Perhaps you remember Rashmi’s post about how the Ninth Circuit’s decision in Omega v. Costco opened the door to copyright owners taking control of the import markets for all kind of products, merely by slapping a copyrighted logo onto everything they make. Wednesday, PK and EFF filed a brief asking the Supreme Court to take the case, explaining that the consequences of the Ninth Circuit’s decision go even further than controlling imports. The short version is that under the Ninth Circuit’s interpretation, any product which has a label or logo manufactured abroad cannot be imported into the U.S., resold, or given away by a lawful purchaser without permission of the owner of the label’s copyright. Sound like a big deal? It is.
Legally, this case is all about the first sale doctrine. By default, under copyright law, only a copyright owner has the right to make and distribute copies of their works. But what about a book that you bought? Can’t you give that away or resell it to someone? That’s where first sale comes in. First sale is a common law doctrine, codified in 1976, that states that the owner of a copy of a work has the right to dispose of that work how they please, including giving it away or reselling it.
The real problem with the Ninth Circuit’s interpretation of the law is that it results in first sale not applying to copyrighted works made abroad. This means that if one lawfully purchases a copyrighted work made in a foreign country, not only is importing the work forbidden, but the copyright owner retains the exclusive right to distribute that copy. In other words, you can’t sell it or give it away without becoming a copyright infringer and risking liability for up to $150,000 in statutory damages if the work is registered.
One way this causes harm is by giving manufacturers a way to eliminate the parallel import market for any goods, which does 10s of billions of dollars of domestic business every year and provides consumers with quality, low-cost products. But the place where the rubber really hits the road is not when someone wants to import or resell a book they bought (although that does present an enormous problem) – it’s when a copyright owner slaps a minimal copyrighted work onto another, noncopyrighted product.
The bar to copyrightability is low, so pretty much any logo, instruction sheet, or artwork is going to be protected by copyright. And by attaching that logo to another product – a bottle of wine, a car, or a watch – suddenly that product becomes immune to import, resale, or even being given away as a gift. Stores carrying imported CDs, used car dealerships, and even someone who wants to give their friend a bottle of French wine will potentially become infringers. And with no real way to figure out where a logo or label was manufactured, resellers will find it hard to carry any goods that they cannot verify the original source of, turning the secondary market of nearly any product into a copyright minefield.
We’re asking the Supreme Court to take this case and bring sanity back to this portion of copyright law. A number of other interested parties have also submitted briefs with the same goal:
- Public Citizen [pdf]
- eBay [pdf]
- Entertainment Merchants Association et al. [pdf]
- Retail Industry Leaders Association et al. [pdf]