For those of you who haven’t been keeping up with my Delicious Feed the past couple weeks or don’t keep up much with business or technology news, you’re probably completely unaware that the US Supreme Court is beginning the hearing process on a case called Wiley v. Kirtsaeng, a case that could prove to be the most important and high-stakes intellectual property case heard this century to date. The decision on this case will have lasting repercussions that could fundamentally change the used goods market in the United States and any other country that has to fall into harmonization with our intellectual property and copyright laws.
Have your attention yet?
This isn’t a Chicken Little scare tactic here done for sensationalist reasons: First Sale Doctrine is on trial, and if the SCOTUS rules to uphold the appellate court ruling in this case, the very fundamental concept of property ownership in this country will be changed for the worse due to our being a nation of goods importers. You know all those great things that help us all save money like consignment shops, Goodwill, Craigslist, Ebay, buying or trading refurbished and used items, flea markets, yard sales, libraries… they’re all at risk. What’s basically on the table here is the individual’s right to ownership of products they purchase to do with as they please, including resale of those goods.
How Did This Happen?
Good question. The short answer is College Textbooks.
A less nuanced but more detailed answer would be that textbook prices in the United States are priced in a very predatory and monopolistic manner, and college students have known this for about a decade now. Many will buy textbooks from out of country and pay to import them because they’re cheaper new from, let’s say the UK, than they are even used inside the United States, which defines a “gray” market legally. Well, one enterprising young man from Thailand attending USC by the name of Supap Kirtsaeng noticed that he could purchase his textbooks from Thailand for far less than he could in the US… he then had a clever idea and proceeded to finance a new “used” college textbook store where he purchased and imported enough textbooks for resale in the US that he was able to finance his entire tuition. Total sales added up to over $1.2 million, but Kirtsaeng claims the total net was only $37,000.
Well, Wiley Publishers caught wind of this, took him to court and won. A federal jury found Kirtsaeng guilty of willful copyright infringement with eight of the books sold, and a judgment was ordered against him to the tune of $600,000. He appealed this ruling, but a panel of appellate judges ruled in the publisher’s favor 2-1 which brings us to today.
Basically, this entire situation is brought about through regional price fixing. In less financially solvent parts of the world and parts of the world that have less ridiculous intellectual property and copyright laws, media publishers are forced to actually price products at a reasonable and competitive price point to actually obtain sales. In the United States, however, partly due in thanks to the DMCA and changes to Copyright Law over the past 40 years, intellectual property rights holders are now permitted an exclusive and eternal monopoly on their content and can set new sales prices at whatever price point the free market can handle. Kirtsaeng wasn’t actually guilty of infringing copyright, he didn’t duplicate or print copies of these textbooks, he purchased and resold official textbooks from one region to another, violating nothing more than a regional usage license. Same content made by the same company, different region, different copyright notice, but still found guilty of federal copyright infringement laws instead of breach of a civil contract.
As I’m sure you’re beginning to realize, this doesn’t hold too much impact over the resale of 100% domestic produced goods… but when was the last time you actually bought something that was 100% made in the United States? Copyright laws in this country have expanded well beyond their intended scope and are used everywhere to silence critics, slow or halt competition, and keep a stranglehold on the marketplace. Under the fuzzy guidelines of artistic license and writing, many goods are now being subjected to copyright law, especially in countries that have broader definitions of copyright-able material or utilize copyrighted artistic elements embedded into products to enforce copyright law on goods for import that can’t and shouldn’t actually be copyrighted.
How does this impact me?
More deeply than you’d imagine. Software code and circuitry patterns are deemed worthy of copyright. Also, thanks to Costco v. Omega, copyright law has been marginally perverted as a means to prevent the import and sale of “gray market” goods purchased from other global markets from the manufacturer and imported into the United States to resell for less than what the manufacturer wants to charge domestically. Costco was purchasing Omega watches abroad and reselling them in the US for far less than Omega was charging. As a means to shut Costco down, Omega introduced a tiny artistic element as a means to convert their watches into a copyrighted work… and it almost worked. Unfortunately, the SCOTUS split 4-4 on the decision (with Kagan unable to rule) upholding the 9th Circuit decision in favor of Omega despite the reprimand of copyright misuse which has created a bit of a legal slippery slope on precedence going forward.
This is a far more clear cut portion of copyright on trial, though. If nearly all goods made out of country can be made subject to copyright law, and all foreign goods are made subject to foreign copyright protection by the manufacturer as a means to prevent gray market sales, ownership of goods and first sale rights in a country that imports everything is effectively dead. Instead of being able to potentially sell used goods you no longer need or want, manufacturers will have the right to exercise the fate of your goods for you using copyright law and prosecute you as a federal criminal for selling those goods without express permission. No more used books, movies, music, games, computers, cell phones, tablets, televisions, electronic devices, cars, appliances, and potentially even clothing, furniture and tools thanks to the abuse and misuse of copyright law. The decision could impact diverse industries, higher education, even our library system… and oh yeah, most everyone else, too.
Between this case and the latest rulings from the Library of Congress on DMCA exemptions, it’s becoming more and more clear that the consumers in this country are losing their physical property ownership rights. Goods are not being sold to us, we’re paying for a non-transferable license to use them for however long the manufacturer allows the product to last, and we’re not allowed to use those things in any form or fashion whatsoever except for the approved function by the manufacturer and/or seller all in the name of protecting copyright. If this stands, the economic impact could be staggering and be felt by even the most financially secure of us all. More importantly, it will take away (or greatly increase the price of) many of the tools available to us that currently make our lives more productive so long as we have the rights to use those tools as we see fit. Environmental impact will be equally depressing as we’d be forced into a society of mandatory disposable consumerism.
What can I do?
Well, for starters, you can see how my greater philosophy of learning to live on less and be less materialistic and dependent on technology can help minimize the impact of this decision if it goes in favor of more draconian copyright law and weaker property law. Knowing how to provide for yourself and create useful things is always a great defense as well. When I speak of electronics as a potential enslavement device, these are the sorts of possible outcomes that concern me. Our entire society and the tools that run it is becoming dependent on technologies that can be manipulated by laws that feed and enforce monopolistic practices through the abuse of copyright.
As for more practical things directly related that can be done? First, you should lend your support to the Owners Rights Initiative, who is fighting to defend and uphold First Sale doctrine and the concept of you bought it, you own it. You can also make an effort to stop supporting companies and organizations with your purchases that are spearheading and trying to enforce copyright law on ownership rights by giving them a chunk of your personal intellectual property but none of your wallet. Also, support your local library, the ALA, and just hug a librarian and thank them… these people are some of the unsung silent guardians trying to help protect our fair use and property rights under modern copyright law. Try to avoid financially supporting companies that abuse Copyright, Trademark & Patent laws as well as our judicial system as a means of conducting business. Use open source hardware and software licensed for use under a generous and permissive license like the GPL. Beyond that, tell people about this case… don’t spread FUD or fearmonger, but be honest and forthright about the risks this decision may impart upon our collective quality of life.
Better or worse, life will continue on and free will shall remain unchanged. Some may be turned into deliberate or accidental scofflaws as many already are under modern copyright law, others made a bit more disenfranchised as the laws of the land leave them with fewer rights still that they feel compelled to adhere to as they yet push up against but don’t directly violate G-d’s Laws and Sovereignty, but instead reminding us to be less worldly. And who knows, perhaps bartering will be found as an acceptable workaround to this insanity if it actually holds. I do pray that the Justice Department has the wisdom to see what would happen if this ruling is upheld and decide in a kind and just fashion for the people as opposed to the deep pockets. I’m all for defending intellectual property rights in a sane and courteous fashion as well, but this is what happens when you’re greedy: you get people like Supap Kirtsaeng exploiting your greed for their own benefit. If content creators are going to produce content for the global market, then they need to provide reasonable prices globally and shouldn’t be allowed to abuse copyright law to force egregious monopolistic pricing in certain areas of the world just because they can.
Ideas and information are powerful and should be protected well enough to allow the ideamakers an opportunity to support themselves on that work for a reasonable time, but ideas and information should never be treated like a physical good as they shape the cultural zeitgeist. I’m not saying what he did was necessarily right (not that either side can claim a monopoly on ethical business practices), but Kirtsaeng did not steal any physical goods nor did he take others information and sell them as his own. He shouldn’t be convicted of IP theft and piracy because he was clever enough to take advantage of a publisher’s own greed for his personal benefit. At worst, this should only be a civil matter as a violation of a use license, with the only federal involvement being income tax levied on the profit made.
Read more about this case at the following links:
Photo by Horia Varlan and licensed under Creative Commons Attribution 2.0 Generic (CC BY 2.0).