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.

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