Supreme Court says mfg can't prohibit sale if lawfully purchased overseas!

[Jim Lapenta]

Looks like some entities became an authorized dealer too soon of some items:
WASHINGTON, March 19, 2013 — /PRNewswire-USNewswire/ -- The Owners' Rights Initiative (ORI) issued the following statement today after the U.S. Supreme Court issued a 6-3 opinion in favor of Kirtsaeng, reversing the Second Circuit Court decision. The majority opinion, authored by Justice Breyer, clearly affirmed that the Copyright Act was not intended and cannot be misconstrued to limit the distribution of authentic goods. Andrew Shore, Executive Director of ORI said:"ORI is gratified by the U.S. Supreme Court's decision in favor of Supap Kirtsaeng in this important copyright case. This decision is a landmark win for consumers, small businesses, online marketplaces, retailers and libraries nationwide and an affirmation of the ORI motto, 'you bought it, you own it.'

This decision definitively affirms the first sale doctrine, cementing the right of consumers and organizations to sell, lend and give away goods that they bought and own, regardless of where those goods were made.


"While we are energized by this decision, we expect that some will continue attempts to eliminate owners' rights, reduce competition in the marketplace and restrict the global trade of authentic goods. ORI will continue to be vigilant and diligent in protecting owners' rights now and in the future and we expect policymakers to do the same."

So what they said was if a mfg sells goods overseas and someone legally buys them there, they have the right to sell them in the US, at a discount, or even at a loss without the permission of the original mfg.


The official opinion:
http://www.supremecourt.gov/opinions/12pdf/11-697_d1o2.pdf


This may also open up the sale of items the mfg doesn't officially offer here to shops overseas if I understand it correctly. Once the shop buys it the mfg cannot prohibit it's sale here.

This could be fun to watch.

​

 

[diveprof]

Quite interesting. Eliminates some of the "Gray" in Gray marketing . However, the question is will the manufacturer be required to stand behind their warranties? Sure they can sell it, but does the manufacturer have to honor the warranties and "free service parts if serviced according to the service schedule". Oh wait, that has already ended except in some restricted circumstances. This may break down the international "price schedules" and let dealers sell stuff for what they want, or will this mean that prices in areas where gear was purchased cheaper, now become as expensive as here? Let the fun begin

 

[Svidas]

While I haven't read the entire decision yet, I am an intellectual property lawyer and I think the case will be limited to works protected by copyright and not by patents. A U.S. patent gives you the right to exclude others from making, using or selling the patented product in the U.S. thus, if I was made legally in Canada the U.S. patented would have a right to sue if it was brought into the U.S. for sale. Of course, if you are just a consumer with a legal product in Canada crossing into the U.S. yo would generally be safe.

 

[theduckguru]

Your example was not the case before the court, but there is no reason that this case will not be applicable to patented items.

I believe this case may have just settled the Omega v Cosco case that the court was unable the resolve.

I think this is really good news for consumers in the US.

While I haven't read the entire decision yet, I am an intellectual property lawyer and I think the case will be limited to works protected by copyright and not by patents. A U.S. patent gives you the right to exclude others from making, using or selling the patented product in the U.S. thus, if I was made legally in Canada the U.S. patented would have a right to sue if it was brought into the U.S. for sale. Of course, if you are just a consumer with a legal product in Canada crossing into the U.S. yo would generally be safe.

 

[Dr. Lecter]

The first sale doctrine only makes sense if copyright law applies at the point of the first sale, and the problem with this ruling is that it enforces a well-established 'sword' of copyright law against copyright owners who don't have the 'shield' of US copyright protections available to them in the markets where the first sale of these copies occurs.

These are for sale dirt cheap in Asia only because if the copyright owner tried extract the value of the copyright itself by charging more than the cost of printing and distributing high-quality textbooks, others would knock off the textbooks and no court would give a flying about that infringement. Well, the copyright owners could probably get a judgment in a U.S. court if they could get jurisdiction over the defendants... but it wouldn't be worth the paper on which it was written in terms of enforcement abroad

The effect of the ruling will only be to cut those copyright owners who wish to sell their products in the U.S. out of foreign markets, because if only knockoffs are for sale in Asia, the copyright owners can slap anyone importing the infringing goods with a court order that the counterfit textbooks be impounded and destroyed as well as statutory damages per infringing copy imported. But to keep selling cheap legitimate versions of copyrighted works abroad after this ruling would be economic suicide. I'm not sure how lucrative the sale of textbooks in Asia, without the IP premium attached to the books' value, is... maybe just accepting that copyright infringement is rampant and that Asia is a lost market to be addressed with DRM weapons (a losing battle, to be sure) isn't such a bad thing. For SCUBA gear, I think this is less relevant as I don't see too many pieces of SCUBA gear with copyright protection and the First Sale Doctrine has no applicability to patent or trademark/dress.

Somewhat off topic, but I'm not aware of any U.S. jurisdiction that would preclude a seller from disclaiming warranties for these sorts of goods. It's possible some state has such a statute, but generally this sort of service warranty is only created by contract and those can be modified/restricted/eliminated however the parties (well, really just the seller in this sort of 'buy it on our terms or piss off' context) want.

 

[Jim Lapenta]

Some people may not care about a warranty if they save enough money.

 

[diveprof]

Some people may not care about a warranty if they save enough money.

I agree. It would also be interesting to see if this decision would somehow result in availability of reg service kits for certain manufacturers that do not sell them directly to the public.

 

[Scared Silly]

However, the question is will the manufacturer be required to stand behind their warranties? Sure they can sell it, but does the manufacturer have to honor the warranties ...

No, as most warranties apply to the original owner. Once something is sold outside of the agreed upon distribution channel it is has an owner.

 

[theduckguru]

Some people may not care about a warranty if they save enough money.

Especially if its a stupid parts for life warranty that is void on resale or missing an inspection.