You Don’t Own E-nything

By Ryan Morrison

With news breaking last month that Amazon has a patent to resell e-books, consumers smiled and authors worriedly reviewed the contents of their savings accounts. Earlier this month, attorney and bestselling author Scott Turow wrote an opinion piece in the New York Times stating that the practice of reselling such an item will most likely be “ruled illegal.”

I share his optimism.  But only because our laws are so far behind Europe’s.

If a realm existed more poorly regulated and filled with bad law than the internet, I’d love to see it. We have reactionary legislation from people who don’t know how to turn on their computer, case law decided by judges perplexed by futuristic terms like “modem,” and an army of users content to make up their own interpretations of the law and let it spread like wildfire. This misinterpretation of the law is then repeated on various online forums until it is recited with more bravado than Gaston, mocking any who dare to disagree, even when the dissenters are correct.  Well, get on your chuckle boots, internet, because you’re about to be educated.

When you purchase an e-book, you aren’t actually buying that e-book; you are obtaining a license to display it on your e-reader. This is important; because you haven’t purchased anything but a license, you have nothing to resell (besides maybe that license, but we’ll get into that later).

So to be clear, when it comes to e-books, you do not own what you are buying.

Potential resellers of used e-books around the internet have touted the First Sale Doctrine as a means of protection for their actions, but they are deluded. The First Sale Doctrine is a bit of law that was developed in a 1908 US Supreme Court case that decided publishers could not limit the re-sale of copyrighted materials that had been legitimately purchased. It’s what allows you to lend, resell, or gift items you’ve bought. Basically, the theory goes, you buy it, you own it, you can do what you like with it.

This doctrine, however, was created in the Pleistocene age, in which reading material was restricted to print and hardcopies.

The doctrine was updated in 1976 under Title 17 § 109 of the United States Code in order to try and keep up with new technologies, in particular, cassette recorders used to bootleg various music. The update protected the resale of music albums, but made it illegal to make copies of them.

Now we find ourselves with another bit of new technology, e-books, and no updated law. But, even an update saying specifically, “e-books are okay to resell,” might mean nothing because, again, you do not own the e-books you buy, you are just licensing them.

Same issue, new medium. Video gamers are familiar with the legal battle between rental and ownership, it being illegal to try to resell software purchased on video game networks such as Steam. Books and videogames are treated the same way under the law  — whether in hard copies or downloads. The 9th Circuit made it clear in 2010:

We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.”

And for now, that appears to be that. The Supreme Court refused to hear the appeal from that case and it is experts widely believe that the 9th Circuit’s ruling is good law.

And while American consumers and would-be owners may sit steaming mad, things are different for our European friends.

The European Court of Justice held last July that even if you are only buying a license, that license is re-sellable. The case was a battle between a company trying to create a marketplace to resell used software and Oracle, a game company, which argued, as online retailers do, that its license agreement clearly states that the licenses it sells cannot be resold. The Court decided that once you sell something you have “exhausted” your right to control it.

This seems to be the common sense answer and is probably a good sign of things to come. Many companies have started adopting resell policies, even one specifically for e-books, allowing you to sell used e-books as long as you completely delete all copies you have yourself. (Something the European Court demanded in its ruling, too.)

Here in the U.S., though, we will have to sit back once again and wait for our laws to catch up to our technology. It’s a painful process, but it’s all we can do. Slow down scientists, our legislators can’t keep up.


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