International edition text books infringement

[chu_cs]

What is the name of your state? NY

To whom it may concern,

First of all, I need to inform you that I do live in Thailand but have my shipping partner in NY.

I sell textbooks online on Ebay. Majority of text books are international edition and have wordings "not for sale/distribute in USA" clearly on cover pages. Yesterday, I received a warning letter from the publisher regarding "NOTICE OF COPYRIGHT AND TRADEMARK INFRINGEMENT " stating that I infringed their copyright and trademark. Here is the quote:

"It has come to our attention that you are offering for sale, and selling into the US, Cengage Learning International Editions on the eBay.com and AbeBooks.com web sites. Many of these International Editions, which are identified in Exhibit A below, are published outside the US, bear various Cengage Learning trademarks and are materially different versions of the US editions on which they are based, and are intended for sale only into certain restricted territories and not intended for sale in the US.

By marketing and selling the trademarked International Editions within the US and otherwise outside of the territories for which they are intended, you are knowingly infringing on Cengage Learning’s rights as a copyright and trademark owner, and violating various fair trade and unfair competition prohibitions. Your actions subject you, and all other parties involved with your infringement, to the remedies provided under the copyright and trademark laws. These remedies include injunctive relief, monetary damages, an accounting of your profits and payment of our costs and attorneys’ fees. You should also be aware that, under United States copyright law, deliberate multiple infringement of Cengage Learning’s copyrighted and trademarked works could subject you to liability for substantial punitive damages, including an award of fees and special damages for each infringement.

Cengage Learning demands that you immediately cease and desist from any further infringement of its copyright and trademark rights, and that you promptly discontinue any marketing and/or distribution of the International Editions (including, without limitation, discontinuing any advertising or sale of the International Editions on eBay, AbeBooks or any other website and/or refraining from shipping any copies to any successful bidder or other purchaser).

This letter and your compliance with the above does not waive Cengage Learning’s right to seek damages or any other remedies to which it might be entitled based on your actions to date, and this letter is not a full statement of the facts or of any claims or defenses Cengage Learning might have, all of which are expressly reserved. "

Somehow, they managed to let the website pull out all my listings from Ebay and asked me to cease selling their products.

From what I understand, all the copyright and trademark right are exhausted when the items once sold. I've purchased all the items form authorized dealer in Out of US area as a regular customer, resell on websites, and import to USA to my end consumers (sometimes, consolidate and import them to US in bulk and redistribute them to my customers). I have around 1000 covers on each website and I'm not even an authorized distributor. I always state clearly on the website that this book is international edition.

My questions are:
1. Do I infringe their copyright and trademak?
2. Am I qualified to use "First Sale Doctrine"?
3. What should be my exit stragegy if I want to keep running my business like this?
4. Would it be more helpful to this case if I state clearly on the website that I'm a reseller and not an authorized distributor ?

Any kind favor is very much appreciate. Thank you very much in advance.

 

[quincy]

Prepare to be sued.

Yes, the First Sale Doctrine can apply to the importation of copyrighted works and "gray market" sales are legal, as long as they are disclosed, however your advertising of these books on eBay, using Cenage Learning trademarks, amounted to copyright and trademark infringement, and trademark and copyright holders are not prohibited from bringing suit under fair trade and unfair competition practices.

The Supreme Court has supported the right to sell "gray market" goods in the United States (those works legally purchased overseas at a low price, then resold in the U.S. at a higher price). The copyright and/or trademark holder has no control over the resale of goods already legally purchased. However, a copyright holder or trademark owner does not sell the rights of copyright or trademark when they sell a particular work. A purchaser has only purchased that one copy - but not the rights to reproduce the work, distribute the work, or profit from the work - except under the First Sale Doctrine.

Copyright and trademark owners can petition, and usually do petition, for the removal (from eBay, AbeBooks, and similar sites) any ads that violate U.S. copyright and trademark laws. EBay will remove listings of such products even when the sale of such products is not illegal.

I suggest you sit down with an IP attorney, to see exactly where you stand legally in regards to your sales - however, even if legal, your sales can still result in costly litigation brought against you by Cenage.

And please wait for our IP attorney and others to post with additional information and/or corrections.

 

[divgradcurl]

I disagree with quincy. There is nothing illegal under current law with what you are doing. First sale doctrine applies to trademarks as well as copyrights. As long as these books are legal copies legally obtained, there is no violation of anyone's rights.

That said, there really isn't any way you can force eBay or Abe or anyone else to allow you to sell these books, and it is very likely that the publishers will do whatever they can to shut you down. If eBay or Abe or anyone else won't sell let you post your books, all you can do is open up your own distribution system. You are not going to get sued -- the publisher is not going to fly to Thailand to sue you, and they cannot compel you to come to the U.S. to face suit. Besides, there really isn't anything to sue you for -- the law is clearly on your side.

But they will still try and make it as difficult as possible for you. You should respond to any DMCA takedown requests or eBay VERO requests as best you can, but like I said, you can't force eBay or Abe to allow you to sell. If you put up your own website, and they try and shut you down with a DMCA takedown notice, you can respond to the DMCA request (Google to find a response form), and your website will go back up and then the publisher will either have to sue you or give up.

 

[quincy]

Divgradcurl -

Thanks for posting. I am not surprised you disagreed, because this is not an area I feel entirely comfortable with or knowledgeable in.

However, doesn't Cengage Learning have a legitimate and legal right under copyright and trademark laws to prohibit the use of their trademark in the sale of these books on sites like eBay? I certainly understand, and I think I stated clearly, that the book sales themselves are legal. But is the advertising of these books legal, using the Cengage trademark?

Also, as for suing, I know you said a suit is unlikely, but chu_cs's partner is based in New York. I assume he would be an easier "target" for a suit than chu_cs in Thailand.

I am also under the impression (possibly/probably wrong) that an infringement suit is still possible on goods first manufactured outside the U.S. under another country's copyright laws and then imported for sale here, as the Supreme Court only ruled on those items manufactured in the U.S. and exported for sale. I thought copyright holders could still sue foreign distributors who make the products in that foreign region and then sell their products here in the U.S. (under fair trade and unfair competition laws). Do they not have the right to try to prohibit the unauthorized importation of these copies?

Again, I don't doubt that everything you said is accurate. This is mostly to clear it all up in my own head. Thanks.

 

[divgradcurl]

However, doesn't Cengage Learning have a legitimate and legal right under copyright and trademark laws to prohibit the use of their trademark in the sale of these books on sites like eBay? I certainly understand, and I think I stated clearly, that the book sales themselves are legal. But is the advertising of these books legal, using the Cengage trademark?

No. Use of the trademark in a purely descriptive manner is never infringing. I can refer to a Dell laptop as a Dell laptop without infringement. I can even sell a Dell laptop on eBay and call it a Dell laptop, because it IS a Dell laptop, and the use of the mark is purely descriptive. I cannot use the terms "IBM" or "Compaq" in my ad for a Dell laptop, however, because that use falls outside of a purely descriptive use -- that use is using the trademarks to drive traffic to my site, and is an example of a type of "passing off."

And copyright doesn't enter into this at all, so long as the books are licensed copies.

Also, as for suing, I know you said a suit is unlikely, but chu_cs's partner is based in New York. I assume he would be an easier "target" for a suit than chu_cs in Thailand.

Neither party will get sued because there is no cause of action. The law is clear on this point. Not only will any such suit probably get knocked out immediately by a motion to dismiss, any lawyer who brought such an action could be liable for sanctions under FRCP 11. We often say "any one can sue anyone else for anything," but the fact is there are times when sanctions are available for truly frivolous lawsuits. I suppose it is possible that such a suit could be brought, but given the current state of the law, it seems unlikely that any publisher would bother. Oh, they may threaten a suit, and may send letters and make threatening phone calls, but an actual filed suit seems fairly unlikely -- and easy to fight in any case.

Rule 11 sanctions are rare, but they do happen. Most state courts have similar provisions.

I am also under the impression (possibly/probably wrong) that an infringement suit is still possible on goods first manufactured outside the U.S. under another country's copyright laws and then imported for sale here, as the Supreme Court only ruled on those items manufactured in the U.S. and exported for sale. I thought copyright holders could still sue foreign distributors who make the products in that foreign region and then sell their products here in the U.S. (under fair trade and unfair competition laws). Do they not have the right to try to prohibit the unauthorized importation of these copies?

If the foreign copies are legal copies -- that is, they are made with permission of the U.S. copyright holder -- then they are legal copies in EVERY country that is a Berne signatory, and that's most countries these days (and the non-Berne countries typically don't care much for IP rights anyway...). If, for example, a copy of Harry Potter is printed with permission from the publisher, it doesn't matter where it is published -- it is a legal copy in ANY Berne signatory country. In this way, copyright differs from trademark and patent law -- copyright laws are national in scope, but pretty much everyone has agreed to treat foreign copyrights just like local copyrights.

Copyright holders could sue foreign publishers if they were making unauthorized copies. But an authorized copy is an authorized copy, no matter where it is published.

Trademark works a little different -- there is not an international agreement to enforce foreign trademarks. But the first sale and exhaustion doctrines still apply, and a first sale is a first sale, no matter where that sale occurs. Once a legal sale is made of a legal product, the rights to that instance of the product are exhausted.

Really, this isn't an IP issue at all, its just publishers trying to use IP laws in an anticompetitive manner to try and protect their marketplaces. There is an easy way to stop the grey market imports -- publishers could simply charge the same price in every country in which they sell, which would eliminate the arbitrage and therefore eliminate any incentive to bring in the grey market imports. They wouldn't be able to sell many books overseas that way, though, so they have to use this disparate pricing, and then they have to just deal with the fact that others might be able to profit from this disparate pricing model. It's the same deal with the publishers trying to eliminate the used book market by pushing new versions out all of the time, or like when the RIAA sue the Wherehouse to try and stop them from selling used CD's.

It's all just trying to maintain their supercompetitive pricing structure in the U.S. These are really antitrust issues, not IP issues...

 

[seniorjudge]

...

Hey, div...check your PMs.

(Sorry for the hijack.)

 

[quincy]

Thanks for the education, div!

 

[chu_cs]

Should I respond to Cengage learning?

Quincy and divgradcurl ,

Thank you very much for all the explanation above. This information has been a lot more helpful than the researches I've been doing for the whole week.

divgradcurl: thank you for your recommendation about finding other distribution channel. I'm openning other selling channels in anyway. However, I can't ignore Ebay, the most sigle & powerful online store so far. The traffic is amazing and expectedly significantly higher than other channels which I couldn't avoid it.

I've contacted Ebay regarding this issue and they informed me that eventhough, I could resell my own items now but they encourage me to contact Cengage Learning to understand why my listings were in violation and how I can relist items properly.

So, my question are as follows:

1. Should I respond to the email they sent me? If so, what should I be using to explain on them?

2. If you were them, what would you do?

3. Would you understand and perhaps let me continue my selling or you would state more points of me violating your rights?

Otherwise, after I resell my products on Ebay, it's most likely for them to track me down again and eventually, get suspended from Ebay.

Thank you very much.

 

[divgradcurl]

1. Should I respond to the email they sent me? If so, what should I be using to explain on them?

It is up to you whether or not you want to respond to them. I can't advise you on what exactly you should say -- I am not your lawyer -- but you might want to reiterate that you are reselling authentic textbooks, and that under the first sale or exhaustion doctrines, you have the right to resell those authentic books.

2. If you were them, what would you do?

I don't know what they will do; they will probably stick to their guns, and probably keep complaining to eBay. Maybe they will back off if you assert your rights, who knows -- but I wouldn't count on it.

Presumably they know they really don't have a legal leg to stand on, but that doesn't mean that eBay won't continue to stop your auctions if they continue to complain. Maybe your NY partner could sit down with an attorney to see what, if any, avenues might be open if this publisher continues to come down hard on you -- maybe a restraining order or something, who knows. An attorney that has access to and can review all of the facts of your current situation would be in the best position to advise you.

 

[Aldos]

Maybe I can help you.

What is the name of your state? NY

To whom it may concern,

First of all, I need to inform you that I do live in Thailand but have my shipping partner in NY.

I sell textbooks online on Ebay. Majority of text books are international edition and have wordings "not for sale/distribute in USA" clearly on cover pages. Yesterday, I received a warning letter from the publisher regarding "NOTICE OF COPYRIGHT AND TRADEMARK INFRINGEMENT " stating that I infringed their copyright and trademark. Here is the quote:

"It has come to our attention that you are offering for sale, and selling into the US, Cengage Learning International Editions on the eBay.com and AbeBooks.com web sites. Many of these International Editions, which are identified in Exhibit A below, are published outside the US, bear various Cengage Learning trademarks and are materially different versions of the US editions on which they are based, and are intended for sale only into certain restricted territories and not intended for sale in the US.

By marketing and selling the trademarked International Editions within the US and otherwise outside of the territories for which they are intended, you are knowingly infringing on Cengage Learning’s rights as a copyright and trademark owner, and violating various fair trade and unfair competition prohibitions. Your actions subject you, and all other parties involved with your infringement, to the remedies provided under the copyright and trademark laws. These remedies include injunctive relief, monetary damages, an accounting of your profits and payment of our costs and attorneys’ fees. You should also be aware that, under United States copyright law, deliberate multiple infringement of Cengage Learning’s copyrighted and trademarked works could subject you to liability for substantial punitive damages, including an award of fees and special damages for each infringement.

Cengage Learning demands that you immediately cease and desist from any further infringement of its copyright and trademark rights, and that you promptly discontinue any marketing and/or distribution of the International Editions (including, without limitation, discontinuing any advertising or sale of the International Editions on eBay, AbeBooks or any other website and/or refraining from shipping any copies to any successful bidder or other purchaser).

This letter and your compliance with the above does not waive Cengage Learning’s right to seek damages or any other remedies to which it might be entitled based on your actions to date, and this letter is not a full statement of the facts or of any claims or defenses Cengage Learning might have, all of which are expressly reserved. "

Somehow, they managed to let the website pull out all my listings from Ebay and asked me to cease selling their products.

From what I understand, all the copyright and trademark right are exhausted when the items once sold. I've purchased all the items form authorized dealer in Out of US area as a regular customer, resell on websites, and import to USA to my end consumers (sometimes, consolidate and import them to US in bulk and redistribute them to my customers). I have around 1000 covers on each website and I'm not even an authorized distributor. I always state clearly on the website that this book is international edition.

My questions are:
1. Do I infringe their copyright and trademak?
2. Am I qualified to use "First Sale Doctrine"?
3. What should be my exit stragegy if I want to keep running my business like this?
4. Would it be more helpful to this case if I state clearly on the website that I'm a reseller and not an authorized distributor ?

Any kind favor is very much appreciate. Thank you very much in advance.

Send me an e-mail at [email protected] I am in the same position, but maybe I can help you. I had my listings recently removed by e-bay as well. Maybe we can work together. Please contact me so we can correspond directly.

Alex

 

[Business-3]

You would be well advised to consult an IP attorney who is knowledgeable about these matters.

In particular, you should examine Section 602(a) of the United States Copyright Act which prohibits the importation and sale into the United States of International Edition textbooks that are manufactured abroad and not authorized for sale in the U.S. In addition, the importation into the U.S. and sale of materially different trademarked International Editions may violate Sections 32(1) and 43(a) of the Lanham Act.

The First Sale Doctrine, under Quality King Distributors v. L'anza Research International, only applies to goods first manufactured in the US. Cases since then have repeatedly held that copyrighted works manufactured outside the US and imported into the US without the authorization of the copyright holder constitutes infringement under Section 602(a).

 

[quincy]

Business-3 -

Divgradcurl, who answered chu_cs's question, IS an IP attorney.

 

[divgradcurl]

Cases since then have repeatedly held that copyrighted works manufactured outside the US and imported into the US without the authorization of the copyright holder constitutes infringement under Section 602(a).

Do you have any citations for this assertion? I am not aware of any cases that have ended up with this result, but that doesn't mean there aren't any cases that state this.

 

[divgradcurl]

Business-3 -

Divgradcurl, who answered chu_cs's question, IS an IP attorney.

Thanks for the support, but that in no way means that my replies can't be incomplete or even wrong sometimes. And while I do practice IP law, my primary focus is on patents, not copyrights or trademarks -- but I do know a little about copyrights and trademarks.

I have never heard of a case of importation of textbooks successfully challenged on this basis (602), but its possible, I suppose. Maybe Business-3 can provide some citations.

 

[Business-3]

Cases that have addressed this issue include U2 Home Entertainment v. Lai Ying Music Trading, 2005 U.S. Dist. LEXIS 9853 (importation of copies into the United States of a work manufactured in a foreign country can form the basis for a copyright infringement claim by an exclusive U.S. distributor without regard to the first sale doctrine); Lingo Corp. v. Topix, Inc., 2003 U.S. Dist. LEXIS 1437 (importation of gray market goods manufactured abroad could form basis for copyright infringement claim); BGM Music v. Perez, 952 F.2d 318 (first sale doctrine does not provide a defense for goods manufactured abroad).