US Supreme Court to look at NSA spying, resale of products

The U.S. Supreme Court will hear arguments Monday in two cases with potentially broad implications to technology users, one reviewing whether consumers can resell copyright-protected products they have purchased and the second challenging an electronic surveillance program at the U.S. National Security Agency.

In one case, Kirtsaeng v. John Wiley & Sons, the court will hear a challenge to the long-established first-sale doctrine, which allows consumers to resell products protected by copyright without the copyright owner's permission. The case, examining whether products manufactured overseas are protected by the first-sale doctrine, could have a huge impact on eBay, Craigslist, libraries and ordinary U.S. residents who try to resell a wide range of products made overseas, including CDs, DVDs and books, critics say.

The court battle involves a Thai student who imported textbooks into the U.S. from his homeland and sold them on eBay in competition with the publisher.

A lower court ordered Supap Kirtsaengto, who attended graduate school in the U.S., to pay John Wiley & Sons Inc. US$600,000 for importing the publisher's textbooks, available for a lower cost in Thailand.

Tech-related groups and businesses including eBay, NetCoalition, the Computer and Communications Industry Association, TechAmerica and Public Knowledge have all called for the Supreme Court to throw out a 2011 decision by the U.S. Court of Appeals for the Second Circuit allowing consumers to resell copyright-protected works only when they are produced in the U.S.

The Second Circuit reached an "extreme conclusion" in the case, according to a court brief filed by eBay, NetCoalition, CCIA, TechAmerica and other tech groups. The appeals court defined the phrase, "lawfully made under this title," in copyright law to mean manufactured in the U.S.

The Second Circuit's decision would "substantially threaten" e-commerce, the tech groups said in their brief. "The Second Circuit's rule not only is inconsistent with the terms, structure, history and purpose of the copyright act, but it also allows for significant adverse consequences for trade, e-commerce, secondary markets, small businesses, consumers, and jobs in the United States," lawyers for the groups wrote.

An adverse decision at the Supreme Court could mean that libraries will have to stop lending books, said Corey Williams, associate director of the American Library Association's Office of Government Relations. It's often difficult to determine where a book is manufactured, with some publishers outsourcing that portion of their business, she said.

"When you open a book and look at the copyright page, more often than not, a book ... does not indicate where it was manufactured," she said. If the Supreme Court upholds the Second Circuit's decision, the longtime practice of libraries lending books "would be raised into question," she added.

The Motion Picture Association of America, the Association of American Publishers and the Software and Information Industry Association filed briefs in support of the Second Circuit's decision. Copyright owners should be able to control whether products they produce overseas are imported into the U.S., the SIIA's lawyers wrote.

Software vendors and other companies often sell products at a discount overseas and those products shouldn't be allowed to compete with their U.S. products, the SIIA said in its brief.

The first-sale portion of the Copyright Act "does not shimmer with clarity," but critics of the Second Circuit's decision have focused less on the law than on "the parade of alleged horribles" that will occur if the Supreme Court upholds the lower court's decision, the SIIA said. Critics of the lower court's decision have overblown the problems, the SIIA said.

In the other case on the Supreme Court's docket Monday, privacy and civil rights groups including Amnesty International and the American Civil Liberties Union have challenged a law allowing the NSA to track the telephone calls and emails of U.S. residents communicating with suspected terrorists.

In Clapper v. Amnesty International USA, the civil rights groups have challenged the legality of the FISA Amendments Act of 2008, a law that formally endorsed an NSA spying program that began operating shortly after the Sept. 11, 2001, terrorist attacks on the U.S.

In March 2011, the Second Circuit ruled that a coalition of groups had the right to challenge the constitutionality of the law. The U.S. government has challenged that decision.

"This law clearly intrudes on constitutionally protected privacy and free speech rights, and the courts have not just the authority but the obligation to intervene," Jameel Jaffer, the ACLU's deputy legal director, said in a statement.

The ACLU filed the lawsuit in July 2008 on behalf of a coalition of attorneys and human rights, labor, legal and media organizations that engage in sensitive telephone and email communications with people outside the U.S.

The U.S. Department of Justice, representing the NSA, argued that the law requires the agency to get permission from a court before conducting surveillance on a U.S. resident. The groups asking for the law to be overturned have not established that they are surveillance targets or are in imminent danger of being spied upon, the DOJ argued in a brief.

If the FISA Amendments Act were overturned, the U.S. government's ability to fight terrorism would be crippled, some government officials have said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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