
Supreme Court to hear arguments in case of student who resold books - pwg
http://edition.cnn.com/2012/10/26/justice/court-student-copyright/index.html?hpt=hp_t4
======
droithomme
Whichever way they rule it is going to be interesting.

If they bless the sales, it legitimizes what is already a very active global
gray market.

If they condemn the sales, they strike down the first sale doctrine and it is
a massive blow to fundamental property rights. As commenters have already
pointed out earlier this year regarding this case, since most electronic goods
are made overseas, it would be officially illegal to resell them without
permission. Criminalizing the resale of foreign made goods that contain an IP
component. It would also provide a massive benefit to moving manufacturing of
every kind overseas to obtain this special new protection.

~~~
TillE
> electronic goods

But this case is apparently about copyright, and hardware isn't usually
subject to copyright. Though I suppose firmware, etc. might be.

Of course, I think it's ludicrous that anyone could be guilty of a copyright
violation without having, by any imaginable definition, _made a copy_ of
anything.

~~~
alexqgb
Copyright law governs both the creation of copies, and their distribution.
This pairing is one of the law's longest-standing and must basic features.
It's also the root of the conflict in this case.

~~~
decode
> Copyright law governs both the creation of copies, and their distribution.

This is an interesting idea that I haven't heard before. In what ways has
copyright law governed the distribution of objects when no copying is
involved?

~~~
alexqgb
"This DVD is licensed only for private, non-commercial use."

That's backed up by copyright law. If you build a theater, charge people to
enter, and program runs of classic movies, you will get sued for violating the
commercial-distribution aspects of copyright law, even if you bought the DVD
you were charging others to see.

~~~
decode
"you will get sued for violating the commercial-distribution aspects of
copyright law"

I think that's incorrect. I think this would be infringement due to it being
considered a public performance, not commercial distribution. As the copyright
act says, "A public performance or display of a work does not of itself
constitute publication."

The MPAA also describes the situation as a public performance issue:

<http://www.mpaa.org/contentprotection/public-performance-law>

Do you know of any cases where a public performance was prosecuted as a
commercial distribution case?

~~~
alexqgb
I'm a producer, not a lawyer, so I can't quote you legal chapter and verse.
But as your own link makes clear

"But suppose you took the same movie or TV episode and showed it to patrons at
a club or bar that you happen to manage. In that case, you have infringed the
copyright in the video work."

Whether a public performance constitutes legal publication is, of course, a
separate issue. The point I was making is that copyright law governs both
duplication and distribution, not duplication only.

------
greenyoda
"Wiley, _with the Justice Department in support_ , dismiss those scenarios,
and say Congress would be in a position to ensure libraries in particular do
not suffer from any high court ruling against them."

It's strange that the Justice Department would have a reason to have an
opinion in this court case at all. And why would our executive branch be
siding with the publishing business and against the average citizen on this
case?

~~~
tzs
Why do you find it strange that the department in charge of enforcement of the
laws of the United States would have an opinion on a case concerning the
interpretation of one of those laws?

~~~
rhizome
Because interpretation is a matter for the judiciary particularly, and a
matter of policy to the rest of the department.

~~~
tptacek
That's not always true. For instance, the US Code refers to the US Copyright
Office for judgements about fair use.

------
csense
Economics 101: If your goods cost $C to produce, and person A will buy them
for $C + $5, and person B will buy them for $C + $8, you will sell two copies
at $C + $5 for a maximum profit of $10. (If you try raising your prices above
this point, you'll make less because your sales volume will go down due to B
leaving the market.)

But if you can price-discriminate -- figure out how much each customer is
willing (or able) to pay and charge exactly that much -- you can set A's price
at $C + $8 and set B's price at $C + $5 and make $13 instead.

The publisher's doing exactly this sort of price discrimination: American
customers are much wealthier than Thai customers, and willing/able to pay
more, so they charge more.

The crucial point of this analysis, however, is that _the seller is still able
to make a profit at the lower price level_ ; it's just a smaller profit.

So a ruling against the publisher won't greatly harm them; they'll still be
able to profitably sell their books. However, a ruling in favor of the
publisher will make it much more complicated for people to determine the
restrictions in effect on their property, make their books available to fewer
people, and generally stifle economic activity.

~~~
vec
Books don't cost $C/book to produce, they additionally cost $X to research,
write, market, etc. And $X is much much larger than $C.

So to take your example, assuming X=12 and C=1, if I sell my books for $6 and
$9, respectively, I make $1 profit, but if I'm forced to sell them both at $6
I lose $2.

Price discrimination is often a Good Thing, on balance. The takeaway from
allowing price discrimination isn't (mainly) that Americans get gouged, it's
that Thai students get access to textbooks they wouldn't otherwise be able to
afford.

~~~
Someone
There are two sides to it: the Thai student gets the book at a lower price,
and the US student gets it at a higher price, and the two may not balance out.
In your example, a publisher might sell 2M copies of that X=12M book, 1M for
$6 each in Thailand and 1M in the US for $100 each, making a huge margin of
(106-12)/12=785%.

In a free market competition should decrease that margin. However, the markets
for books isn't entirely a free one. For many books, competitors cannot make
close enough clones to actually compete (Harry Potter and fifty shades of grey
inspired 'clones' aren't really clones; a physics textbook may have the same
content, but it cannot have the exact same presentation order, questions, etc)

The publishers argue that will be offset by other books that also cost them
X=12M of which they sell, say, 10K in Thailand for $6 and 10K in the US for
$100 at a huge loss. There probably is truth in that, but should one try and
enforce that through regulation? If so, how? Prescribe that publishers can
make at most x% on every dollar they spend at a printer every year? That would
likely make them find more expensive printers for their US wares.

------
hermanhermitage
Any idea why this is in USA courts?

Surely the sale occurred in another country and the terms and condition of
that sale are dictated in that country?

The transfer of ownership happened in the original country. If that breached
the law it happened in the other country.

If Ownership of a book is a property that survives crossing international
boundaries (that is it is not seized by the state) and ownership in that
nation confers certain rights then so be it.

Don't sell something if you still want to own it. Don't give something to
someone if you still want to keep it.

~~~
mikeryan
There's two sales which occur,the original purchase of the book which happens
overseas, there's no dispute here.

The book is then resold in the US from a "distributor" in the US to US
customers, thats why this becomes a US issue. Its the secondary sale which is
questionable.

~~~
hermanhermitage
Thanks for that - I think I kind of get it.

And the second sale is questionable because of a limitation of the first sale?

~~~
GauntletWizard
There's a difference between personal first-sale and wholesale distribution.
It sucks that information - There's no value in the paper, just the printing
on it - can cost different amounts in different areas, but it's fairly easy to
differentiate between "I bought 1-3 copies of this book in my home country,
moved here, and brought them with me" and "I had my parents ship crates of
books from my home country, which I resold at a profit". The gray area will
remain "I personally bought something from foreign land, even though I do not
reside there".

~~~
csense
> There's a difference between personal first-sale and wholesale distribution.

I'm not a lawyer, but as far as I know, legally, there isn't, and shouldn't
be. You should be able to build a business or nonprofit to give away, sell or
lend secondhand games, books, CD's, videos, etc.

~~~
jborden13
I'm sure almost every manufacturer who wishes to remain in business would
strongly disagree with you. Many have spent decades and millions of dollars
building & supporting their sales channels.

The assertion that people should be able to do whatever they want with
products on a scale large enough to damage a manufacturer's business is
flawed. I propose that you to start and grow a manufacturing company and tell
me if your perspective changes.

*Disclaimer, I work with manufacturers to solve these types of issues.

~~~
icebraining
I'm sorry, but that's not an argument, that's just bias. In principle everyone
is against policies that are damaging to one's life, but that doesn't mean
they're necessarily bad.

~~~
jborden13
It's an argument and a bias. I clearly stated the context of my relationship
with manufacturers for a reason. There is plenty of evidence that shows the
negative effects of gray markets on manufacturers. The long-term macroeconomic
effects that these types of issues have on manufacturers can be devastating.

> In principle everyone is against policies that are damaging to one's life,
> but that doesn't mean they're necessarily bad.

No doubt. But regulations exist in society for a reason...

~~~
icebraining
_There is plenty of evidence that shows the negative effects of gray markets
on manufacturers. The long-term macroeconomic effects that these types of
issues have on manufacturers can be devastating._

Negative effects may or may not be compensated by the benefits accrued by
consumers. Can you point me to the evidence that suggests that it would be
devastating?

 _No doubt. But regulations exist in society for a reason..._

Sure; whether this specific one actually solves the problem -and without
causing bigger ones- is a different matter, though. Losing first-sales rights
seems a rather important problem to me.

~~~
jborden13
I'm not advocating the repeal of the First-sale doctrine. It's the abuse of
the doctrine that is troublesome. The doctrine should protect non-commercial
isolated sales of goods by consumers. But when the sales transition into a
larger scale business is when the problems only begin.

Gray markets can be devastating in an economic capacity (revenue,
profitability, brand equity, sales channels, consumer satisfaction, warranty
costs, r&d) and in a social capacity (consumer safety, environmental costs,
tax revenue, organized crime)

Below is a very small sample of the negative impacts of gray markets:

[http://www.kpmg.com.hk/en/virtual_library/Information_Commun...](http://www.kpmg.com.hk/en/virtual_library/Information_Communications_Entertainment/The_grey_market0302.pdf)

Osawa & Co. v. B&H Photo

United States v. Hill

Fagan v. AmerisourceBergen Gorp.

Lynn v. Serono Inc.

------
perlpimp
Seems that corporations want to profit from globalization but they want to
forbid private entities to do so. Kind of unfair, whatever the outcome of the
court ruling will be.

The only control they might have is to produce completely different texts for
each country - but to profit on global scale this would be inefficient. So
they resort to lawyers and tarnishing of their name.

------
pseingatl
This case is about what happens in the analog world; the interesting thing
will be what unintended consequences obtain for the digital world based on
this decision. The "law" in this situation is far from clear, and what will
happen is that because of the size of the U.S. market, the international
consequences of this decision will be severe. It will be interesting to see if
any other country files, or attempts to file, an amicus brief.

------
lambada
One thing most people haven't picked up on is how the 'terms' of the first
sale typically include that the textbook can't be imported into the US without
prior consent.

That could mean a way out without actually solving anything - ruling it an
illegal importation or something similar. That would mean the problem would be
when he imported the book, not when he resold it.

~~~
csense
I believe that such sale conditions aren't binding in the US, except for
software licenses. At the dawn of the recording era in the early 1900's, the
music industry -- surprisingly similar to today -- tried printing on each
record, "Not to be resold for less than five cents" or something similar. And
this was struck down by the court system.

