While our modern economy may be complex, at its foundation much of it is intuitive especially the simple, everyday act of buying and selling. I take something I own and give it to you for a price that we both agree is fair, and both of us walk away with what we want. As long as I didn't steal what I sold to you or it wasn't illegal to possess it in the first place, then there's no problem.
An upcoming Supreme Court case, Kirtsaeng v. John Wiley and Sons, however, is calling that most intuitive part of our market economy into question.
The case concerns Supap Kirtsaeng, a Thai native who came to the United States to study at Cornell University. Noting the absurdly high prices of textbooks in the United States, he called on his Thai relatives to purchase cheaper copies of the same textbooks, printed by Wiley and Sons, in Asia and ship them to him in the United States. He turned this into a business of sorts and made a profit selling textbooks, eventually racking up $1.2 million in revenue and thousands in profits. Wiley sued Kirtsaeng for a violation of copyright law, and Kirtsaeng countered with the first-sale doctrine.
The first-sale doctrine gives people who have lawfully purchased copyrighted items the "right to sell, display or otherwise dispose of that particular copy." This does not apply to computer software, which is usually governed by licensing agreements, but it holds true for physical items. However, this doctrine is contradicted by another statue which states that "importation into the United States, without the authority of the owner of copyright ... 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."
The 2011 decision of the Second Circuit Court of Appeals upheld the ruling of a lower court that Kirtsaeng's importation and resale of Wiley and Sons' textbooks was a violation of copyright law. If the Supreme Court upholds this decision, it means that you will have to get permission from the copyright holder in order to legally sell anything made outside of the United States.
For many businesses and ordinary people, this will be an enormous inconvenience that will result in wasted time and increased prices. Not only is it a pain to get permission to resell things, but the copyright holder will more likely than not ask for a cut of the revenue in exchange for permission. Many ordinary people would rather not go through the trouble if they're selling something that's not very valuable. This could very well mean the demise of businesses such as eBay, which derive an enormous amount of revenue from such sales.
It doesn't end with e-commerce, though. Among American-made cars, 40 percent contain foreign-made technology, posing potential problems for the used car industry. The American Library Association says that U.S. libraries, which contain over 200 million books published abroad, could also be severely hampered in their everyday operations by this decision. These and other industries could end up losing thousands of jobs were the Second Court's decision enforced rigorously.
One can question, however, whether such rigorous enforcement will happen at all. The scope of secondary-market transactions is so vast that it would take an advanced police state to stop all such commerce from happening. What remains troubling, though, is that such laws can be enforced selectively when there is a major interest at hand, such as a business like Wiley and Sons looking to maintain high textbook prices in the United States. In such cases, it's usually the little guy, who may have no knowledge of the existence of such laws, on the hook.
Besides that, this copyright law and other laws like it are, for most people, just plain stupid. To some, they represent nothing more than unwarranted intrusions into what should be personal business. This resentment breeds contempt for the law among otherwise ordinary law-abiding citizens, contempt that is unhealthy for a society which has respect for the rule of law as one of its foundations. It would therefore be best not to create or maintain statutes like this one, which warrant wide-scale intrusion into everyday activities to prevent and punish activities that are the foundation of a free market and free society.
