Thursday, February 19, 2015

It’s Official! Brands Can't Stop You From Re-selling

Much of the online marketplace is modeled around re-selling secondhand goods. This is especially true for eBay. In 1998, the Supreme Court ruled that first-sale doctrine applies to products made in the United States that are sold overseas. This meant that the copyright holder (the brand) could only claim profit for an item sold on the first sale. If the item was re-sold in the United States, the profit would go to the purchaser of that item. But in coming years, that ruling would be challenged, potentially jeopardizing online reselling of products.

In 2004, Costco purchased Omega watches from distributors outside of the United States. As Omega had not authorized Costco to sell their products, they sued Costco in the United States District Court for the Central District of California for copyright infringement, as they had not given Costco permission to import their products into the United States for sale in their stores. The District Court found in favor of Costco, and Omega appealed to the US Supreme Court. The court heard the case, but was divided.

In 2012, Wiley Asia sued Supap Kirtsaeng for importing international editions of textbooks into the United States without their permission. The US District Court for the Southern District of New York found that Kirtsaeng was in violation of copyright laws, and awarded Wiley $600,000. Kirtsaeng appealed to the US Supreme Court. He argued that the first-sale doctrine makes no mention of where an item was manufactured, therefore, items manufactured outside of the United States also fall within this doctrine.. In late 2013, the Court ruled in favor of Kirtsaeng.

After the Kirtsaeng case, the US District Court for Central California decided to re-examine the original Omega case. In late January, they found that copyright holders can’t prevent goods made abroad from being imported and sold within the United States.

What does this mean for all of you sellers on eBay, Amazon, and other marketplaces? It means that according the law, you are able to sell second-hand goods without fear of penalty from the original manufacturer.

Do you feel the relief?

Barbara Anderson
Marketing Coordinator