Here's A Taste Of What Publishers Will Do If First Sale Rights For Foreign Goods Disappear

from the goodbye-first-sale,-goodbye-jobs? dept

As Techdirt reported a few months back, the Supreme Court Justices seem rightly concerned about the "parade of horribles" -- things that would happen if the decision in the Wiley v. Kirtsaeng copyright case over whether or not you have the right to resell a foreign-made product you bought were applied generally. In the oral arguments, the line of Wiley's lawyer was essentially: nothing bad will happen, because copyright holders would never dream of using the decision to make outrageous demands.
But a fascinating post by Kevin Smith on the Scholarly Communications @ Duke blog recounts a couple of troubling stories of how publishers are already making outrageous demands that could become the norm if the Kirtsaeng decision is upheld. The first concerns a film:

In response to a faculty request, we purchased a DVD of this film through an ordinary commercial channel. Going directly to a retail outlet in this case was the fastest way to fulfill the request, as librarians will surely understand. But somehow the film's producer found out that our library owned a copy of this film, and they have been asserting to us that we need to buy an additional license, at three times the retail price we paid for the DVD, in order to lend the film.

That's not the case, because first sale allows the library to lend out the DVD if it wishes. However, if the DVD had been manufactured abroad, and the Kirtsaeng decision applied, the library would not have been able to do that. The second story concerns physical books:

A donor to [a] library had given them some books, amongst which was a copy of a specialized textbook that is currently in use at the school. Subsequently, the library has been contacted by the publisher of the textbook who has told them that they are not permitted to place the copy of the book that they were given in their library.

Apparently, the fear was that students might make photocopies instead of buying the book. But again, the first sale doctrine means that the publisher has no power to demand the book be removed from the library in this way. And once more, if the Kirtsaeng ruling applied, and the book had been printed abroad, the publisher would have that extraordinary right to determine which of its books could be lent out - thus ripping the heart out of the present library system. In fact, so great is the additional control that publishers would have over titles not printed in the US in this situation, that Smith suggests there is likely to be a rush to off-shore operations:

If the Supreme Court does hold that first sale applies only to copyrighted works made in the U.S., publishers will have a strong incentive to move their manufacturing operations off-shore. In making its ruling in Kirtsaeng the Second Circuit admitted as much. If a publisher has its books printed or its DVDs pressed in the U.S., it will be very difficult for it to implement truly tiered pricing [that is, to charge libraries extra for books or DVDs that will be lent out -- something publishers are keen to do.] But if it moves those operations overseas, it might be able to stop libraries from lending materials without a separate, expensive license. It might also be able to forbid libraries from lending certain books entirely, like textbooks. It might even be able to stop students from selling their textbooks second-hand to the next crop of students taking the course. The experiences libraries have had with e-books proves that these goals are important to publishers.

In other words, it won't just be the public and libraries that lose out massively if the first sale doctrine is not upheld for foreign goods involving copyright: it's quite likely that many US workers will suffer too, as a wide range of industries move manufacturing offshore in order to obtain even more control over how people use their products.