The First Sale Principle and What it Means to You

Show of hands: If you had to pay the copyright holder when you decide to resell something, say that year-old laptop upon which you’ve been writing the Great American Novel, since your good Uncle Fester just gave you a new one, would you resell it? More to the point, would you have bought the thing in the first place?

That, my friends, is precisely what may happen, and soon. At the end of the month, the US Supreme Court is hearing Kirtsaeng v. John Wiley & Sons, which came to the Supreme Court from the US Second Circuit Court of Appeals. Kirtsaeng was a Thai student who was studying in the US. He discovered that he could get the text books he needed much cheaper in Thailand than here in the US, so he got his family to buy them there and ship them to him. When he was done he sold them all and made a mint. That, of course, ticked-off John Wiley & Sons, who sued Kirtsaeng for copyright infringment.

Kirtsaeng’s defense is the First Sale Doctrine, which was recognized in the High Court in 1908 as a part of American copyright law. The Doctrine says that you can resell whatever you own without considering the copyright holder because their rights were satisfied on the first sale. According to the Second Circuit, this applies only to products developed and manufactured in the US. In other words, since Kirtsaeng’s books were printed and bound in Asia, they are not covered under the First Sale Doctrine.

As writers, we use a lot of technology from overseas, computers, software, tablets; we use books, all sorts of things in pursuit of the perfect metaphor. It could mean hanging onto old technology or outdated software out of fear of paying royalties for selling the old stuff on eBay; it could mean buying all American, but are there any computers actually manufactured here anymore? It could mean stiff price hikes as the manufactures “compromise” by front-loading the resale royalties into the original sale price. One thing is certain, anyone who uses technology will be paying much more if the Supreme Court upholds the Second Circuit’s ruling. Of course if they do, then it will be up to Congress to change the law to include foreign-made items in the Doctrine, but how long will that take, if it happens at all? Let’s not forget those pesky lobbyists and how money speaks louder than either morality or common sense.

So, while we are waiting, let’s play a game. I know that you are all creative souls, so think a moment and see if you can come up with some of the ludicrous effects a Supreme Court affirmation of the Second Circuit’s ruling would have. Come to think of it, leave your idea as a response and let’s see just how ridiculous this can get.

 

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