A Right To Resell

Mar 22 2013 @ 10:11am

Earlier this week, SCOTUS ruled that Americans have the right to re-sell books bought abroad. Jerry Brito explains the case:

Supap Kirtsaeng, a student at Cornell who was originally from Thailand, realized that the exact same textbooks that were going for over a hundred dollars in the U.S. were available for peanuts back home. So, he asked his friends and family in Thailand to go to bookstores and buy the textbooks, ship them to him in the U.S., and he sold them on eBay for a profit. These were not pirate or knock-off goods; they were the real deal published by the Asian subsidiary of John Wiley & Sons and stamped “not for resale.”

Wiley sells books more cheaply in Thailand because it engages in market segmentation, a simple kind of price discrimination. In order to maximize profits, Wiley charges different prices to different consumers according to their willingness to pay. And what country or market you’re in serves as a proxy for what you’re willing to pay. This only works, though, if you can make sure that there is no arbitrage, and that’s why Wiley sued Kirtsaeng.

Brito thinks that “the Kirtsaeng decision makes it practically impossible to price discriminate, a practice that tends to make all parties better off” but that SCOTUS made “the right decision because while there’s no right to price-discriminate, there is a right to do with your property as you like.” David Post applauds the decision:

[T]he rule Wiley argued for would have given publishers a substantial incentive to move all of their manufacturing facilities (for books, and CDs, and DVDs and . . .) overseas, because they would only be able to prevent arbitrage, and maintain their price discrimination and market segmentation, with respect to those foreign-manufactured copies. It is hard to believe — impossible, actually — that Congress intended that result.