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Adrian Kingsley-Hughes

First-sale doctrine lost for goods purchased overseas

By | December 16, 2010, 2:40pm PST

Summary: The Supreme Court’s 4:4 decision to uphold a Ninth Circuit court decision limiting first-sale doctrine to U.S. produced goods has huge potential implications for the technology you buy.

The Supreme Court’s 4:4 decision to uphold a Ninth Circuit court decision limiting first-sale doctrine to U.S. produced goods has huge potential implications for the technology you buy.

Forbes has the details on the decision:

The decision upholds the right of manufacturers — in this case, Swiss watchmaker Omega — to use copyright laws to prevent U.S. retailers from selling goods they obtained overseas.

SCOTUSblog has more:

At issue is the so-called “first sale doctrine.”  Federal law provides that, if a copy of a protected work is made or purchased legally, that copy can be sold without the consent of the owner of the copyright.  Once the owner of a protected work has sold a copy of it to someone else, that other person may sell it without permission of the owner of the copyright.

Under other provisions of copyright law, importing a copy of a protected work amounts to an infringement of the copyright if the copy was made abroad and brought back into the U.S. without permission. The first-sale doctrine is an exception to that provision.  The Ninth Circuit, however, ruled that the doctrine applies only to copies made legally and sold inside the U.S.  It said that recognizing the defense for goods made abroad would extend copyright law beyond U.S. borders inappropriately.

This case involved Swiss watchmaker Omega and warehouse club Costco. Costco was buying Omega Seamaster watches abroad and selling them for $1,299, about a third less than Omega’s suggested retail price of $1,999. This latest ruling allows foreign copyright holders to control how its works are distributed.

Put that another way, you buy an Omega watch and it’s yours … forever. Technically this ruling prevents you from being able to sell it on without obtaining Omega’s permission, whether that be a public sale or a private one.

Now, you might not be buying or selling many Omega watches, but chances are that if you are reading this blog you’re the kind of person who buys a lot of imported stuff, either directly, or imported without the direct consent or approval of the manufacturer. You could well be affected by this decision.

While this doesn’t affect foreign-made products found in most peoples homes, it’s a worrying development for those who value their right to do with their stuff whatever they want to do with it.

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Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

Disclosure

Adrian Kingsley-Hughes

All opinions expressed on Hardware 2.0 are those of Adrian Kingsley-Hughes. Every effort is made to ensure that the information posted is accurate. If you have any comments, queries or corrections, please contact Adrian via the email link here. Any possible conflicts of interest will be posted below. [Updated: February 23, 2010] - Adrian Kingsley-Hughes has no business relationships, affiliations, investments, or other actual/potential conflicts of interest relating to the content posted so far on this blog.

Biography

Adrian Kingsley-Hughes

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.

Adrian has authored/co-authored technical books on a variety of topics, ranging from programming to building and maintaining PCs. His most recent books include "Build the Ultimate Custom PC", "Beginning Programming" and "The PC Doctor's Fix It Yourself Guide". He has also written training manuals that have been used by a number of Fortune 500 companies.

Adrian also runs a popular blog under the name The PC Doctor, where he covers a range of computer-related topics -- from security to repairing and upgrading.

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RE: First-sale doctrine lost for goods purchased overseas
aureolin 20th Dec 2010
@aep528 You're missing the point - the US is not "stopping forcing it's copyright laws on other countries", it's ceding it's own copyright laws TO other countries, within its own borders. I.E. We've just give up a big chunk of US sovereignty in favor of other countries laws.
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Another case where lawyers are insane
terry flores 16th Dec 2010
Copyright law is going to cause the downfall of Western Civilization. It has become so obtuse, invasive and arbitrary that it can make almost any common person into a federal criminal just by breathing and shopping at Walmart.

No wonder that intellectual property laws have become the main competitive weapons in corporate arsenals, because they are the only ones who can afford all the lawyers needed to decrypt this arcane nonsense.
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RE: First-sale doctrine lost for goods purchased overseas
lehnerus2000 Updated - 17th Dec 2010
@terry flores
Agreed.

During the past decade, we have seen a concerted push, to transfer rights from individuals, to Corporations and Governments.

The "Patriot Act", "Cloud Computing", "DMCA", "software patent wars" and "allowing Corporations to buy elections", are just a few examples.

The shocking thing is that most people seem to agree with these developments!

Edited: DCMA changed to DMCA
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@lehnerus2000
I agree with the [so-called] "Cloud", though this is nothing more than an existing technology renamed, much like Twitter is a fancy version of IRC renamed with an interface then everyone goes gaga over it.

But yes, governments and corporation own the world because the people (or is that sheeple) do whatever they are told to do, the rest of us simply go insane because we cannot believe how stupid people can actually be.
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What about Apple?
rmccarlie1@... 16th Dec 2010
I wonder what Apple is going to make of this? Don't they believe they own their devices even after you buy them?
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@rmccarlie1@...
They've certainly always asserted that they own the copy of software contained within their products even after you buy them.

To my understanding of the formal definition of the word "copy" under US Federal copyright law, a "copy of the software" is exactly the same thing as a "physical object in which the software is embodied". Hence, they must've always been of the opinion that you never actually owned the physical object in the first place.
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This has NOTHING to do with first-sale doctrine
wackoae Updated - 16th Dec 2010
The case is an issue of sellers bypassing distribution channels by purchasing large quantities of goods overseas. In essence, they become distributors without a legal contract from the manufacturer.

First-sale doctrine was not made to protect people distributing goods in large scale. It is meant to protect the buyer ... you know, the guy who buys one or two goods and later wants to sell it to another person for whatever reason.

The fact that ignorant people can't see that obvious and HUGE difference is beyond my comprehension.
@wackoae I can't help you. You will continue to not understand.
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Let me put this into perspective
Mr. Copro Encephalic to You 17th Dec 2010
@wackoae, the ruling does not limit its findings to "large quantities" or any for that matter. Hence, according to 18 U.S.C. ? 2319, you buy a 3D 60" LG on eBay shipped to you from Southeast Asia (a legitimate, store-bought, authentic LG and you pay all applicable taxes), for $2599. You sell it to your buddy for $1500 6 months later. You can go to prison for up to 5 years and pay up to $250,000 in penalties, have a criminal felony record, and all the fun that goes with that. How does "this [have] nothing to do with the first-sale doctrine"?
@wackoae
I'll sell to whomever I please. Black, White, or Otherwise.
The law does not discriminate between one person buying one of a product or a corporation buying thousands of a product. This ruling effective takes away your right to buy a product overseas and bring it into this country. Have your top end, expensive electronic device stolen overseas and you purchased a replacement of the same make and model? The manufacturer can prohibit you from bringing that item into the US when you return home.
It's funny how people are missing the biggest, most important point in the whole ruling - that the US cannot force it's copyright law on other countries.
@aep528 Does that mean they admit defeat, and will leave the Torrent sites alone? The Pirate Bay for one will be pleased - and the RIAA will be miffed.
@aep528 You're missing the point - the US is not "stopping forcing it's copyright laws on other countries", it's ceding it's own copyright laws TO other countries, within its own borders. I.E. We've just give up a big chunk of US sovereignty in favor of other countries laws.
Buying an expensive elecrtronic product overseas is stupid anyways cause you don't get the warranty on the item in tis country that way. If it breaks and you want it replaced or fixed, you have to send it overseas. I would rather buy from a domestic source, even if it costs a little more cause the domestic warranty on the item gives me invaluable peace of mind.
Maybe this will encourage people and stores to buy American.
@rws0205@...

Dude, that's a stupid statement. Your fancy Sony BluRay player was probably manufactured in China and shipped to you via a Dominican shipping line with Shanghai as its home port.

How does that equate to 'buy' American? Especially when you consider that you might actually purchase Blue Jeans Cable in Australia, which is made by Americans... and be unable to resell it in the USA.

Which isn't the issue in the first place. The issue is that now, when you buy a product, you no longer own all the rights associated with it. Look up the term 'leasehold' as it pertains to property rights in the British Commonwealth countries, and you begin to see the magnitude of the problem.

But then again, maybe I shouldn't feed the trolls.

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