US Supreme Court first-sale principle

Supreme Court Ruling May Put An End To eBay, Craigslist, And Even Yard Sales

A pending US Supreme Court case could ban yard sales and popular online selling websites such as eBay and Craigslist. In 1997, Supap Kirtsaeng relocated from Thailand to attend Cornell University. Kirtsaeng was not on campus long before he realized how much more expensive college text books were in America than his native Thailand.

The industrious young man asked his family to buy a whole lot of books and ship them to him in the United States. Kirtsaeng reportedly made a $1.2 million profit by selling the academic books on eBay at prices which undercut bookstores across the country, Death and Taxes Magazine reports. Wiley, the textbook manufacturer, sued Kirtsaeng for copyright infringement, Market Watch notes.

During the first court battle, which Supap Kirtsaeng lost, the judge ruled that the first-sale principle only applies to items manufactured in the United States. The law basically states that a company or business can only get paid one time for a product, and a customer has the right to re-sell it later and keep the proceeds.

Once upon a time, when most of the items Americans used where actually made here, the law did not spark much controversy. But, if the US Supreme Court upholds the lower court’s ruling, yard sales and making some extra cash by getting rid of unwanted items online would likely come to an end.

Internet giant eBay is watching the court case very closely. A statement released by the company claims that not allowing items made abroad to be covered by the first-sale principle would adversely impact trade, small businesses, e-commerce, consumers, and jobs in the United States. Since many American-made vehicles have parts that were manufactured overseas, selling old cars to help finance a new one could very well be a thing of the past as well.

The first-sale principle became law in 1908. If SCOTUS does not overturn the lower court ruling, it would be up to Congress to change the law.