You Are Not Entitled to a Profitable Business Model

Lynne Kiesling

Cory Doctorow at Boing Boing highlights the Supreme Court’s copyright decision in Kirtsaeng v. John Wiley & Sons. Briefly, Wiley wanted the court to enforce copyright in a way that restricts the flow of book purchases across geographic regions (i.e., limiting the ability to buy cheaper versions elsewhere online).

Clearly Wiley was attempting second-degree price discrimination, and the Internet makes arbitrage prevention nearly impossible, so this case is a good illustration of how price discrimination can fall apart.

But I’m more interested in the fact that the defense was attempting to use a “but … but we can’t make money if they can buy cheaper versions from other regions!” argument to get the court to expand the copyright breadth. The ruling’s smack-down of that line of argument is beautiful:

Third, Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.

You may enter an industry and build up your business, but you are not entitled to having that business remain profitable ad infinitum. You have to work harder to avoid becoming the destruction in creative destruction. And if you do that, and consumers benefit from it, you’ll profit too. Funny how that works.