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Right to resell being challenged before the US Supreme Court
LegoFanTexas
Member Posts: 8,404
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/
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/
1
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Comments
@rocao: removed potentially offensive descriptions
:)
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.
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).
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).
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)!
(edit: This is in the US, I dont know how the British or other court systems work.)
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.
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...
"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/
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.
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.
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.
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.
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.
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...
Interesting discussion here on copyright law.
But agree, no need to panic, yet.
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? :)
@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.
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? :)
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.
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/
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.