How The Supreme Court Could Destroy the Free Market

Say goodbye to Sunday afternoon garage sales.

A U.S. Supreme Court case set for October 29 wants to take away your rights to sell your goods. That's right—you may no longer be able to sell your old books, your record player, or even your iPhone.

Kirtsaeng v. John Wiley & Sons addresses copyright law. According to the first-sale doctrine, the copyright owner only has control over the first sale of the item. Thereafter, the owner is free to sell the good as he or she wishes.

This doctrine has been in place since 1908. It's allowed garage sales, the advent of websites like Amazon, Craigslist, and eBay, the existence of used book stores, used car dealers, and antique shops...

But it's being called into question, and the case specifically addresses goods manufactured overseas.

If the doctrine is overturned, you would have to get permission directly from the copyright holder if you'd like to sell anything manufactured outside of the U.S.

It all started when Supap Kirtsaeng moved from Thailand to attend college at Cornell University in 1997. The price of college textbooks is high in the U.S., but in Thailand, he could get a good discount. So he had them shipped.

When he later sold them for $1.2 million, copyright holder John Wiley & Sons took him to court.

Last August, the case reached the U.S. Court of Appeals for the Second Circuit. A lower court had ruled that “copies manufactured domestically” were the only ones subject to the first-sale doctrine, and the Court of Appeals upheld this.

If this goes through, it would have widespread effects.

From MarketWatch:

It could be your personal electronic devices or the family jewels that have been passed down from your great-grandparents who immigrated from Spain. It could be a book that was written by an American writer but printed and bound overseas, or an Italian painter's artwork.

It would devastate the free market. Even American-made cars are full of parts manufactured abroad. So many small businesses that make their profit from selling used goods would be shut down or face the grueling process of seeking out and obtaining permission from the copyright holder.

And then copyright holders would likely request a cut of the profits.

From MarketWatch:

In its friend-of-the-court brief, eBay noted that the Second Circuit's rule “affords copyright owners the ability to control the downstream sales of goods for which they have already been paid.” What's more, it “allows for significant adverse consequences for trade, e-commerce, secondary markets, small businesses, consumers and jobs in the United States.”

All of us garage sale-goers and eBay-sellers will have to hope that the Supreme Court overturns the Court of Appeals' ruling.

If not, we will watch as our freedom is stripped away, one case at a time.

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