First-Sale Doctrine Lost Overseas

Max Hyre writes "In a 4-4 decision, the US Supreme court let stand the Ninth Circuit's decision that the First-Sale Doctrine (which says once you buy something, the maker gets no say in what you do with it) only applies to goods made in the US. That Omega watch you bought in Switzerland last year? It's yours now—forever. You can't sell it without Omega's permission."

Comments

First sale doctrine

[just_another_sean]

That is the most absurd and arbitrary distinction I've ever heard. A law of convenience if I ever heard of one. One step closer to stripping our rights in the name of international legal harmony.

Re:First sale doctrine

[Massacrifice]

Just wait till the chinese manufacturers start toying with one. Want to sell your used motherboard on craigslist? Sorry, no can do, this luxuriuously ASUS-branded product was sold to YOU and only YOU.

Considering the amount of stuff that gets produced abroad, I suspect this decision will soon be so full of holes and exceptions that it wont be an issue.

Re:First sale doctrine

[commodore64_love]

Dred Scott may have been an immoral ruling, but it was also legally correct. Under the Union Constitution, each member state had freedom to decide if blacks were Citizens or Property. The justices did what they were supposed to do: Enforce the law as written. It was upto the Congress/States to change the law (via amendment) not the courts.

In contrast Wickard v. Filburn can not be justified in any context. It gave the Union government power to tell a man he was not allowed to grow food for his OWN consumption. That is not what the Supreme Law says, nor the original intent of the authors. ----- Intrastate commerce is the purview of the Member State - alone. In fact: Eating your own food isn't even commerce. Period.

Re:First sale doctrine

[BassMan449]

Wickard v. Filburn is easily the worst decision the Supreme Court ever made. The twisted logic that they went through to conclude that by not participating in commerce he had effected commerce and was therefore subject to regulation is absurd.

Re:First sale doctrine

[Lilith's Heart-shape]

I can top it. In Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886), the SCOTUS decided that corporations were people and thus entitled to 14th amendment protection.

Re:First sale doctrine

[PopeRatzo]

Do we really need a constitutional amendment to clarify that yes, people are actually people?

No, but we certainly need a constitutional amendment to clarify that no, corporations are not actually people.

Re:First sale doctrine

[afabbro]

Under the Union Constitution, each member state had freedom to decide if blacks were Citizens or Property.

So every state gets the freedom to decide for themselves whether black people are people? What other conditions do states have the right to place on a person’s “person-hood”? Do we really need a constitutional amendment to clarify that yes, people are actually people?

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America...

Dude, wipe the foam off your chin and read some history. Yes, we did need an amendment. Yes, we have one. We did not have it at the time the Dred Scot decision was handed down.

Quoting the preamble means nothing. At the time it was written, blacks were not considered part of "We the People". Have you actually read any history, or don't they teach that at your high school any more?

Re:First sale doctrine

[VortexCortex]

I can top it. In Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886), the SCOTUS decided that corporations were people and thus entitled to 14th amendment protection.

Yes, Corporations, have all the benefits of being 'people', none of the drawbacks (such as finite life spans), and obey few of the laws that other 'people' must observe.

Corporations are free to merge with many other corporations, while polygamy is still illegal for 'people' in most states.

Corporations are allowed to have business practices such as "cutting off the competitor's air supply" while murder is still illegal for 'people'.

Corporations are allowed to be dissolved yet Suicide is illegal for 'people' to commit.

Corporations can have 'hostile takeovers' of other weaker corporations, but armed robbery, slavery, and blackmail are all still illegal for other categories of 'people'.

It would be pure anarchy and rule of the corrupt and powerful if real human 'people' were given the same rights as corporate entities have. Laws against things such as murder are in effect to help maintain order and security of society.

Feudalism, chaos and insecurity reign supreme among our most wealthiest 'people', the corporations; Some of us fight for less regulation and then wonder why the economic society is so chaotic and insecure...

Re:First sale doctrine

[sumdumass]

It doesn't matter if he grew twice the amount he could use in a year. The federal government simply does not have jurisdiction inside the state on matters that the US constitution doesn't grant it.

FDR probably said it best when he said

"As a matter of fact and law, the governing rights of the States are all of those which have not been
surrendered to the National Government by the Constitution or its amendments. Wisely or unwisely,
people know that under the Eighteenth Amendment Congress has been given the right to legislate on this particular subject1, but this is not the case in the matter of a great number of other vital problems of government, such as the conduct of public utilities, of banks, of insurance, of business, of agriculture, of education, of social welfare and of a dozen other important features. In these, Washington must not be encouraged to interfere."

He said this in a speech about the Volstead Act which was printed in its entirety on March 3, 1930 by the New York Times. Of course this was two years before he became president and set the stage as well as the motion in works for the expansion of the interstate commerce clause in the US constitution.

You see, no one has to justify anything to something that never should have been allowed to happen. If the guy was participating in interstate commerce, then the feds get jurisdiction. He did not sell in interstate commerce so it was solely a state matter. If the state enacted the same laws and brought the same prosecution about, it never would have reached the supreme court unless something in the state constitution bared that type of law, seeing how US constitution specifically gives the states this jurisdiction within the state.

Re:First sale doctrine

[random coward]

The Bill of Rights to the constitution grants no rights. Its evident if you read it. The first amendment reads:

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."


It doesn't say it grants any rights or freedoms. It recognizes the freedom and rights of the people that already existed. Indeed to be even more clear the 9th amendment reads

"The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."

Where do these other rights come from if you think they come from the constitution? Clearly the founders of our country realized that the rights of men were not granted by governments, but came from some other higher power; they said so in the Declaration of Independence. Your views on rights being granted at whim by the government lead to a statist tyranny. Dread Scott was wrong on law and on the merits.

Re:First sale doctrine

[roman_mir]

Oh, jeez, and I wanted to moderate this story.

Well, not anymore I won't.

Here is a huge correction to your statement:

The Supreme Court has NEVER said that corporations were people!

It has never happened.

The sentence in question was added YEARS after the decision on that case was made, it was added by a clerk who did that on purpose in order to change the law all by himself.

http://www.youtube.com/watch?v=wHmGEkzhhfQ - skip to minute 5 in the video and listen for a couple of minutes.

The stupidest thing is

[Compaqt]

that they based it on copyright law: an Omega logo on the watch.

I thought it would be something like a signed contract, or buying from a foreign wholesaler, then importing to the US.

But the copyright on the logo?

Re:The stupidest thing is

[MoonBuggy]

The prohibition is on distribution of copies or derivative works. Not resale of the original.

Specifically due to the 'first sale' doctrine - the copyright holder controls distribution only through the first transaction, not through subsequent transactions. Since this ruling says that 'first sale' does not apply to goods procured outside the US, it means that the copyright holder does retain distribution control of the original copyrighted work.

It's an absolutely unforgivably terrible ruling, but that's what it says.

Re:The stupidest thing is

[Late Adopter]

The contracts between "Manufacturer and Retailer" and "Retailer and Customer" are wholly separate, and Manufacturer cannot impose subsequent conditions on the contract between "Retailer and Customer". (In other words, Apple can't demand their retailers sell at a specified price).

No longer true, as of 2007,
http://en.wikipedia.org/wiki/Leegin_Creative_Leather_Products,_Inc._v._PSKS,_Inc.

Retailer is free to source products from anywhere in the world (the "grey market"), they're not obliged to buy from local distributors

No longer true, as of 1998,
http://en.wikipedia.org/wiki/Quality_King_v._L'anza

Will this ever improve?

[DoofusOfDeath]

It seems like the dominant trend in U.S. legislation is that if favors rich corporiations and individuals, at the cost of what seem like basic freedoms of common citizens.

Does anyone know, historically, whether all countries have this trend? And if so, historically, what things (if any) have lead to the reversa of these trends? I.e., does it require a reboot (i.e., full-blown revoluion), or is even that never enough?

Re:Will this ever improve?

[rwa2]

Yep, pretty much. We've moved from a manufacturing and research economy to a purely intellectual property economy. All our wealth is going to be tied up in imaginary pieces of paper that say that people have to pay us for using computer software, or by building windshield wipers a particular way, making pharmaceuticals with a particular active ingredient, or for listening to music or watching movies (ooh, a toll on "culture"). We even get money if they record and distribute content themselves using patented h.264 video codecs. So all we need to do is just sit back and collect the money, backed by the threat of economic or conventional warfare if they don't pay up. Maybe once in a while we need to renew or trivially update our patents or copyrights to keep anyone from innovating around them, thus maintaining the status quo.

Not much different from the way things were in the colonial era, where we sent a lot of profits back to the empire, and you needed official licenses from the king to operate trade routes or the navy would sink you. Heck, they even still unabashedly call some of these payments "royalties" today. Fortunately, we know how this turned out, so we can probably count on history repeating itself eventually.

No precedential force

[Sonny Yatsen]

The headline is overstating things a lot. The First-Sale Doctrine isn't lost overseas. Since this is a 4-4 tie decision by the Supreme Court, only the lower court decision is upheld. There is no precedential force behind the decision at all. Thus, the only thing that can be said about this is that Costco loses this particular instance, but the right of First-Sale overseas remains in effect since this decision isn't useful for any subsequent precedent.

http://www.slate.com/id/2109077/ --- A good analysis of what happens when a tied decision occurs.

Re:No precedential force

[Sonny Yatsen]

For the curious, here's the actual decision.

http://www.supremecourt.gov/opinions/10pdf/08-1423.pdf

It's two sentences long and simply states:

"PER CURIAM
The judgment is affirmed by an equally divided Court.

JUSTICE KAGAN took no part in the consideration or decision of this case."

Re:No precedential force

[pavon]

And here is the original 9th circuit ruling which does have precedent in that circuit, and will likely be referenced in other circuits.

That's Not What The Article Says

[raftpeople]

"prevent U.S. retailers from selling goods they obtained overseas."

There is a difference between "produced overseas" and "obtained overseas".

Re:That's Not What The Article Says

[EdIII]

Unfortunately, the idea that we can enjoy our own property peacefully and privately has been under attack for quite some time now.

I recently gave up trying to explain to some mentally challenged person here on Slashdot the very simple concept of property ownership and how once somebody sells you something they literally have no rights over it. Morally, ethically, etc... no rights.

It has been this way forever. In the Wild West if you sold some guy a horse and then fucked with him 6 weeks later about a saddle he did not buy from you, your ass would have been shot. Nobody would have had sympathy for you either. Society would have considered you insane.

Now, with DRM and the DMCA companies can try telling me that I don't own my own hardware and because some mental midgets don't want to get cheated on in video games, I should not have the right to fully own my own hardware. It's all magically different because we are talking about software some how?

According to the article this twisted, disgusting, morally offensive logic now applies to non-electronic hardware!?

This is the point where, as a people, globally, we just need to stand up and kill the top 3% of the people running the planet that have these stupid ideas. There is such a thing as too far and the last straw.

The First Sale Doctrine is not just some piece of random legal logic. It was a rebuke to the sociopathic executives and marketers that had the ridiculous idea they could try to keep controlling and monetizing their products after they sold them. It recognized something we all understand to be a fundamental human right, something sacrosanct, something to be rigorously defended.

Now we are allowing Sony and these Swiss douchebags to have permanent co-ownership of our property. How the heck are we losing these arguments? It's a no-brainer. My shit is my shit. Back off.

Good luck

[betterunixthanunix]

Until people wake up and realize that they do not owe copyright owners anything, nothing will change. I had a conversation a few weeks ago with a person who used to work for the recording industry, and when I suggested that there might not be any ethical problem with downloading unauthorized copies of music and movies, he became so emotional that the conversation ended with him demanding that I never speak to him again. When the people "on the other side" of the issue are fighting like it is a matter of life and death, what hope do the rest of us have when most people just do not see copyright as being a particularly big deal?

Re:Good luck

[commodore64_love]

"I don't get paid for work I did two decades ago. Why should you?"

"Um... uh... well..."

"That's what I thought. There is no justifiable reason to extend copyright beyond about 10 years. There is no reason why you should get an annual payment for the rest of your life for work you did when you were age 20 or 30. *I* don't get that privilege of lifelong income. I work. I get paid. I might get a bonus at the end-of-the-year or decade for work well done, and that's the end of it. The same should be true for you."

Re:Good luck

[Eric S. Smith]

"I don't get paid for work I did two decades ago. Why should you?"

A possible response: "Because work that I did two decades ago is still valued and in demand, while nobody cares what you did yesterday."

Re:Good luck

[nospam007]

Really? What about house builders, infrastructure?

Should the people who built a highway get money from every user for the rest of their lives?

Should the painter who did the exterior of my house get a say on allowing me to repaint it in a different color?

 

Re:Good luck

[Overzeetop]

You can!

Here's what you do - build a house on your own dime, then rent it to people. You can get income for the rest of your life, for doing nothing!

Now, here's the rub: When you do something like that, you usually have to pay a tax to the government on an annual basis based on the total value of the property - just a couple percent. Maybe that's what we need for copyright?

Bad Summary

[pavon]

The summary is written is misleading. The distinction made by the Ninth Circuit depends both on where an item was made as well as where it was sold. If you legally purchase a foreign made product in the US (ie from an authorized reseller like Walmart), then the right of first sale still applies. However, you can't buy foreign products in a foreign country and then resell them in the US without permission.

I still think it's a bad decision but the summary makes it out to be even worse.

Re:Bad Summary

[infalliable]

Basically, the decision said that a company can enforce regional pricing and distribution structures through a (broad) interpretation of copyright laws.

Omega has various pricing depending on region. Overseas they were cheap and expensive in the US. CostCo bought them from a low priced region overseas and imported them to the USA. The ruling was they couldnt do that as it violated the copyright, despite the fact they were legally purchased overseas.

Why 4-4? Because Kagan recused due to S.G.

[PatPending]

For the 81 cases listed for the October Term 2010, Kagan is recused 31 times or 38% of the cases.

Why? Partly because she was the Solicitor General:

SHAPIRO: How common is it for a new justice to have to recuse from the number of cases that Kagan is recusing herself from?

TOTENBERG: Well, it's not common because, at least more recently, we haven't had top Justice Department officials migrating to the court. But it's happened many times in our history. Justice Thurgood Marshall, who was solicitor general, for example, recused himself from about half the cases the court heard in his first year. But that high number was largely because he remained SG until he was confirmed.

And Kagan didn't do that. She stopped being SG right after her nomination. So, this high number of recusals, I think, is front loaded. She'll probably be recused from about a third of the docket this year, and then next year her recusals will plummet to zero or something close to that.

One interesting thing, Ari, is that there are a number of cases that she's reused herself from that she really had nothing to do with. And these are cases that generally involve commercial disputes. And the Justice Department filed a notice that it was taking no position, and these are just routine evaluations. They're done by lower-level lawyers but she signed the filing, so she's taking herself out of those cases.

SHAPIRO: And when she's recused and there are eight justices on the Supreme Court, what happens then?

TOTENBERG: Well, the case goes forward, as usual. And if there's a four-to-four tie, the lower court opinion is automatically affirmed without the Supreme Court issued any opinion, then presumably the issue can come up in another case, later, where Kagan can participate.

Re:What does this mean?

[TFAFalcon]

Why are only corporations allowed to take advantage of the 'global economy' (outsourcing), but customers should be prevented from purchasing goods where they are cheapest?

Re:Legitimate problem with grey market

[rahvin112]

Costco ALWAYS clearly labeled grey market products. They back them with their 100% satisfaction guarantee. I bought a Denon Receiver from them and they were very clear that they were not an authorized retailer and that Denon would not service the product or warranty. I was a fully informed consumer when I purchased it.

Illegally as per copyright law

[Adrian Lopez]

17 U.S.C. 602(a):

"Importation into the United States, without the authority of the owner of copyright under this title, of copies ... of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies ... under section 106, actionable under section 501."

It sucks, but it's the law.

Read Twain. Twain will save you.

[jeko]

If I had the power to destroy one fiendishly wrong-headed notion before I die, the following would be on the short list:

The justices did what they were supposed to do: Enforce the law as written.

Sigh. Have you seen the inscriptions over the Court? ""Equal Justice Under Law" coming, "Justice, the Guardian of Liberty" going. Maybe you've seen the statue of the blind-folded chick? Wanna take a guess what her name is?

The ultimate job of the Court is not just "to follow the rules." A third-grade hall monitor would be sufficient for that. The ultimate job of the Court is to find what is Just. It is the job of a god in the hands of flawed, fallible men. This is the reason why we are supposed to find our nine finest legal minds, our nine wisest elders.

In our finest legal traditions, we have found that the beginning of Justice, the bare minimum, is to keep the Strong from preying on the Weak, and that is why Dred Scott is such a famously reprehensible decision. We don't condemn the Sharia judges for stoning women to death because they're misapplying the rules. We condemn them for the evil they do by refusing to look beyond the rulebook. The Dred Scott Court cannot excuse themselves by crying "We were just following the rules" any more than other famously evil men can.

When we put guns in the hands of 18-year-old kids and tell them to go and kill in our name, we give them a warning. If the rules conflict with your conscience, if you do something you know is wrong by following the rules, you will one day be held accountable, and crying "I was just doing what the rules said I should," will not save you.

The job of the Court is to find Justice as best Humanity can in the year 2010. It is their black-letter job to stand in the gap and say "This rule, written by the Strong to steal from the Weak, is wrong and we will not abide it."

The Court is supposed to be the Conscience of our Nation, not nine bureaucrats bludgeoning people with the results of lobbies and politics.

The job of the Dred Scott Court was to keep men free. to be the "Guardians of Liberty" as inscribed, not to safeguard the pocketbooks of their kidnappers and rapists. The Dred Scott judges were not "Bad men, but good judges." They were evil men and bad judges as well.

New/Used has nothing to do with it.

[marcus]

Omega sold that watch to a distributor.

The distributor sold it to Costco.

Somewhere along the line it was imported to the US. According to this ruling, any of the purchases/sales along the way from the OEM to your wrist can be forbidden if Omega says so.