The exhausting Amsterdam e-book case
Innovative second-hand e-book store Tom Kabinet will appear in front of a judge this week. The charges? Copyright infringement. Publishers sued the webshop because it sells second-hand e-books without paying dues to authors. Below I will explain not only why this is ridiculous, but also why it is a bad move by the Publishers Alliance.
The principle of exhaustion in copyright law (also known as the First Sale Doctrine) was introduced to make the system feasible. It is an exception on the copyright holder’s distribution right. If exhaustion did not exist, because of the exclusivity in copyright, you would have to ask for permission to dispose of a book you bought, as this is a distribution (if only to the garbage dump). This would obviously be highly impractical. Imagine selling a bookcase you got at IKEA on eBay, asking them for permission for the sale and then having to send them 30% of the proceeds. It is none of IKEA’s business what you do with the bookcase, as you have already paid them for it. On this same principle you can also re-sell a book that you have bought. The author has been remunerated in the original sale, so there is no need to keep him involved.
Exhaustion was introduced well before the digital age. One of the reasons why it was introduced with little resistance from the rightsholders is because it was highly unlikely that a book would be resold ten times, let alone a hundred. It was a good compromise for both the public and the copyright holders. However, nowadays it is very likely that an e-book is resold a hundred times. The issue came up in a case that was about reselling software bought online. UsedSoft, a German company, sold second-hand software. The software company Oracle claimed that since the original purchase of the software was done online you never really owned the software and therefore exhaustion did not apply, and therefore sued them. Thankfully, the European Court of Justice decided in 2012:
“Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return for payment of a fee, a licence agreement granting the customer the right to use that copy for an unlimited period, that right holder sells the copy to the customer and thus exhausts his exclusive distribution right.”
Based on the Oracle case we can clearly state that the fact that the books resold by Tom Kabinet are intangible is irrelevant.
However, a German court disagreed with the European Court of Justice on this one, and stated: “Given the lower price of an audiobook, or e-book compared to the physical work, the average customer will be satisfied with the use of the file for his own purposes only.” This is where the Publisher’s Alliance is banking on in the Tom Kabinet’s case. No offence to the German court, but it is not up to them to decide what people find valuable or interesting enough to resell. If I buy a physical book for 50 cents, does that mean I cannot resell it just because it was cheap? Not to mention that e-books are still quite expensive. If I compare the new book by Simone van der Vlught the e-book costs €15.00 and the physical book costs €20.00. The €5.00 difference should not exclude me from applying exhaustion..
But what about the publisher’s angle? Why did they decide to sue? They are scared, that much is clear. With piracy abundant in e-books just as much as in music and film they are trying to keep on to their exclusivity in the e-book market. Understandable? Yes. Wrong? Also yes.
Tom Kabinet has done everything within reason (Dutch article) to make sure people sell their books once (they apply watermarks) and ask for bank information to discourage people from selling books they downloaded illegally. Is this an airtight system? No. Will there be books sold illegally here? Yes. But publishers need to think about what they want to squash before it can even grow. Do they want to kill a company that is trying to create a viable, good working market for legally bought e-books or do they want people to download books illegally because they find firsthand e-books too expensive? I would have hoped they would promote Tom Kabinet instead of sue them. Apparently I was mistaken.
Hopefully the Amsterdam court will dismiss the case on the basis of exhaustion and the Oracle European Court of Justice ruling of 2012. If not: publishers, think about what your plan is. Do you want to focus on making it more difficult for people who want to obtain books or do you want to focus on promote proper use, including remuneration for the authors, and reuse of the books you sell? Drop the charges!