Copyrights and free market pricing

The New York Times points us to one anomaly in the idea of “free markets”. Dean Baker (and many others) of course has championed taking a more critical look at this set of issues for years.  But most readers know that “free market” is an election slogan and a metaphorical  apocryphal story line rather than  something real for guiding either private companies or governments policies and rules.  On the other hand, that is the language used and something I hear from people in a non-critical way.

Copyright and patent rights need strong government to enforce the rules, and distort “pricing” mechanisms.   Yet it does not seem to be enough to cajole people into making a list of possible exceptions and then applying the rule of  “free”…if open to exception, where does it stop?  Often the question puts people to sleep, but is part of the bread and butter of real multinational companies.  And then enforcement falls to whom?  Who votes based on such details?  Trade policy hasn’t had traction for years.  

…can sell their copyrighted works abroad at prices different from what they charge in the American market and rely on copyright law to help maintain the separate pricing without having importers profit from the difference. The justices should rule that the Copyright Act and a revision to it that Congress made in 1976 prohibit such resales…..

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A federal trial court ordered Mr. Kirtsaeng to pay $600,000 in damages for infringing on the Wiley copyright by reselling more than 600 copies of eight different books that he bought in Thailand. Mr. Kirtsaeng contends that the law allows him to resell the textbooks because he, family members and friends bought them legally and a principle called the first-sale doctrine, announced by the Supreme Court in a 1908 ruling and codified into law by Congress, says copyright owners cannot control the distribution and pricing of works, like books, after the initial sale.

But the Copyright Act prohibits anyone from importing into the United States copyrighted works without the copyright holder’s approval. That provision would be seriously limited if copies of a work made abroad could be resold by importers in this country without constraint.

This case requires a difficult interpretation of the Copyright Act, but that is made easier by understanding the intent of Congress when it revised the law in 1976. It did so to broaden protection against unauthorized imports of copyrighted works by so-called gray-market sellers, and to make easier the kind of market segmentation by geography and price that Mr. Kirtsaeng’s resales subverted. With segmentation, book publishers can offer cheaper editions of their works in less-developed countries, without concern that those copies will be resold in the United States and unfairly undercut sales here.

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