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<title>Techdirt. Stories filed under &quot;kirtsaeng&quot;</title>
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<image><title>Techdirt. Stories filed under &quot;kirtsaeng&quot;</title><url>http://www.techdirt.com/images/td-88x31.gif</url><link>http://www.techdirt.com/</link></image>
<item>
<pubDate>Wed, 20 Mar 2013 07:34:25 PDT</pubDate>
<title>Congressman Already Claims That He Needs To Overturn Supreme Court Ruling In Kirtsaeng</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130319/18153322384/congressman-already-claims-that-he-needs-to-overturn-supreme-court-ruling-kirtsaeng.shtml</link>
<guid>http://www.techdirt.com/articles/20130319/18153322384/congressman-already-claims-that-he-needs-to-overturn-supreme-court-ruling-kirtsaeng.shtml</guid>
<description><![CDATA[ We fully <a href="http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml">expected</a> efforts in Congress to look to overturn the strong and important "first sale" ruling by the Supreme Court, and it looks like they're not wasting any time.  Rep. Doug Collins has already put out a statement about <a href="http://dougcollins.house.gov/press-releases/collins-comments-on-kirtsaeng-v-wiley-copyright-case/" target="_blank">how awful the ruling in Kirtsaeng is</a> and how he'll look to remedy it.
<blockquote><i>
&#8220;The Supreme Court's ruling in Kirtsaeng v. Wiley raises concerning questions about the future of U.S. copyright law,&#8221; Collins said. &#8220;Many industries and businesses in Georgia rely on strong copyright protections to create jobs and invest in our local economies, including the established and exclusive right to import in to the United States. When a U.S. business harnesses innovation and creativity to develop a product, they should have certainty their copyrighted work will be protected against unauthorized importation of foreign products.
<br /><br />
&#8220;As a Member of the House Judiciary Committee, I look forward to discussing the need for strong copyright protections with the Register of Copyrights at a subcommittee hearing tomorrow afternoon.&#8221;
</i></blockquote>
No, actually, it doesn't raise any serious questions.  It <i>confirms</i> a basic principle that "you own what you've purchased."  It's amazing that  a Representative who <a href="http://dougcollins.house.gov/economy-and-jobs/" target="_blank">claims</a> that he wants government to get out of the way and and that "the private sector is best at generating economic growth" would suddenly pipe up in favor of centralized monopolies handed out by the federal government.  Furthermore, it's ridiculous, wrong and misleading to argue that Kirtsaeng is somehow antithetical to "strong copyright protections."  The first sale doctrine has existed in the US for ages and nothing in it goes against "strong copyright protections."  The Supreme Court decision standing up for first sale is hardly an attack on copyright.  Even the claim about "being protected against unauthorized importation of foreign products."  That's not a copyright issue, but an import issue.  Here, again, Collins, who pretends to be for free trade, appears to be arguing that the US should have tariffs.  It's funny what copyright will do to politicians -- including highlighting their own hypocrisies.<br /><br /><a href="http://www.techdirt.com/articles/20130319/18153322384/congressman-already-claims-that-he-needs-to-overturn-supreme-court-ruling-kirtsaeng.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130319/18153322384/congressman-already-claims-that-he-needs-to-overturn-supreme-court-ruling-kirtsaeng.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130319/18153322384/congressman-already-claims-that-he-needs-to-overturn-supreme-court-ruling-kirtsaeng.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>and-off-we-go</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130319/18153322384</wfw:commentRss>
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<pubDate>Tue, 19 Mar 2013 10:04:33 PDT</pubDate>
<title>Supreme Court Gets It Right In Kirtsaeng: You Can Resell Things You Bought Abroad Without Infringing</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml</link>
<guid>http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml</guid>
<description><![CDATA[ For a <a href="http://www.techdirt.com/articles/20110817/18162715566/legally-bought-some-books-abroad-sell-them-us-you-could-owe-150k-per-book-infringement.shtml">few years now</a>, we've been following the Kirtsaeng case, in which a student was sued by publisher John Wiley &#038; Sons for buying cheap (legal) textbooks abroad, and then reselling them in the US for profit.  Wiley claimed this was copyright infringement, while the student, Sudap Kirtsaeng, argued that the first sale doctrine applied.  First sale gives you the right to resell, say, a book that you legally bought without having to get permission from the copyright holder.  Under copyright law, it says that the first sale doctrine applies to any product "legally made under this title."  Wiley argued that goods made abroad were not legally made under US law since they were made abroad (even though, obviously, it wanted <i>the rest of copyright law</i> to apply to it once those works came to the US).  We were guardedly <a href="http://www.techdirt.com/articles/20121029/17262020880/supreme-court-justices-worry-about-parade-horribles-if-they-agree-you-dont-own-what-you-bought.shtml">optimistic</a> after the oral hearings at the Supreme Court, in which the Justices explored the "parade of horribles" that might happen if Wiley won.  And while what happens at oral arguments frequently doesn't seem to have any bearing on the eventual situation, in this case, <a href="https://www.documentcloud.org/documents/624421-11-697-d1o2.html" target="_blank">the Supreme Court has ruled in favor of Kirtsaeng</a>, saying that it is silly to interpret the first sale doctrine the way Wiley does, and that there is no evidence that such "geographical restrictions" make sense, or that Congress intended such a result.
<blockquote><i>
In our view, &sect;109(a)&#8217;s language, its context, and the common-law history of the &#8220;first sale&#8221; doctrine, taken together, favor a non-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities.... We consequently conclude that Kirtsaeng&#8217;s nongeographical reading is the better reading of the Act.
</i></blockquote>
To get technical, the key issue in the dispute was that two different sections of copyright law <i>could</i> be read to conflict.  <a href="http://www.law.cornell.edu/uscode/text/17/109" target="_blank">Section 109</a> defines the First Sale doctrine while <a href="http://www.law.cornell.edu/uscode/text/17/602" target="_blank">Section 602</a> defines importation of works.  Kirtsaeng focused on 109, while Wiley insisted that 602 is more important.  The Supreme Court -- by a six to three margin -- side strongly with Kirtsaeng.  The majority was written by Justice Breyer, who is consistently good on intellectual property issues, while the dissent was led by Ginsburg, who is consistently bad on copyright issues (Scalia and Kennedy sided with Ginsburg).  Thankfully the "good" side won out today.
<blockquote><i>
The language of &sect;109(a) read literally favors Kirtsaeng&#8217;s nongeographical interpretation, namely, that &#8220;lawfully made under this title&#8221; means made &#8220;in accordance with&#8221; or &#8220;in compliance with&#8221; the Copyright Act. The language of &sect;109(a) says nothing about geography. The word &#8220;under&#8221; can mean &#8220;[i]n accordance with.&#8221; 18 Oxford English Dictionary 950 (2d ed. 1989). See also Black&#8217;s Law Dictionary 1525 (6th ed. 1990) (&#8220;according to&#8221;). And a nongeographical interpretation provides each word of the five-word phrase with a distinct purpose. The first two words of the phrase, &#8220;lawfully made,&#8221; suggest an effort to distinguish those copies that were made lawfully from those that were not, and the last three words, &#8220;under this title,&#8221; set forth the standard of &#8220;lawful[ness].&#8221; Thus, the nongeographical reading is simple, it promotes a traditional copyright objective (combatting piracy), and it makes word-by-word linguistic sense.
<br /><br />
The geographical interpretation, however, bristles with linguistic difficulties. It gives the word &#8220;lawfully&#8221; little, if any, linguistic work to do. (How could a book be unlawfully &#8220;made under this title&#8221;?) It imports geography into a statutory provision that says nothing explicitly about it. And it is far more complex than may at first appear.
<br /><br />
To read the clause geographically, Wiley, like the Second Circuit and the Solicitor General, must first emphasize the word &#8220;under.&#8221; Indeed, Wiley reads &#8220;under this title&#8221; to mean &#8220;in conformance with the Copyright Act where the Copyright Act is applicable.&#8221; Brief for Respondent 15. Wiley must then take a second step, arguing that the Act &#8220;is applicable&#8221; only in the United States. Ibid. And the Solicitor General must do the same. See Brief for United States 6 (&#8220;A copy is &#8216;lawfully made under this title&#8217; if Title 17 governs the copy&#8217;s creation and the copy is made in compliance with Title 17&#8217;s requirements&#8221;). See also post, at 7 (GINSBURG, J., dissenting) (&#8220;under&#8221; describes something &#8220;governed or regulated by another&#8221;).
<br /><br />
One difficulty is that neither &#8220;under&#8221; nor any other word in the phrase means &#8220;where.&#8221; See, e.g., 18 Oxford English Dictionary, supra, at 947&#8211;952 (definition of &#8220;under&#8221;). It might mean &#8220;subject to,&#8221; see post, at 6, but as this Court has repeatedly acknowledged, the word evades a uniform, consistent meaning. See Kucana v. Holder, 558 U. S. 233, 245 (2010) (&#8220;&#8216;under&#8217; is chameleon&#8221;); Ardestani v. INS, 502 U. S. 129, 135 (1991) (&#8220;under&#8221; has &#8220;many dictionary definitions&#8221; and &#8220;must draw its meaning from its context&#8221;).
<br /><br />
A far more serious difficulty arises out of the uncertainty and complexity surrounding the second step&#8217;s effort to read the necessary geographical limitation into the word &#8220;applicable&#8221; (or the equivalent). Where, precisely, is the Copyright Act &#8220;applicable&#8221;? The Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad. But that fact does not mean the Act is inapplicable to copies made abroad. As a matter of ordinary English, one can say that a statute imposing, say, a tariff upon &#8220;any rhododendron grown in Nepal&#8221; applies to all Nepalese rhododendrons. And, similarly, one can say that the American Copyright Act is applicable to all pirated copies, including those printed overseas. Indeed, the Act itself makes clear that (in the Solicitor General&#8217;s language) foreign-printed pirated copies are &#8220;subject to&#8221; the Act.
</i></blockquote>
The ruling goes on to lay out historical and logical reasons why first sale should apply.  It's a good read.  It looks like Breyer relied, in part, on the American Library Association's concern for how a ruling against First Sale would cause serious harm to libraries, which would have to somehow figure out ways to get permission on any book they had that was printed outside the US.  He similarly cites concerns of used book dealers and the tech industry that this would get in the way of all sorts of reasonable transactions.
<blockquote><i>
Technology companies tell us that &#8220;automobiles, microwaves, calculators, mobile phones, tablets, and personal computers&#8221; contain copyrightable software programs or packaging.  Many of these items are made abroad with the American copyright holder&#8217;s permission and then sold and imported (with that permission) to the United States. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and Wiley did not indicate to the contrary when asked.  Without that permission a foreign car owner could not sell his or her used car.
</i></blockquote>
Breyer dismisses the idea, presented by Wiley, that because this "parade of horribles" hasn't happened yet, it won't happen in the future if the ruling had gone the other way.  The ruling notes that this is still somewhat unsettled law, but that large parts of the economy clearly rely on the first sale doctrine, and upsetting that apple cart could have dramatic impact.  It also rejects other spurious arguments, including a favorite of copyright maximalists, that the first sale doctrine on such works prevents copyright holders from doing differential pricing.  The court rightfully questions what this has to do with copyright:
<blockquote><i>
Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.
<br /><br />
[....] the Constitution&#8217;s language nowhere suggests that its limited exclusive right should include a right to divide markets or a concomitant right to charge different purchasers different prices for the same book, say to increase or to maximize gain. Neither, to our knowledge, did any Founder make any such suggestion.We have found no precedent suggesting a legal preference for interpretations of copyright statutes that would provide for market divisions.
<br /><br />
To the contrary, Congress enacted a copyright law that (through the &#8220;first sale&#8221; doctrine) limits copyright holders&#8217;ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid market divisions. 
</i></blockquote>
The dissent obsesses over this issue of differential pricing, despite it having little to do with copyrights and simple serves to reinforce the idea -- as seen in previous copyright rulings, including Eldred -- that Justice Ginsburg seems to have a bit of a blindspot in copyright cases, such that anything that helps copyright maximalists is automatically seen as "good."
<br /><br />
But, perhaps more importantly, Justice Ginsburg repeatedly cites various international trade agreements in arguing that her position is the correct one. With this ruling decided as is, copyright maximalists will no doubt seek to have Congress change the law in their favor -- especially now that comprehensive copyright reform is back on the table.  But, as a part of that, you can absolutely expect to see this issue pop up in various international trade agreements as well.  Copyright maximalists will seek to force Congress' hand in suggesting that first sale rights do not transfer over for goods made in foreign countries.  This is something that we're all going to have to pay close attention to in the coming years.
<br /><br /><br /><br /><a href="http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130319/08094922377/supreme-court-gets-it-right-kirtsaeng-you-can-resell-things-you-bought-abroad-without-infringing.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>phew</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130319/08094922377</wfw:commentRss>
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<pubDate>Mon, 4 Mar 2013 20:06:35 PST</pubDate>
<title>Two And A Half Minute Video Explains How The Ability To Sell Stuff You Legally Purchased Is At Risk</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20130228/02144922148/two-half-minute-video-explains-how-ability-to-sell-stuff-you-legally-purchased-is-risk.shtml</link>
<guid>http://www.techdirt.com/articles/20130228/02144922148/two-half-minute-video-explains-how-ability-to-sell-stuff-you-legally-purchased-is-risk.shtml</guid>
<description><![CDATA[ As we wait patiently for the Supreme Court to decide the <a href="http://www.techdirt.com/blog/?tag=kirtsaeng">Kirtsaeng case</a>, concerning whether or not you can resell goods that were made outside the US but that can be covered by copyright inside the US, the folks at Demand Progress have put together a nice <a href="http://www.youtube.com/watch?v=kjNEvXTYkLI&#038;feature=youtu.be" target="_blank">two and a half minute video highlighting the possible consequences</a> of a ruling that goes against first sale rights and limits your ability to freely sell items you legally purchased.  While it may seem premature to be discussing this before the eventual ruling, having more people understand why this is a vitally important issue is helpful, so that we can either push for legislation to fix a bad ruling, or (hopefully) resist a push in the other direction by companies seeking to stomp out first sale rights.
<center>
<iframe width="560" height="315" src="http://www.youtube.com/embed/kjNEvXTYkLI" frameborder="0" allowfullscreen></iframe>
</center><br /><br /><a href="http://www.techdirt.com/articles/20130228/02144922148/two-half-minute-video-explains-how-ability-to-sell-stuff-you-legally-purchased-is-risk.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20130228/02144922148/two-half-minute-video-explains-how-ability-to-sell-stuff-you-legally-purchased-is-risk.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20130228/02144922148/two-half-minute-video-explains-how-ability-to-sell-stuff-you-legally-purchased-is-risk.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>you've-been-owned</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20130228/02144922148</wfw:commentRss>
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<pubDate>Tue, 27 Nov 2012 10:37:52 PST</pubDate>
<title>Colbert Takes On First Sale Rights; Mocks Kirtsaeng Case</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20121127/03061121155/colbert-takes-first-sale-rights-mocks-kirtsaeng-case.shtml</link>
<guid>http://www.techdirt.com/articles/20121127/03061121155/colbert-takes-first-sale-rights-mocks-kirtsaeng-case.shtml</guid>
<description><![CDATA[ Copyright issues don't often become "mainstream" stories.  SOPA was the exception, not the rule, and it only really went fully mainstream at the very end with the January 18th blackouts.  But it's always nice to see when big copyright issues get some mainstream love.  Stephen Colbert actually has covered copyright (and other IP) issues a few times on his show (perhaps because his brother is an IP lawyer).  He was actually among the first on TV to <a href="http://www.techdirt.com/articles/20111202/09361816954/colbert-takes-sopa.shtml">cover SOPA</a>.  Still, it's a bit surprising to hear that he <a href="http://www.colbertnation.com/the-colbert-report-videos/421501/november-26-2012/judge--jury---executioner---copyright-law" target="_blank">devoted an entire segment of his show to First Sale</a>, and specifically the <a href="http://www.techdirt.com/search.php?q=kirtsaeng&edition=&tid=&aid=&searchin=stories">Kirtsaeng case</a> that we've been covering.  If you're in the US or one of the very small number of countries that Viacom's streams work in, you can watch it below (blame Viacom, not me, if you can't):
<center>
<iframe src="http://media.mtvnservices.com/embed/mgid:cms:video:colbertnation.com:421501" width="512" height="288" frameborder="0"></iframe>
</center>
For those who can't watch it, Colbert gives a basic explanation of what's at stake in the Kirtsaeng case, even calling out that the First Sale Doctrine was codified by the courts over a century ago (and then joking "I'm sorry, I don't buy this 'First Sale' argument... and if I did buy it, I would not resell it, because I don't have the right!").  Then he notes that the Kirtsaeng issue would only apply to goods manufactured outside of the US, and cracks a joke about how little is still manufactured in the US these days.  After highlighting how this could hurt sites like eBay, he notes that he's planning a garage sale, and that he now needs to get permission from the copyright holders on any goods made outside the US... and proceeds to call up Elvis Costello to haggle with him over his plan to sell a vinyl copy of <i>My Aim is True</i>.
<br /><br />
It may not be the funniest Colbert bit, but it's still quite amazing to see first sale issues get such mainstream coverage.  Even though the Kirtsaeng case is at the Supreme Court and a certified "big deal," it's still pretty obscure outside of copyright circles.  So it's great that it appears to be getting some mainstream love.  Colbert uses clips from a few popular news shows discussing the case, including the O'Reilly Factor, again showing the issue is getting plenty of attention.
<br /><br />
And, while we're used to commentators screwing up the details, Colbert mostly seems to get them right here (again, I wonder if he ran some stuff by his brother).  It gets a little fuzzy at times when he seems to suggest that all goods are covered by copyright, but that can likely be chalked up to trying to simplify the explanation for the sake of lining up a good punchline.   Of course, it's also worth noting that Colbert's bosses at Viacom are members of the MPAA (via Paramount, which is owned by Viacom), and the MPAA filed a <a href="http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml">ridiculous brief</a> in the case that effectively argues that the US economy might collapse if the Supreme Court doesn't wipe out your first sale rights.  It would have been really amazing if Colbert dug into the insanity therein...<br /><br /><a href="http://www.techdirt.com/articles/20121127/03061121155/colbert-takes-first-sale-rights-mocks-kirtsaeng-case.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20121127/03061121155/colbert-takes-first-sale-rights-mocks-kirtsaeng-case.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20121127/03061121155/colbert-takes-first-sale-rights-mocks-kirtsaeng-case.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>first-sale-goes-mainstream</slash:department>
<wfw:commentRss>http://www.techdirt.com/comment_rss.php?sid=20121127/03061121155</wfw:commentRss>
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<item>
<pubDate>Mon, 29 Oct 2012 09:22:56 PDT</pubDate>
<title>Supreme Court Will Decide If You Actually Own What You've Bought</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20121029/02292920865/supreme-court-will-decide-if-you-actually-own-what-youve-bought.shtml</link>
<guid>http://www.techdirt.com/articles/20121029/02292920865/supreme-court-will-decide-if-you-actually-own-what-youve-bought.shtml</guid>
<description><![CDATA[ We've written about the <i>Wiley v. Kirtsaeng</i> case <a href="http://www.techdirt.com/search.php?q=kirtsaeng">many times</a> already, but it's an important one to follow.  While everything else in DC closed down to bunker down for Hurricane Sandy, the Supreme Court Justices decided to soldier on and actually hear the case today. Joe Mullin has written up the most thorough and detailed <a href="http://arstechnica.com/tech-policy/2012/10/a-supreme-court-clash-could-change-what-ownership-means/" target="_blank">examination of the case</a>, including the fact that Kirsaeng is merely the first, and most well-known case brought by copyright holders trying to stop them from reselling legally purchased works made outside the US.  Copyright holders <i>love</i> the fact that Kirtsaeng is the central case here, because he earned a lot of money -- so they can argue that he's somehow "unfairly" profiting from international arbitrage.  But, as Mullin notes, lawsuits have been brought against many others who were selling a lot less.
<br /><br />
Copyright holders keep trying to downplay the "horror story" scenarios that many of us worried about a ruling in favor of Wiley could lead to.  However, if the Supreme Court says that it's copyright infringement to sell a copyright-covered work made outside the US, but legally imported in, you can bet that all sorts of companies will seek to take advantage of this fact. We've already talked about the predecessor case here, <a href="http://www.techdirt.com/articles/20091224/0041137498.shtml">Omega v. Costco</a>, in which merely putting a copyright image <i>that no one would see</i> on the back of a watch could open up the ability to block resale of physical products.  While Omega eventually got smacked down in the lower court, that was for copyright misuse -- the first sale issue stuck.  So, all companies need to do is slightly modify the way they use copyright, and they can ban your ability to resell products.
<br /><br />
If you believe in basic property rights, this should freak you out.  It's kind of funny to see the MPAA and RIAA -- who like to pretend they're in favor of property rights -- right upfront in arguing <a href="http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml">against it</a> here.
<br /><br />
While it's pretty rare to see "activism" around a Supreme Court case, the folks at Demand Progress have put together a campaign called <a href="http://www.youvebeenowned.org/" target="_blank">You've Been Owned</a> to speak out about this.  While that won't impact the Supreme Court, they're right that this issue <i>is</i> going to matter in Congress eventually.  Whichever side loses this case is going to run to Congress with pre-written legislation to "fix" the Court's ruling.  If you believe that you should own what you bought -- even if it's made in a foreign country -- then this is a case to pay attention to, and to be ready to speak out about when the inevitable legislative "fix" is introduced.<br /><br /><a href="http://www.techdirt.com/articles/20121029/02292920865/supreme-court-will-decide-if-you-actually-own-what-youve-bought.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20121029/02292920865/supreme-court-will-decide-if-you-actually-own-what-youve-bought.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20121029/02292920865/supreme-court-will-decide-if-you-actually-own-what-youve-bought.shtml?op=sharethis">Email This Story</a><br />
 ]]></description>
<slash:department>yes,-it's-come-to-this</slash:department>
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<pubDate>Thu, 20 Sep 2012 09:44:56 PDT</pubDate>
<title>MPAA &amp; RIAA: If People Can Sell Foreign Purchased Content Without Paying Us Again, US Economy May Collapse</title>
<dc:creator>Mike Masnick</dc:creator>
<link>http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml</link>
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<description><![CDATA[ We've written a few times about the upcoming <a href="https://www.techdirt.com/search.php?q=kirtsaeng">Kirtsaeng case</a> before the Supreme Court concerning first sale rights.  If you don't recall, the 2nd Circuit appears to have <a href="https://www.techdirt.com/articles/20110817/18162715566/legally-bought-some-books-abroad-sell-them-us-you-could-owe-150k-per-book-infringement.shtml">wiped out</a> the first sale doctrine for content purchased outside the country that you want to resell within the US.  As we noted, there are significant worries about how such a ruling could really <a href="https://www.techdirt.com/articles/20120608/18350819256/why-supreme-court-needs-to-make-sure-that-selling-used-ipad-isnt-copyright-violation.shtml">harm</a> innovation.  At issue was a guy who bought textbooks abroad and resold them in the US (for less than the cover price that the publishers wanted students to buy).  The courts basically found that because the textbooks were made outside the US, they weren't "lawfully made under this title," which is some clumsy phrasing that's at issue here.
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Of course, thanks to our copyright maximalism, under Kirtsaeng, if a product is made outside the US and then imported, US copyright law appears to apply to almost everything that's copyrightable... except that first sale rights go away.  If that seems dangerous, you get a sense of how important the Supreme Court's ruling in Kirtsaeng can be, hopefully by bringing back some sanity, and showing that if you legally purchase some digital content you have the right to resell it.
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It appears that the RIAA and MPAA are pretty scared about this possibility.  They've filed quite the amicus brief in the case claiming that buying goods overseas and selling them in the US is the equivalent of piracy.  No joke:
<blockquote><i>
Copyright protection is essential to the health of the motion picture and music industries and the U.S. economy as a whole.  Like the sale of &#8220;pirated&#8221; copies, unauthorized importation of copies of protected works made overseas and intended only for sale in a foreign market can undercut or eliminate the economic benefit that Congress intended to provide under the Copyright Act.
</i></blockquote>
Oh, and it gets worse.  You see, if that darned first sale is allowed on foreign goods, why (*gasp*) the MPAA and RIAA might actually have to deal with people buying goods in one market and selling them elsewhere.  Horrors!
<blockquote><i>
Extending the first sale doctrine to copies made abroad for distribution in a foreign market could impede authors&#8217; ability to control entry into distinct markets, limit their flexibility to adapt to market conditions, or undermine territorial licensing agreements.  If accepted, Kirtsaeng&#8217;s view of the first sale doctrine could thus prevent U.S. copyright holders from obtaining the economic reward Congress intended to provide under U.S. law to motivate investment in creative activity.
</i></blockquote>
Now that's an interesting interpretation of copyright law.  The RIAA and MPAA are arguing that if they can't block people from importing the versions they sell overseas, it will somehow motivate less investment in creative activity. Really?
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Here's the real problem: the RIAA and MPAA want to have their cake and eat it too.  If products bought abroad and then imported into the US don't get first sale rights, then it seems only reasonable that <i>they shouldn't get US copyright protection either</i>.  Part of the deal with copyright protection in the US is that as part of it, you accept that buyers have first sale rights that allow them to resell what they legally purchased.  What the RIAA and MPAA are attempting to do here is to take away the public's right to resell what they've legally purchased, because it might interfere with one aspect of their preferred business model.
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Of course, what this really comes down to is that the RIAA and MPAA absolutely hate the idea that they might have to compete in a global market.  They more or less admit this in the brief, suggesting that prices are cheaper elsewhere in the world because copyright law sucks in other places... and allowing cheap goods into the US means that they don't get the "separate benefit" of expansive US copyright law:
<blockquote><i>
When copyright owners distribute tangible copies of creative works in a foreign market, they recoup the economic benefit made possible by the copyright law of that country, which may be substantially less generous or well enforced than U.S. copyright law.  They do not realize the separate benefit Congress intended them to derive from their U.S. copyright.  If those copies are imported into the United States without permission, the copyright owner might never obtain that full benefit.
</i></blockquote>
Boohoo.  You sell into one market, people buy, they sell into a different market.  Every other business in the world has to deal with exactly that.  Why should the RIAA/MPAA get special treatment?
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Oh, and of course, they rush to play up how much "harm" this would do if they can't overprice content in the US (what this is really about) by trotting out the same debunked stats about just how important they are -- even to the point of suggesting that allowing people to resell goods they legally bought elsewhere would have deleterious consequences for the entire US economy.
<blockquote><i>
Those harms, in turn, <b>could have deleterious consequences for the U.S. economy as a whole</b>.  As of 2010, the motion picture and television industry supported 2.1 million jobs and nearly $143 billion in total wages in the United States....   In addition to the major motion picture studios, the industry supports a nationwide network of nearly 95,000 businesses throughout the 50 States.  Id.  The music industry employed over 25,000 paid employees as of 2004....  The industry supports many smaller businesses such as retail stores, distribution companies, recording studios, and music professionals.  The retail trade alone generates over $7 billion from the sale of sound recordings...  <b>Maintaining robust copyright protection is thus crucial to preserving not only the health of these creative fields themselves, but also their substantial contributions to the national economy.</b>
</i></blockquote>
That the actual evidence suggests something quite different is, of course, not mentioned.  That the overall music and movie industries have been growing quite nicely, even as copyright is more and more ignored, is not mentioned.  That more content is being produced and more money is being made... is not mentioned.  Inconvenient facts are not allowed.
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The filing at one point gets so snarky that it claims that those arguing the other side are using the word "arbitrage" as a <i>euphemism </i> (for what?!), rather than as an accurate description of what happens to <i>normal</i> economies that can't set up protectionist tariffs on importation of goods.
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The whole thing shows the same myopic thinking of the RIAA and MPAA -- that anything that threatens their chosen obsolete business model simply must be illegal.  Because having the courts and Congress prop up old business models must be better than actually innovating and (*gasp*) letting people resell what they legally bought.<br /><br /><a href="http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml">Permalink</a> | <a href="http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml#comments">Comments</a> | <a href="http://www.techdirt.com/articles/20120920/01565420443/mpaa-riaa-if-people-can-sell-foreign-purchased-content-without-paying-us-again-us-economy-may-collapse.shtml?op=sharethis">Email This Story</a><br />
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<slash:department>a-bit-of-an-exaggeration</slash:department>
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