Can you sell your imported gadgets? Court guts "First Sale", 7/12/10

Matthew Lasar, ArsTechnica.com; Can you sell your imported gadgets? Court guts "First Sale":

"Let's say a relative gave you an imported Omega watch over the holidays. It's a nice piece, but it's not exactly your style, so after agonizing over the issue for the appropriate number of months, you decide to sell it over eBay.

Not so fast. Thanks to a decision by the Ninth Circuit Court of Appeals, that might not be so easy. In fact, the store that sold it, Costco, shouldn't have sold it in the first place, the court recently ruled, because the doctrine of "First Sale" has limits. Section 109 of the Copyright Act says that a copyright owner of a product has the sole initial right to distribute it. Then the subsequent buyers have the right to "to sell or otherwise dispose of the possession of that copy"—in other words, sell it again.

But now the Ninth Circuit says this doesn't necessarily apply to items in which a company's copyrighted logo was inscribed on a product made abroad, as in this case. The Public Knowledge advocacy group calls this decision "a terrible idea," and has filed an amicus brief with the Supreme Court, which is reviewing the case.

"What happens to Netflix, Amazon and eBay," PK's Anjali Bhat worries, "if they have to find out where each item was made, whether it has a copyrighted logo made outside the US (if the item itself isn't a copyrighted work), and then buy licensing rights from the copyright owner if the item was made abroad? That's an enormous economic burden to put on businesses who follow that model."...

The implications of this decision are huge, creating potential liabilities for anyone who distributes anything en masse: libraries, booksellers, or your local DVD or video game rental store."

http://arstechnica.com/tech-policy/news/2010/07/if-you-buy-an-imported-watch-do-you-really-own-it.ars