Monday, October 29, 2012

Copyrights, Property Ownership, Differential Pricing and the First Sale Doctrine in Law and Capitalism

The landmark copyright case Kirtsaeng v. Wiley will be argued today at the United States Supreme Court. Joe Mullin at Ars Technica has a nice write-up at How a Supreme Court ruling may stop you from reselling just about anything.

This is a non-political issue so that we expect a unanimous Supreme Court decision -- with the ratio decidendi in the opinion to run something like this:

"Differential pricing is a luxury of capitalism afforded to sellers of goods and services in the United States and all over the world. In fact, our antitrust law generally prohibits price-fixing among competitors in the offer of sale of any given product [Apple and consorts to the contrary]. Sellers engaging in potentially lucrative practices such as differential pricing in different markets must also be prepared to suffer the risks that such differential pricing encompasses, among these being the likelihood that someone could buy a given product cheaper HERE and sell it more expensively THERE. That, in fact, is the ESSENCE of the capitalist market system, and always has been.

In terms of the copyright law, the Constitution was not drafted to provide special privileges or advantages to authors in the manufacture or sale of their products, whether in domestic or foreign markets, but ONLY to protect their sole right to exploit their works, which has been interpreted by the courts to mean that the law will protect authors from unlawful copying by others, so that authors can sell their works themselves.

How they sell them is their choice, which is a question of authors' individual talents or those of their publishers, advertisers and marketers. But once sold, they are sold, and the deal has been done. The compensatory copyright rights are extinguished for the work sold because the author has been compensated for that particular work. Period. End of story.

That is all a part of how capitalism functions. Choices and results.

Authors who choose not to sell their works at ONE uniform price, but to engage in potentially more profitable or otherwise more desirable differential pricing in local, regional or world markets, can hardly expect the law and the courts to finance the risks involved in such a choice. Courts are not the handmaidens of traders or hawkers of wares. Moreover, the public via the legal system should not have to pay the bill to guarantee the success of marketing choices. That is outside the scope of copyright law.

If a copyright holder sells a copy of his or her copyrighted work in ANY form at ANY price in ANY place, it is considered sold, and, under the first sale doctrine, unless otherwise prohibited by law, it can be sold again to ANYONE at ANY price ANYWHERE. Our capitalist system tolerates nothing more and nothing less."

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