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Originally Posted by paaThaka
This only applies to United States and in some limited extent to some other common law systems with similar license policy legislation.
For instance, in many countries within EU these one-sided usage policies have no legally binding stature.
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Some courts in EU countries have found some EULAs to be not legally binding. But those aren't the kind of licenses used by ebook sellers.
Shrinkwrap or click-through licenses are sometimes questionable because of the fact that you don't have the opportunity to read the license until after you've opened the package or installed the software. These are problematic because you may then be unable to return the opened software, even if you don't agree with it.
But this is not what Amazon (and I assume B&N) do. For Amazon, you first have to register your device with the Kindle store. In doing this, you are presented with the terms of service. If you disagree with the terms, you can return your Kindle.
Here are Amazon's conditions:
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Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.
Restrictions. Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content or any portion of it to any third party, and you may not remove any proprietary notices or labels on the Digital Content. In addition, you may not, and you will not encourage, assist or authorize any other person to, bypass, modify, defeat or circumvent security features that protect the Digital Content.
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But violating this contract isn't really what causes trouble; it's violating the DMCA by circumventing DRM that causes trouble.
Circumventing DRM can be civil or criminal, although it's only criminal if it's done for personal gain. But the civil provisions provide statutory damages, meaning that if you can be shown to violate the DRM, you can be sued *either* for actual damages (lost sales or whatever), or you can be sued for statutory damages, where you owe a penalty of up to $2500 per violation (I think it's a range of $250-$2500). You won't be sent to jail for the civil violation, but you can still be fined in about the same way you can be fined for speeding, which is another civil violation.
And - to respond to some other posts - circumventing DRM is illegal in the US. Aside from the particular exceptions described in the statute (including those adopted by the librarian of the library of congress), there aren't any other exceptions. "Fair use" doesn't apply to the DMCA. "Fair use" is simply an exception to the copyright act; it's not some sort of overarching constitutional right like free speech. Congress created the "fair use" exception, and congress can take it away or refuse to expand it to new laws.
Of course, the likelihood of getting caught is extremely small if you're stripping DRM from books you bought and not redistributing them. And since there's no real harm, I doubt even the rights holder would care. But the (il)legality of the act is clear enough in the US.