You Bought It, You Own It. But Can a Library Lend It? November 12, 2012Posted by Bill Rosenblatt in Law, Publishing.
I’ve been writing regularly about the battle that libraries are fighting over e-book lending — a battle whose outcome doesn’t look good for libraries right now. Libraries can only lend e-books at the pleasure of publishers and not through any legal right. I have said that libraries’ best shot at changing their fortunes as the reading world transitions to digital is to try to get e-lending rights enshrined in the law.
I also didn’t believe — with all due respect to the American Library Association and other library advocacy groups — that the library community stood much of a chance of getting Congress to pay attention to this issue. I had thought that if there were any path to change it would be through the long, hard slog of litigation.
That is, until I read about the Owners’ Rights Initiative, a lobbying group that began life last month. ”You bought it, you own it” is the ORI’s mantra. It’s run by Andrew Shore, a partner in a Washington law and lobbying boutique with experience in international trade issues.
The ORI unites a number of constituencies that stand to gain if the First Sale Doctrine is extended to digital content. Recall that First Sale, section 109 of the US copyright law, says that once you legally obtain a copyrighted work, you can do with it as you please without further involvement from the publisher: resell it, lend it, give it away, use it to line a bird cage. But First Sale is currently deemed not to apply to digital files, such as e-books and software.
Libraries have found some interesting allies in the ORI. Most of them are companies (or trade associations representing companies) that sell used merchandise, including eBay and various used computer equipment dealers. Used book sellers are there (Powell’s Books, Chegg). The video rental kiosk operator Redbox has joined to protect its interests as it undoubtedly plans to move from DVDs and Blu-rays to digital files. A few companies that facilitate e-commerce transactions are on board.
This textbook example of a “strange bedfellows” coalition does have synergies. It would have been inconceivable for companies like eBay and Redbox, let alone the several sellers of used enterprise software, to get anyone to take them seriously on this issue. Tying their opportunism over making money on used software and videos to the issue of public library lending gives them a much better story to tell. For their part, libraries get money and resources far beyond what they can muster on their own, plus a degree of business savvy that is outside of libraries’ comfort zone.
Ironically, the ORI jelled around a court case that is about hardcopy books, not digital content: Kirstaeng v. Wiley, which is currently before the Supreme Court. The case is about college textbooks (published by John Wiley & Sons) that Supap Kirtsaeng purchased in Thailand and has been reselling on eBay in the U.S. The Supreme Court has to determine how to reconcile two provisions of the copyright law that are at odds with one another in this case: First Sale says that the textbooks are his to resell in the U.S., despite the fact that the prices in Thailand are lower than they are here. On the other hand, section 602 of the law lets a publisher block importation of gray-market copies of its works into the country.
Even though Kirstaeng is about hardcopy, it’s not hard to see how the case could apply to digital works if the Supreme Court finds for Wiley. One of the ORI members, Quality King Distributors, was involved in a conflict between 109 and 602 in 1998 when another case, Quality King v. L’anza, went to the Supreme Court. Writing for the Court in that case, Justice Stephens specifically excluded “licensees” from First Sale rights because they are “non-owners” of copyrighted works. Because purchasers of digital files are currently considered licensees rather than owners, Stephens’s opinion could be interpreted to mean that they don’t get First Sale rights — though that remains to be tested.
The ORI looks like an interesting vehicle for the library community to get e-lending rights enshrined in law. Even so, it seems unlikely to succeed. First of all, the Kirstaeng case is an example of how hard the media industry is prepared to fight against First Sale: Wiley has hired no less than Ted Olson, the former U.S. Solicitor General, to argue its case.
Textbook publishers like Wiley don’t like First Sale — whether digital or hardcopy — because it enables the huge market for used textbooks; publishers would love to see the used textbook market go away. Movie studios hate it because it would harm their carefully maintained system of release windows. In general, media companies — as well as digital content retailers like Apple and Amazon — are against digital First Sale because it would create downward pricing pressure, as the “used” copies of digital content are (unlike their physical counterparts) not inferior to “new” ones.
The issue that’s likely to carry the day, if and when digital First Sale legislation is ever considered, is the one that the U.S. Copyright Office pointed out in its 2001 report on the subject: for digital First Sale to work fairly, users would have to delete their copies of files once they gave, lent, or resold them to someone else. Either users would have to be trusted to take this additional step voluntarily (including deletion of copies on all their devices, backups, etc.) or there would have to be a mandatory mechanism, similar to but much more sophisticated than the one that ReDigi has developed for music files, to delete the files automatically.
Neither contingency seems very likely to be enshrined in legislation. This augurs an unsuccessful outcome for libraries. Libraries don’t need the full set of First Sale rights in order to lend e-books without permission from publishers. As I have argued, libraries can get by with narrower rights; such rights could be granted through amendments to Section 108 of the copyright law, the section that extends extra rights to libraries and archives.
So the bottom line on libraries and the Owners’ Rights Initiative is that its critical mass is likely to get libraries more attention in Congress than they might on their own, but it’s unlikely to get the result they need to stay relevant as reading moves to e-books.