eBay and other resellers endangered by court ruling

eBay and other websites where second-hand goods are sold, not to mention car boot sales, may soon be a thing of the past after a new court ruling that products made outside of the US with a copyrighted logo will not be allowed to be resold without prior permission or licence payments to the copyright holder.

Article 109(a), otherwise known as “the First Sale doctrine”, of the US Copyright Act gives those who have bought a product the right to resell their copy or get rid of it in whatever manner they choose. This is what people have been doing across the globe for centuries and has given rise to a number of websites where users can resell their goods, such as eBay and Amazon.

However the Ninth Circuit Court of Appeals has ruled, in a case involving Costco reselling second-hand Omega-branded watches, that if the product has a copyrighted logo then reselling it is an infringement of the copyright and so illegal. which defies all common sense on the subject altogether.

The advocacy group Public Knowledge agrees and is attempting to overturn the ruling. It has filed an Amicus brief with the Supreme Court, which will hopefully see a bit of sense and realise that the product is in the ownership of whoever bought it and they are not doing anything with the logo other than leaving it as it was.

The issue of contention here is that some manufactuers are buying goods from distributers overseas, whereas the Copyright laws, which give buyers the rights to resell items, only apply for the domestic market. In other words, Americans can resell American goods, but not European or Asian ones if they contain anything copyrighted, such as a logo, which is pretty much most of them.

And all of this boils down to a legal interpretation of the phrase “lawfully made under this title”, present within Article 109(a), which the Ninth Circuit Court interprets as only relating to products which do not have foreign copyrighted logos on them.

“The potential consequences of the Ninth Circuit’s decision are huge,” said Anjali Bhat of Public Knowledge. “Control over personal property is a basic freedom we all rely on, both personally and economically. It’s very invasive to be told that we can’t sell our books or DVDs without the publisher’s or manufacturer’s permission because they were printed or pressed abroad. The problem becomes even more obvious when you realize that a manufacturer can get this level of control simply by drawing a small logo on a non-copyrighted product.”

There is also room for this to go further than just copyrighted logos. If the copyright laws allow for foreign copyright holders to retain perpetual control of a product after it has been sold then it means that books printed abroad may potentially be barred from being resold, since they contain copyrighted material.

While it may take another legal case for this to become a reality, the logical conclusions of the Ninth Circuit Court's rulings are very clear.

Second-hand bookshops, charity shops, and libraries could become endangered because of this. Bhat also saw the potential risk for online resellers: “What happens to Netflix, Amazon and eBay if they have to find out where each item was made, whether it has a copyrighted logo made outside the US (if the item itself isn’t a copyrighted work), and then buy licensing rights from the copyright owner if the item was made abroad? That’s an enormous economic burden to put on businesses who follow that model.”