November 1, 2012

Supreme Court Hears Case Over Textbook Resale

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A high-profile Supreme Court case that may redefine the retail market began with an alumnus who resold textbooks manufactured abroad in the U.S. may put a stop to people reselling goods they own.

On Monday, the court heard oral arguments in an appeals case waged by Supap Kirtsaeng ’02, who was ordered to pay $600,000 after losing a copyright infringement case in August 2011. The case, Kirtsaeng v. John Wiley & Sons Inc., addresses the legality of purchasing textbooks manufactured abroad and reselling them in the United States.

Kirtsaeng, a Thailand native, was attending graduate school at the University of Southern California after graduating from Cornell. After friends and family sent Kirtsaeng textbooks they had purchased abroad, he resold $900,000 worth of books at a higher price on eBay, according to The Associated Press.

Eight of these books were published by the Asian subsidiary of publishing company John Wiley & Sons, which successfully sued Kirtsaeng for copyright infringement in May 2010.

The case could have much broader implications than its ruling on Kirtsaeng’s lawsuit.

At a hearing Monday, several justices expressed concern over granting copyright holders such as John Wiley & Sons the right to block the resale of goods that were first purchased overseas, The Wall Street Journal reported Monday.

Justice Stephen Breyer appeared skeptical Monday of the plaintiff’s claims. According to The Journal, Breyer questioned whether copyright laws could be violated by consumers who resold products like used Toyota cars — which may contain GPS systems that were manufactured abroad — or by libraries and art museums who lend or display foreign-made works.

Justice Ruth Bader Ginsburg ’54 seemed to lean toward supporting Wiley. The Journal reported that when Kirtsaeng’s lawyer suggested that a ruling in favor of Wiley would give copyright holders the right to repeatedly resell goods if they were made abroad, Ginsburg asked, “Has that ever happened?”

Companies that sell many of their products online — such as eBay, Google and Costco — have also weighed in on the case. In court documents, companies claimed that a ruling against Kirtsaeng could “threaten the increasingly important e-commerce sector of the economy” by affecting the sale of goods online and in discount stores, the AP reported.

Lawyers for organizations such as the Motion Picture Association of America, the Recording Industry Association of America and the Association of American Publishers have countered that stringent copyright laws are “fundamental to the creative industries.”

Tracy Mitrano, director of IT law and policy at Cornell, said that the case could affect the resale of a variety of goods procured abroad that are protected by copyright laws.

She also added that one of the more contentious aspects of the case is the application of U.S. copyright law on the international stage.

“No one thought about how inappropriate it was to extend U.S. copyright law, already content-owner heavy, onto developing nations,” she said.

Peter Hirtle, senior policy advisor for digital scholarship and preservation services for the Cornell Library, echoed Mitrano’s assessment that the case highlights some faults in U.S. copyright law.

“The case highlights the problems that can result when support for specific business models — in this case, differential geographic pricing — is built into the Copyright Act,” he said.

Hirtle added that the court should make it clear that “first sale rights apply to all copyrighted works, regardless of place of manufacturing” and that issues surrounding the regulation of “so-called ‘gray market goods’ are best addressed outside of copyright law.”

Original Author: Utsav Rai