This actually ties into the question of the price of ebooks. If publishers seriously expect the person buying the ebook to be the only person allowed to read the ebook, the cost of an ebook needs to be a fraction of the cost of a paperback.
"9. Literary Works.
All literary works at kobobooks.com are the exclusive property of the publisher or its licensors and is protected by copyright and other intellectual property laws. The download of these literary works is intended for Kobo's Registered Users' personal and non-commercial use. Any other use of literary works downloaded from kobobooks.com is strictly prohibited. Registered Users may not modify, transmit, publish, participate in the transfer or sale of, reproduce, create derivative works from, distribute, perform, display, or in any way exploit, any of the content of these literary works, in whole or in part. By downloading literary works from kobobooks.com, the Registered User hereby acknowledges and agrees to these terms."
I've just sent kobo an email to get clarification.