Selling a used iPod can violate a copyright law | Hacker News Reader

Selling a used iPod can violate a copyright law

theatlantic.com

66 pointswhy-el45 comments

> Continuing a long string of similar cases, the Supreme Court will review a New York federal court decision that decided, in short, that the first-sale doctrine does not apply to any copyrighted product manufactured abroad.

I can _kinda_ understand manufacturers being upset about gray imports of products that they specifically don't want sold in the local market, and wont make available themselves.

(eg, "You're selling our widget that was designed to work on 110v to people who use 240v, and we're going to look bad when it blows up. Stop selling it!")

But using legal loopholes and trickery to prevent someone (re)selling the exact same thing you're selling in the same market? That doesn't sound right.

And it protects customers from being able to buy cheap genuine designer jeans.

http://news.bbc.co.uk/2/hi/business/1261829.stm

Apparently this is good for customers by maintaining the brand value of the expensive Levis they are wearing !

I firstly don't understand why Wiley didn't sue the guy for the importation, rather than the resale. Importing copyrighted works for anything other than personal use unambiguously requires copyright holder permission by a plain reading of 17 U.S.C. 602 (http://uscode.house.gov/download/pls/Title_17.txt). I think that is a bad law, but it is nevertheless an existing law.

Instead, they try to argue that it is the resale which is illegal, which requires a very creative interpretation of the law, and somehow manage to convince a federal district court and the 2nd circuit of that interpretation.

The interpretation that goods manufactured overseas are automatically not 'lawfully made under this title' is an extreme interpretation. The 2nd Circuit opinion said that 'lawfully made under this title' could mean any of '(1) "manufactured in the United States," (2) "any work made that is subject to protection under this title," or (3) "lawfully made under this title had this title been applicable."'. They decided that it means 1. However, to say that it means anything other than 3 seems to be stretching the plain text interpretation. 'Lawfully made under this law' is synonymous for 'Lawfully made, according to this law'.

They claim that the justification for their ruling is that 17 U.S.C. 602 would be inapplicable if they took anything other than interpretation 1, and so congress must have meant interpretation 1. But this is simply false by the plain text interpretation of the statute. If interpretation 3 is the right one, then it would be legal to import a copy of a copyrighted work in your personal baggage for personal use, and it would be legal to sell it in the US if you later decided you didn't want it, provided the circumstances in which that copy was made would have been legal under US law, but it would still be illegal under 17 U.S.C. 602 to import copies for the purpose of selling them, since 17 U.S.C. 109 only covers "sell[ing] or otherwise dispos[ing] of the possession of that copy or phonorecord".

Disclaimer: IANAL, this is not legal advice.

I have not been following the case. But normal practice is that when you sue someone, you put forth every legal argument that you can think of in the hope that at least one sticks. And any lines of reasoning that come with minimum damages are even better, because you want to sue for as much as you can. (I believe that copyright infringement comes with fairly significant minimum penalties.)

This often leads to weird counter-factual arguments of the form, "A is true, and if A is true, then my client should win. Even if A proves false, B is true, and if B is true then my client should win. Even if B is also false..." If you think A you can show that A is true, why do you need the rest? Because this is about convincing the judge, not about the rest. No matter how clearly A is true, there is a chance the judge will disagree with you, and you still want to leave them a way to rule in your favor.

Not, IANAL, this is likewise not legal advice.

Yeah, their reading of that statute is absurd, but the reason they argued this way is because they really want to be able to clamp down on individuals reselling their own goods. This follows previous attempts to expand the control copyright holders can exert, like Vernor v. Autodesk, Inc.

Hopefully this gets shut down, or we'll start seeing paperback books with EULAs printed on the first page, taking us all the way back to Bobbs-Merrill Co. v. Straus.

This goes agaisnt the spirit of capitalism, and will only result in more monopolies and a worse free market. Imagine if there was a similar law when Herbert Henry Dow fought the german bromine cartel http://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_Mo... .

Wouldn't essentially everything be illegal to resell if this was approved?

Couldn't Ford prevent people from selling their used cars because it contains a Ford logo, electronics, and software all of which Ford owns the copyrights to?

If at some point Ford decided it was in their interest to restrict sales of used Fords then yes they could. Although it's likely that high end makers would do so first - a supercar maker might be more interested in protecting it's brand image by keeping broken down versions of it's car off the street.

Ford is more likely to suffer from the anger of departing new buyers than gain from there not being 40year old Ford pickups rusting in fields.

Microsoft has already won a number of cases stopping companies selling unused software licenses. This is actually a big deal if you are a company - if you have $$$$ in MSFT licenses that you have been treating as assets and the court rules that they can't be sold and so have zero value - you might have a lot of auditors and shareholders you have lied to.

How is this possible? From my reading of the article, the suspension of first-sale only applies to goods manufactured abroad. Wouldn't MS software be manufactured in Washington state?

This is because MSFT and others have set the precendent that you don't own software, you license it. They can include a clause in the license that prevents resale of the license.

The physical good that software is distributed on is covered by the first-sale doctrine and you can resell that, but it won't do much good because you can't reassign your license to it. If I have a license for Windows but lose the physical disc, I can buy your disc. However, without owning a license, I wouldn't have the right to use the software.

If the SCOTUS upholds the circuit court's decision, I wouldn't be able to buy your Windows disc anymore (assuming it's pressed outside of the US).

In fact, I think some supercar makers already do something like this--they make you sign a contract limiting how soon you can sell your car or even mandating that you allow the company to review and control whom you can sell the car to.

Of course, this only works for really expensive but limited edition cars. If there is a several year waiting list just to get the chance to drop half a million on a car, the car maker can get away with almost anything--the customer is obviously willing to go through a lot of trouble! This is designed to stop people from flipping supercars.

Also, there is a very important difference between a voluntary contract and an abuse of copyright law. Now, if every car maker mandated such a contract on every car, it would be a big issue even if it was ostensibly voluntary. In a free market, some other company not mandating such a contract would emerge; however, markets rarely function perfectly. I think this is an interesting parallel to the whole safe boot nonsense: if there was more diversity in the market it wouldn't be an issue, but the market is heavily dominated by a handful of companies, so it is an issue from a purely practical standpoint.

On the other hand, suppose a group of car makers all coincidentally decided to impose this - purely for safety concerns.

And while they couldn't ban after market parts, they could make the engine not start if the new brakes/mufflers/cat didn't give the correct crypto response to the engine management system.

And just imagine that congress would bow down to the car makers (that it had just bailed out) and rule that you couldn't modify the engine computer - in the interests of safety of course.

I think the Nissan GT-R had some components like this, actually.

Did it? All I heard was that it had certain components hand-built and customized to each other (like the engine and the transmission). However, this is an entirely mechanical issue: since it wasn't really mass-produced, each motor and gearbox is different, so replacing them is going to be nontrivial.

Of course, I'm not an expert, and could certainly be missing information on other components of the GT-R. Either way, it's useful to keep in mind that the GT-R is a really crazy car :P.

I know they were trying to prevent it from being "chipped", and putting cryptographic interlocks in major components is the best way to keep the ECU from being completely replaced.

It would be just as easy for a hypothetical Ford to do what GM did with the EV-1 -- don't sell the car and only offer it for lease.

A note for college HN'ers: you don't need foreign relatives to mail you the books. amazon.co.uk will happily ship to US addresses. It costs a little more to ship and takes a week or so longer, but you can still save a substantial amount. I bought most of my engineering texts this way.

> Almost every product made now has a copyright logo on it. That logo, alone, empowers manufacturers to sue people for copyright infringement for unlawful sales.

Logos are not copyrightable (well, you could copyright an image of one...) but fall under trademark law. I have a hard time trusting an article about this stuff that confuses copyright and trademark law; they're two completely unrelated, different beasts.

I believe the author is referring to the copyright symbol (the c with a circle around it). This article could have used more thorough proofreading and editing.

In which case the author is still wrong. The copyright logo has not been necessary to enjoy copyright protections since 1989:

> The notice was once required in order to receive copyright protection in the United States, but in countries respecting the Berne convention this is no longer the case. The United States joined the Berne Convention in 1989

http://en.wikipedia.org/wiki/Copyright_symbol

It is not necessary, but it is still done. Why? Because it takes away the defense, "But I didn't know that it was copyrighted!" It also makes the copyright holder easier to track down for people who want permission.

Nope. They're almost certainly talking about the company logo. See Omega S.A. v. Costco Wholesale Corp.

https://en.wikipedia.org/wiki/Omega_S.A._v._Costco_Wholesale....

Logos are copyrightable. They are also trademarkeable. They are not, however, patentable, except to the extent that they are three dimensional, in which case they may be eligible for patent design protection.

I have a hard time trusting a commenter who confuses copyright and trademark law. They are two related legal concepts that provide different types of protection for intellectual property.

My understanding was that a logo could fall in for a design patent if the logo was part of the design of the items said company sold.

For example: iPhone 3GS. Pretty mirror apple logo is Apple trademark. It is a picture, so copyrightable. And it is part of the design and 'look and feel' of an iPhone, so patentable as well.

But I'm no lawyer..

I found an almost new iPod that had been dropped on the floor. I spent a few minutes looking for the owners details but other than a few Rihanna tunes and rap videos watched on Youtube I couldn't establish the owners contact details.

SO I gave it into the local police station. I asked if I could collect it if no one claimed it within 30 days. No. It comes under data protection act and have to be destroyed. Bloody UK law.

Yeesh. What a mess.

So first of all, let me recommend SCOTUSBlog and the actual court decision rather than the Atlantic:

http://www.scotusblog.com/?p=143279 http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-...

Now what's going on here: Congress said (1) you have a right to resell copies of copyrighted work "lawfully made under this Title", but (2) you can't import copyrighted work from other countries without the copyright holder's permission. This is intended to make it possible to sell things at different prices in Mexico City and LA, which in turn makes it more viable to sell things in Mexico City at all. You may not love it, but it's at least a rational system.

The Ninth Circuit has interpreted this, using common sense, to mean that if a publisher voluntarily imports stuff and sells it in LA, and then you buy it and resell it, the doctrine of first sale applies. What happened in this case is someone was straight up running a business importing and reselling stuff that wasn't intended for the United States. But instead of focusing on that, the Second Circuit took a closer look and said, waitaminute, these books aren't "lawfully made under this Title" in the first place, because they were made under someone else's statutes instead of ours. So whether or not you had the right to import them, you don't have the right to resell them.

Now, as the defendant and the dissent and the Ninth Circuit have all pointed out, that's nuts. It destroys the doctrine of first sale for everything manufactured outside the United States, which makes no damn sense in anyone's world and isn't even necessary to stop what Congress actually wanted to stop. Maybe this is optimistic, but I really don't think there's going to be anyone who manages to get behind that as a Good Thing. So I'm not planning to panic until (1) the Supreme Court fails to salvage this one, and (2) Congress fails to immediately patch up whatever mistake they built into the statute.

Side note: the Atlantic tries to make this a little more dramatic with "Almost every product made now has a copyright logo on it. That logo, alone, empowers manufacturers to sue people for copyright infringement for unlawful sales." There's some truth hidden in there, but it's a really weird way to put it. It is indeed possible to get copyrights on design elements of products, but only if the design elements are totally separable from the actual purpose of the product -- basically if the stuff you claim copyright on could be fully removed from the product and it would still work exactly as well.[1] So can you really copyright an iPad? I'm skeptical -- what's the element of the design that isn't functional? If they're saying that the Apple logo itself is the copyrightable design element, I have trouble buying that -- an iPad isn't the same as, say, a watch with an Apple logo for a face. I think this aspect of their concern is dramatically overstated. (Trade dress, the basis of the Apple v. Samsung cage match, is a different issue, but not one that's relevant to resale.)

TL;DR: WTF with a side of Don't Panic.

[1] Random explanation of design copyrights: http://www.jdsupra.com/post/documentViewer.aspx?fid=d1f71ed3...

First of all, the title asks about iPod and you refer to iPad. But the real question is why do you care about the possibility that consumers might pay less for their iPads? Are you trying to keep prices high?

This is a simple issue of parallel importation. Americans pay more for the same products for which people in other parts of the world, like Thailand, pay less. That's because America does not like the idea of parallel imports. Other countries allow it because it lowers the price of goods to the consumer by giving them choice. The way America enforces its prohibition on parallel imports is, you guessed it, through rules on importation.

The First Sale Doctrine is not a defense to copyright infringement under S. 106(3). See below. That is a ridiculous argument. The Cornell math student was caught red-handed, he stood no chance on appeal and does not have a chance at winning at this level either. He was making obscene amounts of money (see evidence of his dramatically enhanced net worth introduced at trial) selling books that should have never have been allowed into the country. More than enough to support paying his tuition. Hardly a starving student.

So why is the S.Ct. hearing this one? Because the District Court said something very stupid and this needs to be fixed. The First Sale Doctrine does not apply to imports. Never has, never will. See below. Yet the District Court in refuting this losing argument chose to add some new reasoning of its own, instead of relying on the statute and sufficiently similar precedent, and made the erroneous statement that imported copies made elswehere are not covered by S. 109 because of the statutory construction. As everyone can see the statute is very ambiguous with respect to "lawfully made". And it's been that way for a very long time. There's no need to open that can of worms. The First Sale Docrine simply has never had an exception for imports and it's not ever going to have one. This is because the U.S. does not want parallel imports.

The S. Ct. is going to affirm the lower court decision but they will fix the District Court's blunder in trying to intepret the statute when it was wholly unnecessary. They will make it perfectly clear that the First Sale Doctrine applies to copies of US copyrighted works no matter where they are produced. They'll find a way to do it without opening a potetial hole in the Act by applying arbitrary interpretations of ambiguous language as the lower court chose to do. In nerd speak, the District Court has introduced a potentially major security flaw that puts copyright holders at risk. And the S. Ct. is going to fix it, proactively.

Sec. 109(a) [First Sale Doctrine] "Nothwithstanding 106(3)..."

Sec 106(3) [It's infringement] "to distribute copies . . . to the public by sale"

There's a typo in the 3d para. and at the bottom. It should say 602(a) not 106(3).

106 delineates the rights. (And those rights are subject to 109.)

602 delineates what is infringement.

The dissent in the 2d Cir. case points out that 602 derives from 106. True, but there's no precedent that says 109 can subjugate 602. In fact, the S. Ct. in Quality King was quite clear: 602 is broader than 109.

If we're atlking about importing quantities of goods for resale in the U.S., either they cannot be imported or the importer will pay dearly in tariffs. That is how the major American corporations, who lobby for the the copyright laws, doing business globally wanted it. And that is how it shall be.

No court should be saying 109 trumps 602. This would open the floodgates to parallel imports. It would allow an industry to flourish that undercuts U.S. pricing, i.e. the prices American companies want to charge Americans.

These companies that sell goods in many markets worlwide are already unhappy with countries that allow parallel imports since consumers in those countries can potentially buy goods at the lowest prices worldwide, not just at the price an American company thinks consumers in that country should pay.

In sum, it destroys the differential pricing schemes these companies use to maximize profits.

> This is intended to make it possible to sell things at different prices in Mexico City and LA, which in turn makes it more viable to sell things in Mexico City at all. You may not love it, but it's at least a rational system.

Thanks for this explanation, I've despised these anti-arbitrage region-coding-like rules for a while, but when you put it this way it at least makes some kind of sense.

Of course it makes sense, every such rule has some rational intent. The intent here is market segmentation: http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...

But my response to that kind of bullshit is as always: if you can make profit at price X in Mexico City and the importer can still make their profit after undercutting you in US, then you're just scalping your US customers. There should be no laws that help you do that.

That assumes zero fixed cost. Perhaps if you sold to all your customers at Mexico City prices, you would make a large loss.

The copyright issue is that your iPod or iPad comes with a bunch of copies of software from various places pre-installed on it. That software has copyrights. So you'd potentially have to have permission from all of those copyright holders.

(But I'd think that said permission should normally already exist - else Apple would be unable to sell that hardware.)

> Because those products were manufactured abroad, according to the Second Circuit, the first-sale doctrine doesn't apply to them.

This is not a good explanation. Does anyone know why exactly first-sale does not apply to products manufactured abroad?

here is a great explanation: http://news.ycombinator.com/item?id=4149211

All of the cases involve resale of items that were imported without authorization of the copyright owner. When you buy an iPod from Apple in the US, that import was authorized by Apple.

Let's analyze your statement. What does it mean to import an item for resale without the copyright owner? I see 2 scenarios. First, the importer bought the item and turns around to sell it. That's easy, I bought a DVD and now want to sell it, why should whoever I bought the DVD from have a say with what I do with it. In my opinion the same applies whether it is 1 DVD or 500. This gets real easy if you put it in terms of physical goods. I bought 500 screws from you. Why should you have any say over what I do with those screws after the purchase. If the screw has some kind of copyrighted mark on it the rules shouldn't change.

The second case is if in our purchase agreement you add stipulations on what I can do. Then that's easy too. I will buy your 500 screws for a discounted price and agree not to export the screws. If I break the contract then you can sue for breach, in the jurisdiction that we agreed to in the contract.

Neither case needs to involve the US government nor the courts to decide what is commonly understood.

So many actions these days can violate copyright law. I really don't bother trying to figure out what may or may not do that.

And I can only think of the absurdness of getting copyright "permission" for each holder for an iPhone, or for any device that has firmware on it.

BTW: Can an attorney possibly answer this: Where is the proof of copy on an Audio CD?

Agreed. Common sense needs to prevail.

To avoid cheap text books getting dumped in the market change the Mexican version to include content relevant to a Mexican audience. Making importation into the US less appealing.

For DVDs make the default language Spanish.

For watches Add 'Omega Mexico' to the logo.

Since the manufacturers aren't taking these steps that add marginal cost to their product then clearly it isn't a significant problem. It seems so straightforward, what am I missing that the courts are struggling with.

Companies routinely move their wares around the world for the best prices, as well as lay off and rehire in cheap market segments. I believe it's called wage arbitrage.

Companies will also move their headquarters to different 'tax brackets' (read: countries that offer the best deal).

To be competitive, you move non-critical stuffs to cheapest areas. Makes business sense.

YET, we peons cannot buy media outside our 'zone', thanks to DVD and Bluray zone controls. And it's illegal, as in felony, to break this crap.

YET, we peons cannot textbooks outside the zone a company ordains. Meh.

Why are companies allowed to min-max all of their operations, yet when the small guy does it, it's illegal in XYZ many ways?

If it becomes illegal, I doubt the US government will have the money to enforce it, and neither will copyright holders.

So don't worry.

It's probably unenforceable for individuals but, what about the guy who starts a business buying broken iPods, fixing them, and reselling them? He would definitely be a target.

It would be relatively easy for companies to force Amazon Marketplace, eBay and Craig's List to take down unauthorized sales.

That said, I don't think any tech company would be stupid enough to start enforcing this right. Tons of new purchases are subsidized by the sale of the previous version of that product. Game companies, on the other hand, would probably love this.

They already do on eBay - the "veRO" program gives any company that wants one an unappealable, instant takedown button for literally every auction on the site.

Try reselling your weight watchers program materials on eBay and you will learn about the program very quickly.

This is supposedly the reason Apple offer free engraving on iPods. You are less likely to sell a personalized item and it's resale value is lower - so reducing the used iPod market

This is a good thing. If everyone selling used items has to go further underground, it will raise the price of used items. That means items will hold their value for longer, making it less attractive to simply throw things away. Longer use cycles means less trash, and that's good for the environment.

Bottom line: more money for selling your stuff, and less land being razed for landfills.

In some world, that is...

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