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[Wiley v. Kirtsaeng] - Textbooks, Copyright, and Import
AngelHedgie
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Registered User regular
So, there's been a discussion going on in the Administration thread about the Wiley v. Kirtsaeng case that the SCOTUS recently heard. A quick overview from Ars:
What the case comes down to is the interplay between 17 USC 109, the first sale doctrine ;and 17 USC 602, the restriction on import of copyrighted works without authorization of the US copyright holder. The defense holds that first sale, even abroad, causes exhaustion of the copyright claims, while the plaintiff is arguing that the import restrictions preclude asserting first sale.
The case started in 2008, when textbook manufacturer John Wiley & Sons sued Supap Kirtsaeng for re-selling textbooks he bought in Thailand on the cheap. Wiley argues that by importing and selling the books without permission, Kirtsaeng violated copyright law—even though the books aren't pirated, they're simply cheap foreign editions. Wiley won its case at the US Court of Appeals for the 2nd Circuit, and now the stakes have become higher. Kirtsaeng's inability to win the case on "first sale" grounds has alarmed an array of groups—from retailers to museums and libraries—all of whom believe copyright owners might interfere with their own resale and lending.
What the case comes down to is the interplay between 17 USC 109, the first sale doctrine ;and 17 USC 602, the restriction on import of copyrighted works without authorization of the US copyright holder. The defense holds that first sale, even abroad, causes exhaustion of the copyright claims, while the plaintiff is arguing that the import restrictions preclude asserting first sale.
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Angel, you mentioned a number of issues in the other thread that would arise if defendant's argument were to carry. Specifically, that exhaustion of foreign copyright would have a number of dire consequences. Could you elaborate on that further?
Also, I think I somewhat understand the issues at play here. If I understand correctly, the defendant is claiming safe harbor, but the boat he needs to get there invalidates his case?
Lastly, could you clarify if there is any material difference to the works besides the copyrights? Are there changes to the versions that are meaningful in any way?
Really though, the copyright holders here can eat a dick. After the product has been sold, it's resale is none of their business if their actual copyright isn't infringed on, which it wasn't. I'd guess they just greased enough palms to get this through their way.
It's exceedingly likely that the changes are on the level of page numbering, moving around exercises etc. Textbook publishers as a whole detest actually updating content, and most new editions are almost entirely old stuff moved around to make using old editions on courses difficult. They're probably just the same book with a different cover, sold at a lower price because in the target country they would otherwise make few to no sales due to income and pricing level differences.
Are we talking one book he didn't need anymore? Or did be basically ship a pallet of books over and begin distributing?
The latter. He was having family (the defendant is a Thai national) ship him books that he resold.
He earned something like $1.2m so its more than just a couple of books.
I remember reading more about grey markets in a law class that discussed unauthorized resellers, but I've always found the IP holders claims that they harm their brand identity spurious.
Essentially they say that if they cannot approve who is selling their works, then the people that is selling the works may harm the brand by selling inferior imitations or by misleading their customers as to what their works consist of.
The other side of the coin, is that its only by segmenting the markets that they are able to sell their product to the maximum number of people. eg: If they tried selling Windows at full price in the 3rd world, then the only copies of Windows the 3rd world would have access to would be pirated due to differences in cost of living. This ignores other solutions such as selling Windows 7 at the discount price once Windows 8 is released, thus preventing any grey market incentives.
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You know, that sounds incredibly skeevy, but I'm having trouble articulating why. Distribution rights is a separate issue, and they aren't pursuing him on that front anyway. They are arguing copyright. If the manufacturer had a contract with a US distributor that was guaranteed a certain rate, then yeah, throw the book at the dude, but that doesn't seem to be the case. They seem to be saying that if they sell their product in two different places for two different prices, the price difference should be protected by copyright law.
Which also sounds incredibly skeevy.
I think I'm going to come down on the side of the Thai dude. No contracts or regional agreements were being violated. They are demanding their massive margins be legally protected. Not a great precedent to set, I think.
Doesn't technically matter. Section 602(a) bans all importation of works acquired outside the US without consent. The lower court has said the importation ban is in effect because the book was a "foreign manufactured work" and therefore isn't "lawfully made" under S109(a) so first sale doctrine doesn't apply. But Kirtsaeng is trying to interpret that 109(a) applies if it's been manufactured under license, not just "made in the USA".
As I stated in the other thread, though, the fact that this is a "copyright" case at all is proof that our copyright laws are ass-backwards.
- Book Manufactured in Thailand.
- Book Bought in Thailand.
- Book shipped to US.
- Book sold in US.
Tell me when the right to copy was infringed upon.
Even if they support the full on import ban from S602(a), you could still resell any car purchased from a factory or dealer located in the US. A dealer of foreign cars would be an authorized seller here so no import ban and first sale still applies. You would not be able to go to S Korea, buy a Kia, and ship it here. Neither for your own use or resale.
software is a huge part of care manufacturing today. The in-dash computer and its software if often the entire profit margin on the car for the automaker.
What about if I buy a car part overseas and then stick it in my car? Could it now be illegal to resell the vehicle, since I am effectively reselling that one part?
I guess I would be most worried about the sort of bullshit that IP holders currently engage in, where they send threatening letters to people who are in no way breaking the law, just because they can, and because the mere threat of legal action will keep people from doing things they don't approve of. (See: PA's Strawberry Shortcake issue)
Importing under Section 602(a) is an "infringement of the exclusive right to distribute copies". Has nothing to do with making copies. And no doubt just like the Omega case, the easiest claim for a covered work is against that badge on the hood.
FTFY so you can see where the issue is. There is no such thing as a global copyright, just national copyrights and a global framework that lets them play nice with each other.
Again, I really recommend this discussion of copyright at the global level by British SF author Charlie Stross.
Also, I think it would be beneficial to avoid focusing on the shady practices of textbook publishers. I hate me some textbook publishers. My issue is that even assuming we want to protect their ability to segment the market, we can enact tariffs and duties for that.
I was going to buy a guitar from Japan recently. It's not sold here. Part of why I didn't was that I'd have had to add a significant import duty on top of the already hefty price and shipping.
Thai textbooks may cheap, and the shipping may not be so much. So make the import duty like eight hundred percent. Done. There's no reason I can think of that we can't enact a specific duty on textbooks to prevent mass importation and arbitrage.
Um, the guys were violating American Greetings' copyright and would have lost on a parody claim (as I've mentioned several times, look up Geisel v. Penguin.)
My guess, if they went full derp enforcement of it, would be that your item would be confiscated by customs.
Basically it means if you own the copyright in the US, you don't actually own anything cause someone could just ship in product X from a different country and sell it to. Rendering your copyright meaningless.
That's why the law against importing copyrighted material without authorization exists in the first place.
Because copyright is not international, it's country by country.
You infringed on the right of the owner of the US copyright.
Actually you can, as there's a personal use exemption in 17 USC 602.
The reason is that would require enacting a specific duty on all sorts of shit. This isn't just a textbook issue.
What about resale?
Can I ever sell a car now with improperly imported parts? At least if the manufacturer can somehow claim copyrights are involved?
And since this person bought product X from you to begin with, how is your copywright violated. The import ban is there to protect profits (especially on digital goods). If your physical product was priced correctly, there should be little opportunity for arbitrage to begin with.
The thing to remember is that while Omega won the battle, they lost the war. When the case was remanded, the court found that they had abused copyright laws and that the addition of the logo did not make the watch a copyrighted work.
Because they didn't. They bought it from someone else who owns the copyright in a different country.
So it is, but currently only applies in the Ninth Circuit. It would certainly narrow the scope of potential issues.
So then why should your copyright be reapplied if the item was manufactured under their copyright?
There doesn't really exist an equilibrium price where you can effectively profit from the product in both nations like the United States and nations like India. Or even less affluent nations. The disparity of income and wealth is such that the two just don't meet, especially since the original creator(s) are usually in a more affluent nation (so simply "make less" isn't really a viable option).
Ignoring digital goods, and making an (probably horrible) assumption that exchange rates are sensible, that would imply they're simply dumping product. Why should that be protected?
This is not how the law should work. If this is indeed how the law does work, the law needs to change.
* - At least according to my understanding and a little wiki reading. Enlighten me if I'm wrong.
My response to that is sucks to be them. If companies want to take advantage of lower cost of living to make their products overseas, they shouldn't be protected from the other side of the coin. Either you deal with grey market imports or you price them out of business. If that means pricing out of certain markets, tough. They've been pricing US workers out of markets for decades.
The SC seems concerned with that as well. They don't like the defendant, but they really don't like this implication.
I suspect that the decision will be that once something is sold in the US that first sale applies, but not before.
Because copyright doesn't work the way you think it does. Read the link I posted earlier.
That is a horrible assumption. That's your problem.
My electrical engineering textbook from India cost me like 600 rupees. Which is like ten bucks in the US. I'd imagine that, for at least many Indian students, 600 rupees is worth a lot more to them than ten bucks is to me.
It's not "dumping product." It's localizing pricing of product to more accurately reflect the buying power of those in developing economies relative to the U.S. dollar (or other country of origin for the work). And these are essentially "digital goods," in that even for textbooks the bulk of the cost of production is not in the paper and binding* but rather in the writing and marketing.
* - These are of lower quality in international versions anyway.
Because if its not then your copyright doesn't mean anything. Anyone granted copyright in another country can sell it there, and then resell it in the United States.
You write a book and get copyright here and sell your book here. I say "Hey i can produce this for you in China if you sell me the copyright" and you say "ok, you can have the copyright in china". Then i sell books in china, buy them, and resell them in the United States, undercutting you.
It only gets worse if we consider nations who are less than scrupulous with how they handle copyright.
There likely does exist an equilibrium price (accounting for transportation costs. I.E. if you were to take the price in the low country and add transportation costs you get the price in the high cost country, not literally the same price) which you can profit from in both nations. But this price won't maximize profit compared to segmenting the market.