US Circuit Court of Appeal verdict making first-sale doctrine practically useless?

Krystian Galaj · 09-13-2010, 09:39 AM

As described here: http://www.wired.com/threatlevel/201...sale-doctrine/

I don't know US law at all, but I heard first-sale doctrine mentioned many times in discussions about copyright on Mobileread, so I wonder - what does that mean in practice, and for ebooks? (assumming it doesn't get changed in further rehearing). I think any big law changes in US would make waves in the rest of the world atm.

As far as I could check, it wasn't mentioned in the News section of mobileread yet.

Dulin's Books · 09-13-2010, 10:04 AM

hmmm. seems to me that the guy got the software wrongly in the first place. the company or person employed by the company that sold him the four discs shouldn't have. was it the company or jut a guy who worked there? if it was just a guy who worked there then technically they were stolen. if it was the company then they did break their agreement with the software company and they knew it. Either way it seems to me that the ebay seller who brought the suit didn't rightfully own them.

Now this does need to be addressed for future sales of digital media. I dont want to find out when i get home with a shrink wrapped game disc 6 months from now that there is a license agreement inside that says i cant resell it later at a garage sale or game crazy.

mrscoach · 09-13-2010, 10:27 AM

I think the court means he didn't have a legitimate copy and license for the software, therefor he couldn't sell his copies. That last paragraph threw me, I thought I knew what they were saying before, but that changed it.

It sounds like the guy, Vernor, bought copies from a company hired to destroy those copies, but sold them instead. He got the disks, but no user licenses. In essence he had stolen software. If he had obtained good copies with user licenses then he MIGHT have been able to sell said licenses. Maybe. I'm not sure on that point.

I think the company that was supposed to desetroy the disks should be sued, too. They were playing both sides and taking money for something they didn't own, were just in charge of destroying.

But I also wonder if this could later be used to prevent someone from selling their used game, video or even book.

Dulin's Books · 09-13-2010, 11:49 AM

yes mrscoach, i had the same thought about the company he got the software from. he should be going after them for selling the software to him in the first place. the court seems to have ruled on a broader scope than was really necessary. the law definitely needs new clarification from the legislature

queentess · 09-13-2010, 01:04 PM

Quote:

The first-sale doctrine of 1909, in its current form, allows the “owner of a particular copy” of a copyrighted work to sell or dispose of his copy without the copyright owner’s authorization. “The first sale doctrine does not apply to a person who possesses a copy of the copyrighted work without owning it, such as a licensee,” the court ruled.

...which is why resale of ebooks isn't allowed, because it's technically a license, not ownership (as far as I understand it).

Can you imagine if this leaked over into physical items, such as pbooks and dvds? I would be a lot less likely to purchase anything if I knew I couldn't legally sell it or give it away.

Dulin's Books · 09-13-2010, 02:10 PM

it is that way when buying from the Kindle store- not all ebook stores.

Lady Fitzgerald · 09-13-2010, 04:01 PM

Quote:

Originally Posted by queentess

...I would be a lot less likely to purchase anything if I knew I couldn't legally sell it or give it away.

Which is why I will NOT buy books with DRM!

johnc · 09-13-2010, 04:56 PM

my problem is the license c**p in software is hidden away in the package and during installation so you buy it before you see the verbage I believe that should be made illegal (personally I think it already is ie. fraud) they do it that way so you buy before you see all this legal mumble jumble knowing most people will not take it back and some stores probably would refuse if the package was opened. In this case they argued he could not transfer his licenses legally due to the restriction.

Kali Yuga · 09-13-2010, 05:48 PM

DRM has absolutely nothing to do with this situation. I doubt AutoCAD Release 14 had anything more complicated than a serial number and a CD key.

In fact, the only way I can imagine that legitimate transfers of ebooks -- whether you treat it as an actual sale or license -- can work is with DRM.

For example, let's say I purchase an ebook without DRM. I then make backup copies of this book, and burn it to multiple CD's. I then resell the ebook to John Doe via ebay or a private sale. Guess what? I've still got a half-dozen fully accessible copies in my possession, which I can read at any time.

With DRM the vendors, publisher, copyright holder and so forth knows that when you do in fact resell that ebook, that action will in fact result in the seller losing access to their copy of the title.

Nor does it seem like consumers are always thrilled by the idea of a more honest "rental" situation, such as a music subscription service.

At this time I'm not sure of my opinion of this ruling. Information about the case is a bit conflicting. I'm a bit on the fence about resale, again mostly due to the complications of ensuring that the seller does in fact revoke their access. Plus the issue may well end up dwindling in importance as more and more software moves away from the "buy this copy" towards a subscription or service-based approach.

That said, ultimately it makes little sense to treat a non-physical object exactly the same way as a physical object. Of course, most consumers expect to get all of the benefits, and none of the drawbacks, of both physical and non-physical objects, at little (or no) cost. Go figure.

speakingtohe · 09-13-2010, 06:44 PM

Quote:

At this time I'm not sure of my opinion of this ruling. Information about the case is a bit conflicting. I'm a bit on the fence about resale, again mostly due to the complications of ensuring that the seller does in fact revoke their access. Plus the issue may well end up dwindling in importance as more and more software moves away from the "buy this copy" towards a subscription or service-based approach.

I have seen this approach but in an unappealing way.
Subscription or service based could be the key to successful non-drm ebook marketing.
Give the purchaser an option to buy next ebook in series at xx% off or any xx books at xx% off and make it continuing.
Embed id in book (already being done) and if you want to sell book, option must go with it.
This would increase buyers awareness about embedded info and give them a legal option to sell/transfer ebook.
Definitely to publishers advantage as many people cannot be bothered to sell a book but are annoyed that they can't

HansTWN · 09-13-2010, 09:25 PM

Quote:

Originally Posted by Kali Yuga

That said, ultimately it makes little sense to treat a non-physical object exactly the same way as a physical object. Of course, most consumers expect to get all of the benefits, and none of the drawbacks, of both physical and non-physical objects, at little (or no) cost. Go figure.

True enough -- but isn't that an additional argument that people rightly expect ebooks to be a whole lot cheaper than physical books if you deprive them of these benefits? Not free, but considerably cheaper.

Penforhire · 09-14-2010, 12:59 PM

What stops future appliance manufacturers from "activating" your new fridge with a code and claiming they only license you that fridge? That is what is at stake here and we're (consumers are) losing.

queentess · 09-15-2010, 09:08 AM

Quote:

Originally Posted by Lady Fitzgerald

Which is why I will NOT buy books with DRM!

Regardless of DRM, it's still not legal (in the U.S.) to resell or give away ebooks.

loveangel · 09-15-2010, 10:26 AM

i will not buy books frm drm

Lady Fitzgerald · 09-15-2010, 10:41 AM

Quote:

Originally Posted by queentess

Regardless of DRM, it's still not legal (in the U.S.) to resell or give away ebooks.

Really? Where do you get that from? I thought that applied only if the e-book was sold as a license to use only or you want to keep a copy.

09-13-2010, 09:39 AM	#1
Krystian Galaj Guru Posts: 820 Karma: 11012 Join Date: Nov 2007 Location: Warsaw, Poland Device: Bookeen Cybook	US Circuit Court of Appeal verdict making first-sale doctrine practically useless? As described here: http://www.wired.com/threatlevel/201...sale-doctrine/ I don't know US law at all, but I heard first-sale doctrine mentioned many times in discussions about copyright on Mobileread, so I wonder - what does that mean in practice, and for ebooks? (assumming it doesn't get changed in further rehearing). I think any big law changes in US would make waves in the rest of the world atm. As far as I could check, it wasn't mentioned in the News section of mobileread yet.

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09-13-2010, 10:04 AM	#2
Dulin's Books Wizard Posts: 2,806 Karma: 13500000 Join Date: Nov 2009 Location: Portland, OR Device: Boox PB360 etc etc etc	hmmm. seems to me that the guy got the software wrongly in the first place. the company or person employed by the company that sold him the four discs shouldn't have. was it the company or jut a guy who worked there? if it was just a guy who worked there then technically they were stolen. if it was the company then they did break their agreement with the software company and they knew it. Either way it seems to me that the ebay seller who brought the suit didn't rightfully own them. Now this does need to be addressed for future sales of digital media. I dont want to find out when i get home with a shrink wrapped game disc 6 months from now that there is a license agreement inside that says i cant resell it later at a garage sale or game crazy.

09-13-2010, 10:27 AM	#3
mrscoach Guru Posts: 767 Karma: 4837659 Join Date: Aug 2009 Location: San Angelo Texas Device: Samsung Galaxy tab	I think the court means he didn't have a legitimate copy and license for the software, therefor he couldn't sell his copies. That last paragraph threw me, I thought I knew what they were saying before, but that changed it. It sounds like the guy, Vernor, bought copies from a company hired to destroy those copies, but sold them instead. He got the disks, but no user licenses. In essence he had stolen software. If he had obtained good copies with user licenses then he MIGHT have been able to sell said licenses. Maybe. I'm not sure on that point. I think the company that was supposed to desetroy the disks should be sued, too. They were playing both sides and taking money for something they didn't own, were just in charge of destroying. But I also wonder if this could later be used to prevent someone from selling their used game, video or even book.

09-13-2010, 11:49 AM	#4
Dulin's Books Wizard Posts: 2,806 Karma: 13500000 Join Date: Nov 2009 Location: Portland, OR Device: Boox PB360 etc etc etc	yes mrscoach, i had the same thought about the company he got the software from. he should be going after them for selling the software to him in the first place. the court seems to have ruled on a broader scope than was really necessary. the law definitely needs new clarification from the legislature

09-13-2010, 02:10 PM	#6
Dulin's Books Wizard Posts: 2,806 Karma: 13500000 Join Date: Nov 2009 Location: Portland, OR Device: Boox PB360 etc etc etc	it is that way when buying from the Kindle store- not all ebook stores.

09-13-2010, 04:56 PM	#8
johnc Member Posts: 13 Karma: 10 Join Date: Jul 2007 Location: tampa fl Device: sony ereader prs-505	my problem is the license c**p in software is hidden away in the package and during installation so you buy it before you see the verbage I believe that should be made illegal (personally I think it already is ie. fraud) they do it that way so you buy before you see all this legal mumble jumble knowing most people will not take it back and some stores probably would refuse if the package was opened. In this case they argued he could not transfer his licenses legally due to the restriction.

09-13-2010, 05:48 PM	#9
Kali Yuga Professional Contrarian Posts: 2,045 Karma: 3289631 Join Date: Mar 2009 Device: Kindle 4 No Touchie	DRM has absolutely nothing to do with this situation. I doubt AutoCAD Release 14 had anything more complicated than a serial number and a CD key. In fact, the only way I can imagine that legitimate transfers of ebooks -- whether you treat it as an actual sale or license -- can work is with DRM. For example, let's say I purchase an ebook without DRM. I then make backup copies of this book, and burn it to multiple CD's. I then resell the ebook to John Doe via ebay or a private sale. Guess what? I've still got a half-dozen fully accessible copies in my possession, which I can read at any time. With DRM the vendors, publisher, copyright holder and so forth knows that when you do in fact resell that ebook, that action will in fact result in the seller losing access to their copy of the title. Nor does it seem like consumers are always thrilled by the idea of a more honest "rental" situation, such as a music subscription service. At this time I'm not sure of my opinion of this ruling. Information about the case is a bit conflicting. I'm a bit on the fence about resale, again mostly due to the complications of ensuring that the seller does in fact revoke their access. Plus the issue may well end up dwindling in importance as more and more software moves away from the "buy this copy" towards a subscription or service-based approach. That said, ultimately it makes little sense to treat a non-physical object exactly the same way as a physical object. Of course, most consumers expect to get all of the benefits, and none of the drawbacks, of both physical and non-physical objects, at little (or no) cost. Go figure.

09-14-2010, 12:59 PM	#12
Penforhire Wizard Posts: 2,230 Karma: 7145404 Join Date: Nov 2007 Location: Southern California Device: Kindle Voyage & iPhone 7+	What stops future appliance manufacturers from "activating" your new fridge with a code and claiming they only license you that fridge? That is what is at stake here and we're (consumers are) losing.

09-15-2010, 10:26 AM	#14
loveangel Banned Posts: 137 Karma: 30 Join Date: Feb 2010 Device: kindle	i will not buy books frm drm

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