I am both an avid bibliophile and an unabashed gadget guy. I had been waiting to buy the Kindle for months and bought the device minutes after Jeff Bezos announced it in New York City at a Macworld-esque event. Before my Kindle even arrived I read an article in Businessweek that made me realize that Kindle would not only change the way in which I read books, but also, thanks to the DRM, what I could do with my books.
Ever since elementary school, I would swap books with friends and lend books for extended periods of time. No one would question the permissibility of this practice, as the first-sale doctrine, enshrined into the 1976 Copyright Law (Title 17, Chapter 1, § 109)– after being upheld by the Supreme Court since 1908—which states “the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” Meaning after I buy a book, a movie, or any other copyrighted item, I can do whatever I would like with that material with the exception of duplicating it; I could sell it, lend it, trade it, rent it or even throw it out the window.
The DRM on the Kindle limits what I can do with a book after I purchase it; I can read it on my device, transfer it to another Kindle registered to me (seriously—why would anyone need multiple Kindles? Maybe if I had a family or something…), or perhaps, as of today, transfer it to my iPhone. This is it. I will not be able to do with my eBooks as I see fit. I am very much in agreement with the EFF’s opinion that “readers should not be asked to give up their first sale rights, whether their books are digital or made out of paper.”
As the readings suggest, DRM protection is a complicated issue with many arguments for and against. However, what I find particularly problematic is the way in which DRM is impinging on my freedom to invoke my first-sale rights to the books I have purchased. As Wildstrom acknowledges in his Business Week article:
The same can be said about the DRMs that protect downloaded music (where DRM seems to be dying), videos, and games. But those don’t have the same emotional effect on me that DRMed books do, probably because the trade in used books has been an important part of our culture in the way that selling used audio or video recordings has not. Our culture would certainly be much poorer without Powell’s Books in Portland, Ore., or Witherspoon Books in Princeton, N.J., or Manhattan’s Strand Bookstore.
For all of us Yalies who regularly lend or sell books—especially ridiculously priced textbooks after we have used them–the notion that we, for example, couldn’t transfer an Economics textbook purchased on the Kindle to a friend taking the course next year or exchange our copy of Freakonomics with a friend’s copy of Outliers seems unfathomable. Not to mention the fact that there are ways in which I can legally share DRMed music purchased on iTunes by burning the songs to a CD, for instance; there is no equivalent process on the Kindle.
Some probing into the End-User Licensing Agreement (EULA) for the Kindle reveals something that seriously undermines my previous claims about the first-sale doctrine. Even though I click “Buy now with 1-click” on the “Kindle Store” to purchase books, Amazon does not consider the transaction to be a sale in the traditional sense, meaning the first-sale doctrine would not apply. Instead of selling me a digital “copy” of the book, “Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use.” Apparently, Kindle users never buy books, they just license them under a restrictive set of conditions. The EULA then stipulates, “Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content. ”
Fortunately, Amazon’s view that purchasing an eBook merely grants consumers a license rather than ownership of a product could be challenged. Columbia University Law students quoted on Gizmodo argue, “Just because Sony or Amazon call it a license, that doesn’t make it so…That’s a factual question determined by courts…Even if a publisher calls it a license, if the transaction actually looks more like a sale, users will retain their right to resell the copy.”
While there is no case law on applicability of the first-sale doctrine to e-books, there have been cases regarding computer software, which resembles e-books in that companies claim the software is being licensed, rather than sold. In Vernor v. Autodesk Inc. (2000), the court stated that despite a claim that the software was being licensed, it was actually sold since there was no expectation that it would ever be returned; hence, the purchaser has the right do do as he sees fit with the software. In Davidson & Associates v. Internet Gateway Inc (2004), a similar case regarding the status of software heard in the District Court for the Eastern District of Missouri, however, the Court held, “The first sale doctrine is only triggered by an actual sale. Accordingly, a copyright owner does not forfeit his right of distribution by entering into a licensing agreement.” Given the disagreement in the district courts and the fact that the digital content seems to be the way of the future, perhaps the Supreme Court will grant a writ of certiorari to one of these cases on appeal and decide the law of the land.
While EULAs may be struck down by the courts, as Proessor Lessig’s blog post earlier this week about public domain books with DRM restrictions suggests, there is nothing to indicate this would spur a change in the DRM restrictions. Since dismantling the DRM would constitute illegal circumvention under the DMCA, it would still be impossible for someone to legally invoke their first-sale rights to digital books. As we read in Lessig’s Code 2.0 earlier this semester, there are four different ways in which digital content can be protected; with respect to the Kindle, Amazon is using redundant means–both a EULA (a legal contract) and DRM (code)– to restrict the use of its content so it could still retain control in the event that one fails.
The first-sale doctrine has an additional complication when we are discussing digital content such as e-books. Wildstrom states the obvious, “Digital books don’t get dog-eared or marked up and their bindings never break, there’s no reason not to prefer a “used” e-book to a new one if its price is less.” Typically, there is price discrimination in the book market and those with can afford to pay price for their books, have a strong preference for new, crisp unmarked pages, or need a book immediately will shell out for a new copy, while others can opt to save money on a used copy in worse condition. It is difficult to imagine how publishers and authors would maintain constant revenue streams if there were no incentive to buy new books and used e-book markets on the internet featured the exact same books available on the Kindle store for much less money. As Wildstrom goes on to say publishers would have serious qualms about allowing Amazon to license their books if it could result in the loss of so much revenue. Currently, there are two major waves of book sales, for best sellers, at least—hardcover releases and paperback releases. However, if e-book readers proliferate and more and more people begin reading on devices like the Kindle, there could be a wave of people buying a book after it is released. If people could sell or transfer their books, presumably charging less money than a new eBook, people looking to buy a book for less could simply get the book from a friend or on a marketplace.
There are some solutions to this predicament. A middle ground could be reached in which limits are imposed on the number of times a book can be transferred and transfer fees or listing fees could be assessed that would give Amazon and/or the publishers money each time a book changes hands (as “Eric” suggests in his comments on Wildstrom’s piece). Alternatively, Amazon could “rent books” for a limited time at a cheaper price point than purchased books, which could cause people looking to save money to pay for a rental instead of buying a second-hand e-book. Some software (e.g. SPSS Statistics) can be rented on a semesterly basis for students wishing to save money instead of purchasing the full version. The relative ease of renting an e-book verses purchasing an e-book from someone else could keep the flow of revenue moving even if Amazon relaxed its DMA to allow people to invoke their first-sale rights.
Speaking of the first-sale doctrine in the digital age, the Freakonomics blog on the New York Times website featured Questions and Answers with Professor Lessig the other day. In response to a question about the first-sale doctrine, Lessig said:
The First Sale Doctrine represents an important principle forgotten by copyright extremists — that copyright “protection has never,” as Justice Stevens put it in the Sony Betamax case, “accorded the copyright owner complete control over all possible uses of his work.” But in my view, to restrike a proper balance in the digital age, we need to move away from an architecture of copyright law that triggers regulation upon the copy. Instead, copyright law needs to focus on the economically relevant acts that need to be regulated to create the incentives copyright law should produce — and not on the (impossible, self-defeating, and absurd) objective of regulating every time a computer “copies” a work.”
Then question then becomes, what are these economically relevant acts?