
First Sale Under Siege: If You Bought It, You Should Own It - zoowar
https://www.eff.org/deeplinks/2012/12/first-sale-under-siege-if-you-bought-it-you-should-own-it
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tptacek
EFF is leaving very important details out about at least Kirtsaeng. What's
happening in that case is not simply that publishers are trying to claw back
rights from US consumers. Supap Kirtsaeng took advantage of discounted pricing
that Wiley offered students in poorer countries to arbitrage prices. This
trick is called "parallel importation" (or "grey market importation") and it's
a legal grey area, especially where copyright is concerned, turning on whether
owners exhaust the right _to import_ on first sale.

In short, the defendant in Kirtsaeng is taking advantage of a discount program
Wiley never intended to offer that defendant in the first place in order to
subvert Wiley's whole pricing scheme. Whether Wiley can use a legal argument
about first sale to stop this or not, it seems apparent that Wiley will one
way or another prevent that from happening.

Knowing HN, these details probably don't do much to change your view of the
case. But you should still want to know them! This is something the EFF used
to be good at, but now is quite bad at, and despite the fact that EFF mostly
supports causes I agree with, I urge you to direct your donations to ACLU or
other civil liberties charities instead.

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glesica
In a global economy, restrictions on parallel importation are destructive and
backward.

What happened to "free trade"? I see no difference between buying something in
country A and selling it in country B and buying and selling within the
borders of country A.

As borders continue to fade away, restrictions on importation will become
restrictions on first sale rights. So I really draw no distinction,
personally.

~~~
czr80
Recognize that your position may have the following implication: if the
producer cannot segment prices regionally, they may choose to charge the US
price globally - in this case they lose the marginal sales in poorer
countries, and customers in poorer countries lose access to the product. No
one wins in this scenario.

~~~
uvdiv
I read a hypothesis that airlines would be unsustainable without price
discrimination. That is: if tickets were uniformly priced, there is no price
at which ticket sales (demand) would exceed fixed costs. Without gouging
business travelers, there wouldn't be enough revenue to subsidize the pleasure
travelers, who would stop flying because they couldn't afford unsubsidized
fares. And the industry would fail.

This hypothesis is an extreme case, but it shows a mechanism how price
discrimination can be welfare-increasing. That there can be tradeoffs between
first-sale freedoms and societal wealth. (Because first-sale restrictions --
tying tickets to names, like a contract -- is what keeps secondary markets
from equalizing airline fares).

~~~
svmegatron
If you have a link to this, I would love to read it. It makes a lot of sense,
and I'd be interested to read it in more detail

~~~
uvdiv
This is probably unsatisfying, but it's where I read about it:

[http://www.demarcken.org/carl/papers/ITA-software-travel-
com...](http://www.demarcken.org/carl/papers/ITA-software-travel-
complexity/img22.html)

ToC: [http://www.demarcken.org/carl/papers/ITA-software-travel-
com...](http://www.demarcken.org/carl/papers/ITA-software-travel-
complexity/ITA-software-travel-complexity.html)

You could email the author and ask him, he seems to know.

~~~
svmegatron
Thank you!

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Joeri
I'm fine with first sale not applying to digital goods, but then you cannot
call it buying but must call it renting instead. But of course, if amazon was
honest and replaced the 'buy' button on a kindle book with a 'rent' button,
people would be outraged at the price.

If i cannot leave something to my son in my will, it was never mine to begin
with. You can't inherit kindle books, so it's obvious that you don't buy them
either. There's no such thing as "buying a license", legally speaking that's
called "renting".

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nedwin
"There's no such thing as "buying a license", legally speaking that's called
"renting""

Is this your legal opinion as a lawyer?

~~~
DannyBee
Well, i'm a lawyer, and his position is at least defensible.

After all, the difference between leasing and buying is exactly right to use
vs ownership.

Leasing/licensing have retention of ownership in the provider, buying does
not.

Without having thought about it for more than 5 minutes, I can't think of any
legal difference other than terminology.

Note that there is a difference in real property: Licensing is about giving
someone the right to do something that would otherwise be unlawful, whereas
leasing is generally about right to possess.

However, this is not the distinction software "licenses" are making.

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jellicle
Bravo, EFF.

The Kirtsaeng case is quite important because, if lost, it would create a
loophole to destroy "first sale" in the U.S. entirely. Just cease
manufacturing any sort of copyright material in the U.S.; move ALL production
to Mexico or China. If the Kirtsaeng case is lost, reselling any of those
works would become illegal, eliminating used book stores and similar
enterprises entirely. And indeed, this could apply to any product with writing
on it or code in it - massive incentives to move all production of such things
out of the U.S., since then you would be able to prevent ANY secondary sales
of your product.

VERY important case, with massive implications for the future structure of
U.S. society and the economy.

~~~
anigbrowl
Wrong. If it's sold in the US, first sale applies. That's why it's called the
'first _sale_ ' doctrine, not the 'first _manufacture_ ' doctrine. I already
have books that were printed in Mexico and China, and you probably do too.

~~~
belorn
Given the practice of tax dodging, how many items are really sold in the US by
US webstores? Are you sure that all those amazon books are sold "in the US"
and not from Ireland or some small island somewhere?

~~~
anigbrowl
If the transaction is initiated by a US consumer inside the US, it's
considered to be a US sale. If you dig into the case law on this, you'll find
that the concept of first sale doctrine is perfectly well understood by the
legal establishment and is not about to shrivel up and blow away.

There's an excellent (albeit technical) introduction to these issues in the
9th circuit's ruling on _Omega S.A. v. Costco Wholesale Corp._. Read up also
on some of the journal articles from the Wiki page:
[http://en.wikipedia.org/wiki/Omega_S.A._v._Costco_Wholesale_...](http://en.wikipedia.org/wiki/Omega_S.A._v._Costco_Wholesale_Corp).
and if you're really itnerested, dig into the amicus briefs.

~~~
schoen
The Second Circuit specifically disagreed with the Ninth Circuit on this
point, distinguishing its holding from the Ninth Circuit's in Omega.

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meaty
The argument is actually about what you own. Is it the media or a license for
one person to play it?

Most people I know are fed up with such word games and just plain old steal
the bits and bytes (well duplicate them - whether or not that is stealing is
another question). The media industries are just hanging themselves even more
by the day. I don't see any tears being shed.

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ryan_s
How does this currently apply to software? Specifically desktop software apps,
and OSs.

~~~
meaty
Exactly the same way as other media. In fact sometimes worse.

I have tried to sell a few bits of software via eBay (used windows XP pro
retail box) which have been uninstalled or replaced with partner action pack
licenses. After a day or so, I get an email from eBay saying that the item has
been withdrawn due to a complaint from the manufacturer.

This is what they want.

I'm in the UK btw and am concerned this may become an international issue.

~~~
SEMW
That's ebay's choice, but they're certainly not obliged to do that by
copyright -- in the EU, at least. First Sale has been upheld (in the context
of software) by the ECJ pretty recently (even for software you've downloaded
rather than bought in retail), in the UsedSoft case --
[http://www.linklaters.com/Publications/Publication1403Newsle...](http://www.linklaters.com/Publications/Publication1403Newsletter/TMT-
News-November-2012/Pages/EU-Used-Soft-Oracle-ECJ-approves-sale-used-
software.aspx)

Choice quote: "This broad interpretation of Article 4(2) is necessary as
otherwise the effectiveness of the rule of exhaustion would be undermined
since suppliers would merely have to call the contract a “licence” rather than
a “sale” in order to circumvent it."

IANAL.

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woah
At what point do we realize that these people are simply trying to extract
rent from our electronic communications, and we should circumvent them at any
opportunity, and punish the politicians who are bought off to give them power?

~~~
dredmorbius
I'm game with extracting reasonable rent under reasonable terms.

When we're talking about designed-obsolete college texts selling for hundreds
of dollars for century-old wisdom .... Several lines have been crossed.

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eriksank
The copyright owners have a bigger problem than what they may consider
unauthorized copying. Drawing attention to compositions in sound and vision
has become so much more difficult because it has become so much easier to
distribute them. The scarcity has gone and so has the price. Quite a bit of
the value has now decisively shifted to compositions in touch, smell, and
taste, which cannot be distributed digitally.

