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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-...

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...

> 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.

Thanks for this explanation, I've despised these anti-arbitrage region-coding-like rules for a while, but when you put it this way it at least makes some kind of sense.

Of course it makes sense, every such rule has some rational intent. The intent here is market segmentation: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

But my response to that kind of bullshit is as always: if you can make profit at price X in Mexico City and the importer can still make their profit after undercutting you in US, then you're just scalping your US customers. There should be no laws that help you do that.

That assumes zero fixed cost. Perhaps if you sold to all your customers at Mexico City prices, you would make a large loss.

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"

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.

The copyright issue is that your iPod or iPad comes with a bunch of copies of software from various places pre-installed on it. That software has copyrights. So you'd potentially have to have permission from all of those copyright holders.

(But I'd think that said permission should normally already exist - else Apple would be unable to sell that hardware.)

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