My Kind of Country

Country music from a fan's point of view since 2008

U.S. Supreme Court strikes a victory for the used music market

copyrightFor the past few months, I’ve been reading about Supap Kirtsaeng, a Thailand-born student at Cornell University, and how his idea to offset the costs of college tuition led him to the United States Supreme Court. Kirtsaeng made over $100,000 by selling used textbooks online. These textbooks were purchased by his relatives in Thailand at cut-rate prices, much cheaper than they can be bought for in the U.S.  He bought books that were printed and sold legally overseas. He resold them in the States for a profit. The publisher of the textbooks, John Wiley and Sons, Inc., sued and won a $600,000 judgment against Kirtsaeng, arguing he violated fair use since the copyrighted material was sold outside the U.S. The college student and his lawyer held he did not violate fair use because he bought the books through a third-party – to whom Wiley and Sons had licensed the low-cost copyright – and appealed to the high court.

And it all sounded to me like that old first-sale doctrine argument we heard back when some recording artists got their breeches twisted over the sale of used CDs and vinyl records.

Those old enough to remember know the issued of reselling used media caused a stir in the mid-’90s when used CDs started saturating the market and caused a panic at the labels, who quickly issued cease and desist letters to the record stores, ordering them to stop selling used products. The Federal Trade Commission got involved and the labels backed off, but not before some recording artists – most notably Garth Brooks – could weigh in on the subject. Garth went so far as refuse to release new music to record store chains that sold used CDs. What I’m sure was meant to be his championing of the underdog – the “little guy” – turned out to be one of the first of many times Garth made a jackass of himself in the media, especially since he was railing against what was already a nearly nine decades-old precedent settling the argument of “licensing” versus “sale” of a copyright when you buy a book, vinyl record, DVD, or mp3.

Which is why I was surprised at first to learn that the Supreme Court would even be hearing yet another case about this. But there was a difference here. The big issue regarding The Textbook Case is that the product was manufactured outside the United States. Did U.S. copyright law – particularly the first sale doctrine – apply to works made outside U.S. jurisdiction? The justices say so, in a 6-3 vote last week, overturning the district court’s decision. And while their opinions hinged more on giant retailers like Costco and their ability to sell goods made outside the country, it trickles down to the used music marketplace.

If the high court had upheld Mr. Kirtsaeng’s conviction and fines, the availability of and our ability to purchase used (read: reasonably priced) copies of older and out-of-print albums would dramatically drop. Rejecting third-party copyrights from first-sales exemptions wouldn’t completely shut down amazon.com’s used CD market for U.S. customers – providing we were buying American-bred products. But Bear Family and some other great independent labels could have faced an embargo. So I say the court’s ruling is a victory for the audiophiles even more than the general consumer.

Maybe this will be the final say on the matter, with the court extending the first-sale doctrine’s reach to globally-produced products. Or maybe just until there are extraterrestrial copyrights to legislate.

4 responses to “U.S. Supreme Court strikes a victory for the used music market

  1. Ken Johnson March 27, 2013 at 11:10 am

    To be fair- in the early 1990’s no one was sure what the impact of digital music would be. For the first time in history a medium of music delivery was available that would not substantially degrade with multiple plays. Vinyl records & cassettes were susceptable to wear & tear while CD’s sounded as good on the 100,000th play as they did the first. (Assuming the disc was not damaged by abuse)
    Downloads were yet to come. There was initially a lot of paranoia in the music business over digital music. As it turns out Garth was right to be apprehensive as file sharing has now become commonplace and millions of dollars have been lost by artists and the recording industry. A generation has been raised with the concept that music is and should be “free.” The industry is still trying to find a business model that is sustainable. It’s a very tough and complex issue.

    Unfortunately the textbook company really got a raw deal. They were making books available at a far lower price for folks in third world countries and got screwed because of it. Wouldn’t blame them if they raised their foreign prices to coincide with the U.S.

    That said, I’m personally glad to see that the free market won out in this decision and that imported music will remain available in the U.S. Domestic labels are almost absent from the country music reissue marketplace. Overseas labels have become the primary source for vintage country music releases. God Bless Bear Family, Raven, Hux, BGO and other foreign labels for keeping vintage country music alive.

  2. mrowster March 28, 2013 at 3:33 pm

    Great news, and great analysis. It’s been entirely through purchasing used CDs/LPs/45s that I’ve come to amass a collection of older country music – here’s hoping others will always be able to explore it that way.

  3. J.R. Journey March 28, 2013 at 3:56 pm

    @Ken:

    I don’t think it’s fair to say Garth and other artists had any indication at all the lasting effects digital music and online piracy would have on the business, certainly not when they got bent about the sale of used CDs. It wasn’t even a blip on the radar in the early ’90s – when only Al Gore and the tech-nerds were on the web. I think you hit it right on about their apprehension stemming from CDs which would not “substantially degrade with multiple plays”. But, more enduring quality or no, the artists and labels were still bitching about the same old thing the Bobbs-Merrill Publishing Co. had their gripe with in 1908.

    And I agree again that the publishing company got a “raw deal” in this instance. But when the question is “does the first-sale doctrine apply to international, third-party copyrights?”, the answer healthiest to the needs of the many in this case is yes.

    @mrowster:

    Thanks for your comments. Hope to see more of you around these parts.

  4. Ken Johnson March 28, 2013 at 6:36 pm

    J.R.

    To be clear I was not inferring that Garth & others back in the 1990’s were psychic and had the ability to forsee future digital technological advances. My point was that ultimately their worst fears came true when file sharing began. Concerns regarding the resale of CD’s became their least worrisome aspect of the digital revolution. Their paranonia was misplaced and a few years too early.

    By the way I think it’s great that you did this article. Too often topics such as this are only discussed in legal journals or industry business publications. Those who could are most affected are often not informed. Nice job.

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