Right to rent and resell threatened

by Mike Heral

Thinkstock

We are being gouged everywhere we shop. Today, everything costs more than it should. Those costs will continue to increase if book publisher John Wiley & Sons, Inc. has its way. The publisher is challenging the first sale doctrine, a unique law protecting the rights of consumers. The Pandora’s box John Wiley & Sons, Inc. intends to open will destroy the secondhand merchandise market—the only market designed to help the less fortunate—as well as further jeopardize the already fragile dream of attending college.

The first-sale doctrine makes yard sales, swap meets and websites such as Craigslist possible. Most items sold are protected by either copyright or trademark, ensuring creators will be financially rewarded. They only receive protection the first time it’s sold because of the first-sale doctrine. Consumers are mostly free to use or dispose of the product as they see fit (the buyer is prohibited from making copies without the copyright holder’s permission). Therefore, whenever a girl buys the latest Justin Bieber CD, Bieber receives royalty from only the original sale. She’s free to resell it any time after she realizes her repulsion of buying a Bieber CD.

Soon, the U.S. Supreme Court will decide the fate of this doctrine. John Wiley & Sons, Inc. claims Supap Kirtsaeng violated copyright law when family members living in Thailand bought textbooks and shipped them to Ithaca, N.Y., where he was attending Cornell University. Kirtsaeng then resold the textbooks on eBay Inc. He made $1.2 million in profit because these textbooks cost less in Thailand. The publisher claims the fact the textbooks weren’t made in the U.S. makes them exempt from the U.S.’s first-sale doctrine. Accordingly, Kirtsaeng didn’t have the legal right to resell the books without both the publishers’ and authors’ permission.

The floodgate of foreign- produced goods will open if the Supreme Court rules foreign-produced, copyright- protected material is outside the purview of first-sale doctrine. For example, anyone seeking to resell their foreign-made DVD of “The Avengers” will first have to obtain the permission of Marvel Studios and the Walt Disney Co. In other words, don’t expect to see a $1 copy of “The Avengers” at a swap meet near you.

Higher prices will deal a big blow to the staple of American suburbia: the garage sale. Statisticbrain.com estimates U.S. garage sales earn about $4 million per week, with some items being resold on eBay Inc. with a markup of more than 460 percent. Copyright holders demanding their merchandise be sold at higher cost than the average garage sale price of 85 cents will render garage sales as endangered as bookstores; or they’ll turn sellers and buyers into copyright violators.

The potential demise of the first-sale doctrine is equally dire for college students depending on rented textbooks. The National Association of College Stores claims students save between 45 and 66 percent when they rent textbooks. Renting is a first-sale doctrine-protected provision, and it will be endangered should the doctrine be overturned. I recently rented two textbooks for $10.55. I saved 50 percent from the used book price, which was already 50 percent cheaper than the two books’ full price of $44.80. Unlike most domestic goods largely manufactured overseas, both of these books were printed in the U.S.

Let’s suppose the Supreme Court rules the first-sale doctrine doesn’t apply to anything foreign-produced, and as a result the publisher moves its printing operations overseas. The publisher and author could then decide not to allow textbook rentals and set their own used book prices. Therefore, they could demand SDSU Bookstore sells the two used books for $29.99 or won’t allow them to sell used books at all. This scenario could allow a domestic competitor to come in and undercut imported goods, but odds are domestic companies will match the price increase given to the imports.

For the record, the Association of American Publishers has lined up against U.S. consumers with a “friend of the court” brief stating anything non-U.S. produced shouldn’t receive protection. Its belief comes straight from ledger books because an increase in the price of foreign books will drive up the cost of domestic books.

The textbook rental market is a curse to the publishing industry because students pay only a small fraction of the book’s market price. If the Supreme Court rules for a loophole in the doctrine, publishers will exploit it to control rentals. Curtailing the textbook rental market would cost consumers more by raising the cost to rent or buy new or used books. Authors deserve royalties, but they don’t deserve to continue to reap royalties each time the same book is resold.

The choice the U.S. Supreme Court must make is clear: extend the first-sale doctrine provision to cover all products bought and sold in the U.S., regardless of country of origin. Americans pay enough to live in this great country, they needn’t pay inflated costs just because greed says they should.

Print Friendly, PDF & Email