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JUSTICE BREYER: Am I right or am I wrong? Am I off base or am I wrong — am I right?
MR. OLSON: There are other defenses, but that is not this case. This case is not —
JUSTICE BREYER: Well, how do you distinguish? How do you distinguish?
MR. OLSON: The government — the government would argue for a broader interpretation under what was made under this statute, whether that would include the importation or the distribution in commerce. That's an argument that the government makes, but it's not necessary to decide this case.
Breyer gave more examples of hypothetical horribles where buyers might get screwed after buying imported products that contain copyrighted material. His list included “libraries with three hundred million books bought from foreign publishers that they might sell, resell or use” and “museums that buy Picassos.” Olson replied, “When we talk about all the horribles that might apply in cases other than this—museums, used Toyotas, books and luggage, and that sort of thing—we’re not talking about this case.”
On the other side, E. Joshua Rosenkranz, the attorney for Kirtsaeng, posed the idea of how this could impact manufacturing jobs. Rosenkranz tried to explain that a ruling for Wiley & Sons would entice publishers and copyright holders to keep manufacturing overseas, so they could control resale rights at a global scale.
“A U.S. manufacturer who wants to sell into the U.S. market has this incentive to go and send jobs overseas. It's an irresistible incentive if the law is — if this Court says the law is.” Justice Ruth Bader Ginsburg questioned Rosenkranz if this has in fact ever happened. Rosenkranz swears by it, but came up short on providing a case.
After all is said and done with the hearing, this case has gone beyond the walls of the Court of Last Resort. The case has attracted internet big shots like eBay and Overstock as well as other stakeholders in second-hand stuff such as The American Library Association and Goodwill Industries. Together, along with many other businesses, associations and organizations, they have created a coalition called the Owners’ Right Initiative (ORI).
If the Court sides with Kirtsaeng, copyright holders could have a mess on their hands—trying to get ahold of royalties, not only for publishing companies, but for authors, artists, and content creators. A snowball effect could occur. If the creators of content aren’t receiving any royalties due to re-importation, then they might not be as keen to put out so many versions. But then they may increase prices to compensate for that lost revenue stream.
The resellers could see some major damage too—from cultural exchange to online businesses. Damn near everyone has resold something in their lives, at a garage sale or on Craigslist. A victory for Wiley could mean a bigger snowball could roll down the hill, running right over eCommerce, small businesses, libraries, museums, and the lady down the street who is trying to sell foreign knick-knacks.
Whatever decision is rendered, it seems safe to say that it won’t be a perfect solution. Who out of the two groups will take a bigger fall? Publishers, movie studios, and others in the entertainment industry will suffer by not being able to stop imports from their cheapest markets abroad. If that happens, we can expect the price of all licensed goods, from textbooks to DVDs, to spike as copyright holders try to make as much as possible on domestic sales. But resellers could have a cliff that is sharper on the way down.
What needs to change is the mentality around doing business. Kirtsaeng may seem like a entrepreneurial David taking on a corporate Goliath, but that’s not quite right in the bigger picture. You have major companies such as eBay, Google, and Costco embracing the idea of reselling, while other business, as large or larger, favor making the practice a crime. Copyright is enshrined in the Constitution specifically as a means to benefit society, not particular industries or business models, a point which often gets lost in legal battles. After decades of copyright-holder-friendly legislation plainly at odds with technological innovation that undercuts everybody’s ability to control distribution and reproduction, it’s increasingly difficult to argue that consumers are well served by strict enforcement of existing laws.
The Supreme Court’s decision will be announced sometime in the coming months. Depending on that decision—and it’s far from clear how the majority will rule—we may start to see a real-life “parade of horribles” by the beginning of next summer. And no matter what this decision says, you can expect to see a flood of similar cases in the future.