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Supreme Court, Ruling Could Have Major Effect on Auction and Marketplace Sites

The U.S. Supreme Court will soon decide the final ruling on a case between a book publisher and eBay seller, and while this individual case may not seem too important it could have far-reaching effects for eCommerce auction and marketplace sellers and websites.

Supap Kirtsaeng, a Thailand Native attending college in the United States, made large profits by selling textbooks he bought in Thailand to consumers in the U.S. at the higher market price. The publisher, John Wiley & Sons, then sued Kirtsaeng for copyright infringement and won the case, which is now under appeal, requiring Kirtsaeng to pay $600,000. Had the goods been made in the United States the First-Sale Doctrine would have applied – which allows individuals to sell copyrighted products they legally purchased. How John Wiley & Sons was able to win the initial lawsuit, and the main point the Supreme Court is now considering, was their argument that the First-Sale Doctrine does not apply to works purchased overseas. Depending on the Supreme Court’s ruling, this could have major effects on auction sites and marketplaces like eBay and Amazon.

If the Supreme Court rules in favor of the publisher than it makes official the previous conclusion that the First-Sale doctrine only applies to products made in the United States. This would mean anyone selling on eBay, Amazon or other auction and marketplace websites could face copyright infringement charges for products made overseas and resold. eBay, along with eCommerce trade associations and other businesses, have joined a coalition supporting liberal interpretation of the First-Sale Doctrine and stated that ruling in favor of the publisher would lead to substantial restrictions to the flow of commerce.

If the Supreme Court upholds the ruling in favor of John Wiley & Sons, than anyone reselling a good made outside of the U.S. would need approval from the original manufacturer, otherwise they could face copyright infringement charges. While this affects all sales, not just those made online, it would have a huge impact on eCommerce considering the large number of auction and marketplace websites and sellers. The Supreme Court is expected to reach a decision in early 2013, and this ruling has the potential to make the secondary market much more complicated from a legal perspective, which would affect major eCommerce players such as Amazon and eBay, as well as the many retailers that run 3rd party marketplaces.

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