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Thread: New US Supreme Court Case with HUGE potential consequences ...

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    Banned Melonie's Avatar
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    Default New US Supreme Court Case with HUGE potential consequences ...

    (snip)"Tucked into the U.S. Supreme Court’s agenda this fall is a little-known case that could upend your ability to resell everything from your grandmother’s antique furniture to your iPhone 4.

    At issue in Kirtsaeng v. John Wiley & Sons is the first-sale doctrine in copyright law, which allows you to buy and then sell things like electronics, books, artwork and furniture, as well as CDs and DVDs, without getting permission from the copyright holder of those products.

    Under the doctrine, which the Supreme Court has recognized since 1908, you can resell your stuff without worry because the copyright holder only had control over the first sale.

    Put simply, though Apple Inc. has the copyright on the iPhone and Mark Owen has it on the book “No Easy Day,” you can still sell your copies to whomever you please whenever you want without retribution.

    That’s being challenged now for products that are made abroad, and if the Supreme Court upholds an appellate court ruling, it would mean that the copyright holders of anything you own that has been made in China, Japan or Europe, for example, would have to give you permission to sell it.

    “It means that it’s harder for consumers to buy used products and harder for them to sell them,” said Jonathan Band, an adjunct professor at Georgetown University Law Center, who filed a friend-of-the-court brief on behalf of the American Library Association, the Association of College and Research Libraries and the Association for Research Libraries. “This has huge consumer impact on all consumer groups.”

    Another likely result is that it would hit you financially because the copyright holder would now want a piece of that sale.

    It could be your personal electronic devices or the family jewels that have been passed down from your great-grandparents who immigrated from Spain. It could be a book that was written by an American writer but printed and bound overseas, or an Italian painter’s artwork.

    There are implications for a variety of wide-ranging U.S. entities, including libraries, musicians, museums and even resale juggernauts eBay Inc. and Craigslist. U.S. libraries, for example, carry some 200 million books from foreign publishers.

    “It would be absurd to say anything manufactured abroad can’t be bought or sold here,” said Marvin Ammori, a First Amendment lawyer and Schwartz Fellow at the New American Foundation who specializes in technology issues.

    The case stems from Supap Kirtsaeng’s college experience. A native of Thailand, Kirtsaeng came to America in 1997 to study at Cornell University. When he discovered that his textbooks, produced by Wiley, were substantially cheaper to buy in Thailand than they were in Ithaca, N.Y., he rallied his Thai relatives to buy the books and ship them to him in the United States.

    He then sold them on eBay, making upward of $1.2 million, according to court documents.

    Wiley, which admitted that it charged less for books sold abroad than it did in the United States, sued him for copyright infringement. Kirtsaeng countered with the first-sale doctrine.

    In August 2011, the U.S. Court of Appeals for the Second Circuit upheld a lower court’s ruling that anything that was manufactured overseas is not subject to the first-sale principle. Only American-made products or “copies manufactured domestically” were.

    “That’s a non-free-market capitalistic idea for something that’s pretty fundamental to our modern economy,” Ammori commented.

    The Supreme Court is scheduled to hear oral arguments on the case on Oct. 29.

    Both Ammori and Band worry that a decision in favor of the lower court would lead to some strange, even absurd consequences. For example, it could become an incentive for manufacturers to have everything produced overseas because they would be able to control every resale.

    It could also become a weighty issue for auto trade-ins and resales, considering about 40% of most U.S.-made cars carry technology and parts that were made overseas.


    This is a particularly important decision for the likes of eBay and Craigslist, whose very business platform relies on the secondary marketplace. If sellers had to get permission to peddle their wares on the sites, they likely wouldn’t do it.

    Moreover, a major manufacturer would likely go to eBay to get it to pull a for-sale item off the site than to the individual seller, Ammori added.

    In its friend-of-the-court brief, eBay noted that the Second Circuit’s rule “affords copyright owners the ability to control the downstream sales of goods for which they have already been paid.” What’s more, it “allows for significant adverse consequences for trade, e-commerce, secondary markets, small businesses, consumers and jobs in the United States.”(snip)

    (snip) If the Supreme Court does rule with the appellate court, it’s likely that the matter would be brought to Congress to force a change in law. Until then, however, consumers would be stuck between a rock and a hard place when trying to resell their stuff(snip)

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    Veteran Member Cheo_D's Avatar
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    Default Re: New US Supreme Court Case with HUGE potential consequences ...

    Holy smack. Looks like the real problem is Kirtsaeng's turning himself into a channel of commercial scale import and distribution to do an end run around already-existing sales channels in the US, and apparently the lower Court could find no basis in law to make a distinction between someone reselling one book for $30 and someone importing and selling $1.2million in textbooks.

    Looks to me like Kirtsaeng took advantage of a loophole fair and square and what was needed was legislation to close the loophole and so what if he got away with it.

    Instead we risk abolishing the secondhand market. Brilliant.

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    Default Re: New US Supreme Court Case with HUGE potential consequences ...

    Everybody, ease off. This case is not what it first appears. The copyright holder is alleging that when products are not produced pursuant to U.S. copyright protection and intended for sale in a foreign market, those products cannot be imported to the U.S. and freely resold. Instead, the copyright holder is saying they have not yet been paid for the U.S. copyrights. This will not abolish the secondhand market. What they are trying to do is abolish the gray market.

    I agree this is a better case to take to congress than the courts. That is where legislation on copyrights should be handled. Judicial activism is not a good idea in the commercial realm.

    HTH
    Z

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    Default Re: New US Supreme Court Case with HUGE potential consequences ...

    The person who wrote this article (not sure where Melonie quoted this from) doesn't have the slightest idea of what he is talking about.

    http://abovethelaw.com/2012/04/scotu...s/#more-151146
    -snip-
    The issue at the Supreme Court is whether U.S. copyright protection applies to items that are made abroad, purchased abroad and then resold in the U.S. without the permission of the manufacturer.
    -snip-

    When Apple or Toyota manufacture products overseas and sells them in the US, the products are being sold with their permission. This case does not affect such products. If you buy a new Apple or Toyota product in the US, you are free to resell it on whatever terms you want. What this case is deciding, is whether or not you can go to a different country, buy an Apple or Toyota product, bring it to the US, and sell it on your own terms.

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    Default Re: New US Supreme Court Case with HUGE potential consequences ...

    my snippet was from MarketWatch ... specifically


    I also refrained from posting initial commentary, because the ultimate implications of this case are FAR from clear.

    As to the gray market angle, the other side of the argument is that the defendant's relatives paid the FULL RETAIL PRICE the copyright holder charged in a non US market ( as opposed to a wholesale / distributor price ), thus the copyright holder HAS been paid for the 'first sale', first ownership was established by the defendant's relatives, and subsequent sales on e-bay were thus sales of 'second-hand' merchandise ( albeit extremely slightly used 'second-hand' merchandise ).

    As to the 1908 'first sale' copyright payment limitation precedent under US law, and the side issue of the US enforcing or not enforcing the 'first sale' payment limitation precedent for products manufactured outside of the USA, this is the heart of the case.

    Agreed that this will very probably wind up in the lap of congress to pass new legislation clarifying the point. Also it is logical to assume that the decision / new legislation could have some MAJOR effects on e-bay, Amazon, even on camgirls producing material for non US based webcam hosts ( i.e. not being allowed to 'resell' recorded videos without additional payment to the non US based webcam host who owns the copyright ).

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