximalists is automatically seen as "good."

But, perhaps more importantly, Justice Ginsburg repeatedly cites various international trade agreements in arguing that her position is the correct one. With this ruling decided as is, copyright maximalists will no doubt seek to have Congress change the law in their favor -- especially now that comprehensive copyright reform is back on the table. But, as a part of that, you can absolutely expect to see this issue pop up in various international trade agreements as well. Copyright maximalists will seek to force Congress' hand in suggesting that first sale rights do not transfer over for goods made in foreign countries. This is something that we're all going to have to pay close attention to in the coming years.

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Filed Under: copyright, first sale, foreign goods, international exhaustion, kirtsaeng, resale rights, sudap kirtsaeng, supreme court
Companies: john wiley

102 Comments

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Anonymous Coward, 19 Mar 2013 @ 10:19am

Yeah, globalization sucks when it isn't being used to oppress the populace doesn't it?

Glad to see some common sense being applied.
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Anonymous Coward, 19 Mar 2013 @ 10:20am

so has a date been set yet for the first appeal? no way is Wiley gonna accept this ruling when it is gonna cost it money and control. it will get help from as many other industries as possible and start again. Congress again is to blame here, by trying to cater for friends in the entertainment industries, without considering any of the other scenarios or industries or the possible/probable consequences. this is what happens every time when those that understand very little implement laws that have too wide a meaning and interpretation for the wrong reasons. eventually, shit hits fan but rarely do those that caused the splattering get covered!
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Anonymous Coward, 19 Mar 2013 @ 10:21am

I liked this part
Third, Wiley and the dissent claim that a nongeograph�ical interpretation will make it difficult, perhaps impos�sible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights. [...] the Constitution�s language nowhere suggests that its limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain. Neither, to our knowledge, did any Founder make any such suggestion.
To the contrary, Congress enacted a copyright law that (through the �first sale� doctrine) limits copyright holders� ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid mar�ket divisions.

Sorry Wiley, there is no 'right to segment markets'.
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Anonymous Coward, 19 Mar 2013 @ 10:22am

I got news for the court, I don't care, If I but it, I will sell it if I want, So the ruling is a moot point, to me.
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Anonymous Coward, 19 Mar 2013 @ 10:24am

Re:
This is a supreme court decision, there's no more appeals now.
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Anonymous Coward, 19 Mar 2013 @ 10:24am

Re:
Supreme Court Gets it Right in Kirtsaeng ...

No more appeals.
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Anonymous Coward, 19 Mar 2013 @ 10:25am

Re:
Um ... the court agrees with you.
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Ninja (profile), 19 Mar 2013 @ 10:29am

That's refreshing.

This was one of the worst pushes against the 'used' goods market recently. But they'll not stop trying. In an ideal world they'll not only stop you from selling your stuff but they'll also make you pay multiple times for the same content. It's already happening.

This is something that we're all going to have to pay close attention to in the coming years.

Disturbingly close. Keep your eyes open folks.
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Anonymous Coward, 19 Mar 2013 @ 10:30am

Re:
Ummm, there is no appeal from a decision of the Supreme Court.
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This comment has been flagged by the community. Click here to show it

Anonymous Coward, 19 Mar 2013 @ 10:33am

Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.

At least the court acknowledges that this may end differential pricing. Enjoy the collateral damage. I don't see publisher's allowing grifters like Kirtsaeng to make $1.2 million by undercutting their US market with their own textbooks.
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Anonymous Coward, 19 Mar 2013 @ 10:36am

Re: I liked this part
So do you really think that US prices for textbooks will go down? Or have you figured out yet that textbook prices in other countries is going up?
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Nigel (profile), 19 Mar 2013 @ 10:37am

As usual, Scalia's position surprises no one.

Nigel
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Anonymous Coward, 19 Mar 2013 @ 10:37am

Re:
I wonder how this will affect some of the copyright claims on regional DRM (DVDs).

All I know is thank God they got this right. It's a start that hopefully some lower judges can use to keep moving things in the right direction in regards to companies segmenting the world to artificially inflate prices. It's a global market and about time copyright was exposed to competition.
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Anonymous Coward, 19 Mar 2013 @ 10:39am

Well, the court of morons have to get one right once in a rare while.
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Rikuo (profile), 19 Mar 2013 @ 10:40am

Re:
"grifters like Kirtsaeng"

How is he a grifter? the dictionary definition is someone who deceives someone else in a financial transaction. Kirtsaeng didn't pretend he was the publisher. He legally bought the books abroad and then legally sold them in the US. So how did he grift?

Oh wait...I see now. He provided competition. That's how he grifted. Customers who wanted to legally buy Wiley's books now have the option of going to someone else to get a better deal, instead of having to suffer through high prices.
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Anonymous Coward, 19 Mar 2013 @ 10:42am

Re:
Theoretically they could get a rehearing if the ruling was less than 25 days ago, but that does not happen without exceptional circumstances.
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out_of_the_blue, 19 Mar 2013 @ 10:44am

Upheld basis of copyright and anti-trust.
THIS is one that reasonable people could flip a coin over because so close, BUT still doesn't legitimize the grifting. If Kirtsaeng wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on. The rampant grifting where others do all the work and take all the risks needs to be outlawed.

------------------
Gotta admire the plucky ignorance of an AC up there: "so has a date been set yet for the first appeal?"
------------------

Take a loopy tour of Techdirt.com! You always end up at same place!
http://techdirt.com/
If Mike supports copyright, why are the pirates here? They take him same as I do: PRO-PIRACY!
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silverscarcat (profile), 19 Mar 2013 @ 10:45am

Re:
And then you have situations where governments decide that it's better to get pirated copies of textbooks and pay for them.

Wow, Wiley is going to lose even more if they decide to do what you think they're going to do, aren't they?
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Akari Mizunashi (profile), 19 Mar 2013 @ 10:46am

Yo, Costco! You may want to take this information to the courts and shove the issue up Omega's rear end!
;)
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Anonymous Coward, 19 Mar 2013 @ 10:46am

Re:
Kirksaeng was practising arbitrage, that is taking advantage of different prices in different markets. The fat cats in the financial markets do this all the time.
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silverscarcat (profile), 19 Mar 2013 @ 10:48am

Re: you keep using words you don't understand.
You keep using the word "grifter" to describe someone who makes money, especially in this case of selling used textbooks.

To quote the Princess Bride...

"You keep using that term, I do not think it means what you think it means."

Grifting:

Noun

1.(sometimes used with a plural verb) a group of methods for obtaining money falsely through the use of swindles, frauds, dishonest gambling, etc.
2.money obtained from such practices.

Hmm... Where's the dishonesty here?
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Rikuo (profile), 19 Mar 2013 @ 10:49am

Re: Upheld basis of copyright and anti-trust.
"Gotta admire the plucky ignorance of an AC up there: "so has a date been set yet for the first appeal?""

As compared to the many many times you've proven yourself ignorant of everything you rant about?

I wouldn't call six against three being so close a ruling, so I don't know where you got that from.

Again, what grifting? It's legal to buy books abroad and its legal to sell them at home. Just because he did it as a business doesn't change that. He saw there was a demand for these books but not at the prices that Wiley was demanding, so he found a way to satisfy that demand.
Are you now arguing that anyone wanting to sell books should write one first? So what...the bookshop down the road must have a bestseller before they're allowed sell?
Again, Kirtsaeng wasn't in the business of writing books. He was in the business of buying stock and selling. Same as most other businesses.
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silverscarcat (profile), 19 Mar 2013 @ 10:49am

Re: Re: I liked this part
"Or have you figured out yet that textbook prices in other countries is going up?"

And we know what happened when prices of textbooks were too high in other countries, don't we?

The government authorized purchasing pirated textbooks because they were cheaper.
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Anonymous Coward, 19 Mar 2013 @ 10:51am

Re: Upheld basis of copyright and anti-trust.
By your logic, you don't ever own anything unless you make it yourself. Have a nice life in your cave.
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Chosen Reject (profile), 19 Mar 2013 @ 10:55am

Re: Upheld basis of copyright and anti-trust.
It's true.

If Jeff Bezos wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on.

If William J. Lynch, Jr wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on.

If Mike Duke wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on.

Cause I mean, come on guys, Kirtsaeng is obviously different than Amazon, Barnes and Noble, and Walmart. He's reselling legally purchased books, and they are reselling legally purchased books. The difference is as plain as the logic in ootb's comments.
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Anonymous Coward, 19 Mar 2013 @ 10:59am

Re: Re:
Those days are soon over.
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Anonymous Coward, 19 Mar 2013 @ 10:59am

Re:
Who are they going to appeal to? The SUPREME Supreme Court?
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slick8086, 19 Mar 2013 @ 11:00am

>for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.

This should make region unlocking legal.
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Anonymous Coward, 19 Mar 2013 @ 11:01am

Re:
Why is the guy a grifter?

He's merely doing what's been done for ages: buy low, sell high.

Or is that only legal when it is the mega-corporations doing it?
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Khaim (profile), 19 Mar 2013 @ 11:03am

Re: Arbitrage
It's disturbing that you need to explain what 'arbitrage' is. Seems like something that should be taught in your first Econ class, no?
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Anonymous Coward, 19 Mar 2013 @ 11:04am

A Good Decision
This is a good and important decision. I'm relieved at the 6-3 split, which is better than I had hoped.

The majority was written by Justice Breyer, who is consistently good on intellectual property issues, while the dissent was led by Ginsburg, who is consistently bad on copyright issues (Scalia and Kennedy sided with Ginsburg).

(Emphasis mine) Am I to take from this that you believe Ginsburg is only bad on copyright sections of "intellectual property" law, or is this merely avoiding the use of the term a second time? That is to say, is Ginsburg a poor judge of copyright law while being somewhere from indifferent to good on patents; or were you just being editorially inaccurate for the sake of avoiding repetition?

Please don't read any unintended snark into my question. I just think it is uncharacteristic of this site and you in particular to misuse these terms.
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Rikuo (profile), 19 Mar 2013 @ 11:05am

Re: Re: Re:
I have to ask what the fuck you mean because...its legal to buy and sell. That has been upheld. What's over? Kirtsaeng? He's just had his rights to buy and sell upheld. Suffering high prices? I sincerely hope so, because having an artificially high price that the market doesn't want but upheld by law is just plain wrong.
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Anonymous Coward, 19 Mar 2013 @ 11:06am

Re: Re: I liked this part
"Or have you figured out yet that textbook prices in other countries is going up?"

In the short term, maybe. But prices will come tumbling down the second they realize that people aren't buying them and that only the parallel market is profiting from that (quite stupid) decision.
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Sneeje (profile), 19 Mar 2013 @ 11:06am

Re: Upheld basis of copyright and anti-trust.
If Kirtsaeng "grifted", what do you call movie studio accounting or the limited collection society payouts to artists?
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Anonymous Coward, 19 Mar 2013 @ 11:08am

Re: Re: I liked this part
I'm not overly concerned with that. Companies can commit economic suicide any way they feel like.
What I do care about is government enforced restrictions on where and with whom I do business.
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Anonymous Coward, 19 Mar 2013 @ 11:08am

Re:
Thats rather shortsighted of you, considering that the Supreme Court just gave us away around these ridiculous copyright extensions. Think about it: All we have to do is import stuff from countries with very short terms, then resell.
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Guest, 19 Mar 2013 @ 11:09am

Re: Upheld basis of copyright and anti-trust.
"The rampant grifting where others do all the work and take all the risks"

Resellers and distributors do in fact do work and take risks, sir. Ask your local retailer. Ask anybody who sells on eBay for a living.

What is offensive about you is your contempt for capitalism, private ownership and the idea of really working for a living.

If you do not understand why reselling is not grift, you cannot be anti-piracy.

You fool no one. You do not speak for artists, rightsholders or working people. You are pus.
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Anonymous Coward, 19 Mar 2013 @ 11:13am

Re:
The dissenters (Ginsburg, Kennedy, Scalia) are the oldest justices on the court. Maybe one of them will be the next to retire.
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Anonymous Coward, 19 Mar 2013 @ 11:19am

Re: Re: Re: Re:
Wiley's primary market is N. America where the textbook prices are very high. This market is huge and lucrative. The foreign markets are tiny and margins are much slimmer. The Supreme Court has ruled that anyone can freely import heavily discounted foreign texts and undercut Wiley's enormous, high-margin N. American market.

Now; tell me what you think is going to happen next to prices of Wiley textbooks in these markets?
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Anonymous Coward, 19 Mar 2013 @ 11:24am

Re: Re: Re: I liked this part
Well, Kirtsaeng made $1.2 million. Who knows how much Wiley loses to gray market imports by him and others. Wiley'd look at that, compared to loss of revenue in foreign countries due to price increases and increase foreign prices accordingly.
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E. Zachary Knight (profile), 19 Mar 2013 @ 11:24am

Re: Re:
We don't have to think about copyright terms at all (except perhaps for things that should be in the public domain to begin with). All we have to consider is price. Is it cheap where you want to buy it? Yes. Will you make a profit selling here? Yes. Then you have a business model.
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Anonymous Coward, 19 Mar 2013 @ 11:26am

Re:
There has definitely been a turning point against copyright maximalism around the globe. The US Copyright office even suggesting to speak about such things as reform is showing promise. I'm hoping we will see the first sale doctrine applied to digital goods as well, since this is already on the European Court of Justice books.
I'm as skeptical as you though that we will ever see a common-sense approach to copyright, when the vocal minority (Lobbyists) seem to be paying their way in still.
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silverscarcat (profile), 19 Mar 2013 @ 11:26am

Re: Re: Re: Re: Re:
Wiley textbooks might go up, but that just opens the door for someone else to come in and undercut them to match market realities.

Really, the Free Market is a great thing when it works right.

And, speaking of the Free Market, there's something you seem to forget.

If people want something enough, they will get it. By hook or by crook.
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E. Zachary Knight (profile), 19 Mar 2013 @ 11:27am

Re: Re: Re: Re: Re:
Yep. Wiley will most likely raise the price in those markets to make buying, importing and selling much more difficult to do while making a profit. At the same time, they will be pricing themselves out of local markets resulting in more governments like Ghana resorting to piracy to stock their schools.
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Nick (profile), 19 Mar 2013 @ 11:34am

So, they argued that the right of resale was void because the item in question was not created on U.S. property, and thus is not subject to the law that says items made under copyright can be resold by a third party after the initial purchase.

Couldn't the book makers have had a better argument that since it was PURCHASED outside the country, the right of resale was void, not that it was MANUFACTURED outside?

Not that I wanted that argument to work, either. I love this verdict, and am glad the second-sale doctrine is upheld, but I find it odd they went after "manufactured overseas" and not "purchased". You'd think they'd have better grounds that if the purchase wasn't made on U.S. soil that the purchase isn't recognized by the U.S., and thus there wasn't a "first sale" to trigger the "second sale" right.
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John Katos, 19 Mar 2013 @ 11:41am

How does this differ from the Costco - Omega case? Didn't SCOTUS rule for Omega?
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Anonymous Coward, 19 Mar 2013 @ 11:52am

Re:
That was a 4-4 split, so the Court didn't actually address the issues there.
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Anonymous Coward, 19 Mar 2013 @ 11:53am

Re:
Interpreting the law the way you want to makes no sense. Remember, the issue is "lawfully made under this title", not where it was sold. So you'd end up with a situation where it would be legal to resell the books if they were made in the US but illegal if they were not. That would be insane, and do nothing but ensure that publishers move all production overseas so they could exploit this law.

It will not end differential pricing. It probably will, however, make the differentials smaller. But that just brings things into line with how it works for any goods NOT covered by copyright.
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E. Zachary Knight (profile), 19 Mar 2013 @ 11:59am

Re:
Here is the latest update on that case:

http://www.techdirt.com/articles/20111117/03284416803/court-tells-omega-copyright-is-not-sw ord-rejects-attempt-to-control-grey-market-as-copyright-misuse.shtml

Basically, the ruling so far is that Omega was misusing copyright in order to restrict importation of its watches. Which means that Omega is ultimately losing that case.

There is still one more appeal, but with this Supreme Court Ruling in play it is unlikely that Omega will prevail.
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That One Guy (profile), 19 Mar 2013 @ 11:59am

Re: Re: Upheld basis of copyright and anti-trust.
'Business as usual'?
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Atkray (profile), 19 Mar 2013 @ 12:03pm

Re: Re:
Doritos Locos Supreme Court.
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silverscarcat (profile), 19 Mar 2013 @ 12:16pm

Re: Re: Re: Re: I liked this part
Of course, there's another option for Wiley...

They COULD drop their prices accordingly and make even MORE money. I mean, seems to me that Kirtsaeng was just doing what the Free Market dictates.

Price of Product X is Y.

People need X, there's no competition, so they're forced to pay price Y, which is very high.

Now, someone comes along and finds the same product at price N, which is far under what they are in market C (home market), so the person buys the product at price N and sells for price Z, which is higher than what they bought it for, but less than price Y.

Suddenly, there's competition and people want the objects at price Z not Y.

So, Wiley can raise the prices in the foreign countries to price Y, OR they can LOWER the prices of books in market N (The US) to price Z, thus allowing MORE people to get the product in question (books).
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silverscarcat (profile), 19 Mar 2013 @ 12:17pm

Re: Re:
SPACE Supreme Court!
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Anonymous Coward, 19 Mar 2013 @ 12:20pm

Re:
You'd think they'd have better grounds that if the purchase wasn't made on U.S. soil that the purchase isn't recognized by the U.S.

Well that would be one way of enabling customs and the DHS to get rich, nothing you bought while overseas is recognised as yours on entry to the US.
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Anonymous Coward, 19 Mar 2013 @ 12:32pm

Re: Re:
There you go... "Felony interference with a business model." Send him to Getmo and we'll never hear from him again, that's the industry standard solution, right?
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Anonymous Coward, 19 Mar 2013 @ 12:39pm

Re: Re: Re: Re: Re: I liked this part
Textbooks are often a strange market where students are forced to buy if they take a particular class. There's not going to be a ton of demand outside those captive students. And the people who decide which textbooks the students have to buy aren't the people who actually have to buy them, so they aren't as sensitive to price as they otherwise might be.

I think you underestimate the markup they're putting on the books in the US. They'd probably make more money by keeping the prices as they are here, unfortunately.
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Digitari, 19 Mar 2013 @ 12:39pm

Re: Upheld basis of copyright and anti-trust.
" If Kirtsaeng wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on. The rampant grifting where others do all the work and take all the risks needs to be outlawed".

if the Music/Movie industry wants to profit from selling movies and music, they should first write songs and star in movies they wrote find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and them not getting money back and so on The rampant grifting where others do all the work ( like writers, musicians and actors) and take all the risks ( without Hollywood accounting) needs to be outlawed".

there fixed it for you OOTB

OOTB is a fucking freetard and ADMITS it

http://www.techdirt.com/articles/20111208/12500917012/riaa-doesnt-apologize-year-long-blog-cen sorship-just-stands-its-claim-that-site-broke-law.shtml
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Gwiz (profile), 19 Mar 2013 @ 12:40pm

Re: Upheld basis of copyright and anti-trust.
The rampant grifting where others do all the work and take all the risks needs to be outlawed.

Blue, this guy PAID the publisher's asking price (albeit in a different country). How does that even come close to "grifting"?

In your crazy little world do you consider used car salesman grifters too?
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Anonymous Coward, 19 Mar 2013 @ 12:57pm

I'm sure out_of_the_blew_a_midget won't like this news at all.
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Anonymous Coward, 19 Mar 2013 @ 1:01pm

Re: Re: Re: Re: Re: Re:
Free market on scientific books?
Professors choosing what books to use, almost zero competing on who sells the newest edition in a reasonable area and a "black market" for used books from earlier students.

The "free market" you are talking about is limited to non-university use. It is about what the professors want in quality and what he feels he can demand from students that determine what the books cost.
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Anonymous Coward, 19 Mar 2013 @ 1:11pm

Re: Upheld basis of copyright and anti-trust.
" If Kirtsaeng wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on."

He's paying the market price for the book in his country, so Wiley ALREADY got paid what they asked for!
He then resells it at a higher price in the US, but still makes a profit since it's a lower price than what Wiley charges in the US!

So, if Wiley lowers the price in the US to what Kirtsang paid (which still gives them a profit), they undercut Kirtsang and he'll be out of business.

What am I missing, boy?
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Anonymous Coward, 19 Mar 2013 @ 1:13pm

Re:
"You'd think they'd have better grounds that if the purchase wasn't made on U.S. soil that the purchase isn't recognized by the U.S., and thus there wasn't a "first sale" to trigger the "second sale" right."

So, if you buy an Aston-Martin automobile in England, then ship it to the US, you can't re-sell it in America because it wasn't purchased here?
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silverscarcat (profile), 19 Mar 2013 @ 1:22pm

Re: Re: Re: Re: Re: Re: Re:
What about the times we've heard governments in other parts of the world purchasing pirated textbooks for schools because they're cheaper?
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Andrew F (profile), 19 Mar 2013 @ 2:25pm

Re: Re: Re: I liked this part
Piracy isn't the only alternative to Wiley's books as well. I mean, a lot of these textbooks suck. Royally so, and the only reason anyone buys them is because their professor is a co-author and insists on it.

I imagine this is less true in markets where Wiley charges a low price, and that professors there might be open to, e.g., teaching a course using free alternative materials found online.
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Nick (profile), 19 Mar 2013 @ 2:33pm

Re: Re:
Sure. I certainly do not want this to come to pass, I was just playing a bit of devil's advocate and wondering why they didn't try to go after the fact that the SALE took place outside the US, not the manufacture.
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Anonymous Coward, 19 Mar 2013 @ 2:35pm

Age-related
I saw a very interesting comment on this over at arstechnica:

"Note that the vote went along age lines not political. All of the older justices were for strong copyright and the younger ones were against."

http://arstechnica.com/tech-policy/2013/03/thai-student-protected-by-first-sale-supreme -court-rules/?comments=1&post=24108187#comment-24108187
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Nick (profile), 19 Mar 2013 @ 2:38pm

Re: Re:
Well, it's not as if customs or DHS can take items from you as-is because they believe it isn't yours. With the massive amounts of items we take with us, and since we never take proofs of purchase with us (receipts etc), we'd never be able to prove the clothes on our backs were purchased in the US.

No, what I was saying was that if a company can prove that you purchased an item out of the country and that you were attempting to resell that within the US, I was asking if anyone knew enough about the law to see if that would have been a stronger grounds for the plaintiffs to take. Since a lot of our laws are probably designed around the exchange of money between two people within the country, any sale done outside would - in my mind - be exempt from a LOT of US protections, the least of which I'd suspect is second-sale.
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Anonymous Coward, 19 Mar 2013 @ 2:42pm

Re: Re: Re:
"I was just playing a bit of devil's advocate and wondering why they didn't try to go after the fact that the SALE took place outside the US, not the manufacture."

Because the wording of the law said first sale applies to things "lawfully made under this title". Even when using creative interpretations like they tried to do, they have to work with what the law actually says. If the law said "lawfully sold under this title" then that's what they'd be arguing instead (and they'd still be wrong, because as the Supreme Court ruled here, "under this title" does not refer to a physical location.)
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Josh in CharlotteNC (profile), 19 Mar 2013 @ 2:45pm

Re: Re: Re: Re: Re:
Now; tell me what you think is going to happen next to prices of Wiley textbooks in these markets?

Wiley (stupid and short-sightedly) will raise their prices in the smaller markets.

Those markets can't afford the prices, which will force those in the markets to start creating their own equivalent books (legally). The first ones may not be quite the quality that Wiley currently provides, but they will quickly rise to the level. The new publishers from the smaller markets will then realize there's a large an inviting market (North America) that they can enter by selling an equivalent product for a much lower price. Wiley will be forced to lower their prices, or go out of business, because of perfectly legal competition that they created by refusing to adjust to the market.

"Do you hear that, Mr. Anderson? It is the sound of inevitability."

Economics tells us that the price of a good moves toward its marginal cost. What you see about to happen is economics in action. You can keep denying the water is rising. You can keep filling sandbags (copyright law) to wall it off. Eventually you run out of sandbags, and then its too late to save your house, when you could have used all the time you spent building the levee to move out of the flood plain.
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Debbie Kearns, 19 Mar 2013 @ 2:45pm

Copyright Alliance is a liar on the Kirtsaeng
Now Copyright Alliance wants the Supreme Court to reverse the ruling! What idiocy is this?! What a bunch of lies the Copyright Al-LIE-ance is spreading!

http://www.copyrightalliance.org/2013/03/supreme_court_reverses_kirtsaeng
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Nick (profile), 19 Mar 2013 @ 2:54pm

Re: Re: Re: Re:
Hmm, ok. I was just trying to figure out if maybe they had a better chance with a different tactic. Of course, in the end, the SC ruled that as long as the item was lawfully made, then no matter where it was sold or made, it was protected via second sale.

Fair enough. Would have been interesting to see them try this the other way, but I'm still glad that it ruled in our favor. Now, if only we can get a ruling regarding all this about software and the likes, maybe I can sell my overbloated Steam catalog of summer sales purchase mistakes.
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silverscarcat (profile), 19 Mar 2013 @ 3:12pm

Re: Copyright Alliance is a liar on the Kirtsaeng
Wow, nice way they tried to rewrite history there to make themselves look better.
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Anonymous Coward, 19 Mar 2013 @ 3:34pm

Re: Re: Re:
How would business operate if they could not buy goods and services outside the country? Either it legal to resell what you import or it isn't unless you want a trade war or privileges for companies.
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Anonymous Coward, 19 Mar 2013 @ 3:36pm

@ Copyright Alliance
http://www.youtube.com/watch?v=7WHptG35EWU
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Anonymous Coward, 19 Mar 2013 @ 3:39pm

Re: @ Copyright Alliance
dammit, 2 seconds after I click submit and it occurs to me I should've put Supreme Court in the name field...
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Mike Masnick (profile), 19 Mar 2013 @ 3:59pm

Re: A Good Decision
Am I to take from this that you believe Ginsburg is only bad on copyright sections of "intellectual property" law, or is this merely avoiding the use of the term a second time? That is to say, is Ginsburg a poor judge of copyright law while being somewhere from indifferent to good on patents; or were you just being editorially inaccurate for the sake of avoiding repetition?

The latter. I find that she has a blind spot on copyrights, but is "indifferent" on patents. Breyer, on the other hand, tends to be pretty good on both copyrights and patents.
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Anonymous Coward, 19 Mar 2013 @ 5:32pm

Re:
You're right. He didn't.
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Anonymous Coward, 19 Mar 2013 @ 6:04pm

Re: Re: Re: Re: Re: Re:
Those markets can't afford the prices, which will force those in the markets to start creating their own equivalent books (legally). The first ones may not be quite the quality that Wiley currently provides, but they will quickly rise to the level. The new publishers from the smaller markets will then realize there's a large an inviting market (North America) that they can enter by selling an equivalent product for a much lower price. Wiley will be forced to lower their prices, or go out of business, because of perfectly legal competition that they created by refusing to adjust to the market.

What are your assumptions about the size of those markets? What is your assumption about the cost and even capacity to produce a world-class text from within one of those markets? Do you see any barriers to entry for foreign text book producers to the US market? Do you think everyone doesn't see how full of shit you are?
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Anonymous Coward, 19 Mar 2013 @ 6:19pm

Re: Re: Re: Re: Re: Re: Re: Re:
What about the times we've heard governments in other parts of the world purchasing pirated textbooks for schools because they're cheaper?

That is generally low level stuff and in countries without WIPO exposure. Basketcase, Third World countries where most of the population is illiterate isn't much of a threat to the market for advanced scientific texts. Most of the education of the populace that has any advanced education is done abroad.
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Anonymous Coward, 19 Mar 2013 @ 6:21pm

Re: Re: Re: Re: Re: Re:
A great way to invite sanctions under just about any international trade agreement any of these failed states might be party to.
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Gerrob65 (profile), 19 Mar 2013 @ 6:48pm

Thank God for some sanity! Give the people who make a living reselling all books books a break. They are mostly mom and pop antique stores. Why is nobody outraged at the extreme markup of these textbooks that American College students are forced to pay. Its extortion, highway robbery, a criminal enterprise paid for by student loans. If you don't pay this extortion, you don't get a degree and you won't be able to make enough money to comfortably support a family in this society. Free the American People from the American College system already!!!
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MrWilson, 19 Mar 2013 @ 6:50pm

Re: Re: Re: Re: Re: Re: Re:
"How dare you attempt to affordably educate your people instead of catering to the greed of foreign corporations!?! I'm telling my diplomats on you! We'll take your...um...what do you have of value other than markets to exploit?"
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Anonymous Coward, 19 Mar 2013 @ 7:11pm

Re:
Kirtsaeng made $1.2 million.
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Samuel Abram (profile), 19 Mar 2013 @ 8:07pm

Be careful what you wish for�
THIS is one that reasonable people could flip a coin over because so close, BUT still doesn't legitimize the grifting. If Kirtsaeng wants to profit from selling books, he should first write one, fact check and peer review it, find capital to get it published and marketed, pay all applicable taxes, risk it being pirated and him not getting money back, and so on. The rampant grifting where others do all the work and take all the risks needs to be outlawed.

I'll bookmark this quote the next time you have a garage sale (or yard sale, stoop sale, boot sale, etc.).
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PT (profile), 20 Mar 2013 @ 1:16am

Re: Re: I liked this part
So do you really think that US prices for textbooks will go down? Or have you figured out yet that textbook prices in other countries is going up?

In a free market, everything is sold for the maximum price the market will stand. This is fundamental economics. And the whole point of Wiley's lawsuit was to interfere with the free market. If they had the freedom to increase prices overseas, they surely would have done so, but the foreign market would not, and will not, stand it.

The most likely outcome is that US and overseas prices will stay the same. A healthy grey import business will develop, and the publishers' next move will be against the foreign buyers.
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PT (profile), 20 Mar 2013 @ 1:31am

Re: Re:
Good.
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That Anonymous Coward (profile), 20 Mar 2013 @ 2:29am

Re:
I think that date will make itself clear. It will be when congresscritters show up in new suits and begin talking about how we need laws to change this travesty so we can keep corn farmers employed.
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FM Hilton, 20 Mar 2013 @ 3:39am

SCOTUS Rulings
"Theoretically they could get a rehearing if the ruling was less than 25 days ago, but that does not happen without exceptional circumstances."

Decisions from SCOTUS are generally non-appealable. When they issue a ruling, it sticks unless Congress changes the law that it applies to.

I doubt that Kirtsaeng would be interested in doing so anyway, being the victor in this case. Besides, it's expensive to keep doing this kind of appealing. Don't think that either party wants to continue to hemorrhage money for lawyers all the time.
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Anonymous Coward, 20 Mar 2013 @ 4:39am

Re: Re: Re: Re: Re: I liked this part
How can they make "even more" money when the number of buyers remains static? These are not books. People are not gonna go out and start buying textbooks. Only those who need them--aka students--are the target audience. And they are a captive audience. From the company's standpoint, it's best to charge as much as possible from a limited number of buyers who have no choice.
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Anonymous Coward, 20 Mar 2013 @ 4:43am

Re: Re: Re:
Will, or can, this ruling be extended to other products legally sold in other markets by companies operating in the US and legally selling the same for, like 10 times? You know what I'm talking about--pharmaceutical drugs. They are often 100 times cheaper in places like India, which has very strict rules on drug pricing.

Then again, can laymen import medicinal drugs into the US?

Questions, questions...
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Anonymous Coward, 20 Mar 2013 @ 7:06am

Re: Re: Re: Re:
This was a copyright case. Medicines are generally covered by patent law.
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Anonymous Coward, 20 Mar 2013 @ 7:09am

Re: Re: Re: I liked this part
You don't understand the demand function in this case. These books are texts and assigned reading for students seeking to pass a course. It is not the same market as Grade A wheat.
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nasch (profile), 20 Mar 2013 @ 8:01am

Re: Re:
How is he a grifter?

To these guys, grifters are people who interfere with publishers' business models.
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Anonymous Coward, 20 Mar 2013 @ 8:06am

Re: Upheld basis of copyright and anti-trust.
If anyone is grifting it is not Kirtsaeng...

As a market developer I deal with this issue all the time, people/companies trying to make use of different price levels in different countries. Usually they are big international companies by the way, that have a good view of what the same product costs in other countries.

As an employee of a company that likes to stay out of court we have standing orders NOT TO INTERFERE with that. As soon as we've sold the product, we can't put any restrictions on where they use it or what they do with it because that would be illegal and a fast track to a lawsuit.

What Wiley is doing is trying to get the court to put illegal restrictions on their products. Sounds like the grift of all grifts to me, if it had succeeded that is.
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RonKaminsky (profile), 20 Mar 2013 @ 1:20pm

Re: Re:
No, silly, Diana Ross and the Supreme Court...
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Englebert the Immensely Well Endowed In Trouser Sn, 21 Mar 2013 @ 6:17am

Re: Re: Re: Re: Re: Re: I liked this part
The number of customers will likely remain static, but the number of buyers has potential to increase. A lower price of a current edition could well increase purchases by people who would otherwise use the secondhand market.
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David "The Hoff" Hasselhoff, 21 Mar 2013 @ 6:19am

Re: Re: Re: I liked this part
In a free market, everything is sold for the maximum price the market will stand.

I believe supermarkets would disagree with this statement.
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Englebert the Immensely Well Endowed In Trouser Sn, 21 Mar 2013 @ 6:23am

Re: Re: Re: Re:
I would fully expect it to apply to all products.

The real deterrent to this practice would be import duty and the cost of logistics.
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nasch (profile), 21 Mar 2013 @ 6:37am

Re: Re: Re: Re: I liked this part
I believe supermarkets would disagree with this statement.

How do you figure? If you're talking about putting things on sale or coupons, I don't think that really invalidates his point.
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Josh in CharlotteNC (profile), 21 Mar 2013 @ 8:10am

Re: Re: Re: Re: Re: Re: Re:
What are your assumptions about the size of those markets?

That they may be small in terms of the US market right now, but growing rapidly.

What is your assumption about the cost and even capacity to produce a world-class text from within one of those markets?

India, population 1.2 billion. China, population 1.3 billion. Add in the rest of south and east Asia and you're over 3 billion. If you think they're not in need of low-price, quality textbooks then you're crazy. If you think they can't produce something as high quality as a US or other western nation publisher, then you're operating under a bias.

Do you see any barriers to entry for foreign text book producers to the US market?

Of course there are barriers - I never said or implied otherwise. But they are not insurmountable, and the textbook market is ripe for disruption from competition on many fronts.
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Anonymous Coward, 21 Mar 2013 @ 10:04pm

It is always nice to have discussions that actually delve into legal and practical issues associated with business matter. Accordingly, I would recommend viewing a "post mortem" discussion by persons on both sides before jumping to Mr. Masnick's statement that the Court got it "right". That is much too simplistic a statement and is not altogether accurate. Such a discussion (caveat...it is about two hours in length) can be found at:

http://www.pijip-impact.org/events/kirtsaeng-v-wiley/
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ChrisH, 10 Apr 2013 @ 8:01am

Re: I liked this part
A company needs to formulate their business plan to work with existing laws. Changing laws to work with an existing company's business plan should NEVER happen.
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