October 8th, 2012 
AstroNerdBoy 
When it comes to copyrighted items, major copyright holders (publishing companies for the sake of this article but it goes to any copyright holder) have long wanted 100% control over the product, including what the consumer does with said product. Anything that deviates in the slightest from what the copyright holder wants is automatically deemed a copyright violation. We’ve seen this in more modern times with the creation of the VCR, where copyright owners of television programs claimed that simply recording a show for later viewing violated their copyrights since you didn’t have a license to record that. More recently, gaming companies use similar techniques (with greater success) by saying that when you buy a game, you aren’t “buying” it, just a license, thus they can do whatever they want with the product. Unfortunately, copyright holders are at it again, this time trying to restrict the long established first-sale doctrine.
Back in the early 1900s, book publisher Bobbs-Merrill owned the copyright of a novel entitled The Castaway. Because they were the copyright owner, Bobbs-Merrill put a notice inside the book cover stating that the book was to be sold for $1, and ANYONE selling it for less than a dollar was GUILTY of copyright infringement. This is a quote of the actual notice.
The price of this book at retail is $1 net. No dealer is licensed to sell it at a less price, and a sale at a less price will be treated as an infringement of the copyright.
Enter the retailer Nathan Straus of R.H. Macy & Co. Mr. Straus purchased copies of the book from a wholesale dealer, whom presumably had a deal with Bobbs-Merrill to sell the books to retailers at a discount, thus allowing the retailers to make a profit. However, in the spirit of capitalism, Mr. Straus decided to sell the books at 89¢ each, which allowed him to make a profit on the books, but also to sell more of them since he was selling them cheaper than the competition. Bobbs-Merrill didn’t take to kindly to what they considered to be a blatant copyright infringement, and so sued Mr. Straus.
In 1908, the case came up before the Supreme Court. Bobbs-Merrill said their copyright gave them exclusivity to dictate the terms by which their products were distributed. Since Mr. Straus was clearly violating the terms of the copyright, Bobbs-Merrill claimed the right to be able to stop him from selling their products. Mr. Straus argued that this didn’t apply to him, since he didn’t buy the books from Bobbs-Merrill, but from a 3rd-party, wholesale vendor.
The Supreme Court found for Mr. Straus (17 U.S.C. §109(a)) and established what is known as the first-sale doctrine. The Court stated that copyright owners could restrict people from making copies of copyrighted works (thus why ripping an anime DVD or scanlating manga is illegal), but that copyright owners did NOT have the right to restrict people from reselling something once the initial purchase had been made. That’s why libraries and used bookstores/used video stores can legally do what they do and not run afoul of publishers.
Fast forward to 1997. Thailand native Supap Kirtsaeng came to the United States to attend college at Cornell University. He was surprised to learn that his textbooks, published by John Wiley & Sons, were MUCH more expensive to purchase in the U.S. than they were in Thailand. So, seeing an opportunity, Mr. Kirtsaeng had his relatives buy the books in Thailand, ship them to him in America, then he turned around and sold them to American students, who were happy to get new textbooks at a significantly cheaper price. Thus, Mr. Kirtsaeng was able to finance his college education and then some. As happened in 1908, John Wiley & Sons were not amused by what they considered to be a blatant copyright violation.
The case, Kirtsaeng v. John Wiley & Sons, is now before the Supreme Court for the Fall 2012 term. Mr. Kirtsaeng states that due to the first-sale doctrine, he is allowed to resell any book legally purchased for any price. John Wiley & Sons claim that the first-sale doctrine doesn’t apply because the books were purchased overseas. Unfortunately, the lower courts, including the 2nd Circuit Court of Appeals, have ruled in the favor of John Wiley & Sons, stating that the first-sale doctrine only applies to stuff made in the U.S.
Where does that leave us anime and manga fans? Well, if the Supreme Court rules in favor of the publisher, those of us who’ve purchased anime, manga, or anything else from Japan would no longer be able to resell it without the express permission of the copyright holders in Japan. If the anime or manga you purchased had anything contributing to its creation from overseas, you wouldn’t be able to resell them either.
Taking it beyond anime and manga, it would pretty much kill your ability to trade-in your car for a new one. Why? Because many of the parts are made overseas, thus you would not legally have the right to resell those parts, even though the car may have been manufactured in the U.S. Not only that, but the Court ruling for the publisher would pretty much kill eBay, Craigslist, yard sales, etc.
Don’t think for a moment that there’s no way the Supreme Court won’t rule in favor of the copyright owners. This case as a striking remembrances of Henry v. A.B. Dick Co., where the manufacturer of a mimeograph machine demanded people only use their ink and paper. A certain Mr. Henry bought paper and ink from a cheaper source, causing A.B. Dick Co. to sue him for patent violations, and the Supreme Court rules in the company’s favor. Eventually, laws were passed to restrict this, but in today’s environment where politicians of both parties take money from publishers (whether print, audio, or video) and pass increasingly stupid copyright laws, don’t expect Congress to do the same if the Supreme Court rules against consumers.
Sadly, this case hasn’t garnered enough of the attention it deserves, thus why I chose to immediately publish an article in my Piracy Wars series about it. The first-sale doctrine is one that needs to be upheld. Just because John Wiley & Sons (and basically all other textbook publishers) are ripping off U.S. customers, it should not give them the right to prevent the resale of any product, regardless of its origins.
Sources:
http://docs.law.gwu.edu/facweb/claw/ch12a.htm
http://www.invispress.com/law/copyright/bobbs.html
http://en.wikipedia.org/wiki/Bobbs-Merrill_Co._v._Straus
http://en.wikipedia.org/wiki/First-sale_doctrine
http://www.deathandtaxesmag.com/189466/supreme-court-case-could-outlaw-yard-sales-ebay/
http://www.marketwatch.com/story/your-right-to-resell-your-own-stuff-is-in-peril-2012-10-04
http://www.ipbrief.net/2012/06/12/first-sale-doctrine-kirtsaeng-v-john-wiley-sons/
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Considering the potential disruption to trade, I suspect that the Supreme Court will do a really narrow interpretation of the case, if they rule on it at all. Lots of foreign affairs issues tend to get considered as “political questions” by the Court.
If SCOTUS doesn’t rule, then the 2nd Circuit Court ruling stands, and you can’t resell foreign-made stuff. I’m hoping they rule for consumers.
wouldn’t this only affect unlicensed material/imports from japan? I thought once a series is licensed from a company like funimation they have x rights and allow us to resell said material if allowed, hmmm I need to think a bit more on this from some other case studies.
Sadly, it would impact us too. For example, all of my Viz manga titles were printed in Canada. Thus, if SCOTUS rules for the publisher, I would no longer be able to resell any of my Viz manga without the express permission of Viz.
Additionally many DVDs/BDs these days have stickers showing they were made in Mexico (Including a number of FUNimation discs I own as well as some from more major labels) which could be used less on the individual then on the entire concept of re-sale stores. Video game publishers have been trying hard for years to kill off resale entities and a ruling favoring this (or lack of picking up the case and letting the lower court ruling stand) would wipe out any number of places that do such business both directly through legal action and indirectly as business owners may decide they have no desire to deal in resales that may seriously compromise their bottom line through the possibility of litigation.
It would then also provide publishers another reason to move the production of materials to other countries as well to take advantage of this ruling.
>It would then also provide publishers another reason to move the production of materials to other countries as well to take advantage of this ruling.
And that is the biggest fear if the 2nd Circuit’s ruling is allowed to stand.
This is a rather interesting matter, given how vast of a difference in response an American publisher has taken versus responses from Japanese publishers vis-a-vis versions of their products sold for cheaper overseas. Consider the agreement Righstuf had to make to not ship Fate/Zero boxsets overseas, or the lack of Japanese audio on the Blu-ray release of Persona 4… the response here I think speaks to how corporate-friendly jurisprudence has become in the U.S. in the past twenty years or so.
Thinking on it, though, my guess is that Ebay isn’t the only company that has a vested interested in seeing this ruled against. Car companies would be hit pretty hard by such a change, as they would be hurt on their own re-sell market and also on their new car market – people less likely to buy new cars if they can’t trade in the old ones. And part of why folks can buy the newest of things like iPads and smartphones is that folks do the buy-back programs these companies have in place. If anything, then, publishers are probably one of the only businesses that would be happy with a regressive decision here.
I do wonder how enforceable a ruling in favor of not permitting secondhand sales of foreign goods in the U.S. would ultimately be, though. Will they visit every yard sale, trawl Craigslist for illegal re-sells? Sounds like a lot of effort with little chance of “reward”.
Enforcement will be much like the enforcement has been for downloading fansubs, scanlations, or regular music and video programming. Basically, the copyright owner picks out a select few to sue to make an example of them.
As to “trawling,” they are already doing that, looking for illegal copies of things being downloaded or sold.
This is certainly concerning. However, copyright infringement doesn’t really apply to cars, does it? If it does not, this makes your argument look a bit slippery-slope. If it does, well, then, wow.
Patents and copyrights are very similar. The wording of the 2nd Circuit’s ruling is such that people are afraid it WILL apply to any product produced overseas but sold in America, including cars.
I don’t see how this is supposed to work. If Wiley is unhappy that the Thai guy was bringing back the books they were selling in Thailand and reselling them in the U.S., what does that have to do with reselling Japanese products in the U.S?
Case 1
U.S. company sells their copyrighted product A both in the U.S. (for more) and in country X (for less)
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Guy buys A in country X
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Guy brings A into the U.S. and resells it here (for less)
This could be claimed to be interfering with the U.S. company’s entitlement to sell A in the U.S. for more than they do in country X. It’s a bullshit idea, but at least the claim itself has some logic behind it.
Case 2
Japanese company sells their copyrighted product B in Japan
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Guy buys B from Japan
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Guy resells B in the U.S.
Why should it be a problem to do this if the Japanese company doesn’t do business in the U.S.? It could only be seen as a problem if a U.S. company were the ones selling B in Japan in the first place, or if the Japanese company were doing business in the U.S. as well.
It’s not obvious to me how a court decision in Case 1 would change anything for Case 2. Are you positive this is not just someone trying to scare people?
There’s always a case for scare tactics, but what I’m reading from multiple sources, the wording of the 2nd Circuit’s ruling would make it so that anything made overseas would not be subject to the first-sale doctrine in the U.S. The fear is that companies, who’ve always hated the first-sale doctrine, would then have incentive to have products made overseas, whether books, CDs, DVDs, BDs, or anything else, and thus prevent people from selling stuff in the U.S.
I followed a link because of Clannad. Yet I realize how many epic anime/manga you make that I Like :3 Keep up de good work!
“what I’m reading from multiple sources, the wording of the 2nd Circuit’s ruling would make it so that”
Now wait a second, if the ruling isn’t out yet then how can anyone know what the wording is going to be like?
“to have products made overseas, …, and thus prevent people from selling stuff in the U.S.”
They wouldn’t be able to prevent this even if they tried and anyone who tried would have a riot on their hands in no time. This is not internet “piracy”, which is a fairly new thing that for the uninformed has the image of people “stealing” stuff, so it’s seen as “bad” and there’s some level of public support for making an example out of select downloaders. Reselling what you own is a fundamental thing people have been doing forever, so good luck to anyone trying to suddenly remove that kind of a right and start prosecuting those who don’t comply.
It would be an enormously stupid thing to attempt, because on top of pissing everyone off it’s also a completely unenforcable proposition. Even if the judge were stupid enough to make a ruling like that, the content industry lobby is nowhere near powerful enough to prevent the laws getting changed to remove this issue. This would simply be too big to sneak through the system without MAJOR outrage. You must have an awfully bleak outlook if you think something like this can happen just like that.
>Now wait a second, if the ruling isn’t out yet then how can anyone know what the wording is going to be like?
The 2nd Circuit Court of Appeals has already ruled. Their ruling was appealed to the Supreme Court. Should SCOTUS allow the 2nd Circuit’s ruling to stand as is, then we already know the wording.
>Reselling what you own is a fundamental thing people have been doing forever, so good luck to anyone trying to suddenly remove that kind of a right and start prosecuting those who don’t comply.
What you have to understand is that publishing companies as well as companies that make products have ALWAYS wanted to have final say over their products. I’m here to tell you that RIAA, MPAA, and book publishers will rejoice if the 1st-sale doctrine is shot down or weakened. Book publishes loathed that ruling in 1908, just as much as Big Entertainment loathed the ruling that turned the VCR from a tool of pure piracy into something legal. Big Entertainment would love to find a way to prevent you from recording stuff.
As to enforcement, there would be a black market created for sure. However, much as MPAA/RIAA did with music and movie “piracy,” there would be similar things done with reselling of goods, starting with this case. All it takes is for a few big cases to come to life, and fear will cause many to stop, but obviously not everyone. If anything, companies will give consumers a way to resell things legally, providing a percentage of the sale goes back to the publisher/manufacturer.
>You must have an awfully bleak outlook if you think something like this can happen just like that.
No offense, but you need to read more history and see how many outrageous things have been done in the U.S. in the name of progress or whatever. At one point, the government decreed it was illegal to own gold (save for rings and jewelry). While that’s not the case today, the government recently seized some gold coins from a citizen, claiming the MUST be stolen even though the coins were never reported as missing when the government forced people to give up their gold.
As to the law, every time I turn around, some stupid law is trying to be snuck through Congress, like SOPA. Copyright laws have become insane, thanks in part to Disney not wanting “Steamboat Willey” to go into the public domain.
There’s a saying — always bet on stupid.
“then we already know the wording”
Yeah that was my brainfart. I don’t think they’ll let it stand though if it really would mean what you say it would.
The rest of my point was still good. Your view is too bleak because this is a free country and not some place like China where people can’t protest against the government. What happened with SOPA was actually a good thing because it showed exactly what I’m talking about, that the MafiAA lobby isn’t nearly strong enough to make all kinds of sweeping changes without major pushback. I repeat, it’s different with intangible stuff like copyright and internet “piracy” but people will most definitely raise hell if anyone tries to stop them from selling the physical goods they own. This is too ingrained and simply can’t be changed overnight by some stupid court decision. Politicians are corrupt but they aren’t stupid when it comes to getting re-elected. No amount of corporate donations can help them against the voter backlash against anyone who supports this once it starts affecting people.
Follow up: A consumer victory as the Supreme Court ruled 6-3 in favor of the plaintiff.
http://www.forbes.com/sites/garyshapiro/2013/03/20/supreme-court-gives-american-consumers-victory-over-copyright-owners-in-kirtsaeng-vs-john-wiley-sons/