July 28, 2015

Supreme Court: You Bought It, You Own It, You Can Resell It


First Sale Doctrine Resale Rights

This past week the United States Supreme Court decided a case that reinforced the right to re-sell something that you had lawfully bought.

Now — you might be wondering what’s so earth shattering about that.  After all, hasn’t that always been true?  You own an iPad and want to get a new tablet instead?  Just sell the old iPad or donate it or recycle it — because it’s yours and you can do what you want with it.  Bought a book and no longer need it? You sell that, too. Right?

Here in the States we have something called the “first sale doctrine.” It simply means that once a tangible copyrighted work (or something with copyright in it) is sold lawfully the first time, the original copyright owner no longer has rights over the physical item. After that, the buyer can do whatever he or she wants with it — sell it again, donate it, whatever.  That’s why you can legally hold a yard sale or sell computers on eBay. The resale right applies only to the physical item sold, not copies.

Most of us take resale rights for granted.

But that right to resell copyrighted items had been challenged in court.  The Supreme Court’s decision this week reaffirmed that owners have resale rights, as Daniel Fisher writes in Forbes:

The U.S. Supreme Court today settled a long-simmering debate over the Copyright Act by holding that publishers can’t prevent the resale of books they produce overseas in U.S. markets.

The decision in Kirtsaeng v. John Wiley & Sons is a victory for Supap Kirtsaeng, a student who was fined $600,000 for importing Wiley textbooks from his native Thailand, where they were cheaper, and selling them in the U.S. It’s also a victory for libraries and retailers like eBay, who argued the “first sale” doctrine — giving owners of published books and recordings the right to sell them to whomever they want — should apply to imported works as well as U.S. publications.

The lawsuit related specifically to U.S. copyrighted items manufactured outside the United States, but re-sold or disposed of inside the U.S.

The Owners’ Rights Initiative hailed the decision as a victory for individuals, organizations and businesses.  The Initiative is an advocacy group founded to protect owner’s rights to buy and sell authentic goods.

Their motto is: “You bought it. You own it. You have a right to resell it.” (Image above)

The Owner’s Rights Initiative says you should be permitted to resell something you’ve legitimately purchased, no matter where it was manufactured.  While the court’s decision puts to rest one attack on resale rights, the group believes  there could be other legal attacks in the future.  Said Lauren Perez of the American Free Trade Association, in a video on the Owner’s Rights site:

If you buy it you own it. If you paid for it, it’s yours. You shouldn’t have to go ask permission of anybody to resell it.  You shouldn’t have to worry about being sued for copyright infringement because the original copyright owner or manufacturer doesn’t like you being the person reselling it… doesn’t want you to realize a profit from your original investment.

The Owner’s Rights Initiative is backed by groups  like eBay, Etsy, Overstock, the American Library Association, the Computer and Communications Industry Association, and even the popular used/out-of-print bookseller Powell’s Books.

Below is the Supreme Court’s decision (only the 4-page summary, also known as a syllabus):

Image credit: Owner’s Rights Initiative

This article was updated to clarify that resale rights do not apply to copies illegally made of a copyrighted item.

37 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

37 Reactions

  1. Thank you for your write up on this subject

  2. Thanks for the info! I’m assuming (without reading the syllabus) that this only applies to physical goods and not digital content. Can you comment on this?

    • Digital content (and other intellectual property) is licensed — not sold, so while first sale doctrine says you can sell the actual music CD you purchased — you can’t sell or give “copies” of the CD, nor can you legally sell the original CD and then keep a digital version on your hard drive for yourself.

      • Yes, but isn’t the license itself a form of property? If I buy a license to play a video game or listen to a song, then I own that license and should be able to transfer it to someone else in exactly the same way that I can transfer a CD or DVD to someone else.

      • A license for intellectual property is not property — it’s a legally binding contract between you and the licensor. You can’t transfer it to someone else. THEY need to purchase their own license to use. Under “First Sale Doctrine” — while you may be able to give someone the actual CD or DVD — it would be breaking the law to first burn yourself a copy. You can see why these laws are important for creators — Realistically, how many users are respectful enough of the rights of the artist to not take advantage of the simple ways to both keep for yourself AND give away digital media?

  3. Well, I’m glad to hear that we do have the right to resell our property. It would be pretty lame if we didn’t. Thanks for sharing.

    Ti

  4. I hope this doesn’t get misinterpreted by people, although I am sure it will be. This does not mean once you buy an item it is yours to do with it as you please. You still cannot copy CDs or DVDs or art prints and resell them, you still cannot take an image, digital or rubber stamp and resell the image. You do not own the art on these items, and while you may resell the item you purchased you cannot use it to produce more to sell, unless of course you have the owner’s permission. I just hate to see people assume that.

    • Hi Michelle,

      Yes, the Supreme court case and the owner’s rights initiative are about selling items you lawfully purchased and own. When you lawfully purchase one music CD or one film DVD, that’s all you can resell — the one item you purchased.

      The Supreme Court did NOT say one could make illegal copies and would own those. Let’s take an example:

      If you purchase one CD, DVD or artwork legitimately, and then make 5 copies of that same CD, DVD or artwork — without express permission to reproduce copies — you don’t lawfully own those extra 5 copies. Since you have no lawful rights in those bootleg copies of the CD, DVD or artwork, you have no rights to sell them. (Not to mention that you’re breaking the law by making bootleg copies without permission in the first place.)

      One final point: anyone with specific questions about their own legal rights should contact an attorney, and not rely on a news article like this for legal advice.

      – Anita

  5. Good to see how this turned out in favor of owners’ rights. I am still a fan of owning a physical hard copy of software just for the fact that it can be resold easily when I no longer use it.

  6. So if i have “fitness” dvd i paid for does the company have the legal right to force me into a contract not to resell? Is it legally binding?

    Ex. Piyo, zumba, les mills, ect. If i buy it then why does ebay say its copywright infringement…..and yes its a physical dvd

    • Jona,

      Not sure of the facts in your situation, but one possibility is that it may be a bootleg version. If it was illegally copied to begin with, then it’s infringing. Without knowing the exact facts, it’s hard to say.

      With the exception of prohibiiting the sale of bootleg or illegal versions of a DVD, it appears eBay is allowing hundreds of thousands of used DVDs to be sold. I just checked and there are over 500,000 listed on the site for sale.

      – Anita

  7. Thanks for the info! I have someone on eBay watching an listing I have (something that I bought from this person. They are sending me messages stating that the “lovely (item) should have gone to someone that would have enjoyed it & appreciated it”. It didn’t sell the first time around, so I re-listed it. This person keeps watching it. It’s a bit creepy.

  8. Hi, what happens if the item has multiple pieces, a double album for example, or pages in a book. Can you resell the original item in pieces without additional copyright, and can you post photos of the piece in order to resell it. Does I own it, I can resell it cover that?

    Thanks

    • Mary Kay,
      This is very similar to the questions that I have asked and even though you asked it over a year ago, I see no one seems to be able to give an accurate answer to this question.

  9. Hello. Thanks for the info. Was wondering if you purchase something and resell it at a profit often should you be keeping track of the income to claim on taxes? And if you are selling for a profit do you need to charge sales tax? Thanks

    • Hi Brandi, Let me give an off-the-cuff answer, with the proviso that you check with your tax advisor for the answer that applies to your situation.

      Generally speaking, you have to report all income, and that includes gains on the sale of an item. That’s the general rule.

      However, let’s say you sold only one thing during the year and it amounts to $20 in net gain. Will it even make a difference on your annual tax liability? For $20 probably not.

      But change the numbers or the facts a bit, and the rules get really tricky, really fast.

      What if the amount is more than a “de minimis” amount? What if you’re talking hundreds or thousands of dollars of net gain? And what if you sell more than one item during the year and have a gain on each? What if you sell more than one item during the year, and have a gain on some things but a loss on others — do the losses cancel out the gains?

      And it quickly raises other questions. Then you have to look at whether the activity is a business or hobby, to see what expenses and losses can be deducted. Is your sales activity a hobby? The IRS has specific definitions of what constitutes a hobby. Or is your activity a business? Did you have other expenses to deduct? Have you made enough profit under IRS rules to deduct any losses that can be offset?

      There are many questions to be answered, and each situation has to be looked at individually. That’s why I’d say if it’s more than a tiny amount such as $20 gain, it needs to be examined further.

      Sorry I couldn’t be more helpful, but that’s the tax law for you.

      – Anita

  10. Anita,
    I would like your opinion on publishers who sell exclusively to schools and school districts. Could you argue that if a teacher has a book that she got or took from the school, and now has it posted for sale, that she did not purchase it, and therefore doesn’t have the right to sell it? Or my second scenario is that UPS sends things lost in transit to auctions where book sellers buy it. If the material was never written or intended for public use, and are consumable student editions meant for schools only, can the bookstore legally resell them?

  11. I don’t know if anyone here can help me, but I have been quite confused with this whole Copyright thing. Since this article is so straight forward and the comments have been also I’m hoping I can get an idea of … well, I’m not sure what.
    Here’s my predicament.
    I’m an artist, I paint for a living. Now there are photographers out there who take pictures for a living. Some of these photographers sell their photographs with the express intention of letting people use their photos for artistic reference.
    Now if I were to make paintings off these photographs and sell these paintings would this be copyright infringement, even though the original photographer sold thee photographs for the purpose of them being used in other artists work.
    Also, is this right to make pictures, sculptures what have you, off these photographs denied or automatically revoked if the photographer suddenly say withdraws said photographs from his site and says that he does not want them to be sold any longer, nor used?

    Thankfully this has not happened to me yet, but I signed up/onto a site where some of the artists had been burned pretty badly like this and were encouraging eachother, saying it was okay for them to sell what they had already created.
    I was not so sure and decided I’d ask before I went so far as to plop down quite a significant amount of money to anyone for anything. I’d rather rely on my own poor camera and photography instead. =-/!

    Anyway, an answer of any kind would be nice and MUCH Appreciated.

    Thank You

    • Each photographer should have their Terms of Use on the site where you found their work. Usually you will get all your questions answered there. If you are in doubt and need permission for a particular use, just email the photographer and request clarification. They will let you know whether it’s okay or not. Never “assume” you can do something — each photographer has their own licensing terms.

  12. Hi,

    I would really appreciate clarifictaion here as I am also confused. I bought a book in 2007. I am in the UK. The publisher is in the US. I was about to put the book on ebay when I saw this on page 1…
    “This book is sold for the use of one person and cannot be shared, resold or reproduced without written consent of the author and publisher (named). Anyone whoviolates these terms wilbe subject to a monetary penalty of $100,000 payable to the author by a court of law.This includes reselling this huide on Ebay or any other website or offine business”
    Am I correct in that I can actually legally sell it?
    Thank you,
    Florence

  13. What about digital coupons that only give access to 1 print. (Like the ones on coupons.com) If I pay for a membership that gives me access to digital coupons can I resell the digital coupons seperately for a profit. Each one would be the original since the software only allows for one print. I would not be able to keep a copy for myself because of this software and it would not in any way be a copy of the original. I would use a program like snagit and print the coupon to snagit instead of my printer than email it to the customer. Since the software only allows for 1 print of the coupon being sold and each coupon has different redemption codes, Im not sending a copy but the actual coupon itself. Would this still be protected under the act above. Please help me out with this Mo, and thank you so much for your great article its really helped clear up a lot so far.

    • Hi Cody, You’re really stretchhhhhhhhing things there!

      No, I don’t think multiple copies of a coupon are protected — that’s my personal opinion.

      People are confusing the word “copy.” You can’t make photocopies or digital copies of copyrighted items on your own, and try to get multiple items out of them.

      The original case was about being able to re-sell the one item — a single item — you paid for. It was not about replicating that item through copying it, so that you can have multiple items.

      But again, that’s my personal opinion.

      – Anita

      • Hi Anita,
        Im actually not talking about multiple copies. I’m talking about if I have a membership to a website with high value printable coupons, and I sell only the coupon I am allowed to print no copies. Say for example I printed the coupon than mailed it to the customer. Again no copies the original coupon that I was given access to. Since the coupon has to be printed in order to be used and can only be printed once due to the software and separate redemption codes for each coupon are given it is not a copy but the original coupon being sold. Think about it like this, would a digital coupon be considered a digital product if it needs to be printed out to be used. Wouldnt this make it a physical product. Also the digital coupon membership comes with a book that you must purchase in order to use the digital membership which is also a physical product. Also if Im purchasing the membership and have access to a certain limited amount of coupons per membership, I would think that each coupon I have access as long as its not copied should be ok to be resold. Since technically this should not be considered a license but an actual product because of all the reasons above. So, in your opinion if they are not copies but original coupons, can they be resold. Thanks for your help so far Anita!!

    • I think this answers your question
      (from this website) http://www.couponinformationcenter.com/faq.php:

      Q Can I sell my extra coupons?

      A No, there is no legitimate way to sell your unwanted coupons.

      The sale or transfer of coupons is a violation of virtually all manufacturers’ coupon redemption policies. These policies are generally printed on the coupons or are available from the manufacturer upon request. Any sale or transfer voids the coupon.

      People purchasing coupons have often been associated with organized criminal activities. They often purchase the coupons as one aspect of a scheme to defraud the coupon issuers/manufacturers, usually by seeking to redeem coupons without purchasing any products. Individuals selling coupons to such crime rings have been charged with and convicted of criminal violations.

      • Ok, If this is the case. Then please tell me why websites like ebay are able to have thousands of people on their websites selling coupons. CouponClippers.com and many other sites have been in business for years and still run to this day. If they are breaking any kind of laws than how are they able to remain selling coupons. Also how does a book full of coupons differ from an actual book itself. How do the laws not apply to a coupon book but they do apply when it comes to an actual book. I think there is a lot of false information out there aimed at scaring people from selling coupons but I think If this was illegal in any way than it would not be aloud to keep going on right here in the United States on US hosted websites. Wouldn’t the huge companies have sued these coupon sellers long ago and most important WON their case if this can be stopped. Their is no law that says it’s illegal to sell coupons and what I want to know is why? Is it because of this law protecting it. “the first sale doctrine” and what makes a physical coupon book and different from any other book. Doesn’t the company selling the coupon book give up rights to the coupons in the book once its sold? Isn’t that what this law protects? I think a lot of people are being misled when it comes to the selling of coupons and this needs to be cleared up so people can make an accurate decision based on fact instead of here say put out by these big companies who don’t like it. So if anyone can answer the questions I’ve asked both myself and thousands of others would be grateful for an accurate answer. 1. Is it illegal? 2. Can you be sued for selling a companies coupon (not copies) but the actual coupon? 3. What would be the grounds of the lawsuit? 4. Why is a coupon book different from any other book if it is a physical book? 5. If you can be sued for selling coupons than why can I not find one case of this happening if its been going on for so long? 6. Doesn’t this law protect the resale of physical goods once they are sold, which would be a coupon book 7. Why does no one seem to have an actual answer to this question, Only lines they’ve read from websites with no actual factual basis? If anyone can answer these questions in detail I would be highly grateful along with the thousand of others who have asked these same questions. If you have an answer please include facts (the actual law that says its illegal). A case were someone has been sued over selling coupons and lost. The truth is I think its a thorn in the side of big companies and although they may not like it, There seems to be something stopping these companies issuing the coupons from taking companies like ebay and couponclippers.com to court.

  14. For example to make it easier to understand. If I buy a membership to a coupon website for $20 that say gives me access to 1,000 high value coupons. It only allows me to print 1 of each coupon so 1,000 separate coupons. If I sold each coupon for a dollar, no copies but each of my 1,000 coupons that I have access to print and made $1,000 dollars from my 1,000 coupons that I have access to, (not 10 of each coupon or multiplying each coupon, just one) than shouldn’t this be ok since they are not copies?

  15. Also Please do not give me links to articles to people who have been put in jail for selling fake coupons What Im talking about is the sale of real legitimate coupons (not copies) put out by the companies. I cannot find one case of someone even being sued let alone put in jail for selling real coupons. So again Please answer my last post with factual basis, real court cases, and not information written by someone who is expressing there opinion instead of solid fact.

  16. Response to Mo,

    No, there are good reasons not to purchase coupons. In addition to being in violation of the manufacturers’ policies, it simply does not make sense to pay for something that is given away for free.

    Coupons being sold on the Internet or by other means may be stolen property or counterfeit. Individuals attempting to use these coupons may be subject to prosecution.

    From same website CIC, Notice how its says good reasons not to purchase coupons like “it simply does not make sense to pay for something that is given away for free.”

    These coupons I’m talking about are not free, they must be purchases in coupons books. Many people do not want to buy the whole coupon book and only want the discount they need. Notice how it doesn’t say it’s illegal, just against manufacturer policy. I’m actually talking about coupons for things like attractions and food, not products. Also notice how they try to mix the wording in to make people scared of accidentally buying counterfeit or stolen property coupons.

    If you take a sunday paper from someones door step yes now your selling stolen property but If you buy a coupon book, seperate the coupons and sell them individually. Now were not talking stolen property, coupons given away free, or copied or fake coupons. Were talking about actual coupons the company has put out for sale in coupon books.

  17. “It wasn’t so much that we had to find the safe, just wait a long time for the Redditor to come back and tell us what was inside it.”

  18. WOW! The above comment from Cody brings up some very valid points. I too have thought about this same question if coupon selling is illegal or not. What Cody is saying is completely true, people like Mo just spout out false information because they trust what they think is authority like the CIC or coupon information center which is ran by the exact manufactures that dont like the resale of coupons. I am so glad you shut everyone up about this topic Cody. There is not one person that replied to your comment because everything you are saying is true and they cant contend with it. I didnt see Mo replying back saying your wrong because he knows what you said is true. He gave you a paragraph from what he believes is an authoritive website without doing any of his own research first and you just made him look very foolish with your reply. THANKYOU CODY, there are to many people misleading the public and we need more people like you putting them on the spot and calling them out. COUPON SELLING AND BUYING IS 100% LEGAL, NO LAWS AGAINST IT, and its 100% obvious that this is an urban legend put out by the coupon manufactures themselves, (THE OWNERS OF THE CIC website Mo blindly mentioned as proof of what he thought he knew). MO YOU ARE WRONG, You should never answer someone without really knowing what your talking about first and I am so glad Cody put out the Truth about the Coupon industry.

    • Connie, I didn’t reply because I’ve already said my piece and a back and forth isn’t going to help anyone who is intent on exploitation. Just because someone gives you an answer that you “wish” to hear doesn’t mean it’s right. The Coupon Information Corporation is made up of a huge number of large companies — who have lawyers advising them which is why they are a site you should heed.

  19. I hope this doesn’t get misinterpreted by people, although I am sure it will be. This does not mean once you buy an item it is yours to do with it as you please. You still cannot copy CDs or DVDs or art prints and resell them, you still cannot take an image, digital or rubber stamp and resell the image. You do not own the art on these items, and while you may resell the item you purchased you cannot use it to produce more to sell, unless of course you have the owner’s permission. I just hate to see people assume that.

  20. Got a question about all this I bought a Zumba Advanced DVD from a thrift store and put it for sale on my EBay store ebay in turn suspended my account saying it was a violation of intellectual property this is a legal copy of there Zumba Merchandise produced in 2002 did in fact Ebay violate first sale doctrine and the very thing they say there fighting for

  21. If you buy a piece of clothing that is on sale and sell it for retail is that illegal? Let’s you buy alot of one particular brand on sale and sell it online on ebay, can you get in trouble? Would you have to say “I am not a distributor or affiliated with this brand” in order not to get in trouble? Thank you

  22. I have a question, I crochet items to sell, if I were to buy soap from somewhere, crochet a body scrub soap holder item around the soap and then sell it, would that be illegal?

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>