
Selling a used iPod can violate a copyright law - why-el
http://www.theatlantic.com/national/archive/2012/06/if-youve-ever-sold-a-used-ipod-you-may-have-violated-copyright-law/258276/
======
goatforce5
> Continuing a long string of similar cases, the Supreme Court will review a
> New York federal court decision that decided, in short, that the first-sale
> doctrine does not apply to any copyrighted product manufactured abroad.

I can _kinda_ understand manufacturers being upset about gray imports of
products that they specifically don't want sold in the local market, and wont
make available themselves.

(eg, "You're selling our widget that was designed to work on 110v to people
who use 240v, and we're going to look bad when it blows up. Stop selling it!")

But using legal loopholes and trickery to prevent someone (re)selling the
exact same thing you're selling in the same market? That doesn't sound right.

~~~
excuse-me
And it protects customers from being able to buy cheap genuine designer jeans.

<http://news.bbc.co.uk/2/hi/business/1261829.stm>

Apparently this is good for customers by maintaining the brand value of the
expensive Levis they are wearing !

------
A1kmm
I firstly don't understand why Wiley didn't sue the guy for the importation,
rather than the resale. Importing copyrighted works for anything other than
personal use unambiguously requires copyright holder permission by a plain
reading of 17 U.S.C. 602
(<http://uscode.house.gov/download/pls/Title_17.txt>). I think that is a bad
law, but it is nevertheless an existing law.

Instead, they try to argue that it is the resale which is illegal, which
requires a very creative interpretation of the law, and somehow manage to
convince a federal district court and the 2nd circuit of that interpretation.

The interpretation that goods manufactured overseas are automatically not
'lawfully made under this title' is an extreme interpretation. The 2nd Circuit
opinion said that 'lawfully made under this title' could mean any of '(1)
"manufactured in the United States," (2) "any work made that is subject to
protection under this title," or (3) "lawfully made under this title had this
title been applicable."'. They decided that it means 1. However, to say that
it means anything other than 3 seems to be stretching the plain text
interpretation. 'Lawfully made under this law' is synonymous for 'Lawfully
made, according to this law'.

They claim that the justification for their ruling is that 17 U.S.C. 602 would
be inapplicable if they took anything other than interpretation 1, and so
congress must have meant interpretation 1. But this is simply false by the
plain text interpretation of the statute. If interpretation 3 is the right
one, then it would be legal to import a copy of a copyrighted work in your
personal baggage for personal use, and it would be legal to sell it in the US
if you later decided you didn't want it, provided the circumstances in which
that copy was made would have been legal under US law, but it would still be
illegal under 17 U.S.C. 602 to import copies for the purpose of selling them,
since 17 U.S.C. 109 only covers "sell[ing] or otherwise dispos[ing] of the
possession of that copy or phonorecord".

Disclaimer: IANAL, this is not legal advice.

~~~
btilly
I have not been following the case. But normal practice is that when you sue
someone, you put forth every legal argument that you can think of in the hope
that at least one sticks. And any lines of reasoning that come with minimum
damages are even better, because you want to sue for as much as you can. (I
believe that copyright infringement comes with fairly significant minimum
penalties.)

This often leads to weird counter-factual arguments of the form, "A is true,
and if A is true, then my client should win. Even if A proves false, B is
true, and if B is true then my client should win. Even if B is also false..."
If you think A you can show that A is true, why do you need the rest? Because
this is about convincing the judge, not about the rest. No matter how clearly
A is true, there is a chance the judge will disagree with you, and you still
want to leave them a way to rule in your favor.

Not, IANAL, this is likewise not legal advice.

------
greiskul
This goes agaisnt the spirit of capitalism, and will only result in more
monopolies and a worse free market. Imagine if there was a similar law when
Herbert Henry Dow fought the german bromine cartel
[http://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_Mo...](http://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_Monopoly)
.

------
fleitz
Wouldn't essentially everything be illegal to resell if this was approved?

Couldn't Ford prevent people from selling their used cars because it contains
a Ford logo, electronics, and software all of which Ford owns the copyrights
to?

~~~
excuse-me
If at some point Ford decided it was in their interest to restrict sales of
used Fords then yes they could. Although it's likely that high end makers
would do so first - a supercar maker might be more interested in protecting
it's brand image by keeping broken down versions of it's car off the street.

Ford is more likely to suffer from the anger of departing new buyers than gain
from there not being 40year old Ford pickups rusting in fields.

Microsoft has already won a number of cases stopping companies selling unused
software licenses. This is actually a big deal if you are a company - if you
have $$$$ in MSFT licenses that you have been treating as assets and the court
rules that they can't be sold and so have zero value - you might have a lot of
auditors and shareholders you have lied to.

~~~
spinlock
How is this possible? From my reading of the article, the suspension of first-
sale only applies to goods manufactured abroad. Wouldn't MS software be
manufactured in Washington state?

~~~
martingordon
This is because MSFT and others have set the precendent that you don't own
software, you license it. They can include a clause in the license that
prevents resale of the license.

The physical good that software is distributed on is covered by the first-sale
doctrine and you can resell that, but it won't do much good because you can't
reassign your license to it. If I have a license for Windows but lose the
physical disc, I can buy your disc. However, without owning a license, I
wouldn't have the right to use the software.

If the SCOTUS upholds the circuit court's decision, I wouldn't be able to buy
your Windows disc anymore (assuming it's pressed outside of the US).

------
jjguy
A note for college HN'ers: you don't need foreign relatives to mail you the
books. amazon.co.uk will happily ship to US addresses. It costs a little more
to ship and takes a week or so longer, but you can still save a substantial
amount. I bought most of my engineering texts this way.

------
daeken
> Almost every product made now has a copyright logo on it. That logo, alone,
> empowers manufacturers to sue people for copyright infringement for unlawful
> sales.

Logos are not copyrightable (well, you could copyright an _image_ of one...)
but fall under trademark law. I have a hard time trusting an article about
this stuff that confuses copyright and trademark law; they're two completely
unrelated, different beasts.

~~~
dubfan
I believe the author is referring to the copyright symbol (the c with a circle
around it). This article could have used more thorough proofreading and
editing.

~~~
jessriedel
In which case the author is still wrong. The copyright logo has not been
necessary to enjoy copyright protections since 1989:

> The notice was once required in order to receive copyright protection in the
> United States, but in countries respecting the Berne convention this is no
> longer the case. The United States joined the Berne Convention in 1989

<http://en.wikipedia.org/wiki/Copyright_symbol>

~~~
btilly
It is not necessary, but it is still done. Why? Because it takes away the
defense, "But I didn't know that it was copyrighted!" It also makes the
copyright holder easier to track down for people who want permission.

------
flannell
I found an almost new iPod that had been dropped on the floor. I spent a few
minutes looking for the owners details but other than a few Rihanna tunes and
rap videos watched on Youtube I couldn't establish the owners contact details.

SO I gave it into the local police station. I asked if I could collect it if
no one claimed it within 30 days. No. It comes under data protection act and
have to be destroyed. Bloody UK law.

------
JackC
Yeesh. What a mess.

So first of all, let me recommend SCOTUSBlog and the actual court decision
rather than the Atlantic:

<http://www.scotusblog.com/?p=143279> [http://www.scotusblog.com/case-
files/cases/kirtsaeng-v-john-...](http://www.scotusblog.com/case-
files/cases/kirtsaeng-v-john-wiley-sons-inc/)

Now what's going on here: Congress said (1) you have a right to resell copies
of copyrighted work "lawfully made under this Title", but (2) you can't import
copyrighted work from other countries without the copyright holder's
permission. This is intended to make it possible to sell things at different
prices in Mexico City and LA, which in turn makes it more viable to sell
things in Mexico City at all. You may not love it, but it's at least a
rational system.

The Ninth Circuit has interpreted this, using common sense, to mean that if a
publisher _voluntarily_ imports stuff and sells it in LA, and then you buy it
and resell it, the doctrine of first sale applies. What happened in this case
is someone was straight up running a business importing and reselling stuff
that wasn't intended for the United States. But instead of focusing on that,
the Second Circuit took a closer look and said, waitaminute, these books
aren't "lawfully made under this Title" in the first place, because they were
made under someone else's statutes instead of ours. So whether or not you had
the right to import them, you don't have the right to resell them.

Now, as the defendant and the dissent and the Ninth Circuit have all pointed
out, that's nuts. It destroys the doctrine of first sale for everything
manufactured outside the United States, which makes no damn sense in anyone's
world and isn't even necessary to stop what Congress actually wanted to stop.
Maybe this is optimistic, but I really don't think there's going to be anyone
who manages to get behind that as a Good Thing. So I'm not planning to panic
until (1) the Supreme Court fails to salvage this one, and (2) Congress fails
to immediately patch up whatever mistake they built into the statute.

Side note: the Atlantic tries to make this a little more dramatic with "Almost
every product made now has a copyright logo on it. That logo, alone, empowers
manufacturers to sue people for copyright infringement for unlawful sales."
There's some truth hidden in there, but it's a really weird way to put it. It
is indeed possible to get copyrights on design elements of products, but only
if the design elements are totally separable from the actual purpose of the
product -- basically if the stuff you claim copyright on could be fully
removed from the product and it would still work exactly as well.[1] So can
you really copyright an iPad? I'm skeptical -- what's the element of the
design that isn't functional? If they're saying that the Apple logo itself is
the copyrightable design element, I have trouble buying that -- an iPad isn't
the same as, say, a watch with an Apple logo for a face. I think this aspect
of their concern is dramatically overstated. (Trade dress, the basis of the
Apple v. Samsung cage match, is a different issue, but not one that's relevant
to resale.)

TL;DR: WTF with a side of Don't Panic.

[1] Random explanation of design copyrights:
[http://www.jdsupra.com/post/documentViewer.aspx?fid=d1f71ed3...](http://www.jdsupra.com/post/documentViewer.aspx?fid=d1f71ed3-eb60-4408-a53d-55b34061f0f2)

~~~
idiot_
First of all, the title asks about iPod and you refer to iPad. But the real
question is why do you care about the possibility that consumers might pay
less for their iPads? Are you trying to keep prices high?

This is a simple issue of parallel importation. Americans pay more for the
same products for which people in other parts of the world, like Thailand, pay
less. That's because America does not like the idea of parallel imports. Other
countries allow it because it lowers the price of goods to the consumer by
giving them choice. The way America enforces its prohibition on parallel
imports is, you guessed it, through rules on importation.

The First Sale Doctrine is not a defense to copyright infringement under S.
106(3). See below. That is a ridiculous argument. The Cornell math student was
caught red-handed, he stood no chance on appeal and does not have a chance at
winning at this level either. He was making obscene amounts of money (see
evidence of his dramatically enhanced net worth introduced at trial) selling
books that should have never have been allowed into the country. More than
enough to support paying his tuition. Hardly a starving student.

So why is the S.Ct. hearing this one? Because the District Court said
something very stupid and this needs to be fixed. The First Sale Doctrine does
not apply to imports. Never has, never will. See below. Yet the District Court
in refuting this losing argument chose to add some new reasoning of its own,
instead of relying on the statute and sufficiently similar precedent, and made
the erroneous statement that imported copies made elswehere are not covered by
S. 109 because of the statutory construction. As everyone can see the statute
is very ambiguous with respect to "lawfully made". And it's been that way for
a very long time. There's no need to open that can of worms. The First Sale
Docrine simply has never had an exception for imports and it's not ever going
to have one. This is because the U.S. does not want parallel imports.

The S. Ct. is going to affirm the lower court decision but they will fix the
District Court's blunder in trying to intepret the statute when it was wholly
unnecessary. They will make it perfectly clear that the First Sale Doctrine
applies to copies of US copyrighted works no matter where they are produced.
They'll find a way to do it without opening a potetial hole in the Act by
applying arbitrary interpretations of ambiguous language as the lower court
chose to do. In nerd speak, the District Court has introduced a potentially
major security flaw that puts copyright holders at risk. And the S. Ct. is
going to fix it, proactively.

Sec. 109(a) [First Sale Doctrine] "Nothwithstanding 106(3)..."

Sec 106(3) [It's infringement] "to distribute copies . . . to the public by
sale"

~~~
idiot_
There's a typo in the 3d para. and at the bottom. It should say 602(a) not
106(3).

106 delineates the rights. (And those rights are subject to 109.)

602 delineates what is infringement.

The dissent in the 2d Cir. case points out that 602 derives from 106. True,
but there's no precedent that says 109 can subjugate 602. In fact, the S. Ct.
in Quality King was quite clear: 602 is broader than 109.

If we're atlking about importing quantities of goods for resale in the U.S.,
either they cannot be imported or the importer will pay dearly in tariffs.
That is how the major American corporations, who lobby for the the copyright
laws, doing business globally wanted it. And that is how it shall be.

No court should be saying 109 trumps 602. This would open the floodgates to
parallel imports. It would allow an industry to flourish that undercuts U.S.
pricing, i.e. the prices American companies want to charge Americans.

These companies that sell goods in many markets worlwide are already unhappy
with countries that allow parallel imports since consumers in those countries
can potentially buy goods at the lowest prices worldwide, not just at the
price an American company thinks consumers in that country should pay.

In sum, it destroys the differential pricing schemes these companies use to
maximize profits.

------
makmanalp
> Because those products were manufactured abroad, according to the Second
> Circuit, the first-sale doctrine doesn't apply to them.

This is not a good explanation. Does anyone know _why_ exactly first-sale does
not apply to products manufactured abroad?

~~~
joshAg
here is a great explanation: <http://news.ycombinator.com/item?id=4149211>

------
tzs
All of the cases involve resale of items that were imported without
authorization of the copyright owner. When you buy an iPod from Apple in the
US, that import was authorized by Apple.

~~~
josho
Let's analyze your statement. What does it mean to import an item for resale
without the copyright owner? I see 2 scenarios. First, the importer bought the
item and turns around to sell it. That's easy, I bought a DVD and now want to
sell it, why should whoever I bought the DVD from have a say with what I do
with it. In my opinion the same applies whether it is 1 DVD or 500. This gets
real easy if you put it in terms of physical goods. I bought 500 screws from
you. Why should you have any say over what I do with those screws after the
purchase. If the screw has some kind of copyrighted mark on it the rules
shouldn't change.

The second case is if in our purchase agreement you add stipulations on what I
can do. Then that's easy too. I will buy your 500 screws for a discounted
price and agree not to export the screws. If I break the contract then you can
sue for breach, in the jurisdiction that we agreed to in the contract.

Neither case needs to involve the US government nor the courts to decide what
is commonly understood.

------
TheAmazingIdiot
So many actions these days can violate copyright law. I really don't bother
trying to figure out what may or may not do that.

And I can only think of the absurdness of getting copyright "permission" for
each holder for an iPhone, or for any device that has firmware on it.

BTW: Can an attorney possibly answer this: Where is the proof of copy on an
Audio CD?

~~~
josho
Agreed. Common sense needs to prevail.

To avoid cheap text books getting dumped in the market change the Mexican
version to include content relevant to a Mexican audience. Making importation
into the US less appealing.

For DVDs make the default language Spanish.

For watches Add 'Omega Mexico' to the logo.

Since the manufacturers aren't taking these steps that add marginal cost to
their product then clearly it isn't a significant problem. It seems so
straightforward, what am I missing that the courts are struggling with.

~~~
TheAmazingIdiot
Companies routinely move their wares around the world for the best prices, as
well as lay off and rehire in cheap market segments. I believe it's called
wage arbitrage.

Companies will also move their headquarters to different 'tax brackets' (read:
countries that offer the best deal).

To be competitive, you move non-critical stuffs to cheapest areas. Makes
business sense.

YET, we peons cannot buy media outside our 'zone', thanks to DVD and Bluray
zone controls. And it's illegal, as in felony, to break this crap.

YET, we peons cannot textbooks outside the zone a company ordains. Meh.

Why are companies allowed to min-max all of their operations, yet when the
small guy does it, it's illegal in XYZ many ways?

------
TazeTSchnitzel
If it becomes illegal, I doubt the US government will have the money to
enforce it, and neither will copyright holders.

So don't worry.

~~~
spinlock
It's probably unenforceable for individuals but, what about the guy who starts
a business buying broken iPods, fixing them, and reselling them? He would
definitely be a target.

~~~
martingordon
It would be relatively easy for companies to force Amazon Marketplace, eBay
and Craig's List to take down unauthorized sales.

That said, I don't think any tech company would be stupid enough to start
enforcing this right. Tons of new purchases are subsidized by the sale of the
previous version of that product. Game companies, on the other hand, would
probably love this.

~~~
gergles
They already do on eBay - the "veRO" program gives any company that wants one
an unappealable, instant takedown button for literally every auction on the
site.

Try reselling your weight watchers program materials on eBay and you will
learn about the program very quickly.

------
jrockway
This is a good thing. If everyone selling used items has to go further
underground, it will raise the price of used items. That means items will hold
their value for longer, making it less attractive to simply throw things away.
Longer use cycles means less trash, and that's good for the environment.

Bottom line: more money for selling your stuff, and less land being razed for
landfills.

In some world, that is...

