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Student Charged For Re-selling Textbooks
AstroPhilosopher writes "The U.S. Supreme Court will hear an appeal from a Thai student who was fined $600,000 for re-selling textbooks. Trying to make ends meet, the student had family members in Thailand mail him textbooks that were made and purchased abroad, which he then resold in the U.S. It's a method many retailers practice every day. 'Discount sellers like Costco and Target and Internet giants eBay and Amazon help form an estimated $63 billion annual market for goods that are purchased abroad, then imported and resold without the permission of the manufacturer. The U.S.-based sellers, and consumers, benefit from the common practice of manufacturers to price items more cheaply abroad than in the United States. This phenomenon is sometimes called a parallel market or grey market.'"
When I was doing my MBA, I was able to find "international versions" of textbooks on Ebay or the like. They were identical to the domestic versions but were not hardcover, in some cases printed on cheap paper - those kinds of differences. Nice way to save yourself 50% or so.
I'm not sure why publishers foist the high-grade materials on everyone especially at the college level where the book will never be used again - that is, unless it's meant to be fit for resale.
Every level of the textbook business is about manipulation, lies, and control, from the publisher to the campus bookstore.
I researched the actual cost of textbooks once, and found industry websites with cost breakdowns which swore, up and down, that the profit margin on textbooks was 1%. I shit you not. You buy the 13th edition of your text for a retail price of $298, a book that's been out for 15 years and hundreds of printings, and they expect you to believe that even *now*, on the 13th edition, the publisher made well under $3 per copy.
On the retail side, I worked for a campus bookstore and my wife was their night manager. After they let me off for total lack of available work, I decided to just sell them books I found on ebay and bought from other students. After I sold them several dozen they fired my wife and banned me from the store based on their unwritten and inconsistently enforced policy that a student can sell only one copy of a particular title to them. Why do they care? I have no idea. The only time I sold them books was the two week period after spring semester buyback but before summer classes; I gave them more copies of these books, at prices and quantities they set, during a period when their used stock was already at it's yearly maximum but still not high enough for their liking. There were no other copies for them to acquire from students, and awful NC state laws forbid them from acquiring more used copies on Amazon, eBay, etc. For this they treated me like a criminal, fired my wife, and even made allusions to whether we'd stolen the books despite the fact that there are cameras, audits, and never less than 3 people at the registers.
It was all about control; what I did was good for their business, and they didn't give a shit. I was making money in a place they thought only they were allowed to make money. Even though it made them even more money than it made me, they hated me for it and considered it abusive.
Control, control, control.
I fail to understand how the first-sale doctrine does not apply just because the first sale was outside the US. I would understand completely if ICE was coming after him for not paying duties or tariffs, but what does copyright have to do with anything here? He didn't make copies. He simply resold books the publisher was already paid for.
The First Sale Doctrine doesn't apply to copyrighted good manufactured outside the U.S. The relevant case law is Pearson v. Liu, decided in the district court of the Southern District of New York. The case was appealed to the 2nd circuit court of appeals which affirmed the lower court's decision. The case was appealed to the Supreme Court which denied to hear the case, letting the decision of the 2nd Circuit Court of Appeals to stand.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
According to TFA, this book was legally published abroad by a subsidiary of the American publisher. I don't see it as very complicated at all: the copy was legal, so it should be legal to import it.
That would make sense. Except that U.S. Copyright law explicitly forbids it:
602. Infringing importation of copies or phonorecords
(a) Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.
What's not clear is whether the First Sale Doctrine applies to books manufactured outside of the U.S. And that's the real question that's being put in front of the SC. If they decide that the First Sale Doctrine applies in this case, then the importation of these books for resale will be legal. If it doesn't apply, then it won't be legal.
Apologies for replying to my own post, but I must make a correction. The link I provided was not for the Pearson v Liu case, but rather for the current case mentioned in the article. I was therefore in error in stating that the Supreme Court allowed that ruling to stand. The more relevant case, as it has already reached the Supreme Court is Omega v Costco, a 9th Circuit Court opinion which held the same thing: the First Sale Doctrine does NOT apply to copyrighted goods manufactured abroad. This opinion was appealed to the Supreme Court, but Justice Kagan recused herself, as she had previously argued the case for the government. The result was a 4-4 decision, which meant that the 9th Circuit decision stood, but it doesn't set a national precedent. This present case might well settle that precedent once and for all.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
First off, the Costco case applied to goods made inside the US -- not goods made outside the US like this case.
The Costco case was about goods made outside the USA (i.e. Switzerland in the Costco case). It is the reason why the SCOTUS ruled not to overturn the lower courts ruling.
From the Forbes article linked to in the /. summary of the Costco case.
The Supreme Court, in a 4:4 decision, refused to overturn a Ninth Circuit decision limiting the first-sale doctrine to U.S.-produced goods. The decision upholds the right of manufacturers — in this case, Swiss watchmaker Omega — to use copyright laws to prevent U.S. retailers from selling goods they obtained overseas.
Unless the Forbes summary is wrong, I think your comment needs to be reworked in light of these facts.
It seems that this student has quite a legal obstacle to clear in this case. I hope some group takes over his representation to challenge the previous SCOTUS split ruling (assuming the case has merit), as the Costco Wholesale Corp. v. Omega S.A. Ninth Circuit decision was deleterious to the USA (and possibly world) economy. USA copyright law is a dead weight loss to the USA economy in general; the Costco case extended USA copyright law's application to our detriment.
That is why I love Amazon. Just read the preface of the book on their "look inside" feature and BAM, you instantly knew what changed from edition to edition.
The law specifically forbids this practice.
When our name is on the back of your car, we're behind you all the way!
He had somewhere between $900,000 and $1,200,000 in revenue (no idea what the profit margin was).
Argument seems to be that 17 U.S.C. S 109(a) says:
And something manufactured overseas isn't "lawfully made under this title" is what the Court of Appeals ruled.
http://www.bloomberglaw.com/public/document/John_Wiley__Sons_v_Kirtsaeng_654_F3d_210_99_USPQ2d_1641_2d_Cir_20 has details.
Yes, this is a copyright issue. And there is a law which expressedly makes illegal what the guy was doing. It's a very bad law, if you ask my opinion, but it's on the books, so there's no way the court could have ruled other than how it did.
Even if he has unmet tax liability, that is not the issue being raised in this case.
Your avoiding the main question. Why is it illegal? Because it's against copyright is not an answer. Why the hell does copyright say it is not okay to buy books in one country and sell them in another? What is the law protecting? Is it just a business model? If so, then that is not good enough.
The milk I buy in the supermarket in the US is also rbgh-free. It's required to come with a legal blurb saying that the FDA has not approved any benefit to hormone-free milk. Despite this, it's been years since I've seen a container of milk that doesn't claim to be free of synthetic hormones. (I live in the northeastern US)