Resale price maintenance of books held on consignment The Commission \vas recently requested to render an…

No. 121. Resale price maintenance of books held on consignment The Commission \vas recently requested to render an advisory opinion concerning the legality of an agreement behveen a university press and a scholarly association that the press would not sell the annual publication of the association, which it held on consignment, at less than the minimum resale price stipulatcd by the association. The book normally sells by mail order for the same amount as is charged by the association for annual dues. Members of the association are entitled to receive a copy of the book at no extra charge. The association wishes to include a provision in the contract prohibiting the press from selJing to educational institutions, mainly libraries, at any discount below the usual retail price, its purpose being to prevent such buyers from obtaining the book at a lower price than they could by joining the association. This would mean that the press could not give libraries the normal trade discount.

In addition, the Commission was assured that the relationship between the press and the association 'was strictly one of agency. The press does not print the books for the association , which subcontracts the printing and simply wishes to use the selling facilities of the press to handle sales to nonmembers. Legal title ADVISORY OPINION DIGESTS 1731

to the books remain in the association, which owns the copyrights and the books are being handled by the press on a consignment basis.

The Commission advised that it could see no objection to the inclusion of this provision under the precise factual situation presented. In arriving at this conclusion, the Commission stated that it was mindful of the fact that consignment agreements can under certain circumstances, be used as a device for illegal resale price maintenance, even where patented or copyrighted articles are involved. However, it was of the opinion that this proposal would not fal1 within that category in view of the fact that the contemplated consignment agreement containing the clause in question wi1 be with only one consignee and there wi1 be no other outlets competing in the distribution of these books. This view of the law was limited solely to the factual situation involved. Hence, generalizations from this opinion or its extension to other factual situations would not be warranted. (File No. 673 7074 released Apr. 22, 1967.