Trans-Pacific Partnership Proposes Copyright Suppression of Price Competition
Dissatisfied with the exclusive right to set the price at which copies of their works are first sold, copyright holders have been trying, for over 150 years, to bolster the resale prices at which copies of their works are re-sold, in order to protect them from the normal pressures of free market price competition. Since they no longer own the copies, they have tried extending the reach of their exclusive right to “distribute” copies to encompass copies they no longer own. For just as long, the courts and Congress have rebuffed those efforts. Today, however, the United States Trade Representative is negotiating with foreign countries to obligate Congress and the courts to give them that power, even as their latest in a series of efforts to extend the existing distribution right is pending before the Supreme Court.
When Mark Twain tried to prevent dealers in his books from offering discounts to retailers, he lost. Clemens v. Estes, 22 Fed. 899 (C.C.D. Mass. 1885). When the publisher of The Castaway tried to use its copyright to prevent Macy’s from reselling the books for less than a dollar, it lost. Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908). The following year, Congress said “it would be most unwise to permit the copyright proprietor to exercise any control whatever over the article which is the subject of copyright after said proprietor has made the first sale.” H.R. Rep. No. 2222, 60th Cong., 2d Sess., at 28-29 (1909), and wrote that principle into law. Going beyond the judicially created “first sale” doctrine, Congress decreed that anyone in lawful possession of a copy was free to distribute it without the copyright owner’s permission, and established the copy/copyright dichotomy that ownership of “copyrights” is distinct from ownership of “copies,” such that ownership of one has no bearing on ownership of the other. (Section 41, Copyright Act of 1909.) After courts wrestled with that a bit, and determined that Congress probably did not mean for it to apply, literally, to someone in lawful possession of a pirated copy, or to someone holding a copy in trust for someone else (see, e.g., Platt & Munk Co. v. Republic Graphics, Inc., 315 F.2d 847 (2d Cir. 1963)), the Copyright Act of 1976 clarified the statute, placing the copy/copyright dichotomy into the new Section 202, and explaining, in Section 109, that the “owner” of a copy, “lawfully made under this title,” is entitled to redistribute it without the consent of the copyright holder.