Wednesday, October 10, 2012
People love shopping for bargains. In the Walla Walla Valley there are many second-hand shops (and plenty of weekly yard sales) where great deals can be found on pre-owned goods.
But the joy of getting a good deal could be significantly diminished if the U.S. Supreme Court rules in favor of a textbook publisher in a case that will go before the justices this fall.
A ruling could also put the kibosh on eBay, Craigslist and any business that deals in pre-owned goods.
Frankly, this case sounds too absurd to be true. Yet, it is real.
Let’s start at the beginning. U.S. copyright law acknowledges the first-sale doctrine, which allows people to resell products such as electronics, books, artwork, CDs and DVDs without getting permission from the copyright holder of those products.
This is a very reasonable approach. Those who own products should be able to do what they want with that product — including sell it.
But a global textbook company, John Wiley & Sons, challenged the law for goods made outside of the United States.
What got Wiley in an uproar was the successful reselling of its textbooks in a way that undercut its U.S. sales.
Supap Kirtsaeng, a native of Thailand, came to the U.S. in 1997 to study at Cornell University. He noticed his textbooks, produced by Wiley, were substantially cheaper to buy in Thailand than they were at university bookstores. He had his relatives in Thailand buy books and ship them to him. He then sold them across the nation on eBay making more than $1 million in profit.
Not long ago Costco came under fire from some manufacturers for buying products outside the usual wholesale channels and then reselling them at Costco for less than what the manufacturer demanded its partner retailers charge.
In that instance, we sided with Costco. In the free market, the price of a product is set by demand.
And in this case we side with Kirtsaeng. It’s a global economy and those who manufacture goods need to monitor the pricing around the globe or it’s possible they will essentially undercut themselves.
If Wiley prevails, those who make goods outside the U.S. will try to get a piece of the profit when their products are resold.
It will be difficult to enforce on yard sales, although someone will surely try, but second-hand shops and Internet sites such as eBay will be squeezed — as will consumers.