Property Rights: No Longer For Individuals?

There’s a remarkable case working its way through the US Supreme Court, Wiley v. Kirtsaeng that challenges the “first sale” doctrine – the limitation on copyright that effectively says that once something has been sold, the copyright holder no longer has any control over it being lent out or resold. Click on the link above if you want the details of the case, but the quick version is that Supap Kirtsaeng was a Thai student studying in the US who quickly realized that the Thai editions of his textbooks were much cheaper than the (effectively identical) American ones and he did a brisk business importing Thai text book editions and selling them to his fellow students.

A victory for the efficiency of free markets? Not in the eyes of publisher John Wiley & Sons who has sued Kirtsaeng for hundreds of thousands of dollars on the basis that US copyright law does not explicitly apply the first sale doctrine to foreign-made products. The ramifications of this are staggering, any foreign-made product in the US could conceivably be banned from resale, or, more likely, the copyright holders would attempt to get a percentage on any resale. This would have an obvious chilling effect on everything from Craigslist and eBay to the simple yard sale. The copyright holders in the publishing as well as film and music industries claim that they do not want a cut of your sale of used records but at some point if they are legally allowed to make a profit by demanding a cut from such sales, why wouldn’t they?

This development follows a trend that originates probably in software, where one is not sold a product as much they are sold a license to use intellectual property that remains under someone else’s ownership. There was the case where an e-reader was been erased due to vague allegations of terms-of-service violations. But withholding electronic information is one thing, in the case of our physical books and perhaps vinyl records (though not necessarily DVDs or CDs) we had things and we believed we owned them. Now though it seems there is a move afoot to say, no, you do not own this, anyone who claims the copyright for any aspect of the product you supposedly own may now want to be able to prevent you from selling it or lending it without giving them a cut.

I know that many regard property rights as an important protection against the interference of the state or of other, more powerful actors such as government, big business or banks or whoever. What happens when the concept of property can be turned into a rent-seeking tool for those with enough lawyers?