But losses mount for the home furnishings e-retailer that went public in October.
The marketplace wants merchants to be able to resell imported merchandise.
EBay Inc. is urging its sellers to sign a petition that urges the Obama administration to affirm the right of businesses to resell merchandise legally acquired overseas.
EBay’s political stand comes as the U.S. Supreme Court prepares to hear a case this fall that could limit the sale of items purchased abroad. The case, Kirtsaeng v. John Wiley & Sons, involves an eBay seller who was successfully sued by textbook publisher John Wiley & Sons for copyright infringement after he resold books in the United States. He had purchased those books in Thailand, where the publisher sold them at a discount through a subsidiary.
The case centers on an aspect of copyright law called first-sale doctrine that gives copyright holders the right to set the price for the first sale of a product. After a consumer purchases that product, he can resell or give away that product without the rights holder’s permission. The Supreme Court this fall will decide whether the first-sale doctrine applies to products purchased overseas and then imported into the United States.
Wiley won $600,000 in damages in its case against the eBay seller in a lower court. The U.S. Court of Appeals for the Second Circuit upheld that ruling.
If the Supreme Court agrees with the previous rulings that the first-sale doctrine applies to products manufactured and bought overseas it could have serious effects, eBay wrote in a post in its Main Street public policy blog. “This rule could affect most of the goods we use every day, from books to cell phones. Manufacturers would retain ownership of an item no matter how many times it changes owner. This rule could threaten the laws of ownership and resale that we all enjoy. When you purchase an item on eBay, you should be able to resell it, give it away, or use it as you see fit. Likewise, when you sell an item on eBay, ownership of the item should transfer to the buyer.”
If the Supreme Court rules against first-sale doctrine for good purchased overseas, it could have a fallout on eBay, Etsy and other online marketplaces, says Scot Wingo, CEO of e-commerce services provider ChannelAdvisor Corp., which helps retailers sell on such online marketplaces as Amazon and eBay.
“While the amount of these goods is probably relatively small, the real pain could be in enforcement,” he says. “Imagine if eBay or Craigslist had to either police items sold that have international origin, or, even worse, had to verify that second-sale items were not of international origin. If the burden on the marketplaces was high enough, they could decide to just stop selling this type of [product].”
The petition eBay aims for sellers to sign is being circulated by Citizens for Ownership Rights, which is a coalition of digital rights advocacy groups such as Demand Progress, Electronic Frontier Foundation and Don’t Censor the Net. The group intends to deliver the petition to President Obama and U.S. Attorney General Eric Holder.