I found this article earlier today, and felt it a MUST to post here. This could possibly impact the entire aftermarket sale of goods, especially this forum. On a posititve note, this could also allow the dictation of manufacturers to set price ceilings/floorings for aftermarket, used goods as well. As above so below in this world...
READ THE ARTICLE! Can you sell your imported gadgets? Court guts
Cliffs for you lazy fvcks:
The Ninth Circuit Court of Appeals is basically making up their own interpretations of Section 109 of the Copyright Act and saying that ORIGINAL manufacturers of such copyrighted stamped products can dictate the future sales of said products. Meaning you must get permission to sell said product.
So Jacob...can I sell my SAZ-3000D for $50?
Let's say a relative gave you an imported Omega watch over the holidays. It's a nice piece, but it's not exactly your style, so after agonizing over the issue for the appropriate number of months, you decide to sell it over eBay.
Not so fast. Thanks to a decision by the Ninth Circuit Court of Appeals, that might not be so easy. In fact, the store that sold it, Costco, shouldn't have sold it in the first place, the court recently ruled, because the doctrine of "First Sale" has limits. Section 109 of the Copyright Act says that a copyright owner of a product has the sole initial right to distribute it. Then the subsequent buyers have the right to "to sell or otherwise dispose of the possession of that copy"—in other words, sell it again.
But now the Ninth Circuit says this doesn't necessarily apply to items in which a company's copyrighted logo was inscribed on a product made abroad, as in this case. The Public Knowledge advocacy group calls this decision "a terrible idea," and has filed an amicus brief with the Supreme Court, which is reviewing the case.
"What happens to Netflix, Amazon and eBay," PK's Anjali Bhat worries, "if they have to find out where each item was made, whether it has a copyrighted logo made outside the US (if the item itself isn't a copyrighted work), and then buy licensing rights from the copyright owner if the item was made abroad? That's an enormous economic burden to put on businesses who follow that model."
Costco didn't directly buy these logoed watches from Omega. Instead, it purchased them at a bargain price via the so-called "gray market"—from distribution companies authorized to sell the items overseas. A company called ENE Limited bought them up and sold them to Costco, which put them up for sale at its stores in California. When Omega found out about this activity, it sued Costco for infringement.
Standing in the way of the company's complaint was the Supreme Court's 1998 Quality King Distributors decision, which put limits on this sort of litigation. In that case, California hair care product maker L'anza sued Quality King for illegal distribution of L'anza products. These US-made items came to Quality King via a similarly circuitous route. The company bought them extra cheap from a distributor in Malta, which had purchased them with affixed copyrighted labels from L'anza's United Kingdom wholesale outlet.
L'anza charged that because King bought its products outside the US, Section 109 protections didn't apply. Those protections were said to be overruled by Section 602, which prohibits unauthorized importation of copyrighted works acquired outside of the country. But the High Court saw it otherwise, contending that the First Sale principle "is applicable to imported copies."
602's "literal text is simply inapplicable to both domestic and foreign owners of L'anza's products who decide to import and resell them here," the Supremes declared at the time.
So Omega ran a new line of argument past the Ninth Circuit in this latest dispute. Even though the Omega Globe Design logo is a US copyright, "the watches bearing the design were manufactured and first sold overseas." That makes this case different, the company's lawyers contended.
The Ninth concurred. "We hold that Quality King did not invalidate our general rule that § 109(a) can provide a defense against" unlawful importation claims "only insofar as the claims involve domestically made copies of US-copyrighted works." Thus, the First Sale doctrine doesn't apply in this instance.
What's the precise logic here? Let's go back to the exact language of Section 109. We've added italics to the key phrase:
"The owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."
The Ninth interprets the "lawfully made under this title" phrase to mean, "legally made and sold in the United States."
An interconnected world
The Electronic Frontier Foundation (EFF), which joined the amicus brief, calls this logic "outrageous" and a "bogus copyright theory," as does Public Knowledge. "There is no textual support for this interpretation of 'lawfully made under this title'," writes PK's Bhat. "'Under this title' usually isn't synonymous with 'in this country'."