The Supreme Court’s decision in Kirtsaeng today is a big win for the public, for ownership rights, and free trade. In a compellingly-argued 6-3 decision, the Court held that copyright owners do not have a perpetual right to control the resale of goods, even when they are manufactured overseas.
Some publishers and other copyright interests argue that they just want to control unauthorized imports of works–they want to be able to sell a book for $5 overseas and $50 in the United States, and be given legal protection for this market segmentation. Of course, all kinds of businesses would like it if Congress passed laws to support their business models. It’s unclear why price discrimination should receive government support but not arbitrage. (After all, it’s textbook economics that arbitrage can help improve economic efficiency). But that’s an argument for another day, since in Kirtsaeng the publishers and many others did not argue merely that they should have the right to control imports–they wanted the right to control the distribution of copies of their books in perpetuity (or until any copyrights expired, whichever comes first). The effects would go far beyond the original importer.
This would have been an absurd result. If you own something, you own it, and whether or not you can resell it, give it as a gift, or lend it out should not depend on the country it was made in. (In many cases, how would you even know?)
Had the Court gone the other way, a used bookstore or a library with books on its shelves that were imported from the U.K. twenty years ago might be a copyright infringer. But thanks to the Court’s decision, sales of used books, CDs, clothes or other items with copyrighted designs or logos, and anything with embedded software (such as cars, electronics, and appliances) can continue without legal uncertainty hanging over them.
Detractors have said that this line of reasoning is fear-mongering; that we’re conjuring up a “parade of horribles” that would be unlikely to actually occur. But the Court today recognized that you can’t just ignore the possible consequences of a bad legal ruling. As it wrote,
[T]he fact that harm has proved limited so far may simply reflect the reluctance of copyright holders so far to assert geographically based resale rights. They may decide differently if the law is clarified in their favor. Regardless, a copyright law that can work in practice only if unenforced is not a sound copyright law. It is a law that would create uncertainty, would bring about selective enforcement, and, if widely unenforced, would breed disrespect for copyright law itself.
This is exactly right. Some proponents of stronger copyrights undermine their cause when they overreach as they did in this case. Public Knowledge and many others who applaud this decision support copyright and want the public to respect it–but this requires bringing it back into balance and not just mindlessly “strengthening” it until everyone is a copyright infringer all the time.
Companies that are disappointed with this decision will very likely take their fight to Congress, and try to get it to pass a new law that strengthens copyright holders’ right to prevent unauthorized imports. To change the law, they will have to make a compelling case that some kind of new legal protection is in the public interest–that it makes sense for Congress to pass laws that allow companies to sell products in the United States at higher prices. This will be an interesting discussion to have. Luckily, it appears that the real agenda of some content interests–control over resale markets–is already off the table.