Agency and Anti-Competitive Behavior: Looking back a century

I was reading Barry Eisler’s takedown of the most recent Amazon hit piece (Surprise! From yet another author with a book under contract to Hachette who didn’t think it necessary to disclose that fact. Funny how often that happens. You’d almost think it was a pattern of intentionally misleading readers into believing they don’t have a direct financial stake in the matter. Yeah, almost). During a comment I left there, I went back and plucked a quote or two from an old SCOTUS decision ruling against agreements that allow a manufacturer to fix the retail price of their goods. As I glossed over the text of the case, I found many interesting points of reference.

Now understand, this is from a century ago. These issues have been adjudicated again and again over the years, so this case is in no way binding or even any sort of standard for how these deals are dealt with today. But as I was reading it, I was struck with how much sense it made. Perhaps this is one instance where the traditional ways of thinking about something (resale price maintenance agreements or vertical price fixing, if you will) truly should have been maintained.

The case, Dr. Miles Medical Co. v. John D. Park & Sons Co. (220 U.S. 373, 1911) involved a pharmaceutical company who created a network of contracts with both wholesalers and retailers whereby to access their products, they had to agree to numerous stipulations about the resale of those goods, most importantly related to a minimum price they were allowed to sell to the public, under penalty referenced in the contract. The company refused to sell to any entity that didn’t agree with its dictates and further, was attempting to squash a retailer who managed to get its products and was selling them below their required costs. Dr. Miles lost this particular case, the court finding at the time that the company had no statutory legal right to impose such requirements on wholesalers or retailers and, further, such agreements, enforced only through the “monopoly of production” as the Court put it, ran afoul of the Sherman Antitrust Act.

Much of the following is from Justice Charles Evans Hughes writing the majority decision, with some excerpts from other applicable rulings. I’m also choosing to quote liberally, taking longer blocks of thought in some places. If I learned anything from the Orwell kerfuffle, it’s to read the entire line of thought, not simply the one or two sentences you agree with. Here’s a link to the full text of the ruling, including the dissent penned by none other than Oliver Wendell Holmes, that’s also fascinating for how similar it is to some of the pro-Agency arguments I’ve seen in its lack of concern for competition and the best interests of consumers. It’s super-long and pretty dry, lawyerly stuff, but well worth the read if you have any interest in the background of what Agency actually means and what it does in market conditions. I’ve excerpted a few high points to discuss. The bold type is my own added emphasis.

“But this argument rests on monopoly of production, and not on the secrecy of the process or the particular fact that may confer that monopoly. It implies that if, for any reason, monopoly of production exists, it carries with it the right to control the entire trade of the produced article, and to prevent any competition that otherwise might arise between wholesale and retail dealers. The principle would not be limited to secret processes, but would extend to goods manufactured by anyone who secured control of the source of supply of a necessary raw material or ingredient. But because there is monopoly of production, it certainly cannot be said that there is no public interest in maintaining freedom of trade with respect to future sales after the article has been placed on the market and the producer has parted with his title. Moreover, every manufacturer, before sale, controls the articles he makes. With respect to these, he has the rights of ownership, and his dominion does not depend upon whether the process of manufacture is known or unknown, or upon any special advantage he may possess by reason of location, materials, or efficiency. The fact that the market may not be supplied with the particular article unless he produces it is a practical consequence which does not enlarge his right of property in what he does produce.”

Here’s the idea of “monopoly of production.” From the book trade, only Hachette can produce Hachette books. They are the only source. They have a monopoly of production on Hachette books. What they’re trying to say, and what Justice Hughes is refuting here, is that this monopoly of production gives them rights to control the product, specifically it’s pricing, after its been transferred to another party. Dr. Miles was telling people who bought their drugs what they could sell them for. Hachette is trying to tell Amazon what to sell its books for.

Note the implication that the reasoning behind this is to inhibit or prevent competition. Hughes certainly didn’t. He makes a clear point that once a product has been placed on the market, the title transferred (sold) to another entity, that the public interest is in freedom of trade in future sales. Dr. Miles was arguing just the opposite, and by extension, so is Hachette. They want to restrain trade in that area. I think it’s telling that the principle weapon most of those calling for action against Amazon for its market power advocate for is, itself, a form of restraint of trade against retailers.

I also like the last sentence there. Just because you’re the only one who can produce or bring your products to market, that doesn’t mean it gives you any more rights of property than anyone else. No special snowflakes need apply.

“Nor can the manufacturer by rule and notice, in the absence of contract or statutory right, even though the restriction be known to purchasers, fix prices for future sales. It has been held by this Court that no such privilege exists under the copyright statutes, although the owner of the copyright has the sole right to vend copies of the copyrighted production. Bobbs-Merrill Co. v. Straus, 210 U. S. 339. There, the Court said:

‘The owner of the copyright in this case did sell copies of the book in quantities and at a price satisfactory to it. It has exercised the right to vend. What the complainant contends for embraces not only the right to sell the copies, but to qualify the title of a future purchaser by the reservation of the right to have the remedies of the statute against an infringer because of the printed notice of its purpose so to do unless the purchaser sells at a price fixed in the notice. To add to the right of exclusive sale the authority to control all future retail sales, by a notice that such sales must be made at a fixed sum, would give a right not included in the terms of the statute, and, in our view, extend its operation, by construction, beyond its meaning, when interpreted with a view to ascertaining the legislative intent in its enactment.'”

The statute referred to there is copyright. Our current situation isn’t the first time publishers tried to fix retail prices for books. The case here is from 1908. A publisher included a disclaimer on the copyright page of their books that said selling this book under the price printed on it constituted copyright infringement. They were interpreting the “exclusive right” to produce and sell conferred to authors and creators in copyright statute as meaning it gave them the right to control the uses (prices) of the books after they’d been sold (title transferred).

Notice, again, the intent of this action was not to simply sell copies but to qualify the title of the buyer, restrict what they can sell it for after they’ve bought it. See a pattern developing? The publisher lost this case, by the way. Also note the phrase “in the absence of contract” in the first bold quote there in relation to the ability to fix prices. That relates directly to this next part:

“Whatever right the manufacturer may have to project his control beyond his own sales must depend not upon an inherent power incident to production and original ownership, but upon agreement.”

There’s the thing. These deals weren’t even totally illegal then if, and only if, they resulted from a fair, willing agreement of parties. If a retailer liked, they could grant this right to a manufacturer in a contract and it would be perfectly valid. My question is why would they? What kind of incentives would a manufacturer have to offer to entice a retailer to willingly allow it’s trade to be restrained? That’s probably why there aren’t too many of these types of agreements without some severe power imbalance in favor of the manufacturer or some form of coercion.

The publishers couldn’t get Amazon on board through negotiation, they didn’t have enough to offer for them to even consider it, so they colluded to force it. Now, they’re in the same boat. Want the world, don’t possess the resources to get it. It’s got to be frustrating, especially when you’re a company that used to possess just such leverage and resources. But that’s the way this works. You have to earn your leverage. You don’t just get it because you want it. I suspect that’s why the contract exemption exists. No retailer would accept a deal like that in absence of some likely illegal coercion without a damn good reason for doing so. Amazon certainly doesn’t have one, and I have a hard time envisioning what a publisher like Hachette could possibly bring to offer that would even make a dent. A much higher cut of the proceeds to Amazon would seem like a minimum starting point and I doubt that would even really open the conversation. That’s the thing, in the absence of government mandate or intervention, an Agency type agreement is never going to be willingly negotiated between a healthy retailer and book publishers. Which, again, is calling for special dispensation from government that other industries don’t get.

“The present case is not analogous to that of a sale of goodwill, or of an interest in a business, or of the grant of a right to use a process of manufacture. The complainant has not parted with any interest in its business or instrumentalities of production. It has conferred no right by virtue of which purchasers of its products may compete with it. It retains complete control over the business in which it is engaged, manufacturing what it pleases and fixing such prices for its own sales as it may desire. Nor are we dealing with a single transaction, conceivably unrelated to the public interest. The agreements are designed to maintain prices after the complainant has parted with the title to the articles, and to prevent competition among those who trade in them.”

Third time’s a charm. These agreements are designed to prevent competition. Everybody now! The earlier portion of this is interesting, too, in that it clearly notes that the manufacturer is giving up nothing while simultaneously taking rights away from retailers (and wholesalers, in this case). See my previous comments on agreements. You’ve got to give a little to get a little and, in cases like this, the manufacturer doesn’t want to give at all, only take.

“The bill asserts the importance of a standard retail price, and alleges generally that confusion and damage have resulted from sales at less than the prices fixed. But the advantage of established retail prices primarily concerns the dealers. The enlarged profits which would result from adherence to the established rates would go to them, and not to the complainant. It is through the inability of the favored dealers to realize these profits, on account of the described competition, that the complainant works out its alleged injury.

If there be an advantage to the manufacturer in the maintenance of fixed retail prices, the question remains whether it is one which he is entitled to secure by agreements restricting the freedom of trade on the part of dealers who own what they sell. As to this, the complainant can fare no better with its plan of identical contracts than could the dealers themselves if they formed a combination and endeavored to establish the same restrictions, and thus to achieve the same result, by agreement with each other. If the immediate advantage they would thus obtain would not be sufficient to sustain such a direct agreement, the asserted ulterior benefit to the complainant cannot be regarded as sufficient to support its system. But agreements or combinations between dealers, having for their sole purpose the destruction of competition and the fixing of prices, are injurious to the public interest and void. They are not saved by the advantages which the participants expect to derive from the enhanced price to the consumer.”

What he’s describing there is horizontal price fixing by a cartel of retailers. And he equates the end result of manufacturers controlling retail prices precisely to that. The results are the same. He also makes no bones about describing such deals as having the sole purpose of destroying competition. We wouldn’t want a group of retailers to band together and fix prices. Somehow, though, we should be in favor of it when it’s manufacturers, even though the ultimate results are the same?

See what happened here? The dealers who signed the agreements didn’t like the competition from the ones who didn’t and sold underneath the manufacturer’s required retail price. The competition cut into their guaranteed profits. Here’s a way a manufacturer could entice a retailer, with the notion of larger, locked in profits. There’s a counter argument to that relating to sales volume and how you actually attract sales if there’s no retail competition to speak of. Is a higher profit per item but fewer sales (and little means to spur them) actually good for a retailer? But that’s a different matter. What’s happening here is that Dr. Miles isn’t simply setting the retail price after title has been transferred, they’re actually picking winners and losers among retailers. They’re not only restraining trade but deciding who gets to engage in competition and to what extent that competition is allowed to go. It’s the “give ’em an Inch and they’ll take a mile” theory.

“The complainant having sold its product at prices satisfactory to itself, the public is entitled to whatever advantage may be derived from competition in the subsequent traffic.”

Yes, the public is. That’s part of the deal. Everyone in the chain has rights up to the point they give up title to the property. Their rights stop there, transferred to the buyer, until they themselves give up title. It’s how things work. Giving anyone in the chain power to dictate actions of participants you should no longer have control over throws everything out of balance. There’s a huge difference between not being able to get most favorable terms from a retailer, as Hachette seems unable to do, and forcing those terms on them through a restraint of trade. It’s very difficult to argue that manufacturers controlling retail prices is anything but a restraint of trade against retailers. The key here is, with that restraint, the public doesn’t benefit from the competition of subsequent traffic in the goods. There is no competition. This breaks the covenant. Everyone has rights. Stay in your lane. In these scenarios, manufacturers benefit while retailers lose autonomy and consumers lose the price benefits of competition. And they are doing so by claiming a right based on a monopoly of production.

This last part is from the dissent in this ruling, written by Justice Oliver Wendell Holmes:

“What, then, is the ground upon which we interfere in the present case? Of course, it is not the interest of the producer. No one, I judge, cares for that. It hardly can be the interest of subordinate vendors, as there seems to be no particular reason for preferring them to the originator and first vendor of the product. Perhaps it may be assumed to be the interest of the consumers and the public. On that point, I confess that I am in a minority as to larger issues than are concerned here. I think that we greatly exaggerate the value and importance to the public of competition in the production or distribution of an article (here it is only distribution) as fixing a fair price. What really fixes that is the competition of conflicting desires.

We, none of us, can have as much as we want of all the things that we want. Therefore, we have to choose. As soon as the price of something that we want goes above the point at which we are willing to give up other things to have that, we cease to buy it and buy something else. Of course, I am speaking of things that we can get along without. There may be necessaries that sooner or later must be dealt with like short rations in a shipwreck, but they are not Dr. Miles’ medicines. With regard to things like the latter, it seems to me that the point of most profitable returns marks the equilibrium of social desires, and determines the fair price in the only sense in which I can find meaning in those words. The Dr. Miles Medical Company knows better than we do what will enable it to do the best business. We must assume its retail price to be reasonable, for it is so alleged and the case is here on demurrer, so I see nothing to warrant my assuming that the public will not be served best by the company’s being allowed to carry out its plan. I cannot believe that, in the long run, the public will profit by this Court’s permitting knaves to cut reasonable prices for some ulterior purpose of their own, and thus to impair, if not to destroy, the production and sale of articles which it is assumed to be desirable that the public should be able to get.”

So answer me a question: if there’s no competition in production, no competition in distribution and you’re supporting agreements that restrict or eliminate competition in retail, when exactly should we be concerned about the value of competition to consumers? I suppose there’s no point in worrying about the value of competition when there isn’t any. I’m stunned by his blunt statement that Dr. Miles knows best and that we must assume the retail prices they are requiring are reasonable. Why, in the name of all things great and holy, would you assume that? His colleagues who supported this ruling certainly didn’t. In fact, I would argue just the opposite. You allow someone outsized power unearned by statute or not gained through the crucible of competition, and I think you have to assume their retail price is not reasonable until shown to be otherwise. Power unchecked by competition doesn’t usually result in best case scenarios for customers. It slows innovation and raises prices. Say what you want about Amazon being a monopoly, there is very little doubt that they behave in a fiercely competitive manner. I’m not sure the same can be said for Hachette or any of the large publishers. More the veneer of competition wrapped around what they perceive as an already divvied up industry.

His point at the end is almost word for word something I’ve seen from publisher supporters. If they can’t charge what they want, they’ll stop producing and the public interest is damaged in turn. It’s nonsense. They can’t do it? So stop. No one cares. Their writers will find other outlets, books will continue to be made and sold and read in the millions upon millions. The life or death of a Hachette is totally irrelevant to the totality of the industry. It is relevant to the people whose livlihoods depend on them. That’s why they should be doing everything they can to stop the self destructive stupidity and hubris that has overtaken the company. Your paycheck depends on it. Amazon is not the one who’ll be pulling your next book contract or laying you off in a year. Amazon will be saying, “you know, we just wanted to sell more of your books. And we wanted you to get paid more while doing so.”

Here’s my point: no one wants Amazon to become an all-consuming monster. Everyone has concerns about their market size and how they decide to wield the power that comes with that. But, as yet, there’s nothing illegal about what they’ve done. The publishers, including Hachette, can’t say the same thing. When you talk about Agency contracts, understand what’s being discussed isn’t simply a different business model, it’s a departure from the basic market structure we’ve had for a very long time. Allowing manufacturers to dictate retail prices to stores isn’t a right they should have, it’s one they specifically don’t have because, in order to do so, it involves instituting a restraint of trade against those stores. More than that, as this case even illustrated, the manufacturer in control of these agreements, garnered through its own monopoly of production, gains more than pricing power, they gain the ability to preferentially choose winners and losers among retailers and even who is or isn’t allowed to compete at all.

Negotiation and a willing arrangement is the proper way to pursue deals like this, its worst excesses kept in check by the give and take of deal making. But the publishers failed at that. They didn’t have the right incentives to negotiate a deal. So they moved on to collusion to force the deal through. That didn’t work either as the DOJ was all over it almost immediately, the attempt was so blatant. Now, having failed to negotiate or coerce a deal, the next step is to cry to the government to step in and force the issue. That, I’m certain, is every bit as doomed to failure. There’s a point where you have to let go of the way you wish things to be and deal with the way things actually are. The longer this particular fight goes on, the farther behind the companies most embroiled in it will fall.

If you’d like to argue that we should get rid of all the anti-competitive actions in publishing, from every side, then that’s an idea I fully support. But by arguing that publishers should have the right to price however they want, that’s not what you’re advocating. You don’t want to clean the industry of anti-competitive behavior, you just want to be the only ones allowed to use it. Arguing for anti-competitive behavior (and resale price maintenance agreements are anti-competitive by nature) to combat what you perceive as other anti-competitive behavior is a non-starter. If my neighbor breaks into my house and steals my tv, then the next night, I break in and steal his tv, we’re both going to jail. I may seem justified but really I’d be just as wrong.

Editor’s Note: If the previous 4,000 words weren’t enough for you, here’s 1,500 more where I make some rebuttals to myself here, and then rebut those rebuttals.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron


The Benefits of Globalization Don’t Apply to the Little People

The U.S. Supreme Court is set to rule on a case that has profound implications for the concept of ownership, (See SCOTUS blog here and read up. It’s fascinating) and could conceivably eliminate the last lingering vestiges of the notion that copyright law has any limits.  If the court rules the wrong way on this, copyright ceases to have any pretense of societal good. And why is it that we’re faced with the possibility from SCOTUS? To defend a publishers’ right to segment the world into territories.

In the past, I’ve argued that the idea of territoriality is already outdated and should be done away with. This case illustrates pretty clearly why that’s the case. Given the technological realities we have today, there is simply no easy way to defend this practice in statute that doesn’t have the unintended consequence of severely undermining first sale, fair use and ownership and resale rights for nearly everything we buy. The benefit to society for allowing territoriality to stand is negligible. In fact, it’s the consequences of doing so that are severe and destructive.

First, let’s look at the publisher, John Wiley & Sons. They are textbook publishers who, as many do, routinely use the concept of territoriality to both exploit poorer markets and maintain the ability to overcharge more affluent ones. The key issue in this case is that an individual, Thai national Supap Kirtsaeng, purchased textbooks sold by Wiley at lower prices in Thailand, brought them to the American market and sold them on eBay to help pay for his education at USC, where the exact same textbooks are priced much, much higher. My first response to this was, “good for him!” This guy identified a seam in the sales channels and exploited the price variance for the same product in different markets to make a buck. That’s market-based globalized free enterprise at its best.

But Wiley was having none of it, suing (in my opinion, inexplicably) for copyright infringement. The guy in question didn’t copy anything. He legally purchased said textbooks at full price offered by the publisher, then used his first sale rights to turn around and sell them for whatever the hell he wanted. There’s no copyright infringement here at all. (Note: I’m speaking in practical terms. Yes, I’m aware that there are portions of copyright law dealing with importation of foreign goods, but those parts were written long before globalization and free trade took hold, before the internet was even a thing and back when importation was a little more complicated than a few mouse clicks and a week’s wait for shipping. Those rules have about as much relevance to modern life as the use of grindstones to make bread). But the 2nd District Court disagreed, invalidating his defense through first sale, declaring his actions as infringing and fining him a substantial amount of money. The key problem lies not just in the decision, which I believe is catastrophically wrongheaded, but in the justification used. The court ruled that first sale rights don’t apply to any goods manufactured outside of the U.S.

Apparently, the judges of the 2nd District missed the memo about the new global economy we’re all supposed to be giddy about. They seem to have not noticed American corporations offshoring jobs and manufacturing at economy-gutting levels to save on labor costs and such. They’ve obviously never set foot in a Walmart or any other retail outlet and taken a few minutes to check the “made in” labels or they would have realized that a plurality of goods we buy every day aren’t manufactured in this country. If first sale doesn’t apply, then this court just swiped ownership rights to the majority of our possessions.

To make matters worse, how many foreign manufactured components do you think are present in our homes and cars? If I own a home that has a central heating system installed that was put together from any amount of foreign made components, do I even have the right to sell my home without first buying licenses for every non-U.S. element it contains? What if I want to sell my home complete with appliances, also made from foreign manufactured components? Do I need separate licenses for my refrigerator, washer, dryer, dish washer, etc? What will the costs of acquiring these licenses do to the overall value of my home. If you said “plummet” you hit the jackpot.

I can no longer legally even sell the smartphone I’m currently typing on. And what about the licenses HTC acquired for the plethora of foreign-made components that make up the phone itself? Does those licenses transfer? Is it enough to get resale permission from HTC or do I also have to get permission from every component manufacturer too? The same applies to cars. Can an ok from Toyota allow me to sell my car, or do I also need an okay from the stereo manufacturer, the maker of the chips in the car’s computer, and whoever made the tires, brake pads, oil filter and anything else in the vehicle that wasn’t American made. What does this do the value of your car? Again, “plummet” is the correct answer.

Yet, this value loss is totally on the consumer side. When the resale market gets gutshot in this way, there is no logical reason to expect car makers to do anything except up their prices. Really, all they have to do is refuse permission for resale and the used car market ends instantly. No more competition on that front.

There’s two key problems I see here. One, this kind of ruling creates a massive incentive for businesses to continue and actually speed up offshoring jobs and manufacturing. If first sale doesn’t apply to foreign goods, companies that trade in foreign made goods will control not only the primary market, but any secondary markets would only be allowed to exist on their terms at their discretion. The entire point of first sale was to prevent this very thing.

In a global economy where much if not most of what we buy isn’t made in America, how long would it be before companies still producing goods in the U.S. argue that first sale prevents them from competing and must be done away with here as well? I put the over/under on three hours.

Then there’s the legal illogic of somehow claiming one part of copyright doesn’t apply to foreign goods (first sale) yet other parts will (fair use). Supporters of Wiley have almost all claimed that the above concerns I’ve mentioned are scare tactics because consumers will retain fair use rights to defend their actions. But why should fair use be any more applicable to foreign goods than first sale? This is a flat-out lie by those who want Wiley to win. If the District Court decision on first sale stands, it’ll be roughly a half an hour before someone tries to invalidate fair use for foreign goods as well. And they’ll win because they’re right, logically and legally. If first sale doesn’t apply, then neither does fair use.

Get it yet? Think for a second, how many people in this country just bought, wrapped up and gave away foreign made goods as presents this past Christmas. If this ruling stands, every one of those gifts was an incident of infringement. I’m pretty sure we just rang up a $100 trillion worth of infringement penalities last month. Don’t think businesses will try to exploit this fully? Take a look at how publishers have been extorting exorbitant fees from libraries on ebooks. First sale doesn’t apply to digital goods (I believe strongly that it absolutely should, by the way) and fair use rights for the same have been willfully undermined as a consequence, resulting in absurdly, indefensibly high prices. And these are goods made in this country supposedly subject to the fullness of copyright law. Take away even those limited protections, and I think we can all see where this is heading.

All of these possibilities only exist because the courts are trying to carve a legal protection out of copyright that allows publishers to gouge rich markets while also simultaneously charging more reasonable prices in poorer ones. We could all effectively lose our right to resell virtually anything because a publisher wants the law to protect them from their own pricing strategies.

We’ve all had “the benefits of globalization” crammed down our throats the past few decades, and this case puts the lie to those notions. Corporations will readily tell you how great the global economy is as they ship manufacturing to third world countries with no worker protections, minimum wage laws or safety standards, but here, a regular guy finds a way to profit from globalization, and those same corporations are screaming that hellfire, brimstone and economic ruin will descend upon us all if its allowed to stand. If the District Court decision is held, that will be a clear sign that globalization belongs only to corporations and the wealthy. They get all the benefits and profits, while we get all the sacrifices and consequences.

There are two big societal problems made worse by an upholding of Wiley’s case: offshoring jobs and the cost of higher education. I’ve already mentioned how this decision creates a massive financial incentive for businesses to stop trading in American made goods, making a serious problem exponentially worse. The cost of education is, in part, too high thanks to textbook publishers. Territoriality is one way in which they keep textbook prices in the American market artificially high. This decision would also make that problem significantly worse as well. Textbook makers already undermine resale value by routinely producing new editions with little or no substantive changes specifically to prevent students from selling their books for any tangible return. This decision provides a clear path for them to further erode consumer rights; simply print the books overseas and now students lose all rights to resell (or give away) those books at any price.

The potential damage to the public and the overall economy from upholding the District Court decision outweighs the damage done to publishers by striking down the infringement claim defending territoriality by so many levels that even considering it scares the hell out of me.

What better case can be made that copyright is irretrievably broken than this one? The District Court ruling essentially makes copyright unlimited in scope, with manufacturers retaining not only primary sale rights, but also grabbing total control of any secondary markets as well. Considering that expansion of copyright terms has essentially made copyright length infinite (Life of creator plus 70 years. It is certainly infinite for the creator as my copyright wouldn’t expire until several generations after I’ve been dead and buried. And that’s only presuming it doesn’t get expanded again, which only an outright fool would believe won’t happen when Mickey Mouse next approaches public domain) where exactly are the statutory limits on copyright that were the principle element of the protection in the first place?

If the possible consequences weren’t so severe–as in instantly stealing at least half of the value of the goods we’ve paid for, eliminating secondary resale markets, and extorting copyright monopoly rents with additional licenses on products we’ve already paid for, not to mention possibly gutting fair use which could well have serious deleterious effects on free speech–I’d say maybe a decision this inordinately stupid needs to happen so regular people can see clearly how distorted and unfair copyright law has actually become and demand much needed change. But then, I’m opposed to further destroying what little productive economy we have left to make a point about copyright. Unfortunately, our corporate leaders and government don’t seem to agree.

The only logical choice here is to strike down the copyright infringement defense of territoriality. The alternatives do a hell of a lot more damage. I wish I was more confident that SCOTUS will get it right. We can all dream, can’t we? Unless, of course, your dream includes an infringing appearance by a copyrighted character, in which case that nap’ll cost you $150,000.

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