Thursday, January 17, 2013

Copyright & First Purchase: SCOTUS to Determine Resale Rights of Book Purchasers

Do you have a right to resell these books? Image via Photo Pin.*
When someone purchases a book, do they purchase the right to re-sell it?

Nonsense, you say?  Who would ever think that when you buy something, you can't resell it at the best price you can get?  When you buy a car, you can resell it, right?  Same is true with books and CDs.  Otherwise flea markets, pawn shops and used book stores would be out of business.  If people couldn't resell what they buy, Pawn Stars would be the most boring show on television.

But not so fast.  A trial court has already held that a book purchaser violated the publisher's copyright by buying textbooks cheaply in Europe and selling them at a profit on E-bay.

Just what rights the purchaser of a book has is the multi-billion dollar question currently awaiting decision by the U.S. Supreme Court in Kirtsaeng v. John Wiley & Sons.  The decision will have far-reaching impact on the global intellectual property rights for books, CDs, and DVDs.

Kirtsaeng was a student in Europe, he found that text books, which were manufactured in Europe, were much cheaper than in the United States. Working with his parents, he bought $900,000 in texts books at the reduced European price, then resold them on Ebay to U.S. students, pocketing a nifty $100,000 profit.

Image via Photo Pin. **
Kirtsaeng took advantage of the common practice of manufacturers selling their products at lower prices in the global market than in the United States.  The practice of buying those cheaper-priced items abroad and reselling in the United States is called the "gray market"

Text book publisher John Wiley & Sons was offended at someone making six-figure profits by reselling its books, and sued Kirtsaeng for copyright infringement.  At trial, the jury found that Kirsaeng infringed on Wiley's copyright by unlawfully reselling the books he lawfully purchased in Europe and awarded Wiley $600,000 in damages.

The Supreme Court previously split 4-4 on this issue in 2010 when Justice Keegan did not take part in the decision because she had participated in preparation of the Department of Justice brief.  This time Justice Keegan is fully participating.

Ebay, Google and art museums are lined up in support of Kirtsaeng, saying that if the lower court decision is allowed to stand, it will disrupt the entire resale segment of the economy.  The book, movie and music industry is lined up in support of the lower court decision, arguing that it is necessary to avoid the producers of those goods from being undercut by a secondary market selling their products without permission.

Oral argument, which took place October 29, showed that the Court has not reached a consensus on the issue.  At one point Justice Breyer referred to the disruptive impact the decision could have on the resale market as the "bear in the mouse hole." Lawyers for the publisher could not satisfy Justice Breyer that affirming the decision for the publisher would not release that bear.

A decision is expected this spring.

*photo credit: <a href="">Blue Train Books</a> via <a href="">photopin</a> <a href="">cc</a>

**photo credit: <a href="">mindgutter</a> via <a href="">photopin</a> <a href="">cc</a>

No comments:

Post a Comment