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Old 06-14-2012, 02:20 AM   #1
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First Sale Doctrine now under assault

"The Supreme Court will soon hear a case that will affect whether you can sell your iPad -- or almost anything else -- without needing to get permission from a dozen "copyright holders." Here are some things you might have recently done that will be rendered illegal if the Supreme Court upholds the lower court decision:

1. Sold your first-generation iPad on Craigslist to a willing buyer, even if you bought the iPad lawfully at the Apple Store.

2. Sold your dad's used Omega watch on eBay to buy him a fancier (used or new) Rolex at a local jewelry store.

3. Sold an "import CD" of your favorite band that was only released abroad but legally purchased there. Ditto for a copy of a French or Spanish novel not released in the U.S.

4. Sold your house to a willing buyer, so long as you sell your house along with the fixtures manufactured in China, a chandelier made in Thailand or Paris, support beams produced in Canada that carry the imprint of a copyrighted logo, or a bricks or a marble countertop made in Italy with any copyrighted features or insignia.

Here is what's going on.

The Supreme Court case concerns something called the "first-sale doctrine" in copyright law. Simply put, the doctrine means that you can buy and sell the stuff you purchase. Even if someone has copyright over some piece of your stuff, you can sell it without permission from the copyright holder because the copyright holder can only control the "first-sale." The Supreme Court has recognized this doctrine since 1908.

To use a classic example, imagine you buy a novel by Sabina Murray. Sabina owns the copyright to the book, so you can't make a copy of the book. But you bought a copy of the book, and can sell the copy to anyone who'll pay you for it. You can sell it to a neighbor, to a fellow student, or to someone else on Craigslist or on eBay.

But the first-sale rule doesn't just make it possible to sell your books and other creative works like CDs, paintings, or DVDs. Almost every product made now has a copyright logo on it. That logo, alone, empowers manufacturers to sue people for copyright infringement for unlawful sales."

http://www.theatlantic.com/national/...ht-law/258276/
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Old 06-14-2012, 02:40 AM   #2
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Old 06-14-2012, 04:15 AM   #3
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It reminds me of when some authors/publishers were wanting to a piece of the used book market. i.e. they wanted to add a charge to Amazon, B&N and others' used book prices. The question was then raised about whether Ford and GM would start getting a cut when a guy sold his old pickup truck to someone. That question was basically laughed at and quickly forgotten.

I am sure these new dumb ideas will also be laughed at and quickly forgotten.

added ---
I read a little more into the cases and it seems the problem is when an item is meant to be sold cheaper abroad than in the USA. Some guy imported some text books and sold them on e-bay (as new) cheaper than they could be purchased in the USA. That is not exactly the used market.
I don't know what will happen.

I don't think you can get a new Toyota truck in Japan and ship it over here for a price that is less than buying it in America. But if it were used, I can't see a problem.

And to indicate that I am aware of some of these things. There is the case when you buy a vehicle or aircraft abroad, and ship it to the USA, it has to meet the US emissions and safety requirements, etc. If necessary the vehicle has to be retrofitted and inspected.

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Old 06-14-2012, 04:33 AM   #4
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Sounds like landfill space is going to be in even bigger demand. Who is pushing for this load of twaddle?
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Old 06-14-2012, 08:36 AM   #5
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I read a little more into the cases and it seems the problem is when an item is meant to be sold cheaper abroad than in the USA. Some guy imported some text books and sold them on e-bay (as new) cheaper than they could be purchased in the USA. That is not exactly the used market.
I don't know what will happen.
Ah, it's a gray market case!
And they're trying to use copyright as the bludgeon this time?
Manufacturers have been fighting this war for decades; they've tried contract law, licensing agreements, everything they can.
Odds of success just went down. More, even if they win this is only about product manufactured abroad intended for sale outside the US; basically about manufacturers forbidding importation/resale into the US. It is a narrow category.

The Atlantic folks are hyperventilating: some of the examples are a reach, at best.

The law is ambiguous in parts but it is just as likely that First Sale gets extended to everything brought into the country as it gets restricted with foreign manufactured goods *not* intended for US sale. That qualifier maters.

As the article points out (buried deep) the Supreme Court is usually on the lookout for "absurd results" where the literal application of a law leads to clearly unacceptable outcomes: the iPad example, for one. iPads sold in the US are intended to be sold to US consumers so denying First Sale rights to the buyer is exactly the kind of "absurd result" the court will be looking for.

It'll be (somewhat) interesting to see how they rule, but odds are the ruling won't make much of a difference.
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Old 06-14-2012, 10:38 AM   #6
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Gray Marketing goes on all the time in the US Jewelry Business. You might be surprised by how many big name corporate stores do this. Watches are the worst. For example, Seiko gives a 3 year warranty. One year is world wide and the other two years is good only in the country it was manufactured for. You buy a gray market Seiko that has the Day/Date's second language as Spanish or Arabic (the most common) and you would have to send it to the original country for warranty repair. And be especially careful when buying cheaper name brand watches off the Internet.
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Old 06-14-2012, 11:03 AM   #7
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Gray Marketing goes on all the time in the US Jewelry Business. You might be surprised by how many big name corporate stores do this. Watches are the worst. For example, Seiko gives a 3 year warranty. One year is world wide and the other two years is good only in the country it was manufactured for. You buy a gray market Seiko that has the Day/Date's second language as Spanish or Arabic (the most common) and you would have to send it to the original country for warranty repair. And be especially careful when buying cheaper name brand watches off the Internet.
Apache
This happens quite bit in cameras and electronics too (or at least it did, I'm a bit out of touch now).
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Old 06-14-2012, 12:27 PM   #8
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I think it still happens in camera gear but you risk not having a manufacturer warranty. At one time Nikon did not honor grey market item warranties (item S/N's are different by region) while Canon still did. Not sure if that changed at all.

First sale doctrine has been under fire for a very long time. I think I recall Autodesk trying to prevent resale of AutoCAD software many years ago. Too many of our purchases are now just licensed, so we don't ever "own" them. E-books with DRM are like this today. We can't resell our e-books.
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Old 06-14-2012, 02:02 PM   #9
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This happens quite bit in cameras and electronics too (or at least it did, I'm a bit out of touch now).
It was all the rage in the early days of PCs, too.
Dell put an end to it by putting all the "authorized dealer" brands out of business.
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Old 06-14-2012, 03:08 PM   #10
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I had friends (old service buddies) that were doing work in and around China, Hong Kong, Singapore, Taiwan and the like some years ago, maybe 12 or more. As I recall they could buy a disk with Auto desk or MS Office or Adobe Photo or anything else for $5.00 USD on the "street." I was asked if I wanted anything, but I cautioned my friends that it wasn't worth the risk.

Still some years later, one of them gave me one that he still had for he never had a use for it.

That is probably less First Sale Market, or Gray Market and more like Counterfeit Market though.
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Old 06-14-2012, 03:23 PM   #11
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Originally Posted by Apache View Post
Gray Marketing goes on all the time in the US Jewelry Business. You might be surprised by how many big name corporate stores do this. Watches are the worst. For example, Seiko gives a 3 year warranty. One year is world wide and the other two years is good only in the country it was manufactured for. You buy a gray market Seiko that has the Day/Date's second language as Spanish or Arabic (the most common) and you would have to send it to the original country for warranty repair. And be especially careful when buying cheaper name brand watches off the Internet.
Apache
That's painting far too bleak a picture of grey market watch sales. I'm sure there shops which will sell you watches with Arabic, Chinese or any other language dials and refer you to the original country for warranty repair, but there are a large number of grey market dealers offering their own warranties which match the ones you get when buying your watch from an authorised source. Personally I've bought almost all my watches this way and have never had any problems.

Where watches are concerned, grey market sales are in any case a phenomenon entirely of the manufacturers' own making. Many, or most, "high end" manufacturers demand that a shop or dealer buy a minimum amount of watches, regardless of its ability to sell that number. Hence the only way for a small independent watch shop to be able to carry, say, Breitling watches, is to buy the minimum amount, keep the ones it thinks it can sell and sell the others on to a grey market dealer at cost or a minimal profit.

Pardon the OT.
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Old 06-14-2012, 07:05 PM   #12
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It reminds me of when some authors/publishers were wanting to a piece of the used book market. i.e. they wanted to add a charge to Amazon, B&N and others' used book prices. The question was then raised about whether Ford and GM would start getting a cut when a guy sold his old pickup truck to someone. That question was basically laughed at and quickly forgotten.
How long ago was that decided?

The reason I ask is because the Supreme Court has had a much stronger pro-Big Business bias since the past Bush administration, and this is an election year. Depending on how the election goes, any damage they do could take years or even decades to reverse.
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Old 06-14-2012, 07:12 PM   #13
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It reminds me of when some authors/publishers were wanting to a piece of the used book market. i.e. they wanted to add a charge to Amazon, B&N and others' used book prices. The question was then raised about whether Ford and GM would start getting a cut when a guy sold his old pickup truck to someone. That question was basically laughed at and quickly forgotten.
In video games, the used market is something a lot of the big publishers and such are trying to combat, since they don't see any of the money from the re-sale of the games. I haven't read anything about them lobbying to make used games illegal to sell (Gamestop would go out of business pretty much immediately, I imagine), but there's been murmurs of the next consoles having a built in lock that prevents the system from playing a used game, somehow.
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Old 06-14-2012, 07:44 PM   #14
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Where watches are concerned, grey market sales are in any case a phenomenon entirely of the manufacturers' own making. Many, or most, "high end" manufacturers demand that a shop or dealer buy a minimum amount of watches, regardless of its ability to sell that number. Hence the only way for a small independent watch shop to be able to carry, say, Breitling watches, is to buy the minimum amount, keep the ones it thinks it can sell and sell the others on to a grey market dealer at cost or a minimal profit.

Pardon the OT.
That is exactly what used to happen in the 80's PC market; the vendors wanted to prop up the "perceived value" of their products so they wanted to limit sales to the "right" dealers. But the "right" dealers, Computerland, etc, couldn't keep up with the mail order vendors so they had to slip the excess inventory out the back door to the very Mail Order guys that were squeezing them in the first place.

Not OT, BTW, that is the core case being argued: can manufacturers keep people from reselling what they buy. So far, all precedent says yes. But there is no precedent for *imports*, hence the case running through now. And the case is *only* about Gray Market imports so there is no real threat of The First Sale Doctrine being overturned.
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Old 06-15-2012, 02:37 AM   #15
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In video games, the used market is something a lot of the big publishers and such are trying to combat, since they don't see any of the money from the re-sale of the games. I haven't read anything about them lobbying to make used games illegal to sell (Gamestop would go out of business pretty much immediately, I imagine), but there's been murmurs of the next consoles having a built in lock that prevents the system from playing a used game, somehow.
This is already done on PC games and digital market.

In digital world I see this as acceptable practice, I can't resell my games, but on other hand I can wait for them and almost every time get them from sales, so I pay 10-50% of the price. Also good services like Steam make life much easier if you have good internet connection.

Still, it's purely wrong if this is done for physical products. Not sure if they can enforce it though...
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