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Publishers Lose First Round of Lawsuit Against Used eBook Marketplace

tom kabinet used ebook marketplaceIn a stunning upset, used ebook marketplace Tom Kabinet has survived its first round of legal battles today in the Netherlands. A judge for the District Court of Amsterdam has ruled today that Tom Kabinet can continue to operate while it is being sued in court.

Launched just over a month ago, Tom Kabinet enables users to resell ebooks, both DRM-free and ebooks protected by digital watermarks (but not ebooks encumbered by Adobe DRM). The site was in operation for only 8 days when it got its first legal nastygram from the Nederlandse Uitgeversverbond (NUV), the Dutch Trade Publishers Association, which believes that the site is out and out illegal.

That legal notice was inspired in part by a letter that Tom Kabinet had sent to publishers. The operators of the site explained what how the site worked and noted that the site earned a 10% commission on ebooks sold there. They offered to pay a 5% royalty to authors for each ebook sold in Tom Kabinet’s marketplace.

Believing Tom Kabinet to be illegal, the publishers either declined or ignored the offer and instead responded with a promise of a lawsuit. I’ve covered their legal arguments before, so I won’t repeat them here.

I would have tended to agree with the arguments presented by the GAU in their letter to Tom Kabinet, but I guess the judge isn’t as convinced that selling ebooks is illegal.

Even though Tom Kabinet won today, the odds are still stacked against it. The site is going to have to win the lawsuit in both local and EU courts, a process which will likely take years. What’s more, the Dutch courts have a history of supporting industry trade groups  whenever the topic of piracy comes up, including repeatedly ordering ISPs to block The Pirate Bay. That blockade was only lifted in January of this year when EU courts overruled Dutch courts, saying that the blocks were disproportionate and ineffective.

Tom Kabinet is in a much more difficult position than ReDigi, which faced a similar lawsuit in 2012. ReDigi lost that lawsuit in 2013 and changed their business model to comply with the ruling. The company is still in operation today, and they were even awarded a patent earlier this year for their marketplace platform.

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Chris @ Publishing Hero July 21, 2014 um 1:37 pm

Has anyone dived into the ToS and actually seen a rule that prohibits one from reselling their license to the book they’ve bought? Yes, you’ve bought a license, not the book itself – but licenses to many other things change hands all the time.

That said, the difference between a new and used copy of a digital file is nil. Calling it a 'used' ebook market remains a chutzpah-filled claim.

Nate Hoffelder July 21, 2014 um 1:49 pm

Most of the license have terms that preclude reselling the license. But in at least the case of software, that clause is not enforceable in Europe. And thanks to the ReDigi decision it’s also not enforceable in the US (under certain conditions).

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