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Supreme Court Might Make Textbooks More Expensive

September 8, 2012

Dependent on an impending decision from the High Court, the costs you pay for textbooks might be going up. Supap Kirtsaeng, who received a degree from Cornell, was studying for his Ph.D in California when he thought about an inventive way to earn money : selling Thai textbooks to American students.

In states like Thailand, American publishers sell less expensive copies of American textbooks, basically lowering their profit markups on each textbook so as to sell them to scholars in poorer nations.  These foreign textbooks are precisely the same as American textbooks vis content, except they are infrequently made with less expensive materials.

As the price difference between American and Thai textbooks can be sizeable, there’s major cash to be made in selling these less expensive textbooks to American scholars.  Accordingly, Kirtsaeng had chums in Thailand mail him inexpensive Thai-edition textbooks, which he sold to scholars on eBay for crazily inexpensive costs.  Predictably, Kirtsaeng’s profits made textbook publishers like Wiley annoyed of course, Kirtsaeng was cutting into their geographically segregated business structure.  Therefore , Wiley sued Kirtsaeng in 2008.  So far, Wiley has won.  The NY District Court and the Court of Appeals both held that Kirtsaeng breached copyright by selling Thai edition textbooks in  The United States. By doing this, both courts held that Kirtsaeng couldn’t avail himself to the “first sale doctrine” a doctrine which permits customers to re-sell copyrighted or trademarked products that they have legally acquired from a copyright / trademark holder without being in contravention of copyright.  According to those courts, the 1st sale doctrine only is applicable to products sold in the U.S.

Implying that nobody can import and sell a copyrighted / trademarked good intended just for foreign audiences without the authorization of the copyright / trademark owner. The High Court will hear oral discussions on Kirtsaeng’s case the month after next. The assumption the 1st sale doctrine only covers products “intended” to be sold in  The USA should worry you a good deal.

In fact, world price discrimination permits firms to make their products randomly dearer in  The USA, and importers like Kirtsaeng made those products much less expensive than they would be otherwise.  What will occur if the High Court holds that Kirtsaeng can’t avail himself to the 1st sale doctrine?  Corporations  will be given free reign to price segregate all they need, for both good and for bad.  Textbook makers could probably sell a book in Thailand for $1 and in  The USA for $1,000, and there’s not much you might do about it.

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