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.'"

Comments

The advance of IP

[colinrichardday]

When will they stop? Ever?

Re:The advance of IP

[djl4570]

You cannot buy a politician. You can only rent them.

it's also called price discrimination..

[gl4ss]

..in which you decide how much the product costs not based on how much the product costs to make, but on how much money the potential buyer has. parallel or gray market is just a term the content holders would like to use, since it doesn't make them look like asshats. http://en.wikipedia.org/wiki/Price_discrimination

it's bullshit, of course. too bad for the publishers that books don't come with drm chips.

(I'm assuming that in this case the books were original - as in printed with copyright holders permission).

Uh, Have You Heard of Distribution Channels?

[eldavojohn]

Well, as an MBA you might want to brush up on international trade laws like NAFTA and understand that manufacturers and especially publishers greatly reduce the price of their materials to target third world markets and to provide people the ability purchase the same books we do. You do understand that there are distribution channels and contracts that prevent someone in, say New Delhi, from noticing that their Addison Wesley book on Modern Evolution sells exceptionally well in the states so they are just going to set up an online store, right? I mean, you have to acknowledge that the publishers are asking different rates from Americans versus Mexicans on their books because -- let's face it -- the standard of living is different. The fact that the American publisher chooses hardcover over softcover is purely just internal marketing in the United States, not an attempt to:

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.

I'm no MBA but this is pretty clear to even me.

Re:Uh, Have You Heard of Distribution Channels?

[gl4ss]

the contracts are done with the printing houses - not with the people who actually buy the books and bring them to their homes. why should they be barred from selling their physical goods to another country?

Re:Uh, Have You Heard of Distribution Channels?

[secret_squirrel_99]

there are distribution channels and contracts that prevent someone in

This isn't a contractual issue. This is a copyright issue. No one is claiming breach of contract. Furthermore, the defendant in this case never entered into any sort of contract with the publisher. He purchased books on the open market and resold them on the open market. The plaintiffs are claiming copyright infringement. This should be a clear cut example of the first sale doctrine, and should have never gotten beyond a district court.

College now days is more about profit now days

[Joe_Dragon]

That is why text book get updated so much also some professors get a cut of the book costs for the books they author so some of them rip out pages to force students to buy a new book for the class.

Also other ways to make profit is the filler and high number of gen eds that at some College push out what used to be 4 years to 5 years.

High cost dorm room that cost more then renting on your own to live a with a room mate and have shared bathroom with a full floor also have to go off campus during brakes.

High cost meal plans that have hidden fees and other stuff that can force people to buy $100's in caddy as the funds are on use it or lose it cash cards that time out.

Re:College now days is more about profit now days

[secret_squirrel_99]

Don't people use photocopiers anymore?
no, they grab a torrent of the PDF of the book. I can find and download most textbooks in less time that it take you to walk to the copier. Most students can do it faster than that.

Globalisation Baby

[Anonymous Coward]

As long as custom is paid, then it should be FULLY legal. After all if firm/MPAA/whatnot can have region code, and import cheap from China, or even outsource jobs, then everybody should be allowed to do it. Globalisation and import/export as logn as custom are paid, should be fully legal. And if they (publisher) lose money on that, bad luck.

I don't understand

[Dog-Cow]

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.

Re:I Don't See the Parallelism Here ...

[cpu6502]

I don't give a shit if the Megacorp doesn't like that I purchased a cheap paperback Indian copy instead of the overpriced, glossybacked American copy. Sucks to be them. It's not my responsibility to bendover and kiss its ass..... it is not my girlfriend. I have every right as a free citizen (not a megacorp slave) to buy the cheapest copy I can find. It's called free trade.

Allow Me to Rephrase the Problem

[eldavojohn]

Let's say Addison Wesley publishes a text book on Modern Evolution and it runs you a steep $90 here in the United States. Unsurprisingly, as the gatekeepers of that copyright, some of us actually shell that out. Well, universities in India are going to want access to this same material but there's a problem and I think you know what it is. That much money means a lot more in India than it does in the United States. So we have publishers wanting to sell textbooks in India to college students but the most anybody can really afford is $9. What's worse, if they don't release a version at that price, they're just going to bootleg it anyway. So the solution is to engage in, as you put it, "price discrimination" or as I might call it distribution values based on localized income since they want to make these materials available but they want to also make a profit in first world countries.

If you want to turn the screws on the publishers and say international trade laws are all bullshit and the books worth what it's worth and you're only paying $9 for the Indian version, I assure you they'll just sell it at $90 everywhere in the world and try to deal with the bootlegging in a much less understanding way than they are right now.

I see you replied to my post in another question about why the end consumer shouldn't be able to resell to another country. In cases of one or two books, I don't think anybody really gives a damn, it's when you're putting yourself through college on a publishers dime that they start to get upset and bring up international trade laws against you. I'm pretty sure with how copyright law works in the states and even abroad by distribution channels that this kid is going to be screwed pretty hard.

it's bullshit, of course. too bad for the publishers that books don't come with drm chips.

No, it's too bad for the publishers that they are trying to sell books cheaper inside poorer countries.

Re:Allow Me to Rephrase the Problem

[suomynonAyletamitlU]

I may be speaking from inexperience here, but the problem you're highlighting is a big circular clusterfuck.

Going back to ancient times, once a book is published the first time, it can be copied. When book-copying labor (scribes with pens) was scarce, books were scarce--but at the same time, anyone could be in the business of copying books, if they had the education and a steady hand; demand for more books was virtually infinite, as there were plenty of libraries or individuals that would pay for a copy of, say, philosophy, or math, or something else interesting. (Of course, it was dependent on local demand specifically, or any travelling traders you could sell to, and those are different...) When book copying first became industrial (printing press), book publication (both copying and first edition) became a centralized industry, with a large overhead that had to do with labor, machine costs, and transportation. But because you were doing it in bulk, you could absorb the overhead with margins on each book sold instead of sustaining yourself on a sell-by-sell basis.

The book industry now faces two problems: it's incredibly easy to print things (albeit in variable quality), and book copying is now digital: instantaneous and costing virtually nothing. We are back where we were at the beginning, where anyone could get into the business of copying books--and thanks to digital communications, books created anywhere can be printed and distributed anywhere. Book publication as a centralized industry can only exist with the digital equivalent of mercantilism, which means that book publication as an industry needs to use its money as a leverage to prevent the industry from collapsing.

Basically, if the entire book industry collapsed in a pile of dust tomorrow, and there never again was a centralized book publishing regime, we wouldn't lose access to many books. There would be lots of scanning and trading, and a lot of books published digitally and independently, either to be printed locally or used on some sort of reader. Maybe--maybe--certain authors that could only thrive on a centralized industry would fail, but a new decentralized industry would be born. Basically the only people who really, severely don't want that to happen are people who depend on the system as-is, and unfortunately, many of them have been filling out their wallets on those margins for a long time. It'd be nice for them to stop being selfish, but their worldview and their current jobs rely on this system, so I guess it's only to be expected that they think in those terms.

Re:Allow Me to Rephrase the Problem

[fuzznutz]

As a Business PhD I know said to a book rep that last visited him, "You are on the wrong side of history." Since the value is "in the words" as you say, they need to reduce the costs of those words.

The current pricing model is not sustainable. Globalization doesn't just work in favor of the big corporations. Technology will never allow such high pricing discrepancies to exist. As long as there are such large profits to be made on the arbitrage of textbooks, there will be a market. It's been a year since I bought a brand new US edition for my Masters program. I've probably saved nearly a thousand dollars. And I hate to break it to you, but even the professors are looking for ways to reduce student costs which many times includes allowing multiple editions for class.

If you are shilling for the textbook industry, I would recommend you start looking for another line of work. Between, international edition arbitrage, eBook sharing, and open source companies like Flatworld, the future isn't looking too bright.

Re:Allow Me to Rephrase the Problem

[JDG1980]

Let's say Addison Wesley publishes a text book on Modern Evolution and it runs you a steep $90 here in the United States. Unsurprisingly, as the gatekeepers of that copyright, some of us actually shell that out. Well, universities in India are going to want access to this same material but there's a problem and I think you know what it is. That much money means a lot more in India than it does in the United States. So we have publishers wanting to sell textbooks in India to college students but the most anybody can really afford is $9. What's worse, if they don't release a version at that price, they're just going to bootleg it anyway. So the solution is to engage in, as you put it, "price discrimination" or as I might call it distribution values based on localized income since they want to make these materials available but they want to also make a profit in first world countries.

You've explained why this is a dilemma for publishers. What you haven't explained is why anyone outside the publishing industry should give a crap about their business model.

You do not have a right to make a profit in business. Just because someone is doing something that makes it harder for your business to be profitable doesn't mean that it is, or should be, illegal. And rest assured that if the shoe was on the other foot, the publishing companies would have no compunction about eating someone else's financial lunch.

Re:I Don't See the Parallelism Here ...

[Anonymous Coward]

A book's value is mostly determined by its content

A book's value is determined by what people are willing to pay.

Re:I Don't See the Parallelism Here ...

[cptdondo]

Well, typically for electronics at least, the exporter sells the goods at a huge discount, because the distributor on the other end is supposed to provide all of the manuals, support, warranty service, etc. Now you buy one of those "bare" pieces of electronics, bring it to the US, and sell it here to some unsuspecting slob. He then tries to get warranty service and finds out he's been ripped off.

That should be a crime.

But a book? It's nothing but mashed up paper. Presumably it was bought legally over there, and from there on it's private property. First sale, anyone?

What am I missing?

I Give Up

[eldavojohn]

I don't give a shit if the Megacorp doesn't like that I purchased a cheap paperback Indian copy instead of the overpriced, glossybacked American copy. Sucks to be them. It's not my responsibility to bendover and kiss its ass..... it is not my girlfriend. I have every right as a free citizen (not a megacorp slave) to buy the cheapest copy I can find. It's called free trade.

I like how mod my comments are modded as Troll when I'm trying to explain why the situation is what it is yet your profanity laden brash response without any understanding of the concept is moderated as "Insightful."

So this is my problem with Slashdot and why I come back here only to be constantly reminded to stay away and let the people circle jerk with blinders on. I'll let someone else waist their time explaining how the world works to you folk, you clearly never learned to appreciate someone merely relaying the other side of the issue or another viewpoint to you.

Good luck upsetting the publishing business with your brilliant views! Burst forth, you need only say these words and hundreds of years of international copyright law will crumble!

Re:I Give Up

[interkin3tic]

I like how mod my comments are modded as Troll when I'm trying to explain why the situation is what it is

AND took pains to point out you weren't endorsing the status quo. Aside from putting "I'm not saying its right. I'm not saying it's how things should be. I'm just telling you it's how they are" in bold, it would have been hard to make your point any more clear.

Forget reading the article, these days we don't even bother reading the post we're responding to.

Re:I Give Up

[Mashiki]

Good luck upsetting the publishing business with your brilliant views! Burst forth, you need only say these words and hundreds of years of international copyright law will crumble!

One can only hope. The books are the same, we know we're paying over, way and above what the textbooks can be covered for. We end up having to pay for 'minor' revisions to keep concurrent or fail classes. When I was working my way through my law classes a few years ago, the textbooks alone set me back nearly $4000. Though I could buy them out of country, with the same content for $250.

People understand very well how the world works. What you fail to understand is that people are tired of DRM, region locking, overpriced for the same material you can get elsewhere especially in a global economy where you can order something from across the ocean and pay 7/8th's less on the price. So when people want something, they find someplace cheaper to buy it.

Hey are you gonna blast canadians next for buying american products cheaper across the border too? With regards to just about everything? I mean a gallon of milk and butter are in the $4-6 range, sure would be nice to have it like the US where it costs $1.99 or less, flat of eggs only $5 or $1.50 in the US. Or americans buying canadian drugs at a cheaper price when they know that they only have to travel a few hours to get there?

Re:I Give Up

[thoth]

I get what you're saying about the legalities, but this really isn't a copyright issue, is it? This kid isn't attempting to publish the books or claim authorship, he's reselling. If he worked at Goldman Sachs and were buying pork bellies or oil in one market and reselling in another, that would be called "arbitrage". Of course, Goldman Sachs is wealthy enough to afford lawyers to tell others to f*ck off, or pay for favorable legal rulings (or laws themselves, or even politicians).

Sorry, but fundamentally Megacorp(s) don't get to have all the advantages and benefits of free trade (outsourcing production to where their costs are low), and none of the disadvantages and drawbacks. At least, not in a fair world and not in a "free market". I remember a "free market" existing when producers and consumers get choices, not when the producer gets the government to clamp down on imports so the local market is captive, all the while outsourcing production and booking profits through offshore shell corporations.

Re:I Give Up

[russotto]

I get what you're saying about the legalities, but this really isn't a copyright issue, is it? This kid isn't attempting to publish the books or claim authorship, he's reselling.

No, it's a copyright issue. The content industries (and the appeals court) take the position that while copyright protection applies across the entire Berne convention, that copyright exhaustion -- the idea that by selling a particular copy, the copyright holder no longer can control distribution of that particular copy -- applies on a country by country basis. And that therefore importing a copy of a copyrighted item without the permission of the copyright holder, even when that item was lawfully sold in the country of origin in the first place, is illegal.

It's absolutely unjust and ridiculous (just like much of copyright law) -- which means the Supreme Court will probably support it.

Re:I Give Up

[Anonymous Coward]

Well, sorry Eldavojohn, his post accurately reflects my stance on the subject and points out the fact that this flies in the face of free trade. So he gets an insightful point. He wasn't exactly eloquent with his justification as some of the others below, but he was first. Plus I'm personally enraged by the prices I suffered at the hands of the textbook overlords. The system obviously screwed me over pretty hard and I had little power to stop it. So chucking in a swear word here or there also adds accuracy.
It's only a circle-jerk because we're probably right. The blinders are off though. We see how the system ought to be, and can explain why. When others explain why it should be differently, they're usually screwing someone over.

I really don't see your point with the "very strict distribution channels". That's lovely for them, but why do I give a shit? I can buy one for X, own it, walk over here, and someone wants it for X+Y.

"mutually exclusive sets of products" my ass.

A book's value is mostly determined by its content and when you're marking that down in a foreign country through a foreign distributor, it's massively different than marking down a BMW in Mexico or a wristwatch in Switzerland.

I disagree. If he was scanning in and redistributing that content, sure, totally different. Yay cheap and trivial digital distribution. But he isn't. The book is a tangible good. With utility. You passed your class, didn't you? Not that much different from a BMW or a watch.

Now, in terms of quality, truth in advertising, and scamming in general, sure, this guy could very well deserve to be fined. But not for any of the reasons you stated. While you're normally a pretty insightful fellow, you failed to contribute anything meaningful to this conversation. You may say "I'm not saying it's right", but then you provide (bad) justifications for why it's right... Talking out both sides of your face is disingenuous, at best.

Re:I Give Up

[aclarke]

If you want American milk, go get it from the US. There are a lot of really good reasons why Canada has a dairy quota and why we don't import American milk. I'll give you one: rBGH. That's "genetically engineered bovine growth hormone". Yum. You can keep your cheap American milk.

Re:I Give Up

[Half-pint HAL]

It's absolutely unjust and ridiculous (just like much of copyright law) -- which means the Supreme Court will probably support it.

It isn't unjust in and of itself, but a means of maintaining an injustice that all of us rich westerners profit from.

I'm willing to wager everyone reading this owns a lot of things produced in cheaper, underdeveloped countries with poor labour and human rights laws. We can afford to buy lots of their stuff because they're paid less for their time than we are.

Our authors expect similar wages to us as consumers, so books are priced to give them something worthwhile. But people in poorer countries can't afford this. The authors accept a lower profit in poorer countries, because that's the only way they'll get anything out of them.

Now, if the UN passed a resolution demanding free trade rules be applied to all IP-based goods, do you think suppliers would adopt first-world prices or third-world prices...? So what we'd be left with is a world where only people in rich countries can afford university textbooks. Which would reduce the education level in developing countries, making them poorer. And also less qualified to make cheap goods for us.

Re:I Give Up

[Nursie]

They don't.

They resent $megacorp firing six pound an hour guy and paying penny a day a pittance, then turning around and charging us as if they were employing the Brit. Not only that, but demanding that we do so or face legal consequences.

The only resentment here is against the stacked system, in which large corporate interests get to use the global market for labour and materials but small retailers and private individuals are legally restricted from doing the same for goods and services.

This perpetuates the problems of segregation and inequality. What if penny-a-day guy has a brother who wants to export from the local market to a British retailer at a small markup? There's a price gradient he could use to better himself and bring money to his country.

Re:I Give Up

[Half-pint HAL]

I get what you're saying about the legalities, but this really isn't a copyright issue, is it? This kid isn't attempting to publish the books or claim authorship, he's reselling.

Unfortunately, as the importer he is responsible for all steps in the supply chain that occur prior to the goods reaching US soil (this principle holds in many countries) so as far as the US is concerned he is the publisher.

Imagine if this was a piece of electronics instead of a book. As the last man in the US the buck would stop with him on issues like safety testing, radio emissions compliance, FCC licensing etc. If there was a fault with it discovered after sale, he's responsible for repair, replacement or refund.

I bought an MP3 player on eBay about three years ago. It claimed to be USB 2, but it was actually USB 1.1 . The guy who sold it tried to refuse responsibility "that's what they said it was", but it was his responsibility as a professional importer to inspect the goods and make sure they complied with UK laws (Sale of goods act, Sale and supply of goods act, etc). A great many small-scale importers neglect to do this and end up finding themselves out of business after a court finds against them, often losing their homes in the process.

The law isn't designed to punish the individual trader, but to protect the individual consumer. Unfortunately, too many individual traders are ignorant of their responsibilities. Proper import, with appropriate due dilligence, is actually quite expensive.

Re:I Don't See the Parallelism Here ...

[ultranova]

I have every right as a free citizen (not a megacorp slave) to buy the cheapest copy I can find. It's called free trade.

It's only called free trade if it benefits the Megacorp. If it benefits a mere mortal, it's called infringement. What it actually infringes isn't quite clear, since you aren't actually copying anything, but that's unimportant. What's important is that the Megacorp paid good money to have the laws written and interpreted for its favour.

Re:I Don't See the Parallelism Here ...

[Mordok-DestroyerOfWo]

So you are arguing that, as a free citizen, it is OK for you to purchased illegal copies of a book? Or are you arguing that no written material should be able to have copyright protections?

Also, what does the size of the publishing company have to do with publishing/copying rights?

Is it his responsibility to know that it is illegal? And more to the point, by which basis are they illegal? I buy Book A from the campus bookstore, and I buy Book B from an overseas distributor for a fraction of the cost. A is identical to B. I understand that it is illegal, but purchasing books in this way is in no way unethical and to my (admittedly unlawyer-like mind) is far more important.

WTF?

[fuzznutz]

These are copies of a book *LEGALLY* published and sold by the Asian subsidiaries of US publishing houses. How the f*ck are they illegal? The question is whether or not copyright law can restrict if they can be imported and resold.

Oops, sorry. I fed the troll, didn't I?

Re:I Don't See the Parallelism Here ...

[AngryDeuce]

Damn right. These huge corporations are able to go wherever is most financially beneficial to their interests when they're scoping out labor and raw materials, but they want to try and region-lock the final product so that we can't do exactly the same fucking thing and get around their arbitrarily inflated prices? Give me a fucking break...

If these assholes can go to India or China to have these books made for 3 fucking cents a piece, I should be able to go buy one there for a nickle if I choose to do so. If they want to region-lock the books, then they need to be forced to region-lock the fucking labor so that we're not being bent over due to the economic disparity between the first world and the third world.

The fact that it's not limited to tangible goods but services (i.e., call centers) these days is even more ridiculous. All of these companies claim they must do this to remain "competitive" but the cost savings are never passed along to the consumer. Books are just as expensive today as they ever were, if not more so. Even eBooks and eTextbooks cost a ridiculous amount when you take into account the fact that there is almost no overhead after the book itself is completed, and since they can't entirely stop students from sharing eTextbooks, well, they just build it in to your fucking tuition now. Remember when you could go to the library and borrow an expensive textbook you couldn't afford as you needed it and 'get by'? No more of that communist bullshit allowed, am I right? You filthy socialists get back in the fields and make room for the rich kids who can properly afford their education...

Just another 20th century institution trying to shove a 20th century business model into a 21st century market. I won't shed a fucking tear for these assholes when they're belly up, because the book publishers have been ripping off authors for far, far longer than the RIAA and MPAA have been, and there ain't no sympathy here for those fuckwads either, believe me. I just wish more schools would tell these publishers to go pound sand and move to open source textbooks, but unfortunately, this kind of thing is just as politically motivated (and corruptible) as anything else these days. Too much money involved, too many palms being greased...same old song and fucking dance...

Re:I Don't See the Parallelism Here ...

[Mordok-DestroyerOfWo]

If you truly cannot see the difference between home-surgery and selling identical copies of the same book, then arguing is futile. I bow before the power of your distortion field.

Re:I Don't See the Parallelism Here ...

[Altrag]

You start giving a shit really fast when they serve you with legal papers demanding $600,000. If you just ignore those, you'll end up with the cops knocking on your door and a free trip to the local jail while the lawyers sort things out for you.

Remember, you can sue anyone for anything -- only the courts have been granted the power to determine whether the case has merit (either by hearing it, or if its really stupid, just tossing it out.)

Re:I Don't See the Parallelism Here ...

[Anne Thwacks]

The concept of "Licensed only for region X" is only legal if it enhances the profits of American companies. Otherwise it is an infringement of international trade agreements.

This is one of the strategies America uses to make itself unpopular in the rest of the world.

Just don't buy

[MeNeXT]

It's getting to the point that you can never be sure whether a copy is legal or not. If you haven't read the original contract between the author and the publisher and the distributor you cannot be sure if you are acquiring a legal copy. Reading the copyright page in a book does not always state whether it is legal to distribute in such and such a country.

Now if he had pirated the book, since he was a student of few means, he would not be in this situation where he would have the need to sell the book.

If you cannot resell a legally purchased copy then it's best you pirate and be done with it. I don't subscribe to the idea that there is a grey market.

Re:I Don't See the Parallelism Here ...

[the_B0fh]

WHAT THE FUCK ARE YOU ON? It's not the foreign country that is suing is it?

Lets make it more clear.

If he went to Thailand. Bought the books there. Brought it back to USA.

Anything illegal yet?

Once he is done with his class, he sold the book.

Now all of a sudden that is illegal?! YOU ARE FUCKING SHITTING ME RIGHT?

Re:I Don't See the Parallelism Here ...

[haruchai]

Don't bow before idiots

Re:I Don't See the Parallelism Here ...

[shutdown -p now]

No, because it has an exception for "personal use" and such:

"(B) importation or exportation, for the private use of the importer or exporter and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time, or by any person arriving from outside the United States or departing from the United States with respect to copies or phonorecords forming part of such person’s personal baggage"

Of course, if you buy and bring with you two or more copies - say, as gifts for several people - then you're violating the law.