<p>The case stems from Supap Kirtsaengs 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.</p>
<p>He then sold them on eBay, making upward of $1.2 million, according to court documents.</p>
<p>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. </p>
<p>A middle of the road approach: I think the Supreme Court could decide that the First-Sale Doctrine does not apply until after there is a First-Sale in the USA. Once you legally buy it in the USA, you are free to do with it as you please.</p>
<p>Not a lawyer, so don’t understand the legal issues. If I go to China and buy silk scarves, can’t I resell them to my friends and neighbors? What’s the difference?</p>
<p>This case is really about restricting the legal or illegal importation of goods without permission of the copyright holder.</p>
<p>Restriction of free trade is almost always about gouging the customers. The entire academic publishing industry is quite the expert at gouging its customers with the not veiled assistance of public officials.</p>
<p>Add the unstated fact that most of such resales are done online, you have unhappy government officials. Something Wiley is obviously relying on to restrict sales of its imported publications.</p>
<p>Wiley wants to charge the maximum it can in each geographic market and is thus trying to shut down the so-called grey market where independent businesspeople can make money through geographic arbitrage. Isn’t it interesting that Corporate America is all for free trade when it means shipping American jobs off to Asia and entirely against it when it hurts their potential profits?</p>
<p>$1.2 million of cheap international edition textbooks? That hasn’t attracted US customs attention (if only for the amount of books involved and their resale)? But the customs issues are separate from the subject matter of the case, where the lower court’s decision is rather threatening to anyone who ever wants to sell his/her used stuff later.</p>
<p>There also is a difference between buying one book for a class, from whatever source, and reselling it after the course ends, and setting up a million dollar import business.</p>
<p>I used to work for a company that makes razor blades and they charged different prices in different countries for the same product and purchase agreements in the countries where the blades were cheaper included clauses about not reselling the blades in the higher price countries … and it still happened a lot. From the company’s viewpoint they were losing tens of millions of dollars a year … (or said another way consumers were paying a lot more than in a free market).</p>
<p>I would guess there are lots of other examples</p>
<p>Purchase agreements with distributors/retailers.</p>
<p>But you don’t build a million-dollar business buying your inventory item-by-item. I haven’t looked at this case, but I’ll bet the textbooks resold in the U.S. were new textbooks purchased in bulk.</p>
<p>Is there a commonly accepted definition of bulk and a commonly accepted definition of reselling? In other words, what separates the situation where this kid bought in bulk and resold versus if I bought a handful of textbooks and decided to resell them to my neighbor who is taking the same class next quarter?</p>
<p>That’s not a relevant category in this law, at least not yet. I was just speculating that the books in this case were not acquired one by one by legitimate consumers, then resold by them as used books. They were probably purchased in bulk for the sole purpose of selling them in the U.S.</p>
<p>To some extent, this is similar to the computer market selling “grey market” OEM computer parts vs retail ones for regular end users. </p>
<p>OEM parts are essentially the same product except it’s sold in massive bulk quantities to OEM system manufacturers and system builders to build computers for sale to consumers and to provide warranty service on those machines. </p>
<p>Computer part manufacturers don’t like it when OEM parts such as hard drives or Windows Licenses are sold separately to the end user. They have tried using lawsuits and legal threats to end such sales. Another way is to disavow any warranty responsibilities and say warranty on such parts is the responsibility of the OEM system manufacturers/system builders. As such, buying OEM parts is a great way to save for those on a budget who can build their own systems…but if there are any problems…they’re on their own. </p>
<p>However, some sellers with an excess of OEM parts get around that by bundling them with cheap retail parts so they can somehow say…it was sold as part of some “system”. Unfortunately, the lack of a warranty on the OEM parts is still an issue.</p>
<p>Pharmaceuticals are the biggest issue for unathorized importation, because they are so much more expensive in the US than in most other countries. The ironic thing is that Iphones are much more expensive in China than the US, even though they are made in China.</p>
<p>This matter is also complicated by the fact that different companies may have the legal rights to manufacture, print and/or sell products in different countries. </p>
<p>This was an illegal import business, not someone reselling a textbook.</p>
<p>I read the case – it’s really about finding a way to harmonize two statutory provisions, either of which would render the other practically meaningless if it weren’t limited in a reasonable way.</p>
<p>The first provision says its illegal to import copyrighted material without the copyright holder’s consent. The second says that the owner of a copy “lawfully made under the Act” can resell it (but not further copy it) without the copyright holder’s consent. The Supreme Court has previously held that the second provision, in general, trumps the first – the lawful owner of a fully authorized copy can import it without further consent. It that applied to every authorized copy in the world, however, it would completely gut the first provision, which Congress pretty clearly thought was going to address (and criminalize) gray goods importing.</p>
<p>What some (not all) appellate courts have done is to say that copies made abroad, even with authorization, are not “lawfully made under the Act”, and therefore cannot be imported (or sold) without further consent. The problem with that is that it means the “first-sale” resale permission would be meaningless for any goods manufactured abroad – like all iPods and iPads, lots of books, and almost all CDs. And that would be an awfully big incentive to make certain that all manufacture of authorized copies happened abroad. That’s not what Congress intended, either.</p>
<p>The Supreme Court was supposed to deal with this a couple of years ago, but Justice Kagan had to recuse herself, and the remaining Justices spit 4-4.</p>
<p>This case is actually a great civics lesson.</p>
<p>I think everyone would agree that harmonizing these two principles is something that Congress and the President are supposed to do under the Constitution, not really the courts. But Congress enacted something incoherent – although at the time they didn’t mean it to be incoherent – and it hasn’t stepped back in and resolved the problem. The courts have an absolute duty to figure out what Congress meant and apply that rule, at least until Congress comes up with a better one. So, effectively, the courts are stuck with only two alternatives, neither of which is constitutionally respectable. They can decide to give full effect to one of the two provisions, while gutting the other. Or they can cobble together some reasonable but essentially legislative solution out of legal principles and strained interpretations of the statute, a solution they hope will work reasonably well until Congress gets off the dime and fixes the statute. (I.e., a long, long time.)</p>
<p>JHS - couldn’t we assume, that since Congress could “fix” what the courts have done but has not, Congress is okay with leaving this question to the courts?</p>
<p>Of course we can assume that, but it still doesn’t mean that the legitimate tools in the judicial toolkit are adequate to the task. If you think about how to resolve the conflict, unless you are going to pick one principle over the other on a broad basis, you quickly get to the point where you have to start making stuff up, and you need information and input that lawsuits – even Supreme Court appeals with dozens of amicus briefs – don’t supply well.</p>
<p>And I think this is especially true in an area like intellectual property (a) that is highly politicized, but not along conventional lines, so it’s not easy to tell which side “won” and why in Congress or the courts, and (b) where few if any federal judges, and no one on the Supreme Court, actually knows much.</p>