Supreme Court To Consider First Sale of Imports

Animaether passes along a legal tale that "doesn't involve the kind of cutting-edge issues that copyright lawyers usually grapple with in the digital age [and] sounds like the kind of lawsuit that should have been resolved 200 years ago," yet still "is very much a product of the Internet-driven global economy." "Can copyright owners assert rights over imported goods that have already been sold once? That is the issue before the Supreme Court in Costco Wholesale Corp v. Omega, S.A. (backstory here). What's at stake is the ability of resellers to offer legitimate, non-pirated versions of copyrighted goods, manufactured in foreign nations, to US consumers at prices that undercut those charged by the copyright holders."

Comments

Free market, right?

[rolfwind]

What's good for the goose must be good for the gander, no?

Re:Free market, right?

[Anonymous Coward]

The only free market in America is hookers and blow. Just kidding, there is no free market in America.

Re:Free market, right?

[fuzzyfuzzyfungus]

Of course not. When a corporation needs cheap labor/materials/lax laws/no taxes, then "Free Trade" is what makes the world go round.

If you wish to engage in a little arbitrage of your own, then "grey market" is about the most polite term. It is Vital to uphold Safety Standards and Preserve Market Stability, after all...

Re:Free market, right?

[countertrolling]

Actually you're right. Contraband is the perfect example, the epitome, of the free market. Totally unregulated.

Re:Free market, right?

[timeOday]

"Free market" is an oxymoron in the first place (when taken to the logical extreme of "totally unregulated", anyways). It's like asking what basketball would be like without any rules; it wouldn't be basketball. Without property rights, and contract enforcement, and currency, the forces of supply and demand still exist but can't develop into anything like the byzantine sophistication of Wall Street. So you can't just wish all the complexities away. This case is ultimately about a conflict of property rights - ownership of intellectual property vs ownership of the media holding copies of the intellectual property.

Re:Free market, right?

[digitalunity]

This is what bothers me most. Free trade is only good when corporations can take advantage of emerging economies. But when it comes to selling their wares in emerging economies for 5% of what they charge in the US or Europe, well that is just people being unfair.

Perfect discrimination is the epitome of regulated trade. They can't have it both ways. Either free trade is good and we should embrace it, or it isn't and we should close the borders.

Personally, I think a company should have zero control of a product after it's been sold, other than to prevent said consumer from reproducing copyrighted portions of that product. This simple rule would render mod chips legal across board(at least for those designed to remove region coding, as opposed to those that allow you to use CDR media), as well as the used market for all games, even those with online content.

I also think we need a national law spelling out what software publishers may not put in a EULA. Too bad the legislators would name it something like "Consumer Rights Enforcement Act" and it would be 100% pro-corporations.

Copyright weirdness

[girlintraining]

Well, this was pretty clear 200 years ago: Property was real and tangible. Copyright existed to protect the authors of works from publishers and printing presses using their work without paying for it. Fast forward 200 years and now we have copyright being applied to something that's intangible, can be copied for effectively zero cost, and has been hob-cobbled together to encompass intangible things like phrases, lines of code, even the "likeness" or "appearance" of something is not copyrightable. Given this vast expansion of the definition of copyright (for better or for worse, depending on who you ask), of course there's going to come a day when the tangible thing -- a legitimate CD purchased through legitimate channels could be declared illegal because it's being used incorrectly.

Copyright no longer covers just possession of a thing -- it's now been expanded to include the use of a thing as well, and that latter definition is what's causing most of the problems.

 

Re:Copyright weirdness

[fuzzyfuzzyfungus]

It's even nastier than that, in some cases, because some "real and tangible" property is now complex enough to enforce(against all but extremely sophisticated individuals) its own rules about use.

CSS is pitifully weak; but it was perhaps the first demonstration of this concept that gained huge market traction. Thanks to CSS licensing requirements, adding technologically enforced region coding became trivial.

As the cost of computing power continues to fall, and the number of devices that have embedded firmware and/or unique serial numbers continues to increase, there is virtually no area of "real property" over which the DMCA and copyright law will not eventually exert de facto control.

Re:Copyright weirdness

[girlintraining]

wrong, copyright 200 years ago applied to the information, the data, in a book. You could in 1790 copy a book by hand, sell the copy you made,and be in violation of copyright law.

Citation needed! And I'll provide. You want the Copyright Act of 1790, which was created to "securing authors the 'sole right and liberty of printing, reprinting, publishing and vending' the copies of their 'maps, charts, and books' for a term of 14 years, with the right to renew for one additional 14 year term should the copyright holder still be alive."

So you could make a handwritten copy for personal use and not be in violation of copyright law. You could also re-sell anything protected by copyright law that you lawfully purchased without any strings. Neither is true today, which is what this case is all about.

Global economy baby !

[aepervius]

You decide to outsource your programmer in bengladore, your sale rep in ireland, your telephonic support in china ? Welllll we decide to buy our game from import from the global market. Too bad they undercut your local monopoly price. Global market baby. You outsource our job, we outsource our buying. Fair is fair.

Re:Global economy baby !

[HTH NE1]

Imagine: Omega watches which sync up with the radio signal from an atomic clock, but refuse to configure themselves for any timezones other than those for which it was authorized for sale.

Of course, they'd lose the lucrative international traveler market. Or they'll have temporary time zone support, but if you stay too long in a foreign timezone it will reset or disable itself.

And then comes the question: what if I, as an (American) international traveler, buy one of their manufactured-in-Switzerland watches cheaply in an authorized country, travel back to the US, and then decide I don't like it (or need the money) and want to sell the watch on eBay? Apparently they want to bar me from selling the watch because it wasn't authorized for sale in the US.

Will they have their goons patrolling the US looking for people wearing imported watches and harass them to show their receipts showing they personally purchased the watch overseas or give up who sold them the watch under threat of prosecution? "Product's papers, please?"

Re:Why does this even need to be discussed?

[Locke2005]

Free market is free market. Once you sell something, you should have zero authority to dictate where it is shipped to and resold (with the exception of munitions, of course). Oh, and we should be able to import prescription drugs at much lower prices from other countries too!

Bit by bit towards corporate feudalism

[unity100]

in which you will buy everything, but own nothing ...

Re:Why does this even need to be discussed?

[tomkost]

Yes, it is a foregone conclusion, but not in the way you probably are thinking. You see, the rights of corporations must be protected at all costs. They can not be restricted by silly concepts like the sovereignty of nations, fair use, personal property rights, or any other fundamental concept of our legal systems. Don't worry, the Supreme Court will help them achieve their profits at any cost. I sure hope I'm wrong, but let's watch and see.

Rediculous interpretation of law

[Locke2005]

So, if I live in England, legally buy an Omega watch there, then legally immigrate to the US, it is now a copyright violation to resell that watch on eBay?!? This flies in the face of common sense!

Re:How does copyright come into play here?

[Attila Dimedici]

If I understand the backstory article correctly, Omega registered a copyright on its logo in order to fall under this exception to the First Sale Doctrine. I believe Costco made a mistake in not challenging the copyright. The Omega logo does not appear to me to be something that is copyrightable. I don't know if they can change their tactics at this point, but if they can, they should. The Omega logo is not distinct from hundreds of other expressions of Omega that have been used for years. When I did a search of "Omega logo" I found a computer company that uses almost exactly the same logo except with the word "Systems" added. Additionally I saw several other similar logos that I did not bother to follow to see what company they were for (but it wasn'tthe watch company).

Re:How does copyright come into play here?

[pem]

The only reason copyright comes into play is because Omega copyrighted this logo for the _specific_ reason of trying to use copyright as a legal market segmentation tool.

If ever there was a rationale for "misuse of copyright", this is it.

Already against the law in the UK

[thisissilly]

Tesco (think British Wal-mart) was legal purchasing Levi's jeans in Europe from wholesalers, and then reselling them in the UK for lower price than Levi's wanted them sold there. Levi's sued them, and won. We can only hope the US Supreme Court sees things differently.

Re:Sorry, but copyright does control imports

[Trepidity]

The fact that the Supreme Court took the case suggests that it isn't black-letter law, doesn't it?

Research happens outside the US too

[sjbe]

Regulate the US Market and its bye bye medical research.

While it is true that the US does a good bit of the heavy lifting in medical research, it is FAR from true that all medical research depends on the US. Many medical companies and research institutions exist and are headquartered outside the US including some of the biggest pharmaceutical companies. Plenty of research goes on across the world without the US being involved.

Please note that I'm not dismissing your general thesis completely - price controls are something to be approached with great caution. However it is not fair to say that all price regulation is a bad idea. Access to medicine is a moral issue as much as it is an economic one. Many medicines are sold for profit margins that are hard to justify to anyone with a conscience. It's fine for drug companies to make a profit, a handsome profit even. But resources for medical care are finite and just because a drug company is able to charge a lot doesn't always mean they should.

Re:How does copyright come into play here?

[reverseengineer]

Want to know what the copyright is really being asserted on? Here's a picture of the back of an Omega Seamaster watch, the article in question. (No affiliation with the site, just what Google turned up first). Omega isn't asserting copyright on their main logo; they've been using it for over a century. Also, it's the Greek letter omega, not exactly a highly stylized and unique design. They aren't asserting copyright on the Seamaster seahorse that dominates the back, though you'd think that desgin qualifies as the best example of artistic authorship on the watch. Omega has been making Seamasters for about 60 years, so I would think that image could still be copyrighted. But that's not what Omega is claiming infringement on either.

The artwork Omega is enforcing a copyright on is that pattern of circles with an omega in it, just to the right of the pronounced Omega logo and above the "825" in the linked picture. That little doodle is about 0.5 centimeters in diameter, and apparently Omega is arguing that when you buy an Omega Seamaster, you are buying an authorized reproduction of that triumph of human artistic endeavor for the agreed-upon price of two thousand dollars. Omega just happens to be so generous as to frame your purchase with a diving watch.