Posted on November 5, 2012, Ross Lincoln Kirtsaeng v. John Wiley & Sons Inc.: Why Gamers Should Care
Why should gamers give a damn about the legality of an obscure grad student’s used-textbook business? Try this: imagine a consumer landscape in which the games you own are not, as such, games you actually own.
Yes, you’ve legally purchased your copy of Halo 4, your iPad, your Xbox 360. And yes, a century of American law and precedent says that once you buy something, you have full rights to do whatever you want with that particular something, up to and including the right to resell it to someone else. Despite this, let’s say you discover that because your game crossed a border before it crossed your threshold, you have absolutely no authority to make decisions of any kind about what to do with it while it’s in your possession. In fact, if you choose to give it away, trade it in for credit toward the purchase of a newer game, or sell the thing on eBay, you could face legal or financial penalties for having failed to secure the permission of the developer. We the people as renters of everything, owners of nothing more than the privilege of handing our money over, and there’s nothing you can do about it.
It sounds ridiculous and you’d be forgiven if you assume that this concept is too silly for even the most hackneyed fictional dystopia. But this ridiculous concept could become a ridiculous reality if the Supreme Court finds for the defendant in the case of Kirtsaeng v. John Wiley & Sons Inc..
At first glance, Kirtsaeng v. John Wiley & Sons Inc. seems to be about nothing more than a dispute between an eBay auctioneer and a book publisher. Thailand native Supap Kirtsaeng came to the United States as a grad student in 1997. Faced with onerously pricey textbook costs, Kirtsaeng realized that the international versions of those textbooks – the ones intended for students in poorer countries, printed on cheaper paper and lack some graphical content – were largely identical. He saved himself hundreds of dollars by having those versions shipped to him in the US, and began ordering them for fellow students as well. This worked so well that he later parlayed that service into an eBay cottage business reportedly worth more than a million dollars by 2003.
Kirtsaeng’s operation eventually caught the attention of John Wiley & Sons Inc, printers of most of the textbooks in question. They contend his business cut into their own illegally, so the publisher sued Kirtsaeng for copyright infringement; Kirtsaeng countered by citing the First Sale Doctrine, and the case has been winding through US courts ever since. On October 29, the Supreme Court of the United States began hearing arguments in the case.
First Sale What Now?
The First Sale Doctrine stems from a 1908 Supreme Court decision in the case of Bobbs-Merrill Co. v. Straus. Without getting too bogged down, Bobbs-Merrill Co. published a novel that came with a restriction forbidding retailers from selling the book for anything other than the publisher’s set price. The defendants ignored the warning, and the case went all the way to the Supreme Court, where things got weird. Unusual for an era in which the American legal system was dominated by reactionaries bent on crushing everything from labor rights to equal rights, SCOTUS held that while the original seller has the right to “multiply and sell” an item under their own restrictions, that right does not extend to subsequent resales. (For an example of how specific laws address this complexity, see here.)
This decision was influential enough that Congress eventually codified First Sale with the Copyright Act of 1976; it remains the standard by which consumer transactions are managed to this day. And with the case now before the Supreme Court, First Sale as we know it could become a thing of the past.
Kirtsaeng’s defense would at least superficially appear to have been open and shut. He bought the books lawfully, and they were now his to do with as he wanted. To that, John Wiley & Sons. provided a novel counterargument: a separate section of the Copyright Act of 1976, which holds that “importation into the United States, without the authority of the owner of copyright… is an infringement,” actually means that First Sale doesn’t apply to anything sold outside the United States and brought into the country after.
That’s a very interesting interpretation.
The law in question was designed to ensure that imported copyrighted works weren’t pirated, but actually brought into the US legally. Think about it like this: You’re well within your rights to buy an Xbox 360 in another country at a lower price, bring it into the US and, if you choose, sell it to someone else. But you can’t build your own Xbox 360 from specs and sell it as though you designed it. However, the law also aimed to allow sellers to price their wares differently in different markets, something many businesses argue would be fatally undermined by such a scheme (indeed, this kind of argument is used by pharmaceutical companies who oppose the importation of cheaper drugs from Canada).
Unfortunately, much like how the second amendment to the US constitution is maddeningly ambiguous1, these two sections of the Copyright Act of 1976 seem to brazenly contradict one another. Clearly, some kind of reconciliation needs to occur for the law to make sense, but in August, 2011, a US Appellate Court ruled so broadly in favor of John Wiley & Sons that the basic underpinnings of the First Sale Doctrine might end up being negated entirely.
1) Seriously, ‘well regulated militia’ and also ‘shall not be infringed.’ Wouldn’t the ability of the government to ‘well’ regulate something constitute a type of infringement? Thanks a lot, founding fathers. No one is going to fight over that.