It Takes a Village

Posted on January 18, 2015

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One favorite grouse of conservatives is how liberal activist judges have overstepped their bounds and have legislated on their own. Now that the numbers of conservative judges outweigh liberals (especially on the Supreme Court), it is interesting how much of a liking these conservative judges have taken to becoming activist judges and legislating in their own right. A major example, in my mind, is Citizens United, and how the court legislated a corporation into having ostensibly the same rights as an individual. (Next thing we’ll have is corporations voting in elections.) It is also interesting to note that no conservatives seem to find anything contradictory, or ironic, about this judicial legislating from the conservative side. (I guess it’s not OK if liberals do it, but fine and dandy if conservatives do it.) I’m really worried that these same conservatives won’t see some sort of contradiction in their maintaining that the federal government has the right to withhold federal education funding from states that do not implement standardized testing (No Child Left Behind) or prohibits funds to agencies that provide abortions, but it’s not OK for the federal government to withhold funds from states that do not implement the Affordable Care Act.

But I’m a bit off-track here. The point is judicial legislating. The Supreme Court decided to hear arguments on John Wiley & Sons vs. Supap Kirtsaeng. Kirtsaeng bought a large number of copies of a mathematics textbook from Wiley Asia in Thailand at a far lower retail price than in the United States, imported them into the United States and then sold them at a lower price than the U.S. edition copies. It should also be noted that the production quality (stock, binding, color, etc.) was far less in the Wiley Asia copies but the content was identical to the U.S. edition.

The heart of the issue is a conflict between two parts of the U.S. copyright law. There is one provision, called the first-sale doctrine that permits the person who legally bought a copy of a book to resell it. Without this provision the used book sales market would be illegal. The original buyer (and subsequent ones) could resell it at any price — lower, higher or the same retail price. There are also no limitations on quantity. Theoretically, a person could legally buy a book’s complete press run at retail and then resell it at whatever price he/she may want. The Bobbs-Merrill case in 1909 established the precendent of the first-sale doctrine (a closer reading of this case might give some indication that publishers used the “agency” model to circumvent the “wholesale” model’s inability to prevent a retailer from selling below retail price.)

The other provision that creates the problem is one that, according to the copyright act, “importation into the United States, without the authority of the owner of copyright under this title, of copies . . . of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords.” So, one interpretation is that even though copies might be bought legally under the first-sale provision, the buyer would need the permission of the U.S. copyright holder. So that copy of The Girl with the Dragon Tattoo you bought in a Mumbai airport bookstore that you brought home with you makes you technically a criminal. The court, luckily, was aware that this would be an interpretation of this reading and amended it by noting that the law’s intent was to prohibit pirated editions from entering the United States and not to penalize travelers or tourists.

However, the books Kirtsaeng resold in the United States were legally purchased in Thailand. They were not a pirated edition, nor were they stolen. The court noted that this occurrence was unforeseen in the original law. Whomever framed the law did not consider this a possibility. The court, in its wisdom, ruled that corporate ownership of copyright takes precendence over individual ownership of whatever has been copyrighted. The court felt that any other decision would weaken copyright. This decision does amount to a fair degree of legislating (writing in something that did not exist before).

This case raises a number of things to consider:

1) The importance of a good knowledge of intellectual property law for publishing professionals

2) In a global economy where I can order goods direct from Thailand, Canada, Italy or Sri Lanka, the concept of geographical territories for published editions has met its end

If one considers the 2nd point, one needs to think of publishing rights in terms of languages. Publishing a North American English rights edition is antiquated. We need to think in terms of worldwide (global) rights. Putting restrictions on who can publish where needs to be rethought. If we are truly a global economy, then let’s act like it. (One solution to Wiley’s problem with Kirtsaeng would be if there were tariffs/duties in place on books bought legally elsewhere and then imported for resale here. If the tariff is high enough, the ultimate price will not undercut U.S. editions.)

The difference in price and quality of this textbook underscores another issue. The humanitarian impulse to provide a less expensive edition in regions of the world that are less well off should be applauded. But the fact that there are such wide variances in the standard of living across the globe is single decisive issue that must be addressed in the 21st century. We need to work on providing everyone across the globe the same high standard of living. We need to eradicate have-nots. When that happens, true equality and true freedom will arise. Jobs will no longer be lost to somewhere half across the world. And there’d be less incentive to infringe copyright.

Eventually, the Supreme Court did rule on the case in Kirtsaeng’s favor. Miraculously, the Supreme Court backed away from legislating. The SCOTUS held that, in the absence of any direct legislation, the first-sale doctrine prevails. Some members of the court said Congress could take up the issue of covering this “loophole,” but anyone is entitled to buy as many copies of a book where they want and then do anything they want with the copies.

The result of that ruling? Wiley started to raise its prices on its foreign editions of textbooks. So much for humanitarianism.

 

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