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Used eBook Sales Now Illegal in Europe (For The Moment)

Used ebooks are a hot topic right now, with Apple and Amazon each pursuing a patent over reselling digital content and as a result sparking a debate on the legality, ethics, and morality of a second-hand marketplace for products that don’t decay.

This is a hot topic across the pond as well, only it has gone in a slightly different direction. A German court has ruled this week that ebooks cannot be resold.

That was fast, but if I were a publisher I would not be celebrating just yet. I don’t have access to the ruling, but just from reading between the lines of the original German coverage I can already see a couple problems with this case.

The lawsuit was filed by a German consumer advocacy group in the District Court of Bielefeld. According to Boersenblatt, a magazine that covers the German publishing industry (think Publisher’s Weekly), the judges ruled that ebooks were not software, so the ruling made last year that reselling software licenses was legal did not apply.

This is a rather curious decision, and I don’t think it’s going to pass muster. First, I think that this decision is splitting legal hairs. A strong argument could be made that the same legal principle should apply to both software and ebooks. If you can legally resell software in Europe then you should be able to legally resell ebooks, or at least that is how it looks to me. (Read this comment for an explanation as to why this paragraph is crossed out.)

But more importantly, this decision isn’t the end of the issue because something tells me the plaintiff won’t let it die. This lawsuit was brought by VZBV, the same consumer advocacy group that is suing Valve to force the software vendor to enable customers to resell software. I covered this story a couple months back because of the obvious ebook angle.

I don’t think VZBV is going to rest until they either run out of money or the case goes before the European Court of Justice. That’s the highest court in Europe, and that was the court that ruled software resale was legal in Europe.

That case is known as the Usedsoft decision, and it took 5 years to be resolved. I would not expect the ebook issue to be resolved any time soon, but I am also expecting that the ECJ will eventually rule that Europeans can resell ebooks.

Right now the ebook rights issue in Europe is largely the same as it is in the US. It’s not exactly illegal to resell ebooks, but the seller does have to get the copyright holder’s permission first (more detail here).

But once ebook resale is legal in Europe, we’re going to see consumer advocacy groups pushing the issue. And when that happens it’s going to make for interesting times.

For example, what if the seller and buyer are in markets where different publishers have the right to sell the ebook? Arguably Amazon (and other ebooksellers) would have the obligation to respect the territorial rights, but under European law they might not have the legal right to do so.

Do you suppose Amazon might take away a legally purchased ebook because of geographic restrictions? I don’t know, but it’s not out of the question.

I’m also looking forward to the first time a Kindle owner in Europe sells an ebook to a Kindle owner in the US. The latter cannot sell a used ebook, but it’s not clear whether the US Kindle owner can buy a used ebook.

Interesting, no?

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Puzzled April 20, 2013 um 5:23 am

"A strong argument could be made that the same legal principle should apply to both software and ebooks."

I have to disagree with you here. eBooks are static (mostly), while software is not. Software is a tool, it does stuff. Ebooks just sit there, doing nothing (embedded javascript notwithstanding).

eBooks should be on a less restrictive regime than software. I agree that if software can be resold, so should ebooks.

Emma April 23, 2013 um 2:37 pm

Yes Puzzled, I was also puzzled by this remark and not only from a technical point of view, but also from a legal one. Software is subject to a specific EU directive, which is 'lex specialis' to the general copyright directive. So the Court in Usedsoft could distinguish the situation of software from eBooks, MP3s etc. In this German decision – especially since it’s a decision of a District Court – they simply applied the law (the copyright Directive) as it stands and drew inevitable conclusions from that.

If they do go to the CJEU, the outcome is more uncertain since the CJEU has more power to interpret the EU instruments in place. However, a major sticking point is likely to be that the non-application of the exhaustion doctrine to intangibles actually stems from international instruments (WIPO copyright treaty), so unless some movement is made at the International (political) level, the whole prospect of moving resale forward looks more shaky…

Nate Hoffelder April 23, 2013 um 3:12 pm

Thanks for the clarification on the nuances of EU law. I didn’t know.

Emma April 28, 2013 um 10:16 am

No problem, thanks for the update. I’m actually writing my PhD on the application EU law to the digital publishing sector, so these legal bits and pieces are really my thing! Have to say that your blog has been absolutely fantastic for keeping my thesis on topic – you have a great perspective on the industry and I look forward to your future posts!

fjtorres April 20, 2013 um 7:41 am

You have to factor in that in much of europe, books and ebooks aren’t just a commercial product, but rather "priceless cultural artifacts" (read: a special snowflake) and that the vendors of those treasures need to be protected from all economic forces. (Especially the ones that might prevent the publishers from milking consumers for every last drop of blood they can squeeze out of them.)
Not only do many (most?) euro countries tolerate price-fixing of ebooks, several *mandate* it.
(At a minimum that means used enook sellers won’t be allowed to undercut the "pristine" unread edition so used ebooks would have to be sold for full retail, rendering the price of reading the ebook "zero". The result would be worse than the Grandfather Paradox and the spacetime continuum would collapse.)

In any debate between protecting a consumer’s digital first sale rights or protecting the entrenched powers dispensing "culture", my money is on the money-grubbers.

Xendula April 20, 2013 um 11:19 am

AFAIK, price fixing only applies to new books. Maybe that’s what’s scaring them.

fjtorres April 20, 2013 um 1:06 pm

Used books are generally defined solely as in "less that pristine condition". It is my understanding that some retailers will do minor smudges and stuff to books so they can sell them at a discount.
eBooks will *always* be in pristine condition and indistinguishable from new.
If a difference makes no difference then there is no difference. 😉
Used ebook = new ebook.
As long as books are "special" they will be different from software because software is function and ebooks are culture.

Dolansky April 20, 2013 um 7:49 am

used real books got a kind of deterioration when they are sold to others.
what about an inbuild e-reader software-solution for ebooks to do a kind similar aging e.g. to show every 100th page a full page of advertisment of the publisher to show the new ebooks they offer.

Nate Hoffelder April 20, 2013 um 8:07 am

Why would we do that?

The fact that physical goods decay (including books) is an intrinsic characteristic. Your right to resell the goods has absolutely nothing to do with the fact that they will decay, so there is no reason to introduce a faux decay to ebooks.

The Ogre April 20, 2013 um 3:26 pm

And, unless you (or the people you loan it to) are an absolute cretin without even the vaguest idea how to handle books, even mass-market paperbacks can last for decades (currently reading my movie edition copy of 'Dune' that I bought at the drug store across the street from the theatre where I saw the movie back in ’84. I read it almost every year and I’d be very surprised if I have to replace it before 2020), which means even less traction for the "ebooks don’t wear out" argument. Odds are, in 20 years it’ll be next to impossible to read an epub on modern hardware (without a lot of extra work and tracking down obscure, rare software)…

Name April 20, 2013 um 10:25 am

Splitting legal hairs, one could argue that individual digital copies that users keep on their devices can deteriorate in quality like physical copies. How so? Well, by spurious bitflipping that might happen to an ebook binary on a user’s storage device. One could argue that professional sellers would put additional precautions in place to prevent such from happening to their pristine "new and unused" ebook master copies. A changed bit in a book binary might result in a changed letter or somesuch.

fjtorres April 20, 2013 um 1:10 pm

Do that, and by well-established copyright law you just created a derivative work.
And that is most definitely a violation of copyright.
There is no finessing it here; either digital licenses let you resell the pristine product or they don’t let you resell it at all.

Name April 22, 2013 um 8:53 am

Most definitely not. Not even regarding the requirement of a certain degree of sophistication for some work in order to qualify as a derivative, the situation that I described referred to unintended physical alteration of necessary structures to hold the digital content on an individual customer’s device, assuming that these did not put error-correcting counter-measures in place to prevent such spurious events from affecting the stored content.

Another unintended alteration could be some unrelated buggy program on the same device that causes data corruption to parts of the individually stored ebook file, possibly rendering part of the book unreadable. This would be a truely damaged individual ebook copy, which could be likened to a water damaged physical book copy or one with ripped-off pages.

Also, back to the initial example, an altered letter in an individual text copy wouldn’t violate any copyright. If it did, it would not be legally possible to sell used books with individual markings, added emphases, striked-through letters or somesuch.

Anyhow, there is much in flux these days in legislation and interpretation of legislation. Too much is undefined at this time, and it is generally unforeseeable, which anologies individual courts will draw from existing code to apply to some new situation as long as there is no more specific legislation.

fjtorres April 22, 2013 um 11:53 am

Do you remember when Kindle added TTS? The publishers and Authors Guild promptly claimed copyright violation. Some even claim that format conversion is creating a new product…
Rest assured: they will sue… likely under the handy-dandy DMCA…

Dolansky April 20, 2013 um 1:44 pm

Let’s think a moment about the Kindle-Amazon ecosystem.
In the Kindle-Shop they introduce a market for used ebooks. (if the publisher allow it)

After 4 Month or something like that within your ebook appears a button 'sell ebook'.
Press it and your ebook appears on the Kindle market in the used ebook section
The ebook will be deleted on your device. Your ebook is now on the Amazon Server.
On the Server they could some deteroriation work, either restricted to a Font without serif
or build in an advertisement page of the publisher every n’th page with real links to the books they offer to the corresponding books on the Kindle market.

if u sell a ebook and offer it to the Kindle market for used books you can receive a gratification for offering it to the market. If your ebook is actually sold to someone else you will gain a bigger gratification which could correspond to some percentage of a recent price of a corresponding new ebook on the market.

you can use your gratification points to buy a new ebook or a couple used ebooks.
it could work.

fjtorres April 20, 2013 um 4:17 pm

Oh, it would be trivial for Amazon or Apple to engineer a system for transferring ebook licences–both have patents for ways of doing it– but before they implement them they need permission from the copyright holders.
For all the talk of buying and selling ebooks, what is really being marketed today are (non-transferable) user licenses. That is what needs changing, be it by negotiation or legislation.
Litigation? Don’t think so.

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