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Copyright and re-sales from overseas

Copyright and re-sales from overseas

Last updated on: October 30, 2012 at 5:30 am by Gene Veith

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The Supreme Court is considering a case that requires the wisdom of Solomon:

Supap Kirtsaeng was studying in the United States when he struck a nerve in the publishing world by tapping into the market for cheaper college textbooks. Kirtsaeng re-sold copyrighted books that relatives first bought abroad.

His profitable venture provoked a copyright infringement lawsuit from publisher John Wiley & Sons. The case is being argued Monday at the high court.

Kirtsaeng used eBay to sell $900,000 worth of books published abroad by Wiley and others and made about $100,000 in profit. The international editions of the textbooks were essentially the same as the more costly American editions. A jury in New York awarded Wiley $600,000 after deciding Kirtsaeng sold copies of eight Wiley textbooks without permission.

The issue at the Supreme Court concerns what protection the holder of a copyright has after a product made outside the United States is sold for the first time. In this case, the issue 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. The high court split 4-4 when it tried to answer that question in a case in 2010 involving Costco and Swiss watch maker Omega. . . .

The court already has rejected copyright claims over U.S.-made items that were sold abroad and then brought back to the United States for re-sale.

The current case has attracted so much attention because it could affect many goods sold on eBay, Google and other Internet sites, and at Costco and other discount stores. The re-sale of merchandise that originates overseas often is called the gray market, and it has an annual value in the tens of billions of dollars.

Consumers benefit from this market because manufacturers commonly price items more cheaply abroad than in the United States.

The federal appeals court in New York sided with Wiley in this case.

EBay and Google say in court papers that the appellate ruling “threatens the increasingly important e-commerce sector of the economy.” Art museums fear that the ruling, if allowed to stand, would jeopardize their ability to exhibit art created outside the United States.

Conversely, the producers of copyrighted movies, music and other goods say that their businesses will be undercut by unauthorized sales if the court blesses Kirtsaeng’s actions. . . .

[Attorney Theodore] Olson said there may be good reasons why manufacturers price the same goods differently for domestic and foreign sales, including lower incomes and standards of living in many foreign countries.

via Online, discount sellers back Thai student in Supreme Court copyright case – The Washington Post.

This would seem to be a corollary of the global economy. Prices are lower in some lower-income markets. But now it’s possible for consumers in high-price markets to use the internet to buy from the lower-cost countries.

Buying drugs from Canada would be another example, once considered by pharmacy companies as even less fair because the Canadian government subsidizes drugs in that country and makes them cheaper than the free market would dictate.

The advantage to consumers is obvious, but can a company stay in business that way? Would it force companies to charge high-price market rates in poor countries, thus preventing citizens of poorer nations from buying what they need and would otherwise be able to buy?

And copyright adds another dimension. Writers get nothing when their works are re-sold in used bookstores or online, which has always struck me, being an author, as wrong, though I can’t think of an alternative that wouldn’t also be wrong.

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