Your right to resell your own stuff is in peril

http://www.marketwatch.com/story/your-right-to-resell-your-own-stuff-is-in-peril-2012-10-04?pagenumber=1

by DanielBMarkham • 14 years ago

131 71 14 years ago

dmorgan2• 14 years ago

>Your right to resell your own stuff is in peril

Or you can see it in a positive light, as:

1) You are free from forever owning lots of stuff (which ends up owning you in the end, see Hoarders). You just rent stuff.

2) The economy gets a nice boost from people buying the stuff again, instead of getting it in a re-sale.

antidoh2• 14 years ago

Actually the economy already gets a nice boost from people buying stuff again, the same stuff.

Lots of people buy used cars, that either wouldn't buy a car at all or would go more years between cars.

Money doesn't do anyone any good at all unless it flows. A secondary market creates much more flow than a primary only market. One car sold many times creates lots of money flow, and it's the flow, not the original manufacture, that keeps people working and buying.

nathan_long2• 14 years ago

>> The economy gets a nice boost from people buying the stuff again, instead of getting it in a re-sale.

No, this is not a boost. This is a tremendous, horrible loss of value.

Imagine people throwing away furniture, crushing cars, and burning books because they can't be sold. This is value being destroyed.

Please read up on the "broken window fallacy." There is a difference between spending to create value and spending to replace destroyed value. The latter makes everyone poorer.

dmorgan2• 14 years ago

>Imagine people throwing away furniture, crushing cars, and burning books because they can't be sold. This is value being destroyed.

It's "use value" being destroyed, not "economic value".

This is the reason why economies get a huge boost after a war: because stuff has to be bought again, infrastructures have to be re-built, etc... (the well-being of the society is taken back, of course, but economy itself, i.e levels of employment and development rise, because forces before non utilized (unemployed people, savings, etc) have to be utilized. And the disturbed status quo brings up opportunities for growth in areas stifled before by established players.

>Please read up on the "broken window fallacy."

I'm not making the same argument.

With a good such as an e-book, if you could read it and then re-sale it, then there would just be one copy sold by the parent company. If it could be resold even more, then from one original buyer you could get 10 meta-buyers, all of them not giving a penny to the author.

(And those are not pirates, in which case you wouldn't know if they would have bought it if they couldn't get it for free. Those are actual buyers).

So, in essence, the author loses 1/average_resales. That might be good for other companies and the economy in general (as per the "broken window fallacy"), but it's not for the PARTICULAR industry under discussion.

Heck, the author might be financially forced to give up writing altogether, all the while enough people to sustain him _enjoy_ and _pay_ for his book.

anigbrowl2• 14 years ago

Not going to happen, a completely absurd extrapolation of the 2nd circuit's ruling.

bct• 14 years ago

"The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit- and kerosene sprayed over the golden mountains. And the smell of rot fills the country."

skennedy• 14 years ago

In August 2011, the U.S. Court of Appeals for the Second Circuit upheld a lower court’s ruling that anything that was manufactured overseas is not subject to the first-sale principle. Only American-made products or “copies manufactured domestically” were.

It would seem if the sum of foreign made products makes a new product, you would still need the permission of original manufacturers to resell it. Wonder if that could be stretched far enough to say foreign food spices at restaurants can no longer be used.

greenyoda• 14 years ago

This law wouldn't apply to spices since there are no intellectual property rights involved in that product. (The "prior art" for grinding peppercorns probably dates back thousands of years.)

A better example might be a car that's manufactured in the U.S. but contains many parts that are manufactured abroad.

However, even if the courts upheld the lack of a first-sale doctrine on foreign goods, there would be risks for companies to assert these rights. For example, if Toyota demanded a cut of every resale of one of their cars, it would immediately lower the value of any Toyota relative to a U.S.-made car, since the resale value of a car is a significant part of its total cost of ownership. If this practice became widespread, the outcry would force Congress to pass laws to put an end to it (at very little political risk, since the losers would be in foreign countries).

nekojima3• 14 years ago

It most definitely isn't enforceable, but for the last five years when I have bought something of value that I might want to resell or infringe in someway on copyright, I have emailed or mailed the company a two paragraph letter. I include a line that roughly says 'This letter is valid even if you don't read it, as it has been received by your company & that's your responsibility'. As well as 'the letter supercedes your T&C and any amendments I make with or without due notice.' Its much like the actions they take. I also mention that if they don't agree with it, they can provide a full and complete refund including shipping, and I will return the item.

Out of fifty-odd companies in five years, only two have replied. Well three, but the third was in Japanese and they asked me to write in Japanese not in English. The other two companies said my letter wasn't valid and they wouldn't refund me. I replied that since they didn't accept my terms as a customer, I didn't accept their terms as a company (the terms of which I couldn't read until the item was bought and opened). No further response was received by me.

Its a fun experiment to see how many companies reply and how. Wish more took the time, but having worked before in customer service (with very highly ranked teams), I know my letter will either be overlooked, misfiled or misplaced by those that don't necessarily understand or care all that much. I would have loved to have received a letter like that when I was in CS, it would have been a challenge and pleasure to reply. But I know my managers would have dreaded it and it would have been ignored, so as not to cause any problems for themselves.

k-mcgrady• 14 years ago

I would expect that most of the companies that didn't respond read it, labeled it 'bullshit' and moved on (no offense it's a fun experiment to see how they react).

nekojima3• 14 years ago

No offense taken. Having worked in that role, I knew how most companies would react. I was more interested in which companies would respond and how.

coderdude• 14 years ago

You have a limited amount of time to assist a customer and move onto the next so spending any time whatsoever on "challenging" customers is an enormous waste of time. This reminds me of the guy who wrote about how he always buys two of everything from Amazon and the one that comes first is the one he keeps (or some other such nonsense).

I understand that you want to get something out of this experiment. A confrontation? I don't know. From what you've said ("out of fifty-odd companies in five years...") and how you reply to them you're essentially determined to try to become a problem for someone, anyone. Have you considered that this might be a mildly sadistic behavior?

Dylan16807• 14 years ago

It's an extremely minor revenge for the companies doing something morally wrong. You're reading too much into it.

Evbn4• 14 years ago

For a contract to be valid some form of consideration (payment) is required, and it must be accepted by some action. You can't just issue contracts unilaterally.

The legal version of your approach, which people do all the time, is to modify a contract before you agree to it. For example, print the EULA, modify it, and mail it back with a check that they have to cash to accept.

JoeAltmaier• 14 years ago

Not to beat a dead horse, but the common trick of including the EULA in the product is non-enforceable,right? The company's terms are void. Something about 'last shot fired' contracts and the Uniform Commercial Code.

larrys2• 14 years ago

"as it has been received by your company & that's your responsibility"

How can you document that they received it? Have you sent it certified or by some other trackable method?

reneherse• 14 years ago

According to the article, the case stems from a college student who created a business by having his family buy college textbooks in his native Thailand where the publishers sell them at a substantial discount, then reselling them on ebay here in the US. Textbook publisher Wiley sued; it was then that the defendant invoked the "first sale" doctrine.

Oh the irony. Can someone just disrupt these folks out of existence already?

nekojima3• 14 years ago

I bought those books when I lived in Asia. The savings are huge, upwards of 80%. On the cover it does say "Not for Resale in North America & Europe" or "Not for Resale outside of (country)" on the cover. One note though, these books are usually an "international" edition which excludes some of the content usually found in the North American & European editions, including STEM subjects, which I initially found rather surprising.

When I first saw these editions more than ten years ago I had the same thought, of setting up a website and selling to North America and Europe. The main issues were finding sufficient supply (university libraries only order a certain amount for their own students) and that the editions were different. That can make a difference for some subjects and for the assignments.

gambiting• 14 years ago

the "not for resale" note on the cover is completely meaningless. They could also say "if you open this book you owe us 1 billion dollars" and the effect would also be the same - it would have zero ground to stand on in court.

andrewcooke• 14 years ago

you can buy these books on the internet at places like AbeBooks and AdLibris. they're called "international editions" and sometimes are restricted to non-US customers (i think; i don't pay much attention because i am not in the US). sometimes the paper seems to be of lower quality (thinner).

here's one http://www.abebooks.com/servlet/BookDetailsPL?bi=7512020183&... with, as far as i can tell, no restriction (it has US shipping rates).

larrys2• 14 years ago

"Can someone just disrupt these folks out of existence already?"

Charging people different pricing in different locations or at different times or to different buyers is not in itself wrong (although it can be).

Restaurants regularly give "senior" discounts, "ladies for free" as well as offer discounts if you dine at different times. Is that fair to me if I only dine on Saturday night? (Or what they do by having special menus for New Years Eve or other occasions where the price is higher than on normal nights). It's not about fair. Companies do what they have to do in order to make a profit and in some cases that involves legally charging different buyers different prices. I'm able to make a better deal, for example, at a car dealer because presumably I can negotiate better than some other people. As a result the car dealer trying to rip off a newbie subsidizes my sale and allows them to charge me less (so they can meet their manufacturer volume requirements)

If the companies could charge more overseas perhaps they would. In any case the volume in sales they make offsets the price that they have to charge in the US as well. It's entirely possible that if they tried to sell at the higher price overseas they would have less total volume manufactured and as a result the price in the US would be higher than it is. I drive a fairly expensive car. If the manufacturer wants to price it at a lower cost in some new market overseas and they can lower their costs doing so and sell me my next car at a lower price (but not as low as overseas) that's fine with me.

I don't know and I'm not saying this is what's happening with textbooks. I am merely pointing out that the constant use of "disrupt" doesn't always take into account the reasons why things are the way they are.

nathan_long2• 14 years ago

This will never fly, at least not to the extent the article suggests. It would simultaneously cripple the economy and make everyone an outlaw. It might actually cause a political uprising. It would be madness.

Some watered-down version that only applies when you buy something solely to resell it in another market, maybe. I'd still oppose that, though.

protomyth• 14 years ago

The first grandma with some connections they arrest for having a garage sale will be the end of it.

antidoh2• 14 years ago

"It might actually cause a political uprising."

And the guns for the revolution would be sold, used, at garage sales.

csense• 14 years ago

How would this affect your right to give stuff away?

For example, say I bought a car with copyrighted software or logos or whatever in it. Due to this court ruling on the first sale doctrine, and EULA saying my license was nontransferable, I wouldn't be able to sell or give it to anyone else without the copyright holder's permission.

Say I couldn't obtain that permission -- I didn't have enough money, or they went out of business and nobody was sure who owned the copyright, or it was simply too complicated for an ordinary person to figure out who owns all the copyrights to the firmware in all the different microcontrollers -- radio, engine, steering, antilock brakes, etc. EDIT: Or maybe the copyright holder simply refused, saying "the rights are not for sale at any price" or saying "one TRILLION dollars."

Does that then mean that I can't sell the car or give it away either? That I have to leave it rusting in my yard forever when it stops working, I can't even give it to a wrecker?

EDIT: Also, any local or state laws against leaving cars to rust in your yard are now null and void, since getting rid of such cars would require people to violate federal copyright law. (When there's a conflict like this, I'm pretty sure the Constitution says federal law wins.)

danielweber2• 14 years ago

This doesn't affect any normal person's right to resell their car, unless they personally arranged for the import of the car against the wishes of the IP owner of the car.

CamperBob2• 14 years ago

Which has been done frequently in the past with gray-market auto imports.

mratzloff• 14 years ago

There's approximately a zero percent chance that this appellate ruling will be upheld.

aufreak3• 14 years ago

If the "Eastern Economy Edition" (EEE) prints of textbooks are similar to the ones that Kirtsaeng sold on ebay, the books may have a sale restriction based on region - a clause on the book that says something like "this book may only be sold <here> and <there>".

Kirtsaeng probably violated that clause ... if it was present. If that was the case, it may be interpreted as copyright violation, I think, if there is considerable monetary impact on the copyright owner on account of such a resale.

The article presents the case as a general assault on resale, but I believe it may be judged more along the lines of "does such resale prevent the copyright holder from financially benefiting from the artifact?" If I hold one EEE copy of a textbook that I sell on ebay, the financial impact to the publisher is insignificant than if I mass imported EEE copies for sale in the US. Though the sale act is the same in both these cases, I think only the mass sale may count as copyright violation. Perhaps I'm dreaming, but it doesn't look like the general ability of people to sell their stuff second hand (bought wherever) is likely on the table here at all.

(I'm not a lawyer. Just speculating about what aspects of copyright might be involved.)

pbhjpbhj3• 14 years ago

>it may be interpreted as copyright violation //

This hinges on the "first sale" doctrine and what's called "exhaustion of rights". The idea is that once you've sold an object under copyright you've exhausted (ended) your financial rights to that object and so it can be resold, lent, etc. without your permission.

IMO an attempt to create a regional sale restriction to overload copyright should be treated with contempt and the copyright should be rescinded. Copyright is [supposedly] granted by the state on behalf of the citizens/subjects afterall; such attempts to extend the rightsholders rights at the expense of the public should be limited.

IIRC cases of this kind in the UK have been challenged under trademark law, where selling of "grey imports" of Levi jeans - for example - have been prevented as the producers (or their local agents) have argued successfully for trademark violation / passing-off.

See http://en.wikipedia.org/wiki/Parallel_import

Parallel imports are like off-shoring for consumers.

Evbn4• 14 years ago

> Copyright is [supposedly] granted by the state on behalf of the citizens/subjects afterall; such attempts to extend the rightsholders rights at the expense of the public should be limited.

Note how this argument clearly fails to apply across national borders where there is no common "state".

falien2• 14 years ago

>That’s being challenged now for products that are made abroad and if the Supreme Court upholds an appellate court ruling it would mean that the copyright holders of anything you own that has been made in China, Japan or Europe, for example, would have to give you permission to sell it.

That ruling. I don't think it says what you think it says.

I wish I could say this was some of the worst reporting I've ever seen, but alas.

edit: for anyone who wants to read it http://caselaw.findlaw.com/us-2nd-circuit/1577369.html

gergles• 14 years ago

Could you enlighten the audience as to what you believe it says, rather than snarkily just dismissing the reporting as wrong?

jeremyjh2• 14 years ago

Maybe just read what it says? Third paragraph "“[i]mportation into the United States, without the authority of the owner of copyright under [the Copyright Act], of copies ․ of a work that have been acquired outside the United States is an infringement of the [owner's] exclusive right to distribute copies․”4

How is that ever going to apply to an iPhone - or to ANYTHING sold through an authorized distributor?

falien2• 14 years ago

I prefer to let people read into the original as much as they choose, since it is fairly clear by the third introductory paragraph that the reporter misrepresented what was at issue in the case.

tzs3• 14 years ago

The article is greatly exaggerating the potential scope of this. The underlying case involved reselling books that were imported without authorization of the copyright holder. When you buy an iPhone, it was NOT imported without authorization of the copyright holder. That's a huge difference.

jeremyjh2• 14 years ago

This was my thought as well. I don't go to Thailand to buy an iPhone; when I buy one it is in the US and so naturally first-sale does apply.

anigbrowl2• 14 years ago

Of course, anything for eyeballs.

dwc2• 14 years ago

Once you buy something, why would you need the original seller's permission to import it? I find myself personally concerned: I am studying Japanese and there is a paucity of media (books, video, et al) available in Japanese in my country. What might seem reasonable, such as arranging for books to be shipped from Japan, becomes problematic. And when I outgrow basic books, may I sell them to another student? These issues are not contrived, and are not limited to unethical cases. A broad ruling would have potentially harmful effects.

tzs3• 14 years ago

I'd guess that in your case, you'd be buying Japanese materials from Japanese publishers, and then having them shipped (possibly by the publisher themselves) to your country, and that these Japanese publishers don't normally sell their materials in your country.

That would not be a problem. To run into the situation at issue in this case, you'd have to be importing back to your country books that a publisher in your country sold in Japan.

The laws restricting imports are generally aimed at curbing grey market goods. When the good you are importing is one that has no "white market" equivalent in your country, you are probably OK.

theevocater• 14 years ago

A related but important case is: http://en.wikipedia.org/wiki/Omega_S.A._v._Costco_Wholesale_....

Costco, through another company, would buy watches abroad from authorized Omega dealers at low prices. Omega, wanting to keep its prices up, sued. Omega's 9th circuit judgement was upheld 4-4 (Kagen removed herself from the judgement). A split judgement means precedent is not created, so Kirtsaeng will help determine precedent as it is a somewhat similar case. (Omega used trademark protections whereas Kirtsaeng is about copyright.)

Point being, there is a strong possibility that this case will be determined in favor of Wiley. I think OP's article exaggerates greatly the effects of such a ruling because supreme court rulings tend to be as narrow as possible. However we won't know the far reaching effects until the ruling comes.

checoivan• 14 years ago

Doesn't make much sense to me. What would prevent people from giving away 2 gifts,one of item one of money, or a giving away to a 3rd party as escrows?

danielweber2• 14 years ago

As a general matter, judges get fed up with petty shenanigans pretty quick.

astangl• 14 years ago

I'm surprised more people don't take Wiley (and all the other textbook publishers) to task for their price-gouging ways. Instead of going after the kid who found a good arbitrage opportunity, maybe they ought to reexamine their pricing models.

Evbn4• 14 years ago

Yeah, when Wiley stops selling discounted editions in Asia, good will have finally triumphed over evil.

tzs3• 14 years ago

I can definitely see why Wiley is concerned. I've seen some editions for Asia or India that are cheap crap--bad enough that I'd rather buy the US edition because I like to keep my books and the foreign crap will fall apart after a couple reads. Sure, many people would buy the cheap editions and put up with the crap, but a lot of people would avoid them.

The Wiley foreign editions are not like those. When my Wiley copies of Apostol's "Calculus" volumes I and II started falling apart after 30 years of being my goto books when I needed to refresh my memory of calculus, I bought the Indian paperback editions. The pages are a little smaller than the US hardback and a little lower quality, but the binding is well done, all the material is there, and they were about $30 each (with shipping) compared to $200/each for the hardbacks.

If the Wiley Indian editions were readily available in the US, there would be almost no reason to buy the US edition, at least for textbooks like Apostol, where there are no color diagrams.

It was interesting that the total price, books + shipping, was about the same no matter where they were bought from. I could have bought from an India seller for about $5, with $25 shipping, or from US importers for about $25, with $5 shipping. I think I did find a couple Indian and Chinese sellers where I could have saved maybe $5 overall, but no way was I giving my credit card to a seller on the other side of the world that I could find no reviews of anywhere online.

BTW, those hardbacks in 1977 cost about the same as the paperbacks 30 years later. In hindsight, it would have been a good investment in 1977 to buy a bunch of copies, and resell them 30 years later. (And yes, there would be a market for them 30 years later. These books, in the same edition I bought in 1977, are still used at Caltech, MIT, and in the "honors" calculus classes at a few other top schools).

moo• 14 years ago

In 2011 Louisiana passed a law prohibiting using cash for selling or buying used goods.

yason• 14 years ago

How the hell does that fall under copyright?

The "only to be sold in country X" effectively tries to be an agreement in which geographic locations certain items can be sold. No copies are involved and no copies are made. Copyright controls, well, the right to make copies. Reselling shouldn't have anything to do with copyright.

(Note that those warnings that try to be artificial restrictions are deep from the arse. They deliberately try to prevent the market from working for the benefit of one company.)

ubernostrum• 14 years ago

Copyright includes the right to decide whether copies will be sold at all. That right traditionally ends, for any given copy, once that copy has been sold for the first time, which is the first-sale doctrine.

The quirk in this case is that it's dealing with things which had been legally sold... but not in the United States, and the doctrine is actually that the right to control sale of copies ends at the first authorized sale that occurs in the United States, not at the first sale that occurs anywhere in the world.

Since the textbooks were purchased elsewhere and then imported, they had not undergone a first sale in the US, and so US first-sale doctrine had not ended the copyright holder's right to control sale.

lunchladydoris• 14 years ago

Your right to resell your own stuff is in peril

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