E-Book Transactions: Amazon "Kindles" the Copy Ownership Debate

ABSTRACT The Amazon Kindle is revolutionizing the way we buy and read books. But according to Amazon, Kindle books are not sold at all. Rather, they are licensed under surprisingly aggressive terms. This may surprise Kindle users. Amazon's promotional materials paint a very different picture of Kindle e-book transactions than its Terms of Service, which are buried online and purport to bind users automatically by a "browsewrap" agreement--meaning users are bound by its terms simply by visiting Amazon's Web site. It is not clear whether courts will uphold Amazon's characterization of Kindle e-book transactions as mere licenses, or instead reclassify them as sales. If the transaction is deemed a sale, Kindle e-books would trigger the protection of the copyright "first sale" doctrine, allowing e-book owners to lend, trade, and resell them. This Article surveys the legal landscape surrounding digital content transactions, including copyright law, case law, and the Uniform Commercial Code, and argues that Kindle e-book transactions should be, characterized as sales. This Article also presents possible ways to make sales of e-books viable, using Digital Rights Management to enforce single-copy ownership. Books are important and lasting cultural contributions, a fundamental vehicle of free thought. While licensing may make sense for software or other short-lived digital content, courts should protect our ownership interest in books--which brings with it the right to share, sell, and pass on--whether digitally displayed or otherwise. TABLE OF CONTENTS INTRODUCTION I. E-BOOKS, READERS, AND THE KINDLE A. E-Books and Kindle: Pros and Cons B. E-Books: What Are They (Legally)? II. GOVERNING MIXED TRANSACTIONS: A LEGAL MENU A. Sales of Goods: U.C.C. Article 2 B. Information: Intellectual Property Law C. Uniform Computer Information Transactions Act (UCITA) D. Digital Millennium Copyright Act (DMCA) E. Information to Goods Ratio: The Spectrum of Transactions III. E-BOOKS ON THE KINDLE'S TERMS A. The Kindle, Through a User's Eyes B. The Kindle Terms of Service: Non-Transferable License 1 IV. COPY OWNERSHIP CASES: MIXED MESSAGES A. If It Quacks Like a Duck: Courts Reject "Sales in Disguise B. The Courts' (Mixed) View of Contemporary Software Licensing C. Protection Without Licenses: Copyright Remains Strong D. Summary of Copy Ownership: The (Murky) Legal Landscape V. KINDLE E-BOOKS: APPLYING THE LAW A. Applying the U.C.C. B. Applying the Common Law C. Kindle: Legal Summary VI. HOW E-BOOK TRANSACTIONS SHOULD BE HANDLED A. The Case for Copy Ownership: Why E-Book Transactions Should Be Sales B. Self-Help for Retailers: Toward Copy Ownership, Without Litigation CONCLUSION INTRODUCTION [W]hen someone buys a book, they are also buying the right to resell that book, to loan it out, or to even give it away if they want. Everyone understands this. --Jeff Bezos, CEO of Amazon, Open Letter on Used Book Sales, 2002 (1) [Y]ou 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. --Amazon Kindle Terms of Service, 2009 (2) [W]hy is it that Amazon, the most customer-focused, user-friendly company in the world of physical goods, always makes a complete balls-up hash out of digital delivery of goods? You'd think that they'd be the smartest people around when it comes to using the Internet to sell you stuff you want, but as soon as that stuff is digital, they go from customer-driven angels to grabby, EULA-toting horrors. Why does the Web make Amazon go crazy?--Cory Doctorow, BoingBoing. …