Concerning Kirtsaeng v. John Wiley & Sons

Kirtsaeng v. John Wiley & Sons
A recent court case that is currently at the supreme court.



Summary

I'll try to summarize it as best as I can:

1. Kirtsaeng, a Thailand student went to school in the United States
2. There, he noticed that there was quite a disparity between the prices of textbooks
     -They were cheaper in Thailand then in America, and they had virtually the same content*
3. He decided to reverse-import textbook from Thailand, and sell them in the United States to make a profit off the price difference
4. Sold the reverse-imported textbooks on ebay
5. The publisher of the textbooks (John Wiley & Sons) notices and decided to take it up in court
6. Several cases and appeals later it makes it's way onto the supreme court

*This is because of the differences in the standard of living in other countries. In order to be able to make a profit, and compete in those markets, companies books with virtually the same material, but with differences in the way they are made. This is the price and sell them competitively in regions with different standards of living.




SCOTUS

The link to the SCOTUS blog "Proceedings and Orders" Here

When I first read the list I was rather surprised by the list of amicus curiae. The most surprising was Costco, I looked into that and it turned out that Costco had faced a very similar lawsuit with a watch company (Omega) within the past few years in which the courts ruled in favor of Costco. It seems that they are also attempting to protect the first sale doctrine.



Implications

The lawsuit primarily concerns itself with the "First Sale Doctrine" which basically states that after you buy something from a producer, they lose control over it. To put it into context, if I were to buy clothes from "Clothing Inc", I could choose to resell those clothes in a yard sale and "Clothing Inc" would not have any say in it.

If the courts should rule in favor of John Wiley & Sons, then any company could have control of their products after the first sale. So no more yard sales, as every company could (but I don't think they will) demand a portion of the profits from the sale. Kirtsaeng argues that allowing this ruling would give incentive for companies to outsource production overseas, and that it will hurt the economy, primarily the grey market.

On the flip side, if the courts rule in favor of Kirtsaeng, it would set a precedent for reverse-importing, and it could easily destroy some companies. John Wiley & Sons argues that what Kirtsaeng is doing is copyright violation, and they are also seeking reparations for the books that Kirtsaeng sold. I believe that a lower court stated that the first sale doctrine only applies to domestically produced goods, and thus Kirtsaeng is violation of copyright. That was also what caused Kirtsaeng to appeal to the supreme court.

This really is an ambiguous situation. Regardless of the ruling, one party will walk away worse than before.



What Should be done?

My own opinion, but I think that John Wiley & Sons would have been better off keeping quiet. This is actually creating a sort of Streisand Effect. By attempting to stop the reverse-importing/copyright violation, they have actually raised awareness for it. This could start an interesting trend in the "Grey Market", rather then the incoming freshmen buying from upperclassmen. This trend could cause quite a bit of damage in the textbook industry.