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On Monday the U.S. Supreme Court affirmed a lower court decision on “the pricing of products made outside the United States.” This has implications for textbook pricing because it effectively prevents the new introduction of low-priced academic books.
The case, Costco vs. Omega, was originally about watches. As an earlier piece in Inside Higher Ed put it:
Omega, a Swiss luxury watchmaker, noticed that Costco had started selling one of its trademark timepieces in its California stores for less than Omega was charging. Omega sued Costco for copyright violation, noting that Costco had bought the watches from a New York company, which had bought them from “gray market” merchants overseas, which had bought the watches from Omega’s overseas distributors. Since Omega itself did not authorize the sale of its watches in the United States, the watchmaker’s lawyers argued that Costco had violated its copyright.
Costco countered that Omega’s copyright authority does not reach that far: once Omega sells a watch, the wholesaler argued, it has no say over where the watch can be resold, or for what price.
That’s because internationally sold goods usually work like this: the manufacturer produces two types of the same product. One is expensive and lavish, intended to be sold in the developed world. The other version is cheap and basic, intended for sales in Third World countries.
Textbooks work like this too. The real barrier that many students have to accessing inexpensive textbooks is that publishers will only sell them the expensive, lavish version. Publishers totally make the cheap version, which is really all the students need, but the cheap version is only available in the developing world.
The case essentially came down to this: if the producer makes something intended for foreign sales, can American companies buy the product abroad and sell it cheaply back in America?
A victory for Costco would have meant yes, and might have allowed Americans to buy textbooks for less money. That would greatly cut into publishers’ profits, which is why the Association of American Publishers submitted an amicus brief in the case, arguing that,
Prohibiting the importation of copies acquired abroad… protects core aspects of the exclusive distribution right, ensuring that U.S. copyright owners have, as Congress intended, the right to determine when and where to distribute their works, at what price, and with what content.
The Supreme Court appeared to agree, affirming the opinion of the Ninth Circuit, which ruled in favor of Omega and prevented such foreign sales.
This is a victory for publishers. It looks like it’s a loss for students.
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Anthony Damiani on December 15, 2010 6:09 PM:
This is an astonishingly horrible decision; we aren't PERMITTED to buy goods second-hand?
David Martin on December 15, 2010 7:10 PM:
How about buying textbooks from a British source? Amazon.uk or Book Depository might do.
Joanne Jacobs on December 15, 2010 8:56 PM:
Selling all textbooks for the cheap international price wouldn't just cut into profits. It would drive publishers out of business. The cheap edition may be paperback with cheaper paper, but the real cost is in the writing.
My husband no longer writes engineering textbooks because his earnings were undercut by the Indian edition, priced at $10 to $15 to forestall pirating and resold in the U.S. for $30 to $40. The U.S. price is $120. His book, now five years old, is out of date but the publisher hasn't found a new writer willing to work for prestige rather than money.
John asked his publisher to lower the U.S. cost and raise the Indian cost, say to $65 vs. $25, which would make it unprofitable to ship books from India for resale. (The local contract bans resale to the U.S., but it's hard to prevent.) He argued more U.S. students would buy the book if it wasn't so expensive and that $25 would be cheap enough for Indians to afford without resorting to pirated editions. The publisher said they can't make any money that way.