Evan Schuman's StorefrontBacktalk

The Thai college student, like the importer of the watches and the shampoo, argued that the “first sale” doctrine permitted these imports. It is this doctrine that allows you to buy a record album and, after you’re done listening to it and presuming you haven’t made a copy of it, to sell that album at a used record store. The same is true for using textbooks. You bought it; you own it. The presumption is that the author has already been paid for his or her work. Authors don’t get to be paid a second time when purchasers resell something their own.

The first sale doctrine has been around in the common law for hundreds of years. Unfortunately, it is inconvenient for those who want to get paid over and over again for their works. It is even more inconvenient for those who wish to use the copyright law not to protect intellectual property but to block a business model involving the importation of cheap goods from overseas into the United States.

So the publishers or manufacturers came up with a novel argument. The first sale doctrine allows the resale of works that are made “under this law,” meaning under U.S. copyright law. The manufacturers argued that because the products—such as the textbooks, the watches or the labels affixed to the shampoo bottles—were manufactured overseas, they were not “made under copyright law.”

In other words, they were copyrighted, but not made under U.S. copyright law. The products were physically made somewhere else.

The court majority thought that this argument was just a little too cute. Essentially, the justices held that the phrase “under copyright law” means subject to copyright law, not physically under the law of the United States. Therefore, the court held that the first sale doctrine allows people to buy textbooks in Thailand, bring them into the United States and then resell the books they had already bought.

This case may have no practical effect on merchants in the short term, because most suppliers will already be restricted from selling products to legitimate merchants from overseas. It is to the advantage of manufacturers and distributors to continue to persist in segmented markets, where they can take advantage of price differentials based on different geographic markets. And, in fact, technology can help this situation by, for example, creating DVDs that will only play in a particular geographic area.

But the U.S. Supreme Court is holding open the marketplace for entrepreneurial distributors to create a world market for goods. At least the copyright law won’t be an impediment.

If you disagree with me, I’ll see you in court, buddy. If you agree with me, however, I would love to hear from you.