If you buy a regular old book, CD or DVD, you can turn around and loan it to a friend, or sell it again. The right to pass it along is called the "first sale" doctrine. Digital books, music and movies are a different story though. Four students at Columbia Law School's Science and Technology Law Review looked at the particular issue of reselling and copying e-books downloaded to Amazon's Kindle or the Sony Reader, and came up with answers to a fundamental question: Are you buying a crippled license to intellectual property when you download, or are you buying an honest-to-God book?
In the fine print that you "agree" to, Amazon and Sony say you just get a license to the e-books—you're not paying to own 'em, in spite of the use of the term "buy." Digital retailers say that the first sale doctrine—which would let you hawk your old Harry Potter hardcovers on eBay—no longer applies. Your license to read the book is unlimited, though—so even if Amazon or Sony changed technologies, dropped the biz or just got mad at you, they legally couldn't take away your purchases. Still, it's a license you can't sell.
But is this claim legal? Our Columbia friends suggest that just because Sony or Amazon call it a license, that doesn't make it so. "That's a factual question determined by courts," say our legal brainiacs. "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." Score one for the home team.
There's a kicker, though: If a court ruled with you on that front, you still can't sell reproductions of your copy, an illegal act tantamount to Xeroxing your Harry Potters. You'd have to sell the physical media where the "original" download is stored—a hard drive or the actual Kindle or Sony Reader. Our guess is that it only gets more complicated from here. What happens when the file itself resides only on some $20-per-month Google storage locker?
For more details, have a look at the original, surprisingly readable legal summary:
The (Potential) Legal Validity of E-book Reader Restrictions By Rajiv Batra, John Padro, Seung-Ju Paik and Sarah Calvert
Many users are unhappy that e-book readers, such as the Sony Reader and the Amazon Kindle, restrict the sharing, borrowing and transferring of e-books. While some argue that the "first sale" doctrine should allow users to transfer an e-book in the same manner as a hard-copy book, these contentious restrictions may be valid under current law.
The Sony Reader and the Amazon Kindle
The Sony Reader and the Amazon Kindle are portable media devices designed to carry and display e-books and other electronic documents. Kindle has a mobile broadband function that allows users to browse online content and download e-books while on the go. Alternatively, the Sony Reader requires users to download and manage their library of e-books via a home computer.
The contentious characteristic of both products is that they bar users from sharing their e-books with other users. For example, Kindle's license agreement grants a "non-exclusive right to keep a permanent copy...solely for your personal, non-commercial use." Consequently, Kindle users may "not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to...any third party." The Sony Reader has similarly restrictive language in its license, but does allow users to copy e-books to several other Readers as long as they are registered to the same account.
The First Sale Doctrine
Some users have argued that these license restrictions violate the "first sale" doctrine. Under the Copyright Act, the first sale doctrine allows the owner of a particular copy of a work to sell, lease or rent that copy to anyone they want at any price they choose. These rights only apply, however, to the particular copy that was purchased; any unauthorized reproduction or copying of that work constitutes copyright infringement. For instance, you can't give away photocopies of Harry Potter and the Deathly Hallows, but you can auction your paperback on eBay when you're finished with it.
When it comes to digital works, however, two complications arise: first, consumers might only hold a license to the content, rather than all of the rights that come from a sale; second, without a traditional physical container for each purchased work, consumers may not practically be able to sell their "particular copy" at all.
License vs. Sale
The first sale doctrine only applies to the "owner" of a copy of a work, so end users who acquire content by license do not enjoy the right to resell their copies. Whether a transaction is a license or a sale is 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. However, as more commercial transactions involve the transfer of digital content—particularly commercial software—courts have struggled to consistently make the distinction between license and sale. Software is increasingly transferred with highly restrictive licensing terms, but federal case law has not clearly determined whether these types of transfers are licenses or true sales.
Kindle and the Sony Reader are following this licensing trend and creating restrictive licenses that users must agree to upon using the product. If these agreements are found to be enforceable licenses, they could serve as the legal authority to limit users from selling or otherwise transferring the e-books they download.
Amazon vs. Sony
Both license schemes are equally restrictive, but each product limits use in a slightly different manner. Amazon Kindle's use license expressly limits the extent and use of both the device and the digital media. The Sony Reader's restrictions operate in two steps: a license to use the device and a second license to use the e-book library software (created by Sony). In both devices, users are not allowed to circumvent or alter the pre-installed software on the device.
For digital media, Kindle's agreement allows users one permanent copy. The Reader, on the other hand, allows one user to posses multiple copies as long as they are all registered to that user. Both regimes are equally restrictive on the distribution, copying, and sharing of purchased e-books (to other users).
The reason for the differences in these restrictions is a result of their technical characteristics. Amazon's wireless store requires the terms to be agreed on initially, while the Sony Reader's reliance on iTunes-like software allows a separate use agreement. In effect, both agreements accomplish the same level of restriction, but you have a little more leeway with the number of copies with the Sony Reader.
Hard Copies vs. Digital Copies
Another possible complication stems from the inherent difference between transferring an e-book and transferring a hard-copy book. The transfer of a hard-copy book is just that; the physical transfer of one copy. The transfer of an e-book, however, requires the digital recreation or copying of that e-book. Because the first sale doctrine allows transfers of only your particular copy, and not reproductions or recreations, a digital transfer of an e-book is probably impermissible. Thus, users of Kindle and the Sony Reader can only legally transmit works by selling the physical media on which they are stored—be that the e-book readers themselves or the users' hard drives.
While the restrictions on e-books may initially seem inconsistent with the rights granted for hard-copy books, these differences are the consequence of new digital products outgrowing traditional copyright doctrines. Such issues are currently being examined by legal scholars and industry insiders, but only time will tell whether this degree of control over digital media is acceptable to society.