Used eBooks 101: How Amazon Can Legally Resell eBooks
Ever since the news broke earlier in February that Amazon had a patent to sell used digital content there’s been a heated discussion on what this means for the ebook market and authors as well as whether it is right/wrong/ unethical/immoral to sell used digital content in this way.
Unfortunately, in the midst of the debate I have also been encountering a fair amount of misinformation. A number of people (including at least one blogger) don’t understand exactly what it means to sell a used ebook. One blogger writing over at TeleRead believes that it is illegal to resell an ebook:
Amazon has patented a means to sell used e-books within the Kindle system. A book will be branded within the system when it is bought, and when the buyer puts it up for resale at the Kindle store, it will be removed from his account and transferred to the buyer’s account. Amazon will receive a small fee for each sale. A limited number of sales of each book may or may not be included in the system.
According to copyright law, specifically the first sale doctrine, this is illegal because digital goods aren’t physical things so they can’t be resold. (See my article, “The First Sale Doctrine and eBooks,” for more details.)
She’s wrong (though her post on first sale doctrine isn’t completely off base). It’s a little complicated to explain why, so I’m going to have to take things all the way back to the beginning and work from there.
Let’s start with the author.
Someone writes a book and they decide to sell it in the Kindle Store. They upload it to KDP, negotiate and agree to Amazon’s contract, and the ebook is listed in the Kindle Store.
And then Amazon sells the ebook.
Well, no, they don’t.
I know that we are all used to saying that we buy ebooks but the legal relationship of exchanging your money for a Kindle ebook is not a purchase. What happens is that you agree to a contract. Amazon takes your money and grants you the right to use the ebook under certain conditions.
I suspect that people who say that the act of selling used ebooks is illegal due to copyright law don’t seem to have realized that Amazon does not sell ebooks. That means that copyright law does not necessarily forbid the reselling of Kindle ebooks.
Sidenote: The blogger mentioned above believes that you lease an ebook instead of buy it. You could phrase it that way if you like (a lease is indeed a type of contract) but she is still wrong in saying that selling a leased ebook is automatically illegal. She missed the fact that under certain conditions you can legally buy and sell a lease. It happens all the time.
Here’s the thing. When or if Amazon resells ebooks, my guess is that what they will actually be doing is transferring a license from one customer to another while also cutting off access to the ebook for the seller and enabling access to the ebook for the buyer.
When it comes to reselling Kindle ebooks, the contract between the author/publisher and Amazon is probably going to matter just as much as copyright law, and that is because Amazon arguably cannot resell a Kindle ebook if the author/publisher does not give them permission.
Earlier in the post I specifically call out the negotiation step because when an ebook is uploaded, the author/publisher is presented with a number of options like price, market availability, and whether the ebook should be added to KDP Select. The author/publisher is able to decline or accept these conditions.
I also expect that when Amazon decides to start selling used ebooks, authors and publishers will be presented with the the decision of whether they wish to allow Amazon to resell their ebooks.
I am basing that assumption on the text of the patent (and Amazon’s past behavior). The patent includes a provision where the copyright holder can decide to prohibit the reselling of an ebook in much the same way that an author/publisher can decide not allow their ebooks to be loaned by one Kindle user to another.
In fact, this patent appears to cover both the reselling of ebooks and when users loan ebooks to each other. That detail leads me to conclude that Amazon will ask for permission to resell ebooks.
Or at least that is what I think. I could be wrong but I expect that I will end up being closer to the truth than the folks who say that reselling ebooks is illegal.
P.S. If a lawyer shows up and wants to present a counter argument, please do. I like learning why I might be wrong, and the legal issues surrounding this situation are far from settled.