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June 14, 2012

Cory Doctorow’s important quibble to my territories explanation
Posted by Patrick at 10:57 AM * 16 comments

If you’ve been following any of the discussion of publishing “territories” and their divergent effects on how printed books and ebooks are sold, a discussion happening here but most especially on John Scalzi’s The Whatever, you should also read Cory Doctorow’s absolutely correct quibble to my explanation of why it’s generally legal for retail booksellers to sell any edition of a printed book to anyone anywhere in the world, without worrying about the territory restrictions that might be spelled out in the contract between that book’s author and its publisher.

[T]here are, in fact, some international restrictions on what’s called “parallel importation” or “grey market selling,” where a retailer imports goods intended for sale in country X and offers them for sale in country Y. Recent trade treaties (especially ACTA and TPP) have attempted to strengthen these restrictions, and an apocalyptically stupid Ninth Circuit Court of Appeals Decision has further eroded this practice.

The entertainment industry’s representatives deliberately blur the lines between counterfeiting, infringement and parallel importation. When you hear that ACTA is a treaty intended to fight “counterfeiting,” you probably don’t think that the “counterfeit” jewelry, DVDs, books, and perfume under discussion is the actual, bona fide item, manufactured for sale in poor countries and imported without permission to a rich country. Most of us understand that a “counterfeit Omega watch” is a fake Omega watch, not a real Omega watch that was manufactured for sale in India and then imported to the USA.

The white-hot center of this stupidity is the watch trade. For example, “genuine Rolex products can only be imported with the permission of the trademark owner, Rolex Watch U.S.A. Inc. A private individual can hand carry one Rolex watch from a trip overseas without obtaining permission. Bring in more than one, and they will all be seized as a trademark violation. Purchasing a Rolex from overseas by mail is also a trademark violation.”

Like the California Celebrity Rights act that TNH linked to in her sidebar the other day, this is the kind of thing that reminds us the the root of the word “privilege” is “private law.” These are laws and regulations that exist for no reason other than the protection of someone’s private advantage, with not even a remotely plausible argument that such protection does the rest of the world any good. (As Cory implies but doesn’t spell out, if the advocates of these measures felt they actually had any public merit, they wouldn’t feel the need to so constantly lie to the public about them.)
Comments on Cory Doctorow's important quibble to my territories explanation:
#1 ::: Mike Scott ::: (view all by) ::: June 14, 2012, 11:28 AM:

There is a defensible argument in favour of these practices. I don't think it's a very strong one, but it is defensible. They allow (for example) movies to be sold in developing countries for low prices which are affordable to the locals without running the risk that the $2 DVDs will then be imported to the US and sold for $3 where the US retail price is $10. If you allow grey importing, then the price of movies in (for example) India just goes up to $10 to make sure that this can't happen, since losing a few $2 Indian sales is a much lower cost to the movie company than losing a bunch of $10 US sales. So if you legitimise grey importing then Indians can no longer afford to buy DVDs and no one has particularly gained anything.

#2 ::: Michael Paulukonis ::: (view all by) ::: June 14, 2012, 12:48 PM:

@MikeScott: So, instead of letting market forces set the price (supposedly to that the locals think is "affordable"), artificially segregate the market so that you can wring more profit from certain sectors?

Unless there is some whiff of selling-below-market-value in some areas, I'm not buying this argument.

#3 ::: rea ::: (view all by) ::: June 14, 2012, 01:36 PM:

[T]he California Celebrity Rights act that TNH linked to in her sidebar the other day would still give me the right to sue if someone made a commerical showing a holograph of my late mom dancing with a vacuum cleaner. It's just that no one would recognize a hologram of my late mom, so there's no particular interest in making such a commerical. Supporting the right of advertisers to use dead celebrities to advertise their products without paying anyone for the privilege is not a cause for which I have a lot of enthusiasm . . .

#4 ::: Avram ::: (view all by) ::: June 14, 2012, 03:00 PM:

rea @3, why not?

If someone wants to put an illustration of Abe Lincoln or George Washington in a political cartoon, or in an ad for used cars, or on a book cover, they don't have to pay the heirs of Lincoln or Washington. Why should it be different for Marilyn Monroe's image, or Ronald Reagan's?

#5 ::: KristianB ::: (view all by) ::: June 14, 2012, 06:20 PM:

Regarding that California Celebrity Rights act, as I see it this falls in that gray area between "more rights for all" and "more rights for some", where we get "more rights for all that only a few will ever need". On the one hand, I have a hard time seeing how this is giving celebrities more rights than anyone else, and therefore establishing a principle of different laws for the famous than for the rest of us. But on the other hand, "rights for all that only some need" reminds me of how all gay people are allowed to marry straight.
"The law in its majestic equality forbids the rich and the poor alike from begging in the streets, from sleeping under bridges, and from stealing bread." Indeed.

#6 ::: etv13 ::: (view all by) ::: June 14, 2012, 08:40 PM:

rea @3, KristianB @5: Yes, the title is sort of misleading. And I note that it doesn't appear anywhere in my copy of the Civil Code sections cited in the Wikipedia article, which are in the "General Provisions: Relief: Compensatory Relief: Penal Damages" subdivision of the Civil Code. The statute itself uses the term "deceased personality" rather than "celebrity," and it defines "deceased personality" as anyone whose name, likeness, etc. has commercial value at the time of his or her death "or because of his or her death."

Avram @4: Actually, the statute specifically says you don't need the heirs' consent to use the likeness (or whatever) "in connection with any news, public affairs or sports broadcast or account, or any political campaign."

#7 ::: Rick York ::: (view all by) ::: June 14, 2012, 11:47 PM:

For many years New York State had what were called "Fair Trade Laws", a complete misnomer. These laws required retailers to sell products at the maker's listed retail price.

This, of course, led to a huge "black" market which anyone who lived in New York for 2 weeks knew about. All you had to do was head to the Lower East Side and wander around. Soon you'd find a Sony receiver listed for $399 by Sony on sale for $159 at a little storefront.

A consumer group sued to overturn these fair trade laws in the NY State court system and won.

Now, by effectively bribing the US Congress and diplomats everywhere, we are returning to the so-called Fair Trade System via international treaties which we are constitutionally required to treat as domestic laws.

I don't always agree with Cory but, he's right here. If Costco can find a distributor who charges less than Omega's approved distributor, they should be able to sell the product. Omega is still getting the same wholesale price.

Those same politicians who have been effectively bribed (via contributions) by corporate interests have been appointing federal judges who are totally sympathetic to these same interests.

Citizens United has returned functional control of American politics to the same corporate interests which Teddy Roosevelt fought over a century ago.

Anyone who calls this free enterprise is simply lying.

The 99% get screwed again.

#8 ::: Dave Bell ::: (view all by) ::: June 15, 2012, 03:45 AM:

To some degree the protection of celebrity likenesses makes sense. First, there is a general need, though all the media industries, for the marketable rights (copyright and others) to have a predictable protected life. If some right dies immediately with some person's death, then all those stacks of product in the warehouse lose a chunk of their value.

Very few works have a market life even close to what current copyright law specifies for post-mortem copyright duration. It could be argued that celebrity protection lasts too long, just as can be argued for copyright, but if you have made a film the star's face is an asset worth paying to control.

The problems are not with the rights allowed, but with the actions of that class of things labelled "Hollywood Lawyers". It's not that lawyers and accountants don't have a role in a business, but the fact that we have so many gut bacteria which we depend on is no excuse to tolerate parasites.

#9 ::: David Wald ::: (view all by) ::: June 15, 2012, 07:42 AM:

Rick York@7: Omega is still getting the same wholesale price.

I don't think that sentence is accurate. Unless I've misread the context, the watches sold by Costco (and not intended for the US market) were sold by Omega at a lower price.

#10 ::: dcb ::: (view all by) ::: June 15, 2012, 01:58 PM:

Where it gets really silly with technical books (that I've noticed) is when a book, a classic of its type/essential reference text, is being reprinted and sold in, for example, India, and the publisher is showing no interest in either selling that edition or producing a new edition for sale in, for example, the UK or USA, but the book as produced in India still has written on it that it's only for sale in certain Asian countries and it's illegal to sell it elsewhere. Why? They're not making ANY money by keeping it out of print!

#11 ::: Rick York ::: (view all by) ::: June 15, 2012, 06:24 PM:

David Wald@9, you may be correct. But, if the distributor in the lower price country wants to sell Omegas to Costco, it seems common sense and free enterprise tell us he should be allowed to. I can think of several reasons where a distributor might want to sell outside his country. The most obvious is a surplus: more watches ordered than the distributor can sell.

DCB@10. It's not just technical books. Some SF/F books are only available in the author's country. Or, it may be months or years before those books are available in the U.S.

#12 ::: Emily ::: (view all by) ::: June 16, 2012, 07:06 AM:

I have a quibble to the quibble. Its not as simple as goods intended for poor countries being sold in rich countries.
The difference can just as great between the US, the UK, and Australia.

A popular heart rate monitor costs half as much in the US as in Australia. A particular camera costs twice as much in the UK as in the US or Australia. The cost of the jesusphone is a lot more in either the UK or Australia than the exchange rate and shipping costs would suggest.

The cost differential is just as true in the book world. Not sure how that works if Australia is indeed considered part of the UK for bookselling purposes as books are more expensive here than either the UK or the US.

#13 ::: James Moar ::: (view all by) ::: June 16, 2012, 09:58 AM:

The cost of the jesusphone is a lot more in either the UK or Australia than the exchange rate and shipping costs would suggest.
For the UK (I don't know about Australia) you have to add VAT too.

#14 ::: marek ::: (view all by) ::: June 19, 2012, 07:46 PM:

Emily, James @ 12, 13

Phones can also throw some light on another factor in all this: markets behave differently for reasons which may not directly be driven by a specific product An article in the Guardian a couple of days ago shows that iphones are relatively more expensive in the UK (compared with other phones) but absolutelycheaper:

the minimum 24 month total cost of ownership [TCO] for an iPhone 4S in the USA is $2,120, whereas the minimum TCO for a 'free' smartphone is $1,920. For a US consumer, the potential saving from getting a cheaper smartphone instead of an iPhone is just 10% of the 24m TCO

Conversely the lowest TCO at which a consumer can get an iPhone in the UK is just $998. This is under half what they would have to pay in the USA: however, it is also possible to get a smartphone in the UK for a TCO of just $384 – 20% of the US equivalent.

International trade is a strange business.

#15 ::: mac ::: (view all by) ::: June 28, 2012, 12:05 AM:

I think this explains why 'The Book Depository' is dropping out of selling ebooks entirely.

The reason they gave in their email to me was:
"The Book Depository has come to the decision to cease selling eBooks, as we feel that the customer experience we were able to offer was not as good as it should have been. This is partially driven by complexity in format and the number of differing devices, which we found often led to customer frustration. "

I'm sure the reason given is true ... but the licensing issue must be a major headache as well.

After all - their entire business model is to sell to all territories ... something ebook licensing makes very difficult.


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