Friday, October 12, 2012

Your Right to Sell Your Stuff, Day Four

So, if common sense and the statutory construction is so obviously in his favor, why does Kirtsaeng keep losing? Well, it could have something to do with something that was printed on the books.

This book . . . may not be exported. Exportation from or importation of this book to another region without the Publisher's authorization is illegal and is a violation of the Publisher's rights. The Publisher may take legal action to enforce its rights. The Publisher may recover damages and costs, including but not limited to lost profits and attorney's fees, in the event legal action is required.

So, the question is, can you assign a partial copyright approval, such as the above, to a particular copy of a work?

Why, or why not?

Most of the arguments made in the briefs for either side ignore this specific factual item - that there is a clear copyright statement on the book that disallows import out of Asia or into the United States.

For example, the brief by the American Library Association predicts dire consequences by assuming that the rights explicitly claimed by John Wiley & Sons on the printed copies imported by Kirtsaeng would automatically become retroactive and enforceable on copies of works that do not include any such copyright statements, and even those works that predate the enactment of the law!

No, the sky isn't falling. But the Supreme Court has a difficult task. Can they allow the publisher to win, without creating an incentive for manufacturers and other copyright holders to move manufacturing offshore? Can they let Kirtsaeng win, despite the fact that the copies he imported were clearly not intended for import into the US without the express permission of the publisher?

I would hope for the Supreme Court Justices to craft a reasonable and middle of the road opinion, perhaps allowing the publisher to win narrowly on the precise facts of this case, while brushing back all the lower court opinions that pose the interpretation as a general rule.

Another option for a splitting-the-baby would be to state that the import language printed on the book is not strict enough. How would a U.S. buyer of a legally imported book ever know whether the copy he has is legally imported or not? I'd like to see an opinion that says that if a copy of a work is not legal for import to the US, that copy must clearly state that it is not legal for import to the US. That avoids most of the is-it-or-isn't-it problems, and puts the onus on the copyright holder to give fair warning that the one particular copy in question is established to be illegal to have.

Now, let's see what the Supremes do.

Thursday, October 11, 2012

Your Right to Re-Sell Your Stuff, Day Three

Here's an analysis from Harvard about the case, and also see the comments here at drudge.

And here's mine.


What's at stake here is basically a question of which of two laws takes precedence. One law - Section 109(a), referred to as "first sale" - says that a copyright holder gets to be paid only once for each copy of their thing that gets lawfully made and sold. The second law - Section 602(a)1, "the right to import and distribute" - says that it's illegal for someone else to import into the US a copy of their thing if the copy wasn't lawfully made "under this Title".

The crux is whether, under the specific wording of the second law, a copy of their thing that was made legally under a foreign licensing agreement, and that they have been fully paid for under that agreement, counts as "lawfully made under this Title."

In other words, this is a bread-and-butter "statutory construction" case. The Supreme Court isn't going to go all Roe V Wade and invent "emanations" and "umbras" and "penumbras", they are just going to make a best guess at what Congress meant when they wrote the two statutes.

The American Bar Association [possibly seeing a lucrative new field of lawsuits forming] sides with the publishers and various IP creators and owners (authors, media companies, etc) in claiming that when a publisher produces a book under license in a foreign country, collects a royalty there, and sells that book to the foreign public, that this sale should not count as "lawfully made" under U.S. copyright law.

The American Library Association, ebay, the Internet Commerce Coalition, and various retailers all side with Kirtsaeng, basically under the argument that once a licensed copy of something is manufactured legally somewhere, pursuant to a valid copyright agreement with the US copyright holder, the copyright holder has gotten their one-time royalty, and has no right to control the final product further.

As I read the briefs, it looks like Kirtsaeng's side has the better argument on the statutory language.

With regard to policy, the publisher is arguing for a new definition to support their desired policy - their "right" to license things under different terms in different places, and to keep the legally sold copies, lawfully owned by someone else, from traveling from those different places to each other. This new "right" was clearly not a consideration in the statutory construction at issue in the case. In fact, Congress was busily removing (via sunset) language regarding the location of manufacture.

In addition, applying this new definition of "lawfully made under this title" that is being urged by the publisher to the rest of the places where the same term is used, results in negating some of the clear purposes of the law. For instance, section 109(e) gives the owner of a video game machine which was "lawfully made under this title" the right to publicly "perform or display" the machine. Since the relevant machines were then manufactured in Japan, section 109(e) would have had no effect under the definition that the publisher and the ABA now claim was intended.

So, by the plain normal reading of the text and the history of the two laws, Kirtsaeng should win. So why hasn't he in the lower courts? That's for Day Four.

Wednesday, October 10, 2012

Right to sell your stuff, Day Two

Okay, so how would the facts have to be for Kirtsaeng to win, lose or draw on his defense of the infringement suit, in the trial court?

CASE ONE - Best facts for the defendant

Let's suppose the facts were like this -

  1. the foreign version of the book is physically indistinguishable from the domestic one.
  2. The marketer bought his books through intermediaries in the foreign country.
  3. The printer had no idea where the books were going.
  4. The marketer stated in his ebay ads that the book was pre-owed but never read.

Given facts like these, K should have won hands-down on all counts. He would have received the books legally, through distribution channels that had no legal or contractual restrictions, and would have sold them truthfully.

Given facts like these, the case should have been dismissed with prejudice.

It wasn't, though.

CASE TWO - Bad facts for both sides

On the other hand, suppose the facts are something like this -

  • The foreign book has slightly different content.
  • The foreign version of the book contains a notation that it is for use in a specific region.
  • The foreign printer had no idea where the books were going.
  • The marketer claimed in his ebay ads that it was a "new" book.
  • The marketer failed to disclose the differences in content or any possible legal restrictions on the book.

Given those facts, K has clearly violated some laws and or torts - primarily fraud against the students in promising one thing and delivering another.

The publisher should win a lawsuit based upon unfair competition, though, not on "copyright infringement."

That didn't happen, though.

CASE THREE - Best facts for the plaintiff

Now, let's look at a third possibility - let's say the facts look something like this -

  • The foreign printer had a distribution license clearly limited to a particular region, not including the US.
  • The foreign printer knew that the marketer intended to ship the books to the US.
  • The marketer knew that the printer was limited to narrow geographical distribution, not including the US.

In that case, the printer and the marketer would have knowingly conspired to breach the printer's contract allowing use of the copyrighted work.

THAT is a copyright violation.

But those aren't the facts either.


  • The book is slightly different, and clearly marked.
  • K bought the books through family and friends.
  • The foreign printer is not involved in the case.
  • No mention is made in the case of any false marketing claims.

Given the above facts, it would appear impossible for K to have violated any copyright laws. He didn't print anything, bought the books legally, had no contractual privity to the publisher, and had no duty not to compete with the publisher or not to resell the books. He bought legally produced copies of a work ion one place and sold them elsewhere.

So why did the plaintiff win against K in the lower courts? Because of one additional fact -

  • The foreign edition books are clearly marked as not legal for export outside the region of their publication.
And there's the rub. Can the words printed on an authorized copy of a book create a legal restriction on a subsequent owner? If not, why not? If so, to what degree? More analysis on Day Three.

Tuesday, October 9, 2012

Your Right to Sell Your Stuff is NOT in Peril

Often, a legal case will come up that seems to have implications far beyond its own scope. Usually, it doesn't.

Welcome to Kirtsaeng V John Wiley & Sons, a case on the current Supreme Court docket, reported by Jennifer Waters’ Consumer Confidential. Much of the writing on the internet about this is overwrought. For example, here and here, some of whom just parrot the headline without analysis. On the other hand, there are usually some calmer voices, such as here and here. ONE BIG HINT: When it's a supreme court question, you should first review volokh and scotusblog

"Your right to sell your stuff is in Peril!" the Internet voices scream.

No, it is not.

This case will not affect your ability to resell your used iPad.

Understand this - Supap Kirtsaeng, the defendant in the underlying case, wasn't selling one personal copy of a used book. He was in the business of importing large numbers of a foreign edition of a company's product and using these unauthorized imports to compete head-to-head with the company's domestic version of the same product. Kirtsaeng made $1.2 Million in profit from these "grey-market" import sales.


I can't tell, yet. Based on the fact that he lost in the lower courts, the current posture of the case says that it presumably was not. On the other hand, the facts as reported on several sites lead me to believe that it probably was legal. Or should have been.

The question of whether his actions constituted a crime or a tort depends upon several factors. Primarily, it depends upon

  1. Under what contractual conditions the books were produced in the foreign country, and
  2. Whether the foreign manufacturer was complicit in the arrival of the books in the US, and
  3. Whether any enforceable legal limitations existed on the use of the foreign books in the US, after their initial sale elsewhere, and
  4. How Kirtsaeng represented the books when he sold them in the US.
So, what were the facts in this case, and how do they relate to an accusation of copyright infringement?

See Part 2, tomorrow. Oh, and speaking of copyright infringement, I saw dozens of sites out there of people who cut and pasted most of Jennifer Waters’ Consumer Confidential piece. Definitely way beyond fair use, IMHO.