Here's A Taste Of What Publishers Will Do If First Sale Rights For Foreign Goods Disappear

from the goodbye-first-sale,-goodbye-jobs? dept

As Techdirt reported a few months back, the Supreme Court Justices seem rightly concerned about the “parade of horribles” — things that would happen if the decision in the Wiley v. Kirtsaeng copyright case over whether or not you have the right to resell a foreign-made product you bought were applied generally. In the oral arguments, the line of Wiley’s lawyer was essentially: nothing bad will happen, because copyright holders would never dream of using the decision to make outrageous demands.

But a fascinating post by Kevin Smith on the Scholarly Communications @ Duke blog recounts a couple of troubling stories of how publishers are already making outrageous demands that could become the norm if the Kirtsaeng decision is upheld. The first concerns a film:

In response to a faculty request, we purchased a DVD of this film through an ordinary commercial channel. Going directly to a retail outlet in this case was the fastest way to fulfill the request, as librarians will surely understand. But somehow the film’s producer found out that our library owned a copy of this film, and they have been asserting to us that we need to buy an additional license, at three times the retail price we paid for the DVD, in order to lend the film.

That’s not the case, because first sale allows the library to lend out the DVD if it wishes. However, if the DVD had been manufactured abroad, and the Kirtsaeng decision applied, the library would not have been able to do that. The second story concerns physical books:

A donor to [a] library had given them some books, amongst which was a copy of a specialized textbook that is currently in use at the school. Subsequently, the library has been contacted by the publisher of the textbook who has told them that they are not permitted to place the copy of the book that they were given in their library.

Apparently, the fear was that students might make photocopies instead of buying the book. But again, the first sale doctrine means that the publisher has no power to demand the book be removed from the library in this way. And once more, if the Kirtsaeng ruling applied, and the book had been printed abroad, the publisher would have that extraordinary right to determine which of its books could be lent out – thus ripping the heart out of the present library system.

In fact, so great is the additional control that publishers would have over titles not printed in the US in this situation, that Smith suggests there is likely to be a rush to off-shore operations:

If the Supreme Court does hold that first sale applies only to copyrighted works made in the U.S., publishers will have a strong incentive to move their manufacturing operations off-shore. In making its ruling in Kirtsaeng the Second Circuit admitted as much. If a publisher has its books printed or its DVDs pressed in the U.S., it will be very difficult for it to implement truly tiered pricing [that is, to charge libraries extra for books or DVDs that will be lent out — something publishers are keen to do.] But if it moves those operations overseas, it might be able to stop libraries from lending materials without a separate, expensive license. It might also be able to forbid libraries from lending certain books entirely, like textbooks. It might even be able to stop students from selling their textbooks second-hand to the next crop of students taking the course. The experiences libraries have had with e-books proves that these goals are important to publishers.

In other words, it won’t just be the public and libraries that lose out massively if the first sale doctrine is not upheld for foreign goods involving copyright: it’s quite likely that many US workers will suffer too, as a wide range of industries move manufacturing offshore in order to obtain even more control over how people use their products.

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Comments on “Here's A Taste Of What Publishers Will Do If First Sale Rights For Foreign Goods Disappear”

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55 Comments
That One Guy (profile) says:

Having their cake and eating it too?

Here’s the part that I still don’t get: the publishers seem to be arguing that foreign made products should fall under US copyright law when it benefits them(prohibiting re-sell and controlling/eliminating the second-hand market), but shouldn’t fall under US copyright law when it doesn’t(with regards to first sale rights).

This has me confused on two points:

1) I’d always figured copyright was more of an ‘all or nothing’ deal, where if the work/item in question is subject to part of copyright law it was subject to all of it, or at least all the parts that were relevant, but their argument seems to be just the opposite, namely that they should be able to pick and choose which parts will apply.

2) How is it taking the justices this long to realize just what a nightmare, both legally and economically a ruling effectively demolishing first sale rights would be for the country? They have to be smart enough to realize that if they make a ruling that allows a company to control the second hand market, but only regarding foreign made goods that company after company will shut down US-based production and move it all out of the country, with disastrous consequences to the economy, something the US really can’t afford currently.

Michael (profile) says:

Re: Having their cake and eating it too?

From the first sale doctrine:

Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner,

The highlighted part “lawfully made under this title” is the poorly written part of the law that makes the weird situation possible. Copyright gets applied to basically everything, but by the crazy reading of this law that is being proposed, the right of first sale ONLY applies when the goods were manufactured within the jurisdiction of the US.

I would love to blame the industries that are trying to use this to lock things up, or even blame the justices that could make this interpretation law, but, at the end of the day, it was the sneaky/lazy bastard that wrote this piece that created this mess and it needs to be rewritten.

Personally, I think laws should have to pass the 12 year old test. If you have a 12 year old read it and they cannot understand, it needs to be rewritten.

cpt kangarooski says:

Re: Re: Re: Having their cake and eating it too?

I prefer either “lawfully made had this title been operative in that jurisdiction at that time,” or alternatively “made ultimately pursuant to the authorization of the initial copyright holder or others having lawfully acquired rights in the work.” More or less.

cpt kangarooski says:

Re: Re: Re:3 Having their cake and eating it too?

Fair use is a good point, but a tricky one. There’s an unanswered question as to whether a use has to be fair at the time it occurs, or whether future actions can have a retroactive effect on fair use, or at least cancel an existing fair use.

For example, if it is a fair use to make a copy of a CD for space shifting purposes and I do so, the new copy is lawfully made. Can I sell it? What if I had no intention of selling it at the time I made it, but eventually change my mind? What if I go bankrupt and sell it to pay off the remainder of my debts? It’s a thorny issue.

As for expired copyrights, remember that first sale isn’t a right to sell copies, it’s an exception to the copyright holders’ right to prohibit you from selling copies. Once the copyright expires, you can’t be prohibited as a matter of copyright law, so first sale is unnecessary — you can sell it anyway (barring unrelated laws that may apply).

nasch (profile) says:

Re: Re: Re:4 Having their cake and eating it too?

Once the copyright expires, you can’t be prohibited as a matter of copyright law, so first sale is unnecessary — you can sell it anyway (barring unrelated laws that may apply).

Yeah, unless the copy you have was made after copyright expired on the work, and there’s a law that says you have the right of first sale as long as the copy was “made ultimately pursuant to the authorization of the initial copyright holder or others having lawfully acquired rights in the work.” If that copy was made by relying on the fact that the work is now public domain (or fair use), rather than by getting authorization, then that law would say you don’t have first sale rights.

cpt kangarooski says:

Re: Re: Re:5 Having their cake and eating it too?

Okay, you’re seriously misunderstanding how copyright works.

There is a fundamental free speech right which is what people rely on to make copies, distribute them, etc. Copyright is an exception to this which prohibits people from exercising those underlying rights. First sale is an exception to copyright applying — which means that nothing that falls in the bounds of first sale is prohibited. But first sale doesn’t grant any rights to anyone. It just carves a hole in copyright. The right to sell used books is actually the right of free speech, no longer encumbered by copyright.

When a copyright ends, first sale is irrelevant for that work: with no prohibition on free speech, there’s no need for an exception to the prohibition, and free speech still carries the day.

If it helps, think of free speech as a hamburger. Copyright is a slice of Swiss cheese put on top of it, which is smaller than the burger in area. First sale is a hole in the cheese. You’re allowed to use free speech any way you want as long as it isn’t covered in cheese. When the copyright ends, the cheese is removed.

Does this help?

nasch (profile) says:

Re: Re: Re:6 Having their cake and eating it too?

Does this help?

Not really. I know how copyright, first sale, free speech, and fair use work, but none of what you said addresses my comment. Let me try it this way.

1. Work is created
2. Copyright expires
3. A copy is created
4. You buy the copy
5. You sell the copy

Under current law, this is completely legal. IF there were a law that said “you have the right of first sale as long as the copy was made ultimately pursuant to the authorization of the initial copyright holder or others having lawfully acquired rights in the work” then you would have to get authorization to sell your copy. Because the copy wasn’t made with authorization of the copyright holder, it was made because the copyright had expired.

Then again, perhaps your comment wasn’t meant as a suggestion for how the law should read, I don’t know.

Cpt kangarooski says:

Re: Re: Re:7 Having their cake and eating it too?

First sale isn’t a right. The current statute doesn’t say that it is, nor did the language I suggested say that there was. To the extent that there’s any rights involved, the right is free speech, and Congress didn’t give it to you, and can’t infringe on it so casually as you seem to think.

What the statute says (and what my brief idea built on) is merely that when something falls under the category of first sale, it is not infringing. I.E., it does not say that you can do it; it says that the copyright holder can’t stop you from doing it on the basis of copyright infringement. There’s a difference. I urge you to carefully read 17 USC 109 and see for yourself.

First sale is only ever relevant if there is a copyright and there is a prima facie infringement. If there is no copyright, there can be no infringement (nothing to infringe) and thus no need for a defense against an accusation of infringement.

John Fenderson (profile) says:

Re: Re: Having their cake and eating it too?

I would love to blame the industries that are trying to use this to lock things up, or even blame the justices that could make this interpretation law, but, at the end of the day, it was the sneaky/lazy bastard that wrote this piece that created this mess and it needs to be rewritten

The wording allows for the argument being made, but I think the plain intention of it was to say that first sale applies to legal goods.

In any case, this isn’t either/or. We can blame the person who drafted the language, and those who are seeking to exploit it.

cpt kangarooski says:

Re: Having their cake and eating it too?

Here’s the part that I still don’t get: the publishers seem to be arguing that foreign made products should fall under US copyright law when it benefits them(prohibiting re-sell and controlling/eliminating the second-hand market), but shouldn’t fall under US copyright law when it doesn’t(with regards to first sale rights).

Well, what they’re saying is that US copyright law does indeed govern the importation and resale of copies in the US, under the distribution right of copyright. First sale is an exception to that right, which by its own language is only applicable to some copies. The argument they’re making is that the language of the first sale statute should be interpreted to only apply to copies lawfully made in the United States, and not to copies unlawfully made here, nor copies of any provenance made outside the US.

So they’re not saying copyright does apply in some cases and not in others. They’re just trying to weasel out of one of the exceptions to copyright so that it applies even more strongly than before.

Anonymous Coward says:

Wait! They said what?

“In the oral arguments, the line of Wiley’s lawyer was essentially: nothing bad will happen, because copyright holders would never dream of using the decision to make outrageous demands.”

So the publishers are engaged in a lawsuit that is likely quite costly, to increase their control over the free market, and then has the balls to claim that they actually won’t use these new powers if granted? Really? That’s A+ grade bullshit right there.

The Real Michael says:

“If the Supreme Court does hold that first sale applies only to copyrighted works made in the U.S., publishers will have a strong incentive to move their manufacturing operations off-shore.”

So we know for a fact that if they rule in this manner, they’re intentionally eliminating US jobs in order to gain yet more control. An inside job meant to further destroy our economy.

I’ll be keeping my eye on this one.

Anonymous Coward says:

Re: Re: Re:

And, there will eventually be nobody left who can afford to buy it the first time, anyway, once they are done pillaging the economy to its last. But most of these people don’t look past this quarter’s numbers, anyway, so they would never think of this.

How on earth can just one country create so many sociopaths?

The Real Michael says:

Re: Re: Re: Re:

Seriously, what’s the point in all these laws, clauses and doctrines if they’re all subject to change at the behest of corporate bigwigs seeking to lord over our lives, causing all sorts of economic turmoil in the process? Can you imagine how many American jobs could potentially be lost if the Supreme Court rules that the first-sale doctrine applies exlusively to domestically-made products? We’re talking potentially hundreds of thousands, if not millions.

Anonymous Coward says:

‘it’s quite likely that many US workers will suffer too, as a wide range of industries move manufacturing offshore in order to obtain even more control over how people use their products’

so, what do you think will happen then? exactly. the thick fuckers in court will do what has to be done to make sure that jobs are lost, that businesses can move off-shore, that there is greater control of products by companies and more kicks in the bollocks for customers. anyone that believes the case is over anything good that the publishers etc can do is a moron! profit and control are their aims. nothing less!

Anonymous Coward says:

The government wants to create more American jobs right? Well let’s give the entertainment industry incentive to ship jobs overseas!

Ask Boeing how well that worked (while their airplanes are grounded indefinitely for issues with “overseas manufacturing and Boeing contract oversight).

Also, didn’t we just have a case where the government found publishers price setting books? Now we want to give them the right to do it even more?

Anonymous Coward says:

That’s not the case, because first sale allows the library to lend out the DVD if it wishes. However, if the DVD had been manufactured abroad, and the Kirtsaeng decision applied, the library would not have been able to do that.

That does not comport with my understanding. I believe that the market it was sold in, rather than manufactured is the controlling issue. Currently, dvd’s and music cd’s are produced for the US market in foreign countries.

Also, there are specific exemptions to copyright afforded libraries museums and other such institutions for purposes of scholarship and research. So I do not believe that it would affect the status quo with them.

Finally, an adverse ruling for Wiley will simply mean that that it will simply raise the price of its texts in foreign markets so as not to have to compete against itself through a gray market reimportation scheme. The loser will be scholars and students in less developed economies where those texts are currently sold at a price reflective of the local economy.

cpt kangarooski says:

Re: Re:

That does not comport with my understanding. I believe that the market it was sold in, rather than manufactured is the controlling issue. Currently, dvd’s and music cd’s are produced for the US market in foreign countries.

No, the statute refers to copies made, rather than first sold. And there is existing case law to the effect that copies made in the US, exported, sold, then reimported and resold, do fall under first sale.

Also, there are specific exemptions to copyright afforded libraries museums and other such institutions for purposes of scholarship and research. So I do not believe that it would affect the status quo with them.

Yes, it’s first sale. Libraries have other exceptions for things like making their own copies of out of print works. But first sale is the basis for lawfully lending copies without authorization. Feel free to point out the relevant statute if you think there is one.

Finally, an adverse ruling for Wiley will simply mean that that it will simply raise the price of its texts in foreign markets so as not to have to compete against itself through a gray market reimportation scheme. The loser will be scholars and students in less developed economies where those texts are currently sold at a price reflective of the local economy.

So? First, publishers could take other actions, like publishing in the languages used there, rather than English. Second, why should Americans suffer the evisceration of our used copy industry, our libraries, our rental stores, etc. to prop up foreign students? We don’t owe them anything. But if we really did want to help them, why not just increase funding to the Peace Corps or similar bodies to help teach foreign students, to write public domain textbooks with government funding, to grant student visas, etc? It more directly helps the people your insipid sob story wants helped, it comes at a tremendously lower cost to US taxpayers, and it avoids the continued corruption of our laws and the disrespect for them that inevitably follows.

Your foreign students need first sale abolished argument is as dumb as the widows and orphans needing long copyright terms crap.

Anonymous Coward says:

How would you dispose of something you bought overseas? I mean if you don’t want it, and you can’t sell it, and you can’t give it away (this is just a sale for $0), then do you just toss it in the trash? What if someone takes it from the trash can, are you then liable for it entering the possession of another party?

MonkeyFracasJr (profile) says:

Re: the end-game

They’re beginning to realize that the metric tons of cash they’re already raking in aren’t filling the hole in their chest where their heart should be. So now they’re looking for something else they hope will make them feel alive. It looks like physical control and subjugation of the people is their next power-trip.

sporkie (profile) says:

Please let this law pass

and give the publishers exactly what they are asking for.

Anything they would then purchase overseas would then not be resellable in the US by them or anyone else. Any product with any purchased overseas component would also not be resellable. This would kill Apple and every other hardware vendor immediately.

Or will this restriction just apply to consumers and not to corporations?

Anonymous Coward says:

Re: Please let this law pass

They are contracting overseas manufacture , not buying products from overseas. They can then grant their sales outlets a license to sell the books on their behalf on a commission basis. This then gives them much more control over who can sell their books and at what price.
See with a bit of semantic manipulation, only the last transaction in the chain is a sale.

Anonymous Coward says:

Re: Re: Re:

Another way to solve this is to block access to the online catalog from IP addreses of major publishers, to they cannot access.

It is just like what I do with my online radio station to prevent it from ever showing up in filtering lists to being blocked in workplaces. I have all the major filtering vendors blocked at the firewall level so that any attempts to crawl my site will result in my site appearing to not be there, so I do not get added to any filtering lists.

Andrew D. Todd (user link) says:

Wiley Will Just Have To Adapt, And If They Won't, They Will Just Have To Be Superseded By Open-Source

To Anonymous Coward #22, Feb 7th, 2013 @ 7:08am:

Well, of course, the extreme procedure is that employed with classified documents: burn it, and have an official witness to the destruction, who signs an affidavit confirming that such and such a document was burnt.

Seriously, all Wiley has to do is to spin out national language editions, with the translation done in the target country. Students don’t want to have to learn English and Calculus from the same book, and take an exam which is effectively a test of both. The company can develop a system of version control to reduce the costs of maintenance, formally mark up bits of text to indicate whether they are formal language or colloquial language, etc. Even in India, English is not the first language, the cradle language, except for a small elite.

I’m surprised that UNESCO hasn’t already put together a project on these lines. UNESCO could recruit people to write open-source textbooks, and each national education ministry could then arrange translations, which in their turn would be freely available. There should be arrangements for collaboration. The Egyptian, Turkish, and Iranian translators should be able to get together and discuss the best way to translate the word “vector,” or if it should be treated as a loan word.

Ophelia Millais says:

One of the more distressing parts about all this, to me, is when the publishers contact a library and say “you don’t have permission to lend this title” for whatever reason, it doesn’t matter that the publisher legally has no say in the matter. It’s just like fair use. They have implied that they are willing to sue, even if they don’t really have a case. Duke University may be able to tell the publisher to GTFO, but what do you think the legal counsel for a cash-strapped public school district is going to advise that the library do?

The law doesn’t discourage false assertions of authority by copyright owners over exceptions such as fair use or library lending. In theory, the prospect of losing those cases in court is the discouragement. But that means going to court, which schools and pretty much anyone else try hard to avoid. It’s much easier to just cow to the publishers’ demands.

The ALA should call upon Congress to help remedy this situation with stronger incentives for publishers to avoid asserting rights the law does not grant. In the meantime, schools should reconsider their relationship with publishers that are openly hostile to those schools’ libraries. If Wiley threatens a university library, then the school should discourage or prohibit its faculty from using Wiley textbooks.

Ben says:

Whenever I hear someone mention a very bad possible result of a suggested law and someone responds, “Oh, that will never happen,” I absolutely know that thing will happen.

Remember when that kid’s lunch was confiscated at school because some busybody decided it wasn’t healthy enough? I guarantee when the lunch guidance rules were passed at some school board meeting, someone mentioned “Does that mean you’ll be taking away lunches you don’t approve of and forcing kids to pay for the school lunch?” And they were probably laughed at. “Oh, that’s ridiculous, that would never happen. Get real!”

Sorry, but if a law or rule allows something, however unlikely or lacking in common sense that thing is, it WILL happen. And someone will have pointed it out beforehand and gotten laughed at for their suggestion.

The Real Michael says:

The destruction from within

Expect to see the movie, music and publishing industries blame piracy after outsourcing the manufacturing/printing jobs overseas, then push for yet more draconian laws. A win-win situation for greed-obsessed corporates, all at the expense of American freedoms and jobs. Could it be any more obvious who our REAL enemies are?

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