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Right to resell being challenged before the US Supreme Court

LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
edited October 2012 in Buying & Selling Topics
The below case might be about books, but it can just as easily apply to Lego. Imagine if the US Supreme Court rules that overseas goods can no longer be resold without permission. This means that you would not actually own the Lego you buy because it is made overseas, and could no longer sell it without The Lego Group's permission.

As insane as that sounds, that is the case coming up before the Supreme Court:

An upcoming Supreme Court case, Kirtsaeng v. John Wiley & Sons, involves an eBay seller who was sued by a textbook publisher for reselling books. The seller, a graduate student and entrepreneurial seller, sold the books to help cover tuition expenses. These were legitimate books that the book publisher manufactured overseas — they were not counterfeit, pirated, or stolen. Yet, the publisher is trying to use U.S. copyright law to stop the book sales and make the seller pay $600,000 in damages – more than 15 times what he made from selling the books.

It is possible that an extreme application of U.S. copyright law might enable manufacturers to force retailers and consumers to first have to obtain permission from the manufacturer before reselling or even donating goods manufactured overseas. This rule could affect most of the goods we use every day, from books to cell phones. Manufacturers would retain ownership of an item no matter how many times it changes owner. This rule could threaten the laws of ownership and resale that we all enjoy.

Reposted from eBay:
http://announcements.ebay.com/2012/10/sellers-us-supreme-court-case-may-affect-your-rights-act-now/

eBay Mainstreet:
http://www.ebaymainstreet.com/news-events/citizens-for-ownership-rights-collecting-petition-signatures?utm_campaign=recruiting&utm_source=ebay-us-newsletter&utm_medium=enewsletter

Actual Petition to sign:
http://ownershiprights.org/
mressin
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Comments

  • RennyRenny USAMember Posts: 1,145
    Oh boy
  • andyscouseandyscouse Western MAMember Posts: 365
    edited October 2012
    Sod the "Supreme" [sic] Court; it's full of 9 Supreme Idiots, all Alzheimers' patients in robes who are failed lawyers, swanning around in poncy robes thinking they're some kind of god. Similar is true of the poncy-wigged efforts in the UK "High" [sic] Court, who all seem to have a Christian name of 'Justice'.
  • doriansdaddoriansdad CTCMember Posts: 1,337
    ^ Just 5 are idiots. Obama will get to appoint 2-3 new justices in his second term and we can undo alot of the damage done.
  • andyscouseandyscouse Western MAMember Posts: 365
    edited October 2012
    ^ Surely you mean 4 are idiots (esp Kagan and Sotomayer)?

    @rocao: removed potentially offensive descriptions
  • TownTown Member Posts: 68
    ^ Because he always makes great choices, especially when choosing Justices.
  • dougtsdougts Oregon, USAMember Posts: 4,129
    Lets leave the politics out and focus on the issue. Regardless of who us sitting behind the bench, the ramifications of this ruling are potentially enormous for any small business engaging in secondary sales of any product, not to mention individuals wanting to simply sell off old junk
  • andyscouseandyscouse Western MAMember Posts: 365
    OK, let's just agree that lawyers and 'judges' are all idiots! Now, let's move on ...
  • TownTown Member Posts: 68
    edited October 2012
    Agreed they will have to tread a fine line with this ruling. As far as I can tell this guy was buying textbooks directly from the manufacturer and re-selling them on Ebay for a cheaper-than-new price. Kind of smart actually, and legal. The court split 4-4 on the ruling in August, seems really up in the air at the moment.
  • The_MackThe_Mack Member Posts: 239
    The Supreme Court actually do have intelligent people in place. People are just scared because this went all the way up to the Supreme Court. They look at the laws and rights of its citizens. The case seems that a company got upset that they were being undermined by someone who was selling their overpriced books. Since he acquired everything legitimately, Maybe they should adjust their pricing?...Text books and some pharmaceutical companies I put them in the same boat of overpricing their wares. The U.S. is about free markets. To rule any other way would destroy the fabric of what the United States is.
  • dragonhawkdragonhawk USMember Posts: 633
    @doriansdad I would not be so quick to judge. The case was won by the big publisher (Wiley) and this decision was uphold by Second Circuit Court of Appeals. The majority of justices in the Second Circuit Court were appointed by either Clinton or Obama.
  • doriansdaddoriansdad CTCMember Posts: 1,337

    OK, let's just agree that lawyers and 'judges' are all idiots! Now, let's move on ...

    Let's also agree we are all idiots for giving the power to interpret the Constitution to 9 unelected lawyers.

  • cloaked7cloaked7 Member Posts: 1,448
    ^ And, who sit on the bench for life. The courts have became too powerful, IMHO. And, the balance of power that our forefathers had in mind is not in place today. They overturn whatever they want. Whether put into place by voters or congress.
  • 111ins111ins Member Posts: 265
    better hide your garage sale signs before they come and take you away for 're-education"
    :)
  • madforLEGOmadforLEGO Chicagoland USMember Posts: 10,479
    edited October 2012
    The_Mack said:

    The Supreme Court actually do have intelligent people in place. People are just scared because this went all the way up to the Supreme Court. They look at the laws and rights of its citizens. The case seems that a company got upset that they were being undermined by someone who was selling their overpriced books. Since he acquired everything legitimately, Maybe they should adjust their pricing?...Text books and some pharmaceutical companies I put them in the same boat of overpricing their wares. The U.S. is about free markets. To rule any other way would destroy the fabric of what the United States is.


    Politics aside.....

    Tthis probably would apply to something in production at the time of the sale I'm guessing.
    Id think that if a set is discontinued then this does not apply since the orginal maker no longer has it in production.
    Since most people re-sell LEGO sets AFTER it is no longer sold by LEGO, then many should not be affected, and any legit sellers selling current items in stores, or on eBay, probably get most stock from warehouses or other sources that are legit.
    But they may still have an issue depending what the Supreme Court says.
    Also, wouldn't this mean that Retails technically could not sell LEGO anymore, or Hot Wheels, or action figures, etc etc. It also means that technically LEGO could bend every reseller (including retail stores) over a barrel by demanding a large payment for the honor.
  • nkx1nkx1 Member Posts: 719
    Thanks for bringing this to everyone's attention, LFT.

    To me, it is absurd and scary- that it could soon be illegal to resell a legal product that was legally purchased overseas. The gray market has been around for quite a while at this point. IMO, this attempt at diminishing/eliminating the gray market is one of many examples of how corporations have become too influential on government policy (law).
  • y2joshy2josh Member Posts: 2,002
    There was some kind of debacle like this when the PSP came out that wound up getting some website or another shut down because they were selling PSP's that had been imported.

    Anywho, can someone provide a link to the body of the case thus far, cause as it's being presented right now, I'm not understanding what the kid has done wrong (or, at least, what he's done any different than, say, a pawn shop, a GameStop, a campus bookstore, or someone running a garage sale).
  • timinchicagotiminchicago USAMember Posts: 239
    ^ If memory serves the website was called Lik-Sang and it was a great method to obtain video games and hardward not yet (or ever) available in the US.
  • hoyatableshoyatables Northern Virginia, USAMember Posts: 873
    Not sure that the lawyer bashing and judge bashing is necessary or warranted here. I don't see us bashing any one else's professions (well, except the occasional professional reseller ;) ).
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    This is very interesting, but I don't see this happening on items that have components made from several different countries like electronics and automobiles. I think the the textbook company will end up cutting its nose off to spite its face. This just foolish to allow this to happen.
  • cheshirecatcheshirecat Member Posts: 5,332
    Is he importing and then selling, because that would be different.
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    Take automobiles for instance. You buy a new car, the state gets the sales tax, you sell your car to someone else and the state gets the sales tax. This can virtually go on forever. The states would lose tons of tax revenue.
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    I suppose this would all cause a rift in the international trade market. I know it would suck, but if I had the power, I wouldn't allow any companies imports into our country with said restrictions on their products.
  • Farmer_JohnFarmer_John USA - 4,035 Miles from 62 West Wallaby St., Wigan, Lancashire, UKMember Posts: 2,404
    edited October 2012
    The difference in this case is that copyright laws are a subset of "intellectual property" laws, which is different from "tangible" property. Intellectual property is all about ideas, inventions, creations, etc. Patents, copyrights and trademarks all fall under the category of intellectual property.

    Stealing or using someones inventions, copyrights or trademarks without permission is illegal in most countries around the world (including the USA, European countries, Asian Pacific countries, etc.), and rightfully so. Hence, TLG's agreements with George Lucas, Disney, DC, Marvel, etc. I'm sure the licensing agreements with the aforementioned companies include which specific countries the Lego products can be sold in and the revenue or fee per product for each respective country. A book falls under the IP category of copyrights. If the reseller in question was violating USA copyright laws related to the intellectual property they were selling (i.e., books), then the laws are clear.

    On the other hand, Lego bricks are products; not intellectual property. TLG does have patents, copyrights and trademarks related to its products, but the bricks/sets themselves are not intellectual property. Reselling lego sets is akin to reselling an automobile manufactured overseas and imported into the USA. Absolutely not illegal AND not equivalent to the Supreme Court case discussed above (books)!
  • pvancil27pvancil27 Member Posts: 588

    @doriansdad I would not be so quick to judge. The case was won by the big publisher (Wiley) and this decision was uphold by Second Circuit Court of Appeals. The majority of justices in the Second Circuit Court were appointed by either Clinton or Obama.

    One thing people confuse on the appeals process is the Appellate courts only hear the legal determinations, not the actual facts of a case. In this case even is an Appellate Judge feels the case was ruled upon wrongly, he can only overturn the verdict and send it back to the lower courts if there is a case of legal misconduct or a legal error.

    (edit: This is in the US, I dont know how the British or other court systems work.)
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446

    The difference in this case is that copyright laws are a subset of "intellectual property" laws, which is different from "tangible" property. Intellectual property is all about ideas, inventions, creations, etc. Patents, copyrights and trademarks all fall under the category of intellectual property.

    Stealing or using someones inventions, copyrights or trademarks without permission is illegal in most countries around the world (including the USA, European countries, Asian Pacific countries, etc.), and rightfully so. Hence, TLG's agreements with George Lucas, Disney, DC, Marvel, etc. I'm sure the licensing agreements with the aforementioned companies include which specific countries the Lego products can be sold in and the revenue or fee per product for each respective country. A book falls under the IP category of copyrights. If the reseller in question was violating USA copyright laws related to the intellectual property they were selling (i.e., books), then the laws are clear.

    On the other hand, Lego bricks are products; not intellectual property. TLG does have patents, copyrights and trademarks related to its products, but the bricks/sets themselves are not intellectual property. Reselling lego sets is akin to reselling an automobile manufactured overseas and imported into the USA. Absolutely not illegal AND not equivalent to the Supreme Court case discussed above (books)!

    I'm ignorant to such laws, so forgive me. Wouldn't comic books and movies fall under these laws as well. Even though Lego purchased the rights to manufacture the sets and sell them. Wouldn't Walmart or TRU be sued for "reselling"?
  • mrseatlemrseatle Member Posts: 410
    Thugish business practices... Reminds me of how itunes operates...
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    The fights between Google and Apple are relentless.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409

    The difference in this case is that copyright laws are a subset of "intellectual property" laws, which is different from "tangible" property. Intellectual property is all about ideas, inventions, creations, etc. Patents, copyrights and trademarks all fall under the category of intellectual property.

    Yes, but Lego claims copyright over the box, art, design, instructions, etc. in a Lego set. The bricks themselves, no... but everything else is fair game.

    Since no Lego is actually made in the USA, that makes it all imported, so reselling it would violate TLG's copyright on the box, artwork, manual, etc.
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    Bazinga!!!
  • Farmer_JohnFarmer_John USA - 4,035 Miles from 62 West Wallaby St., Wigan, Lancashire, UKMember Posts: 2,404
    edited October 2012
    ^Yes...comic books and movies fall under the IP copyright laws. If you watch the beginning of a movie on DVD, it always has the scary FBI warning "if you copy this, you will be fined $250K and thrown in jail for 5 years (potentially)" statement. That statement is all about copyright infringement; hence the licensing agreements. If TLG's licensing agreements with Disney were only for Great Britain and they (or potentially you) were trying to resell those sets in the USA, then Disney might complain to TLG and they might come after you. So there is a licensing aspect to reselling products; however, I believe all of Lego's licensing agreements to be universal since they sell Lucas, Disney, DC/Marvel, etc. licensed products globally.

    Lucas, Disney, DC/Marvel get their cut from Lego when a set is sold and that is good enough assuming they get the same revenue regardless of the country the set was sold in. However, if the licensing agreement dictates that fees are determined based on the country sets are sold in, then greedy George Lucas (and perhaps TLG) may get angry if someone is reselling from one country to another so that George doesn't get his full measure. In that case, Lucas would likely go after TLG (not the reseller) because his agreement is with TLG. TLG would then have to decide whether or not to go after the reseller to shut him/her down to get Lucas off their back. That's probably how all this book reseller stuff went down...

    All that said, TLG doesn't make their licensing agreements public so we can speculate all day long as to their specifics and end up where we started. However, standard TLG products such as Technic, Pirates, Friends, or Monster Fighters are not licensed and TLG isn't going to worry about resellers around the globe. As has been said many times in the Brickset forums, resellers are a drop in the proverbial bucket compared TLG's entire market. TLG is probably just happy to be moving products. That's another reason Lucas probably doesn't care either (that and the fact that he doesn't want to anger or scare Lego customers as that, too, is bad for everyone's business).

    Sorry to be long-winded...
  • brickmaticbrickmatic Member Posts: 1,071
    Ok, here's the real issue in one sentence:

    "How do Section 602(a)(1) of the Copyright Act, which prohibits the importation of a work without the authority of the copyright’s owner, and Section 109(a) of the Copyright Act, which allows the owner of a copy “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright owner’s permission, apply to a copy that was made and legally acquired abroad and then imported into the United States?"

    http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/
  • DaddyDeuceDaddyDeuce Member Posts: 272
    In a very real sense this seems like a rehearing of Omega v. Costco.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409

    In a very real sense this seems like a rehearing of Omega v. Costco.

    Yes, it does... And Costco lost that battle... :(

    What if TLG decided to make the same case? This is why I posted this, it is a serious threat to the right of people to sell stuff they purchased legally.
  • 12651265 The Great State of TexasMember Posts: 1,092
    Not surprised to see eBay lobbying. Ebay would be one of many outlets to take a serious blow or go under.

    Or maybe the govt can hire a special task group of thousands and fine those who break the law to pay off our 16 trillion in debt. Wait....there's nothing the US govt does that makes a profit.
  • Farmer_JohnFarmer_John USA - 4,035 Miles from 62 West Wallaby St., Wigan, Lancashire, UKMember Posts: 2,404
    Hmmm...

    The paragraph posted by @brickmatic above refers to the "Copyright Act," and the Copyright Act describes "works" that can be "copied"... nothing more.

    Legos are not "works" that can be "copied;" they are products. A book is not a "product;" it is a "work." Books are intellectual property; Legos are not. This lawsuit is about intellectual property and the rights of copyright owners vs. those in possession of the "works"...nothing more.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    edited October 2012
    ^ Right, then why does it say "Copyright" right on the Lego boxes? :)

    Attached are three pictures. One is the new UCS B-Wing, one is the Fire Brigade, and the third is the 3128 Airport set, imported from Europe.
  • ringleheimringleheim Member Posts: 168
    @Farmer_John: you're wrong. Lego can and does own copyrights regarding its toy sets, product packaging, brochures, and instruction manuals. Not to mention its video games and just about everything else they make.

    Other than that, you're right, they don't have any copyrights.

    Let's not all get our panties in a bunch here just yet though. The issue is whether or not the first sale doctrine is limited by place of sale. The Supreme Court has already ruled on this, holding that the first sale doctrine is NOT limited by place of first sale, as recently as 1998.

    The problem is that in recent years, a number of Federal Courts of Appeals have ruled all over the place regarding this issue, and now it is time for The Supreme Court to step in and clarify. To side in favor of plaintiff in this case would instantly yield large portions of the Copyright Act of 1976 incoherent and in conflict with other portions. It would also throw a very long standing principle in US law--the first sale doctrine--out the door.

    I don't think we have to panic with our Ebay Lego sales just yet.

    But you don't have to take my word for any of this, I'm just one of those idiot lawyers everyone is talking about in this thread--who happens to practice IP law.

  • TownTown Member Posts: 68

    Not sure that the lawyer bashing and judge bashing is necessary or warranted here. I don't see us bashing any one else's professions (well, except the occasional professional reseller ;) ).

    Did you read the thread? And you don't get why Americans tend to dislike lawyers and judges?
  • ringleheimringleheim Member Posts: 168
    Town said:

    Not sure that the lawyer bashing and judge bashing is necessary or warranted here. I don't see us bashing any one else's professions (well, except the occasional professional reseller ;) ).

    Did you read the thread? And you don't get why Americans tend to dislike lawyers and judges?
    Yep, everyone hates lawyers...until they need one.

    If you ever do need a lawyer, hire a good one. You'll be very glad you did when the smoke clears.

    On that note, I'm politely bowing out of this thread...
  • TownTown Member Posts: 68
    I hired a decent one who charged me $115 to read a page letter that he's read a thousand times before. Don't feel like it was money well spent. Sorry.
  • nkx1nkx1 Member Posts: 719
    edited October 2012
    Americans love to bash lawyers until they need one (such as to sue someone, a favorite American past time). Lawyers are a necessity, given the ridiculous number and complexity of US laws. Many people who bash lawyers seem generally clueless as to their role in current society. Just like any profession, there are reputable lawyers and shameful ones.

    Interesting discussion here on copyright law.
  • TownTown Member Posts: 68


    The problem is that in recent years, a number of Federal Courts of Appeals have ruled all over the place regarding this issue, and now it is time for The Supreme Court to step in and clarify. To side in favor of plaintiff in this case would instantly yield large portions of the Copyright Act of 1976 incoherent and in conflict with other portions. It would also throw a very long standing principle in US law--the first sale doctrine--out the door.

    This case does have the potential to dramatically alter the sale of goods in this country in a way we've never seen before. All of those "rulings all over the place" have turned things on their head into gray areas now. How has that made things better? I wish the courts would have left things alone or provided clarity. Look at all the problems with patent laws and ip now. Now this one.

    But agree, no need to panic, yet.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409

    Yep, everyone hates lawyers...until they need one.

    If you ever do need a lawyer, hire a good one. You'll be very glad you did when the smoke clears.

    On that note, I'm politely bowing out of this thread...

    Please don't leave... I fully understand the whole "lawyer" thing, but I also have needed lawyers in business before. I've been sued, and had to sue people, and a good lawyer is indeed worth their weight in... something. :)

    All I can say is that I've spent tens of thousands of dollars on lawyers over the years, been sued 3 times (won all of them, thanks lawyers!), sued someone else once (won that too!), I hate court and the darn whole system, but it DOES exist for a reason, and it is much better than everyone fighting it out in the streets like the old west.

    If we don't have lawyers, what do we do, go out at high noon and have pistol duels? :)
  • brickmaticbrickmatic Member Posts: 1,071
    edited October 2012
    @ringleheim I second you staying in this thread, although I can understand not wanting to talk about something that seems like work. I have many friends that are lawyers and I don't like the lawyer bashing.

    @DaddyDeuce Well, since Omega v. Costco was decided with a 4-4 vote, it means it did not effect the 9th District ruling (i.e. it stands). Also, it means the ruling is not expanded to the entire nation. The ruling that resulted from Omega v Costco only applies in the 9th District, so it's no surprise the SCOTUS wants to get another go at the issues.

    I'm against weakening the first sale doctrine.
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,446
    I like that idea, but let's not get into "Why Americans Love Guns So Much" topic again.
  • brickmaticbrickmatic Member Posts: 1,071
    Pistol duels worked better in a time when the pistol technology was primitive and accuracy was terrible.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409

    @ringleheim I second you staying in this thread, although I can understand not wanting to talk about something that seems like work. I have many friends that are lawyers and I don't like the lawyer bashing.

    I'm against weakening the first sale doctrine.

    Ditto on the lawyer bashing... If you don't like the legal system, work to change the system, don't bash the people who have to work within the existing system.

    Do you bash highway workers for traffic congestion? No, of course not. Don't bash lawyers because you don't like the justice system, change the system.

    I also agreee, don't weaken the first sale doctrine, I'd make it stronger and extend it to digital media. If you buy an eBook on Kindle, you should have the right to resell it. This whole idea of "licencing" stuff is nonsense in my view.

    But then again, I'd also cut copyright length in half, so what do I know? :)
  • sonsofscevasonsofsceva 1904 World's FairMember Posts: 542
    I would focus less on bashing the lawyers and instead bash the move made years ago that everyone has to pay their own fees in court. If the Plaintiff loses, he/she/it should have to pay the court costs of the Defendant. That would clear up a lot of our court system to do real work, and help weed out the "ambulance chasing" lawyers that give the profession a bad name.

    Closer to topic: One of the considerations is development for the producing companies. Someone above mentioned the high cost of pharmaceuticals. But what most don't realize is that hundreds of millions of dollars in research and time go into these drugs, which are then restricted by patent law to a seven year exclusive right. They have to make up R&D and get profit mostly in that window of time before 'generics' can come out and compete with the exact same drug (like MB using the exact same minifig as LEGO).
    You can see how frustrating that would be.

    @LegofanTexas: Even worse than resell with electronic purchases is leaving them to next of kin, which I think is still not allowed either. I can leave a 'real' book, but not my ebooks, my CDs but not my MP3s.
  • brickmaticbrickmatic Member Posts: 1,071
    edited October 2012
    ^ Yeah, well the problem with having to monetize your R&D is that pharmaceutical companies are only interested in researching drugs that they can monetize easily. They avoid research on things that would be very helpful, but can't be easily monetized. They also seek to tightly control their product, even if it means many will die as a result.
    See:
    http://www.guardian.co.uk/comment/story/0,3604,247568,00.html
    http://scienceblogs.com/worldsfair/2011/06/08/should-everyone-have-access-to/
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,409
    ^ It is 20 years for utility patents and 14 years for design patents last I checked, but who's counting. :)

    As for leaving stuff to your heirs, that is another issue, what if you want to leave one half of the collection to one child and the other half to another.
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