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Tuesday, November 27, 2012

Guest Blog Post: Copyright Law and Your Property

This past weekend, my mother, sister and I held a yard sale to dispose of our unwanted personal property. We offered clothing that did not fit properly, household items that no longer met our decorating taste, and appliances and electronics that had become obsolete and were since replaced with newer models. I was absolutely overjoyed that there are people in our locale that would exchange money, albeit a modest amount, for our surplus possessions with minimal effort on our part. Each of us dedicated our proceeds from the yard sale toward something we felt would benefit us more than holding onto the property. My newly found money is going in the piggy bank to save for repairing my iPad, which I managed to shatter in the driveway during our yard sale, but I digress. Our ability to resell our possessions may be in jeopardy due to an upcoming Supreme Court case.

On October 29, 2012, the United States Supreme Court will hear oral argument for the case of Kirtsaeng v. John Wiley & Sons, Inc. The Court will settle a three-way split among the Circuit Courts of Appeals and address the question of whether it is legal for copyrighted goods, which are made outside of the United States and purchased lawfully (whether abroad or domestically), to be sold within the United States without getting permission from the holder of the copyright (Read the Questions Presented here).

According to the first sale doctrine, an owner may resell copyrighted property without having to seek permission if it was first purchased in the United States from the holder of the copyright. As stated in 17 U.S.C. § 109(a), “Notwithstanding the provisions of section 106(3), the owner of a particular copy or  phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” Circuit Courts of Appeals have interpreted this provision as applied to goods manufactured abroad in three different ways.

Recently, the Second Circuit held that a foreign made product may never be resold in the United States without the copyright owner's permission. The Supreme Court has accepted review of the Second Circuit's opinion, and will resolve the three-way Circuit Split when it publishes its opinion in Kirtsaeng v. John Wiley & Sons, Inc. If the Supreme Court upholds the decision of the Second Circuit, people across the country may no longer be able to sell foreign made copyrighted goods they legally purchased without the permission of the copyright holder.

What might this mean for personal property appraisers? A significant percentage of appraisal business comes from clients wanting their goods appraised to know the proper asking price at which to sell their property and assistance disposing their items. If the Second Circuit’s ruling is upheld making it more difficult to resell property, appraisers stand to lose a large portion of their business. In addition, if property manufactured outside of the United States can no longer be resold without permission from the copyright holder, how might it affect the value of the items? Will appraisers be spending most of their time researching copyrights instead of searching the market for comparable sales? Could this mean an end to the weekend yard sale to pick up a little extra cash? Does this mean my iPad will never get fixed? If Apple holds a copyright on the iPad, I may never be able to resell it because it was made in China.

Kelly McNeil, ISA

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