SCOTUS CASE: Right To Resell Your Property In Peril

Part of the upcoming Supreme Court of the United States’ agenda is a little known case that could affect your personal property rights (1st, 4th, & 5th Amendments to the U.S. Constitution) with regard to reselling items that you own, whether it’s an iPhone or antique furniture. Imagine every time you have a yard sale, make a private sale of a property item you own or place an item on ebay that you no longer want, or simply take it to a thrift store, you have to pay the copyright holder of the item you are selling along with various other fees and taxes. Would it even be worth reselling?

Marketwatch reports,

At issue in Kirtsaeng v. John Wiley & Sons is the first-sale doctrine in copyright law, which allows you to buy and then sell things like electronics, books, artwork and furniture, as well as CDs and DVDs, without getting permission from the copyright holder of those products.

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A Supreme Court case could limit the resale of goods made overseas but sold in America.

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Under the doctrine, which the Supreme Court has recognized since 1908, you can resell your stuff without worry because the copyright holder only had control over the first sale.

Put simply, though Apple Inc. AAPL +0.27% has the copyright on the iPhone and Mark Owen has it on the book “No Easy Day,” you can still sell your copies to whomever you please whenever you want without retribution.

That’s being challenged now for products that are made abroad, and if the Supreme Court upholds an appellate court ruling, it would mean that the copyright holders of anything you own that has been made in China, Japan or Europe, for example, would have to give you permission to sell it.

“This has huge consumer impact on all consumer groups,” said Jonathan Band, an adjunct professor at Georgetown University Law Center. Band filed a friend-of-the-court brief of several institutions: The American Library Association, the Association of College and Research Libraries, and that Association for Research Libraries.

More than likely it will be a way for the copyright holder to take a piece of the action when you turn around and sell the product.

Joel McDurmon points out that there could be two ramifications if the ruling is upheld:

Two major ramifications that would come about if this ruling is upheld are: first, U.S. manufacturers will have an incentive to move operations overseas so that they can maintain a financial interest in their products no matter how many times it is bought or sold.

This may be balanced by the second outfall: U.S. consumers will have a major incentive to buy only American-made items. This pressure could keep American manufacturers here instead, and the Supreme Court will be vaunted by some for its economy-stimulating decision. Of course, increased demand for American goods would also drive up prices, meaning people may buy less, so the effect may be a wash on the larger economy. The only effect then would be that people buy less and have fewer consumer items.

He rightly points out that it will be the free market that absorbs the blow if the ruling is upheld.

The Court is scheduled to hear oral arguments on October 29.

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