By: Sharon Urias, Esq.
A student from Thailand whose search for inexpensive college textbooks has now led to a legal battle involving federal copyright law that could determine the legal rights of Americans to sell thousands of used products on eBay, Craigslist and at garage sales and flea markets, as well.
When Supap Kirtsaeng came from Thailand to attend college in the United States, he was shocked by the high price of textbooks. Kirtsaeng enlisted his parents in searching for and sending him inexpensive textbooks at local bookstores in Thailand. Before he knew it, Kirtsaeng was running a small, successful textbook business out of his apartment by selling the textbooks on eBay, a business so lucrative it paid for his college education. Unfortunately for the industrious student, these textbooks he was selling, all bore the warning: “Exportation from or importation of this book to another region without the publisher’s authorization is illegal.” After researching online articles on copyright laws, Kirtsaeng concluded he was in no legal jeopardy and continued his business of selling textbooks on the internet.
However, the publisher of some of the books, John Wiley & Sons, did feel Kirtsaeng was breaking the law by selling copyrighted material and sued him in federal court. In 2009, a New York jury agreed with the publisher that Kirtsaeng had indeed violated copyright law and ordered the young man to pay $600,000 in damages. Kirtsaeng found himself caught between two federal laws and is now asking the U.S. Supreme Court for a decision, hopefully one that favors him, in the case.
According to one copyright provision, the first-sale doctrine, when the holder of a copyright offers a work for sale, its legal interest in that specific copy evaporates as the item is sold. Basically it means that when you buy the latest Nora Roberts book, you can sell it or give it away without violating any copyright laws.
However, there is another law that prohibits importing works “acquired outside this country … without the authority of the owner of the copyright.” This is the law that was applied when the court ruled against Kirtsaeng because the textbooks he purchased were manufactured outside of the United States.
Those companies and groups involved in selling used merchandise are urging the Supreme Court to overturn the ruling in the case. These businesses include eBay, Goodwill Industries, Costco and Craigslist to name a few. EBay warned that leaving the ruling intact would be a blow to “trade, consumers, secondary markets, e-commerce, small businesses, and jobs.” Goodwill Industries said the ruling would have a “catastrophic effect on the viability of the secondary market and, consequently, on Goodwill’s ability to provide needed community-based services.” Kirtsaeng’s lawyers argued “Even cherished American traditions, such as flea markets, garage sales, and swapping dog-eared books are vulnerable to copyright challenge” under the appeals court ruling.
Experts feel that industry enforcers would only be visiting stores and Internet sites that sell used materials, not garage sales and flea markets. Nevertheless, they do feel that businesses such as eBay and Craigslist will be disrupted.
The Supreme Court will argue this copyright case on Monday. The decision by the court, will not only affect graymarket sales, which are those sales in which middlemen legally buy products overseas and then make them available to retailers in the U.S., who then turnaround and offer the products for lower prices than those that can be purchased legally in this country, but the way many American consumers sell thousands of used products on the internet, at garage sales and flea markets, as well as adversely affecting those companies whose livelihood depends upon the sale of these products.
