Copyrights vs. ‘Owners Rights’
By Congressional Quarterly Staff
Last year, lobbyist Andrew Shore led the effort for a coalition of Internet companies eager to stop Congress from passing legislation designed to protect the copyrights of music labels and movie studios online. Now he’s warring with the creative community again, on behalf of a coalition of companies, libraries and charitable groups that want Congress to affirm their right to lend or resell merchandise they own but that was manufactured overseas.
The issue is coming to a head because the Supreme Court last week, on the day that Hurricane Sandy hit Washington, heard arguments in a case pitting Supap Kirtsaeng, a mathematics professor in Bangkok, against the publisher John Wiley and Sons. The publisher sued after Kirtsaeng, then a graduate student at the University of Southern California, bought Wiley textbooks that were manufactured overseas and meant for overseas distribution, then sold them online in the United States. The books were almost identical to the ones Wiley produced for the U.S. market, but Kirtsaeng exploited the difference in price to make about $100,000 in profit on eBay. The online auction house has joined Shore’s new coalition, called the Owners’ Rights Initiative.
The coalition, which includes the American Library Association and Goodwill Industries, has begun seeking sponsors for legislation to make clear that people who legally buy goods overseas can lend or resell them here. That precedent is well established for goods made in the United States, but lower courts sided with Wiley with respect to the goods made overseas.
In 2010, the Supreme Court split 4-4 in a similar case, which pitted discount retailer Costco against Swiss watchmaker Omega, affirming a lower-court ruling that Costco had violated Omega’s rights by reselling its watches in the United States without the watchmaker’s permission.
Justice Elena Kagan recused herself in that case because she, as President Obama’s solicitor general, had written the government’s brief in support of Omega. The Obama administration also is supporting Wiley.
Shore says the decisions put at risk “everything from libraries to trading in your automobile when you buy a new one . . . . It’s the entire resale industry.”
But publishers dispute Shore’s contention, saying that the right to lend books and resell items at flea markets has been well established and that Congress also has made clear that publishers have the right to control the distribution of foreign editions of their books, priced for countries where incomes are lower.
If the court or Congress were now to decide otherwise, says industry trade group the Association of American Publishers, then publishers would be “less willing to engage in the labor-intensive process to create textbooks.”
In a brief filed in support of Wiley, trade groups representing the movie and music industries said their copyrights could be put at risk if Kirtsaeng were to win. Movie studios’ “ability to treat national markets separately for purposes of the timing, promotion or content of theatrical and home video releases can be critical to a film’s commercial success,” attorneys for the recording and motion picture associations wrote.
For his part, Shore hopes the court will rule in favor of the resellers, but he says his coalition is getting ready to fight this battle in Congress. “We may get absolute clarity and certainty from the Supreme Court. But we probably won’t, and so we want to be ready on the legislative front.”
Source: Congressional Quarterly, November 5, 2012