ssehgal-ga:
Thank you for your question regarding selling international versions
of textbooks to US consumers.
First, a brief reminder to you that Google Answers and Researchers
such as myself provide general information that is not intended to
substitute for informed professional legal advice. The details of this
limitation is described for you in the disclaimer at the bottom of
this webpage, and the Google Answers Terms of Service.
Now that the legalese is out of the way, on to your Answer. :) Which
of course deals with more legalese!
---------------------
The answer to your question is not a simple one. Three areas of US law
are involved: copyright, trademarks, and tariffs. I will cover each in
the following sections.
The most relevant US law that covers this activity is Title 17:
Copyrights of the U.S. Code. This part of the US Code can be viewed at
either of the following sites:
GPO Access - US Government Printing Office
http://www.access.gpo.gov/uscode/title17/title17.html
Legal Information Institute - Cornell University
http://www4.law.cornell.edu/uscode/17/
You may wish to use the second site, the LII one, to follow along with
this Answer as the format is easier to read.
Title 17 (which I will refer to alternately as the copyright act)
applies to 'original works of authorship fixed in any tangible medium
of expression', as outlined on Section 102:
---
"(a) Copyright protection subsists, in accordance with this title,
in original works of authorship fixed in any tangible medium of
expression, now known or later developed, from which they can be
perceived, reproduced, or otherwise communicated, either directly
or with the aid of a machine or device. Works of authorship include
the following categories:
(1) literary works;
..."
http://www4.law.cornell.edu/uscode/17/102.html
---
The rights granted to the copyright holder are outlined in Section 106:
---
"Sec. 106. - Exclusive rights in copyrighted works
Subject to sections 107 through 121, the owner of copyright under this
title has the exclusive rights to do and to authorize any of the
following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the
public by sale or other transfer of ownership, or by rental, lease,
or lending;
(4) in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and motion pictures and other audiovisual works, to perform
the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and pictorial, graphic, or sculptural works, including the
individual images of a motion picture or other audiovisual work, to
display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work
publicly by means of a digital audio transmission"
http://www4.law.cornell.edu/uscode/17/102.html
---
For the purposes of this Answer, all statements will be with reference
to textbooks as the copyrighted material. There is special treatment
available for copyrighted works that fall into the category of
audio/video recordings, and computer software. Note that for any
computer software that accompanies a textbook, for the most part the
same rules that govern the textbook also govern the software, with the
exception of the application of the fair use rule for making your own
copies of the software.
The right that is of greatest interest for this Answer is subsection
106(3). This subsection grants the copyright holder the exclusive
right to publicly distribute, or to authorize others to publicly
distribute, their copyrighted work. In the case of a piece of
published literary work, the author has authorized the publisher to
distribute their work in return for consideration (in the form of
royalty payments). The author may, at their option, choose to
authorize more than one publisher to distribute their work. The author
may also restrict the authorization as they see fit, to limit the
authorization to a specific period of time, a certain region, or even
a certain medium of expression (where multiple mediums are possible,
such as print and electronic format). Finally, an author can choose to
transfer ownership of the copyright to another party. Most authors
choose to retain ownership of the copyright, but retain the services
of their publisher (as part of a distribution deal) to enforce the
copyright.
The section of Title 17 that applies to importing textbooks is Chapter
6: "MANUFACTURING REQUIREMENTS AND IMPORTATION". This chapter consists
of three sections:
---
Sec. 601. Manufacture, importation, and public distribution of certain copies
Sec. 602. Infringing importation of copies or phonorecords
Sec. 603. Importation prohibitions: Enforcement and disposition of
excluded articles
http://www4.law.cornell.edu/uscode/17/ch6.html
---
Section 601, for all intents and purposes, ceased to have effect
following July 1st, 1986. The original intent of Section 601 was to
provide protection to the domestic U.S. printing industry. It
essentially required that published works be printed in the U.S. (and
subsequently including Canada) in order to qualify for the full
protection granted by the copyright act.
Section 602 is the section that deals directly with importing books.
In this section, clause (a) states that, with a few exceptions,
importing copies of a copyrighted work without the authorization of
the copyright holder is a violation of their exclusive right to
distribution as granted in Section 106(3). Exceptions include
individuals importing a single copy of a copyrighted work for their
own personal use, individuals carrying copies in their personal
baggage who enter the US, and scholarly, educational, or religious
organizations who bring in no more than five copies of a book for the
purpose of not-for-profit lending or archiving.
However, subsection 602(b) adds an interesting twist to this. This
subsection states that, if the copies are lawfully made (therefore,
are authorized for manufacture in their country of origin by the
copyright holder), then the US Customs Service does not have the
authority to prevent the copies from being imported. The only thing
that they are authorized to do, is provide a copyright registration
service where copyright holders can pay a fee to be informed by the
Customs Service whenever goods are imported that are not pirated
goods, but are also not authorized for sale in the United States by
the copyright holder.
Another interesting twist is added by section 109, which states in part:
---
"(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."
http://www4.law.cornell.edu/uscode/17/109.html
---
Within this definition, therefore, if a party legally obtains lawfully
made copies, whether inside or outside of the US, that party has the
right to "sell or otherwise dispose" of the copies without needing the
authorization of the copyright holder. So it is possible under the
combined interpretation of all of these sections of the copyright act
to say that anyone who lawfully obtains copies of copyrighted work
that are lawfully made outside of the US, can import them into the US
without the US Customs Service being able to block it, and can sell
those copies as they see fit. The only recourse available to the
copyright holder is to start a civil suit that attempts to claim a
violation of their basic right to control public distribution under
106(3), the argument being that selling more than a few copies
constitutes an intent to publicly distribute rather than simply
selling or otherwise disposing of the possession of a lawful copy. The
counter-argument is that, because the copies were lawfully obtained
(either directly from, or from a party authorized by, the copyright
holder), the copyright holder's right under 106(3) has already been
exercised, and the subsequent import and resale of the copies only
falls under Section 109.
What this rather complicated piece means is that a party outside the
US, who is authorized by the copyright holder to distribute copies of
a copyrighted work in another part of the world, does NOT have the
right to make copies and ship them directly to the US for direct
distribution to a customer or customers. That would be a clear
violation of the license granted to them by the copyright holder, and
therefore the copyright holder can take action under subsection
106(3). However, if a third party were to buy the copies outside of
the US, take possession of them, then import them into the US for
subsequent sale, that is allowed under Section 109.
This 'right' under Section 109 was tested all the way to the Supreme
Court in the 1990's. In 1998, the Supreme Court overturned a 1996
decision by the Ninth Circuit, Federal Court of Appeals, that had
ruled that the Section 109 right of the owner of a copy of a
copyrighted work to sell or otherwise dispose of said copy, did not
extend to lawfully made and lawfully obtained copies that are imported
into the US for resale. This is referred to as parallel imports, or
the "grey market", where works manufactured under the authorization of
the copyright holder are subsequently imported without the express
consent of the copyright holder for sale in the US. In their 1998
decision, the Supreme Court ruled that a direct interpretation of the
copyright act does indeed provide the owner of a lawfully obtained
copy of a copyrighted work, the right to sell or otherwise dispose of
it as they desire, without violating the rights of the copyright
holder.
---
QUALITY KING DISTRIBUTORS, INC. v. L?ANZARESEARCH INT?L, INC.
(96-1470) 98 F.3d 1109, reversed.
http://supct.law.cornell.edu/supct/html/96-1470.ZS.html
--------------------
OTHER APPLICABLE LAW
TRADEMARKS
----------
In addition to the copyright act, another act that impacts some
imported textbooks is the trademark act found as Chapter 22 in Title
15 of the US Code. This act is comprised of the Lanham Act of 1946
(sections 1051-1127 of Title 15) and two sections added by the
Treasury and General Government Appropriations Act of 2000 (sections
1128-1129).
The trademark act protects marks of trade, best described by the
introduction to the Legal Information Institute's section on
trademarks:
---
"Trademarks are generally distinctive symbols, pictures, or words
that sellers affix to distinguish and identify the origin of their
products. Trademark status may also be granted to distinctive and
unique packaging, color combinations, building designs, product
styles, and overall presentations. It is also possible to receive
trademark status for identification that is not on its face distinct
or unique but which has developed a secondary meaning over time that
identifies it with the product or seller. The owner of a trademark has
exclusive right to use it on the product it was intended to identify
and often on related products. Service-marks receive the same legal
protection as trademarks but are meant to distinguish services rather
than products.
http://www.law.cornell.edu/topics/trademark.html
---
This act becomes applicable where the author or publisher of the book
also registers a trademark with the Patent and Trademark Office for an
element used in the book. For example, I have in front of me a novel
that I am currently reading, "Crossroads of Twilight" by Robert
Jordan. This is the tenth book in his "The Wheel Of Time" series. Mr.
Jordan claims trademark over the phrases "The Wheel Of Time" and "The
Dragon Reborn", as well as a symbol. None of these trademarks are
registered; however, he still has rights under common law, and
indicates such by the letters "TM" displayed with those phrases. His
publisher, on the other hand, has registered its trade name, Tor, and
indicates such with the registered trademark symbol (the letter R in a
circle) displayed with the trade name.
The Lanham Act is only enforceable by the Customs Service when a
trademark is registered with the Patent and Trademark Office. What
they look for is any imported good that violates Section 1114 of the
trademark act:
---
"(1) Any person who shall, without the consent of the registrant -
(a) use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering
for sale, distribution, or advertising of any goods or services on
or in connection with which such use is likely to cause confusion,
or to cause mistake, or to deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a registered mark
and apply such reproduction, counterfeit, copy, or colorable imitation
to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods
or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action by the registrant for the remedies
hereinafter provided."
http://www4.law.cornell.edu/uscode/15/1114.html
---
However, it is important to note that a violation can only occur when
the registered trademark itself is reproduced and applied to a good or
service that can cause confusion in the marketplace next to the goods
and services of the registered trademark holder. Therefore, a
violation does not occur if the registered trademark was originally
applied to a good or service that was made by the registered trademark
holder outside of the US, and subsequently offered in the US
marketplace. As far as the trademark act and the US Customs Service
are concerned, these parallel imports are considered authentic goods,
and therefore no trademark violation has occurred.
TARIFFS
-------
Imports are also subject to review under the Tariff Act, which is
section 1526 of Title 19 of the US Code. This section states, in part:
---
"Sec. 1526. - Merchandise bearing American trade-mark
(a) Importation prohibited
Except as provided in subsection (d) of this section, it shall be
unlawful to import into the United States any merchandise of
foreign manufacture if such merchandise, or the label, sign, print,
package, wrapper, or receptacle, bears a trademark owned by a citizen
of, or by a corporation or association created or organized within,
the United States, and registered in the Patent and Trademark Office
by a person domiciled in the United States, under the provisions of
sections 81 to 109 of title 15, and if a copy of the certificate of
registration of such trademark is filed with the Secretary of the
Treasury, in the manner provided in section 106 of said title 15,
unless written consent of the owner of such trademark is produced
at the time of making entry."
http://www4.law.cornell.edu/uscode/19/1526.html
---
This section, when taken in conjunction with the trademark act,
empowers the US Customs Service to block the import for resale of any
trademarked items without the written consent of the owner of the
trademark. However, this has been interpreted by both the US Customs
Service (in its policies) and the Supreme Court (in the landmark
K-mart v. Cartier ruling) to cover only those goods that are not
manufactured by the trademark holder itself. In other words, if the
manufacturer in the foreign territory is a subsidiary or affiliate of
the US trademark owner, and therefore can claim the same parentage,
then importing that good into the US is not necessarily illegal. The
Supreme Court case that discusses this can be found at:
---
K MART CORP. v. CARTIER, INC., 486 U.S. 281 (1988)
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=486&invol=281
---
An additional view on this can be found at the following site:
---
Crash course on trademarks:Limitations on trademark rights - iusmentis.com
http://www.iusmentis.com/trademarks/crashcourse/limitations/
(scroll down to "First sale and exhaustion in the USA")
---
Note of course that this only applies to registered trademarks. In
order for a textbook to be affected by this, there must be a trademark
on an element of the book, said trademark being in conflict with a
registered trademark in the US. Given the global nature of the book
publishing business, there is a very high likelihood that the US
trademark is held by the same party that holds the trademark in the
foreign country of origin, so the US Customs Service would allow the
item into the US as long as the importer follows the guidelines and
policies of the US Customs Service, found here:
---
US Customs Service - Internet Purchases
http://www.customs.ustreas.gov/xp/cgov/import/infrequent_importer_info/internet_purchases.xml
Importing into the United States
http://www.customs.gov/ImageCache/cgov/content/publications/iius_2epdf/v1/iius.pdf
---
In these bulletins, the Customs Service spells out their requirements
to allow parallel imports to enter the US. If the mark is used for
counterfeit purposes, then the goods will be seized. Otherwise, they
will be permitted entry. In particular, section 35 of the "Importing
into the United States" guide states, in part:
---
"An imported article bearing a name or mark prohibited by Section 42 of
the Trademark Act is subject to seizure and forfeiture. However, upon
the filing of a petition by the importer prior to final disposition of
the article, the port director of Customs may release it upon the
condition that the prohibited marking be removed or obliterated or that
the article and containers be properly marked; or the port director
may permit the article to be exported or destroyed under Customs
supervision and without expense to the government."
---
Under this guideline, goods that are imported bearing a trademark
registered in the US, can still be safely imported as long as they are
clearly marked as not being offered in the marketplace by the
trademark holder, or as long as the trademarks are removed or
obliterated from the goods.
For foreign retailers who may sell a book to a party in the US for
that party's personal use, the rules are even simpler, as such
personal use is clearly allowed under both the copyright and tariff
acts.
--------------------
IN CLOSING...
Therefore, the current state of US law is that international versions
of textbooks that are lawfully manufactured under the authorization of
the copyright holder can be legally imported by a party that has
acquired them outside of the US, for subsequent resale within the US.
While the copyright holder can require that their license holders (the
international printers) do not themselves ship manufactured copies
directly for public distribution in the US without prior consent, the
copyright holder cannot prevent a party from purchasing lawfully
manufactured copies outside the US, and importing them into the US for
sale or otherwise disposal.
It almost goes without saying therefore that the US publishers are
actively lobbying for changes to the law to prevent this. For some
insight into the current state of this lobbying, I suggest you read
the Fall 2003 edition of the Professional/Scholarly Publishing
Bulletin issued by the Association of American Publishers:
---
"MY SAY: AAP/Parallel Importation", by Joe Marcelle
Professional/Scholarly Publishing Bulletin, Vol. 4, No. 3, Fall 2003
http://www.pspcentral.org/bulletins/current_bulletin.pdf
(this URL changes with the release of every new bulletin, the archived
versions can be found at: http://www.pspcentral.org/ , under the
Bulletin link on the left-hand menu)
---
The position taken by many publishers is that versions published for
non-US markets are substantively different from versions published for
the US market. They point to examples such as systems of measurement
(Metric in int'l, US Imperial for domestic versions) to say that the
parallel imports can create confusion in the marketplace. As a result
of this, they can undertake civil action under the trademark act (as
cited above) to prevent this. Where this substantive difference does
not exist, then as long as they authorize the production of the
international versions and their sale in other countries, the
copyright act provides the right to anyone who buys those versions
outside of the US to import then into the US and dispose of them as
they wish. Even where this difference exists, if the importer takes
care to clearly label each item with a notice to the consumer of the
difference, and as long as the difference does not violate some other
aspect of US law (such as health regulations), then the current law
does not prevent the importation and sale of these textbooks.
-------------------
ADDITIONAL REFERENCES
Copyright and Parallel Imports - Paul Supnik
http://www.supnik.com/coprpar.htm
CLL Articles - Parallel Imports (NOTE: article predates Supreme
Court decision on L'Anza case)
http://www.cll.com/articles/article.cfm?articleid=12
- this article is on interest in that it provides a view of the
situation prior to the Supreme Court ruling on the L'Anza case
United States - Copyright Protection and Parallel Imports - Ladas & Parry
http://www.ladas.com/BULLETINS/1999/0399Bulletin/US_CopyrightParImpt.html
Parallel Imports
http://www.cptech.org/ip/fsd/pi.html
===================
SEARCH STRATEGY
"parallel imports" copyright
ADDITIONAL STRATEGY
- Past knowledge of Legal Information Institute resources
- Personal experience/knowledge
===================
I hope that this information is helpful to you. There is a lot to
absorb in this subject, so please let me know via the "Request
Clarification" button if you would like me to explain any part of this
further. I encourage you to use this opportunity for dialogue prior to
rating/accepting this Answer so that I can ensure that you are truly
satisfied with the information. While I am not a lawyer, nor do I play
one on TV, I have a deep personal interest in this particular area of
law, and it was my honour to have been able to Answer this question
for you.
Regards,
aht-ga
Google Answers Researcher |
Clarification of Answer by
aht-ga
on
11 Jan 2004 19:27 PST
ssehgal-ga:
An excellent follow-up question. First, allow me to restate what
constitutes trademark, and more importantly what constitutes a
registered trademark. Citing again from the above:
---
"Trademarks are generally distinctive symbols, pictures, or words
that sellers affix to distinguish and identify the origin of their
products. Trademark status may also be granted to distinctive and
unique packaging, color combinations, building designs, product
styles, and overall presentations. It is also possible to receive
trademark status for identification that is not on its face distinct
or unique but which has developed a secondary meaning over time that
identifies it with the product or seller."
http://www.law.cornell.edu/topics/trademark.html
---
In other words, a trademark refers only to something used by the
original manufacturer to differentiate their version of the product,
from everyone else's version. Take bar soap, for example. Walk into
your local drug store, and there is an entire aisle full of different
manufacturers' versions of bar soap. In order to differentiate their
product from the other products on the shelf, a company like Procter &
Gamble uses a distinctive name, 'Ivory', a distinctive graphic (the
stylized Ivory logo), and a distinctive slogan, '99 44/100% Pure', to
try to make their version of soap stand out. Other manufacturers, like
Palmolive, use other names, like 'Dove', to try to make their own
product catch your eye.
To Procter & Gamble, the name 'Ivory' and the slogan '99 44/100% Pure'
are important enough to their product's identity, that they have
chosen to register them with the Patent & Trademark Office as an
official registered trademark. Once that registration was complete,
and the status recognized by the PTO, no one else was allowed to use
either of those trademarks in association with any product. Only
Procter & Gamble can.
Another example would be Kleenex. The name 'Kleenex' is a registered
trademark. They were so popular at one time, that everyone referred to
facial tissues as Kleenex. However, no other manufacturer is allowed
to call their product Kleenex, because that name and the right to use
it belong exclusively to Kimberly-Clark Corporation.
So now, to address your follow-up question.
-----------------------
REMOVAL OF TRADEMARK
You asked what constitutes removal of a trademark, in reference to
phrases such as "not for sale in US" and similar statements on the
copyright page.
First and foremost, these statements are not trademarks. Again, the
word trademark can only be used to describe something used by the
original manufacturer to differentiate their version of a product from
everyone else's version. Further, the trademark act and the tariff act
only apply to registered trademarks, ie. trademarks where the
trademark holder has formally registered their claim to exclusive use
with the Patent & Trademark Office. This status is usually denoted by
the use of the letter R in a circle, somewhere next to the trademark
in question (note that this is not required, but almost every
registered trademark holder does this to help communicate their
exclusive rights).
What these statements are, are an attempt by the publisher to prevent
individuals and companies from taking advantage of the right granted
to them under Section 109 of the copyright act to re-sell these
versions in the US. The publishers know full well that there is a
demand for lower-cost versions of their textbooks. Its a fact of life
that they are trying to sell high-priced goods to a captive market
that can barely afford them, but has no choice but to buy them.
Regardless of any statements printed on the cover or elsewhere in the
textbook, though, they are not enforceable statements under the
current US law. It is not possible for a party to give up their
Section 109 rights. The copyright act does not allow for this. Removal
of the page or pages of the textbook that display the copyright
information, then offering the product for sale to the public, does
not remove the fact that the contents of the book are copyrighted, nor
does it remove the rights of either the copyright holder or the owner
of the copy.
What all of this means is that no matter how you deface the cover or
the copyright page, the book is still copyrighted, the copyright
holder still has certain rights over the manufacture of copies of the
book, and the parties who buy those copies still have certain rights
to sell or dispose of those copies as they see fit.
People who attempt to pass off international versions of textbooks as
being domestic versions of the same textbook, however, could be found
guilty of misrepresentation, or false advertisement, under Section 52
"Dissemination of false advertisements", in Subchapter I, Chapter 2,
of Title 15 of the US Code. In such a case, it is up to the Federal
Trade Commission, in response to complaints, to take legal action
against the seller. If the seller is a small, private individual
selling one or two copies using false advertising, the chances of a
court case going all the way are pretty slim right now; the courts are
too busy with bigger cases.
-----------------------
OFFERED FOR SALE
You also asked about whether the importer would be regarded as the
trademark holder. Again, a trademark is simply the distinctive method
used by the original manufacturer (in this case, the publisher) to
differentiate their product from the rest of the products in the
marketplace. When someone buys a copy of a product in the marketplace,
they do not receive any rights to the trademarks used on the product.
For example, if you buy a pair of Nike shoes, that does not give you
the right to use the Nike name or logo on other items. So, no one
other than the original manufacturer have rights to use a trademark,
unless the manufacturer explicitly sells that right, through either a
license to use or a complete sale of the intellectual property, to
another party.
To answer your question, the importer cannot appropriate rights to a
trademark, ever. The most they can do is buy the right to use the
trademark from the owner of the trademark. That is almost guaranteed
not to happen when it comes to the domestic selling of international
versions of textbooks. However, just to be certain that this point is
understood, please note that typically the only trademarks found on a
textbook are the name of the publisher, and possibly the name of the
series that a popular textbook belongs to. As long as you are not
trying to pass off a completely different book as being from that
publisher and/or as part of that series, then a trademark infringement
is not happening. As well, please understand that you do not need to
own a trademark in order to sell a lawfully made copy of an item that
uses the trademark. If you bought that pair of authentic Nike shoes in
Thailand, then decided that you wanted to sell them while you were in
the US, you do not need permission from Nike before you do so. The
first sale (from Nike, to you) has already happened, you are free to
re-sell the good as you see fit under both the trademark and tariff
acts. If you bought a pair of no-name-brand runners, then drew the
Nike swoosh logo on them and tried to sell them as Nikes, then you
would be infringing on Nike's trademark rights.
-----------------------
I hope that I have been clear enough in communicating to you what a
trademark is. Defacing the cover or the copyright notice of a textbook
has nothing to do with the rights of the trademark holder. The only
time trademark infringement can occur, is when someone tries to sell
an item based on the goodwill of the trademark, but that particular
item was not manufactured originally by the owner of the trademark or
a party authorized by the owner. Those "not for sale in the US"
notices are only an attempt by the publisher to influence potential
buyers of the products, to bias them towards domestic copies of the
products. If there were manufacturers' warranties on the goods, then
the label also serves to warn the potential customer that the
manufacturer most likely will not provide any support for that
product. Since there are no warranties on most books, that becomes
almost irrelevant to potential customers of these international
versions of textbooks.
This is a complex topic, so please feel free to ask for more
clarification if needed.
Regards,
aht-ga
Google Answers Researcher
|
