Will Supreme Court Take Away the Right to Sell Your Stuff?

The right to sell your own stuff on eBay, Craigslist, at pawn shops, and garage sales is as American as apple pie, right?  Not so fast!  This year the U.S. Supreme Court will decide whether you really do have a right to sell the stuff you own.

And no, I’m not kidding.

A case before the Court, Kirtsaeng v. John Wiley & Sons, threatens what is known as the “first-sale doctrine”or “the right of first sale” in copyright law.

first sale clause right to sell your stuffAccording to Wall Street Journal Market Watch, under the first-sale doctrine, which the Supreme Court has recognized since 1908, Americans may legally “buy and then sell things like electronics, books, artwork, furniture as well as CDs and DVDs, without getting permission from the copyright holder of those products…without worry because the copyright holder only had control over the first sale.”

In other words, the first-sale doctrine says that copyright holders can control the first sale of their product, but not subsequent sales.

Take the iPhone for example. Apple can control who they will allow to sell the phones, how they’re sold, etc.  But once you or I buy the phone, we can sell to someone else whenever and however we want – on eBay, Craigslist, or whatever.

And Honda can control who can sell their cars in America, and how they’re sold. But once I buy a Honda Pilot, I’m free to sell it on Craigslist or eBay, put a sign in the window and park it along a busy street, put an ad in the paper, trade it in to the dealer I bought it from, trade it in to another dealer, or whatever.

Until now.

Appellate Court Ruled Against First-Sale Doctrine, Supreme Court is Next

A New York appellate court has already ruled against the first-sale doctrine in this case, for products made abroad. Which is why it is now before the Supreme Court.

According to MarketWatch, the Kirtsaeng v. John Wiley & Sons case “stems from Supap Kirtsaeng’s college experience. A native of Thailand, Kirtsaeng came to America in 1997 to study at Cornell University. When he discovered that his textbooks, produced by Wiley, were substantially cheaper to buy in Thailand than they were in Ithaca, N.Y., he rallied his Thai relatives to buy the books and ship them to him in the United States”

That sounds cool, right?

But Kirtsaeng didn’t just buy and resell his own text books.  He had his relatives buy and send him hundreds or maybe even thousands of the books from Thailand, which he then sold in America on eBay to the tune of $1.2 million, according to court documents.

Wiley admitted that it did sell the books cheaper abroad than it did in the United States, but it sued Kirtsaeng for copyright infringement. Kirtsaeng countered with the first-sale doctrine.

If the Supreme Court upholds that ruling, it would mean that I would have to get Apple’s permission to sell my iPhone, and Honda’s permission to sell my Pilot.

It would mean that anyone who owns anything made in China, Japan, Taiwan, Mexico, Canada, Europe, or wherever, would have to get permission from the copyright holder in order for them to sell that product.

Do you own a car made in Japan? Furniture made in China?  Clothes made in Cambodia?  Before you could sell them, you’d have to get permission.

If Kirtsaeng v. John Wily & Sons is upheld, it could cripple marketplaces like eBay, Craigslist, and pawn shops, and make it nearly impossible for people to sell their foreign-made stuff. It could also mean that Americans would stop buying certain foreign-made products.

What do you think?  Will this case be upheld or overturned?  If it is upheld, will you stop buying foreign-made items?

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About the author

Rich Rich writes on personal finance from a pastor's perspective here at Money Wise Pastor. He loves In-N-Out Burger (and has the t-shirts to prove it), urban living, homeschooling, Gungor concerts, helping people succeed in life and work, camping, dreaming with his wife, and equipping his five children to become financially faithful and free. Find him on Twitter and Facebook.

Comments

  1. Great story Rich! I clap my hands for the guy from Thailand! That was a pretty clever sales strategy on his part (until he got caught of course)! As scary of a world as that would be, I find it hard to imagine an environment where the Government would have the means to monitor every single copyright and sales transaction. It would be like trying to monitor every time someone burned a CD for friend – it just wouldn’t happen.

    • MMD, thanks for your comment! He definitely saw an opportunity and took advantage of it, eh! I hope the Supreme Court strikes down this case, and that the Congress updates and clarifies the law to make it relevant for today’s economy.

  2. This is a scary case Rich. I’d read about it a few days ago and was shocked to see such a thing was happening.

    I hope that the judges ruling in this case are thinking of the long-term, detrimental effects of the ruling. So many hoops to jump through just to get rid of your old junk…

    • Joe, thanks for your comment! If the Court gets it wrong, I hope Congress acts quickly to clarify it. Just saw that you and Kimanzi worked on a project together. I need to check it out!

  3. Lisa Simpson says:

    Are they actually using copyright law? Because Fair Use takes into account whether you are impacting profitability of the copyright holder. If you make a copy of a magazine article to share with your sister or burn a mix CD for your mom, you aren’t going to be prosecuted for copyright violation. If you start burning that CD wholesale and selling it at swap meets, you’re pirating, and impacting the artist’s/record company’s right to profit from that work by getting buyers to get that music cheaper from you than from the record company.

    The question of whether copyright holders are allowed to determine sales outlets is a good one. This student DID pay for each and every copy of the book, so it’s not outright pirating. But if the Supreme Court upholds the appellate court, they should at least clarify that sale of that pile of books that’s gathering dust on your shelves is Fair Use.

    • Hey Lisa, thanks for your comment. Yes, the first sale doctrine is part of the copyright law. I think it will definitely need to be clarified by the Court or Congress.

  4. The way I see it, there is a bit of a difference between someone importing MORE than personal belongings from overseas to sell here in the states, and those of us who might just want to sell personal belongings that happen to have been manufactured overseas.

    • Hey Harm, thanks for your comment! I would tend to agree with you, though I applaud this student’s ingenuity. This will definitely need to be clarified by the Court or Congress.

  5. Angie unduplicated says:

    This affects more than just the casual seller or flea marketer. An adverse ruling would put wholesale sellers entirely at the mercy of their suppliers, and turn the economy into a franchise-for-fee operation, at the discretion of the first seller. Eventually, the restrictive first seller would lose major business to the non-restrictives, and the economy would adjust. Until the economic adjustment occurred, though, we would have one hell of a recession/depression.

  6. Lloyd Booth says:

    I think the case will end up being about the right to IMPORT QUANTITIES of a copyrighted work without the knowledge or consent of the copyright’s owner. There’s a blog that has been pretty interesting about the Supreme Court called SCOTUS. From their presentation, the element that caught my eye was:
    “Section 602(a)(1) provides that “[i]mportation into the United States, without the authority of the owner of copyright . . . , of copies . . . of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies . . . under section 106.”
    Of course, everyone being a lawyer there, it will likely be something else. However, I doubt that individual items purchased here in the US will fall under this decision, as that would upset law already in place for hundreds of years, and this is still a conservative court.

  7. I know this if off topic but I’m looking into starting my own blog and was curious what all is needed to get setup? I’m assuming having a blog
    like yours would cost a pretty penny? I’m not very internet savvy so I’m not 100% positive.
    Any tips or advice would be greatly appreciated. Appreciate it

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