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Books EU The Courts

Why the Second-Hand eBook Market May Never Take Off (fortune.com) 55

Europe's highest court on Thursday ruled that the exhaustion of copyright does not apply to e-books. "The court says that offering 'second-hand' e-books for sale qualifies as an unauthorized 'communication to the public' under the 2001 InfoSec Directive," reports World IP Review. Not only could this ruling have implications for the book industry, but for the digital film, gaming and music sectors too. From a report: The case involves a Dutch startup called Tom Kabinet, which has since 2014 been trying to make second-hand ebooks a thing. At first, it simply tried to run a second-hand ebook market, but publishers took it to court and won a ruling saying Tom Kabinet had to make sure it wasn't selling pirated copies of ebooks. So the firm rethought its strategy and morphed into a kind of book club. Now even that model has been ruled illegal.

Tom Kabinet's users "donate" the download links for the ebooks they have bought from standard retailers like Kobo and ebooks.com, in exchange for credits that can be used to buy other ebooks from Tom Kabinet. (Obviously this doesn't work with ebooks from Amazon, which does not use download links in its system.) The idea is that using the original links ensures the ebooks have been legitimately bought in the first place, and that the same copy isn't being placed on the platform multiple times. The Dutch publishing industry was still not impressed, and asked a district court in The Hague for an injunction against Tom Kabinet's activities. The district court asked the Court of Justice of the European Union for its opinion, which arrived Thursday. The EU court essentially said Tom Kabinet was breaking European copyright law.

Tom Kabinet's defense was that the so-called "rule of exhaustion" should apply when it comes to second-hand ebooks, as it does with paper books -- in other words, after the ebook has been sold the first time, the publisher no longer has a right to control how it is traded. (This is known as the "first sale doctrine" in the U.S.) The exhaustion principle is part of European copyright law, but the Court of Justice said the lawmakers had only intended it to apply to physical books. The court said the rule would be unfair in the ebook world, because "digital copies of ebooks do not deteriorate with use and are, therefore, perfect substitutes for new copies on any second-hand market."

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Why the Second-Hand eBook Market May Never Take Off

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  • by FeelGood314 ( 2516288 ) on Thursday December 19, 2019 @10:49PM (#59540260)
    Why does it matter if the second hand ebook is in perfect condition or not? There must be more to this than the article explains.
    • I found the answer to my own question - you don't buy an ebook in the EU, you buy the right for someone to communicate it to you. I assume that means you are buying the right to have it transmitted to you sort of like a broadcast. If that is true how can the publishers claim you are buying/purchasing a book? From the article the relevant line is:
      In today’s judgment, the CJEU found that downloading an e-book is not covered by the right of distribution, but rather the right of communication to the
      • Many if not most "ebooks" are not stored locally long-term. They're stored in the cloud, much as Netflix stores movies, or much as JSTOR keeps journals in an organized and accessible format. So the licensed ability to record and transfer the individually accessed copy of that book or article has implications for the ability to, say, get this week's copy of Doctor Who from the BBC and transmit it via BitTorrent to the world. Careless decisions or careless wording of such decisions can affect people's abilit

        • by rossdee ( 243626 )

          "Many if not most "ebooks" are not stored locally long-term. They're stored in the cloud,"

          Not as far as I am concerned.

          Firstly I have a large enough (128GB) micriSD in my Fire that I can keep the content that I buy. (Its not cellular, I only dl stuff at home.)
          Ebooks don't take up much space - a few megs each unless they have a lot of pix.

          Its different for stuff that I borrow. If I get something on Unlimited I return when I am dine since you can only have 10 at a time.

          I notice with some titles that you buy

      • by diems ( 6396892 )

        so basically what youre saying is, in this court case the content holders were able to convince/trick the court into thinking that the ebooks are a serivice and not a good.

        Whereas like say the court case where the french government found that steam should enable reselling/trading of games they deemed digital games to be a good not a service.

        Personally I stay away from paying money for ebooks because the price isnt low enough for all the rights you lose compared with buying the physical copy.

        The slashdot art

        • The ebook market has already taken off rather spectacularly. It has cored out traditional book sales.
          • by diems ( 6396892 )

            it has hardly taken off spectacularly. more like a spectacular failure compared with video streaming and digital games.

            From the cnbc article: "Publishers of books in all formats made almost $26 billion in revenue last year in the U.S., with print making up $22.6 billion and e-books taking $2.04 billion,"

            • The problem is those numbers represent the total sales numbers for the two formats, not the profit the publishers receive. According to a somewhat typical example of sales and publishing costs for a paperback book and its similar e-book version, the e-book version will generate 1500% more profits while selling only half as many books.

              Extending that formula to the $22.6 billion for print books (not exactly accurate because of using paperback profits for all print versions) the profit would be $570 million
              • What are you going on about?

                Nothing you said has anything to do with ebooks taking over. In fact, the numbers given tells everyone that ebooks are not selling well.

                The reason the old fashioned book stores are decimated is because of Amazon, and not because of their ebooks. This is the same Amazon that is posting larger profits and moving more goods than Walmart.
              • by diems ( 6396892 )

                Your entire post hinges on that 1500% being true. Where in your citation does 1500% or a number even close to that appear?
                Your 'citation' isnt backing anything youre saying.

                But even if 1500% profit was true, that says nothing about ebooks taking off. Taking off = large marketshare or lots of growth in that aea. It has nothing to do with profits, neither should the consumer have to care/know what the profit margin is, although if you tell the consumer it's 1500% all you are telling them is that it is grossly

        • by gl4ss ( 559668 )

          the difference I guess is in trading the link to download it vs. the actual downloaded thing. it's all kind of bs though.

          you see, the publishers would like you to believe that you cannot receive an ipod full of bought music as a gift. or even inherit it.

        • by Jhon ( 241832 )

          "so basically what youre saying is, in this court case the content holders were able to convince/trick the court into thinking that the ebooks are a serivice and not a good."

          It's, KINDof that way. If the ebook requires a license check to verify it's "yours" that's run by the original seller -- then yes -- TECHNICALLY it's a service. Kind of.

          The problem is that this is a new format. It aint paper. It wont degrade.
          And it's not really "the same thing". You are not buying a physical object. You ar

      • One those not preclude the other: having the book transmitted to you can still constitute a sale, but one that does not fall under exhaustion.

        Even so, it seems like a rather convoluted (even perverted) twist of existing law to arrive at this conclusion, and I find the statement, that this interpretation must be what the original framers of the law intended to be, to be rather far fetched as well. That feeling is only amplified by further statements that "exhaustion should only apply to things that wear ou
    • by AmiMoJo ( 196126 )

      It explains why in the summary. There is no difference between a used and new ebook so there is no reason to pay more for a new one.

      • And neither the ruling nor the advice from the attorney general points out any article of LAW that states that exhaustion does not apply to stuff that doesn't wear out.
      • Does this somehow invalidate your property right? You bought it, why can you not sell it afterwards? Why would it only be legal for consumers to sell anything if it has deteriorated? That's a very strange point of view.

        • by AmiMoJo ( 196126 )

          It's not an issue of consumer or individual rights. It's an issue with doing it commercially.

          They are not saying that you personally can't sell your used ebooks, they are saying that you can't build a business selling second-hand ebooks at a discount.

        • by fred911 ( 83970 )

          'You bought it, why can you not sell it afterwards?'
          IANAL, but I bet you didn't buy it. You bought a license to use it. The issue is that if you transfer this license, there's no way to assure that you don't have use of it after transfer.

          Without my doing research I'd give 10/1 odds the authorized licensed seller, doesn't sell anything but a license for use.

          • Whenever I still have it or not is not my problem, though. If I sell a DVD who's to know I didn't rip the ISO?
      • It explains why in the summary. There is no difference between a used and new ebook so there is no reason to pay more for a new one.

        So? I have bought paper books, read them once, and then sold them. Which means I'm selling a paper book that is essentially identical with a new one (mine would be less than a week old, and taken better care of than most bookstores manage). So why is my sale legal, but the same sale in ebook form not?

    • by edis ( 266347 )

      "digital copies of ebooks do not deteriorate with use and are, therefore, perfect substitutes for new copies on any second-hand market."

      Does not make sense, as second-hand markets are afloat with the things in "as new" state, yet this has no comparable sanctions.

      • They are "as new" but not actually new, admitting that there may be some flaws or wear that is currently invisible. At the very least, you are asked to trust the previous owner treated the object well and that it won't break because it was mistreated but looked fine physically. That ask is worth some money, which is why it costs less.

        A digital good like an eBook is identical to new after use. There is zero difference; it isn't "as new", the concept of "new" doesn't even apply.

        • by edis ( 266347 )

          What you state for granted (and not), is mostly relative.

          Take this: the book is recent issue, recent writing, possibly in fashion right now, and then is sold on second-hand market after all the hype is over. Is it of identical value still? Nope. Context has moved.

          Then, as said before, you have multitude of new and as-new items circulating outside of primary distribution channels. They are in fine state, because classification and examination of theirs is real, contrary to your defamation. Are these regulate

  • the money I gave for the book was probably transferred electronically too, yet the ebook seller can freely exchange that for other things of value. The vendors could support the exchange of signed copies of the ebooks if they were compelled to, at least the EU is big enough to do that if it wanted to.
    • I think you'll find there are slightly more robust mechanisms to prevent an e-book seller from exchanging that money for things of value while still keeping a copy for themselves, though.

      I do have some sympathy with this ruling, because the only way to allow resale without the realistic outcome becoming commercial copyright infringement by default would be for everyone's permanent copies of e-books to be DRM'd, and I'm not sure that would be a good trade-off even if a sufficiently robust DRM system did exis

  • by laird ( 2705 ) <lairdp@@@gmail...com> on Thursday December 19, 2019 @11:58PM (#59540372) Journal

    It's absurd that there's no after-market for e-Books, but given how they're implemented right now I don't see how it could work. The issue isn't that eBooks don't wear out, it's that you can make infinite perfect copies of an eBook very easily. With a physical book, if I sell a used book, I'm pretty much guaranteed that the original owner no longer has the book, because the new owner does. (Yes, you could make a copy of the whole book, but that'd cost more than buying another copy, and it'd be inferior to the original, so generally speaking that's not a risk to book publishers except for very expensive specialized books.)

    A better resolution, IMO, would be to require eBook companies to all support an after-market, meaning that eBook buyers must be able to transfer ownership of their eBook to someone else. Then everyone could sell their used eBooks that they no longer want to a marketplace and get paid for it, and the marketplace could then sell the books to whoever else they like, without risking that anyone could make a an infinite number of copies and destroy the market for the book. It strikes me that right now DRM systems all prevent an after-market using a meaningless legal dodge, when really the buyer of a book is buying one copy of the book, whether print or eBook.

    IANAL, of course. But letting publishers destroy the used book aftermarket seems absurdly one-sided.

    • I can make infinite perfect copies of an audio cd, but I can still sell my audio CDs. I'm obligated to transfer or destroy any copies with the original. The law doesn't prevent me from doing it anyway, but then, this ruling won't prevent anyone from selling copies of e-Books either. The DRM will, or nothing will.

      • by BlueStrat ( 756137 ) on Friday December 20, 2019 @04:42AM (#59540744)

        I can make infinite perfect copies of an audio cd, but I can still sell my audio CDs. I'm obligated to transfer or destroy any copies with the original. The law doesn't prevent me from doing it anyway, but then, this ruling won't prevent anyone from selling copies of e-Books either. The DRM will, or nothing will.

        If/when eBooks drive nearly all the physical book producers out of business and all the knowledge formerly in books gets locked behind a DRM wall, when individuals are no longer able to collect, truly own, and share books with others, that will herald the downfall of modern civilization. A library is not an institutional building somewhere, a library is a concept, an idea, the idea of sharing collective knowledge and culture to build a civilization. Placing books and literature behind DRM annihilates the entire library paradigm.

        Civilization dies with the lights of the last library.

        Strat

      • by GuB-42 ( 2483988 )

        You can't make perfect copies of audio CDs, at least not at a reasonable price.
        You can burn a CD-R, but it will be an inferior product. Less durable, no artwork and no booklet, and zero value as a collectible.

      • I don't know where you live, but where I live and lived (Netherlands, France, Switzerland) it is legal to copy an audio cd and pass on the original, keeping the copy. Likewise, you can borrow CDs from the library, friends, family, and make copies for yourself. What you aren't allowed to do, is pass on your copies.
    • The solution is to stop treating ebooks like paper books. I can buy a paper book for $20, read it, and sell it for $15. So I basically paid $5 for the privilege of reading the book. Instead of having ebooks prices the same as paper books, they should be priced more like renting so you pay $5 to have it for a year. Online video is just as bad, where a purchase of a online movie is $20 when I can buy the exact same movie (sometimes even new) for a fraction of that price. Digital media shouldnâ(TM)t

      • by fred911 ( 83970 )

        'I can buy a paper book for $20, read it, and sell it for $15.'

        That assumes the book you are buying isn't required course work and authored by your professor, if so multiply by 20.

      • Amazon already does this with Kindle Unlimited. For $10/mo I can read any book in their collection. When I cancel the subscription, Amazon will pull all the downloaded books off my device. My local library has a similar system, I can download the book using a Kindle or similar device, and after three weeks the system will automatically delete it.

        • by nomadic ( 141991 )

          Kindle Unlimited absolutely does not allow you to read any book in their collection. A lot of the "million" titles they list are self-published junk.

    • by Ecuador ( 740021 )

      I don't see how it would work. I am very against anything that makes a digital purchase be a "rental", but second hand e-books don't make sense. I buy second hand physical books for myself, knowing that I don't mind some wear. But why would I buy a new e-book if there was a lower cost "2nd hand" available, what would the difference be for them to warrant a different price?
      The only thing that would work is for ebooks to be cheaper: physical book are more expensive to make and due to the second hand market yo

  • Holland is a major tax haven for royalties. Including many tax free diversions via schemes such as a Dutch sandwich. If the ruling stands, all classes of royalty payments should now fall under general taxation terms, especially all digital royalties if this decision stands. Germany and Switzerland have already ruled on perfect digital software sales - that is they are fully legal in the EU One can see that EU court did not apply black letter law, but went to inventive, appealable unsound interpretations, e
  • When was the last time you saw anyone reading an e-book? I think I saw one on the train last week. I can't remember the previous time but it was quite a while.

    Books just don't work well as electronic documents with the exception of reference works which are still no good for reading but the ability to search is a big feature that paper can't duplicate even with a good index.

    On that last point, I wonder about the echo-chamber effect of electronic journals. Where I work has just replaced about 80% of its jour

    • by WolfgangVL ( 3494585 ) on Friday December 20, 2019 @05:05AM (#59540764)

      I read ebooks all the time. Digital magazines too. To everybody else it looks like I'm just staring at my phone.

      On one hand, I really like the way many of our physical things have made the jump to digital. They weigh less, and use fewer resources to produce. On the other hand, It's hard to respect copyright when copyright wont respect me.

    • When was the last time you saw anyone reading an e-book?

      This morning. My family is full of avid readers. Almost everyone has at least one e-book reader, and some have more than one. They're more convenient to take with you when going out, particularly if you're going away overnight or on a longer holiday when a single reader can take multiple books. They're easier to read one-handed on crowded transport on the way to work. Backlit ones can be read in the evening without needing to have a reading lamp on. Etc.

      I don't think the market for paper books is going away

    • When was the last time you saw anyone reading an e-book?

      I read on my Kindle paperwhite every single day.
    • by fred911 ( 83970 )

      'When was the last time you saw anyone reading an e-book?'

      I can't believe you said that when the real question should be, 'how long is it going to be before we stop tattooing dead trees to pass information or content we think is high enough quality to get paid for and be a lasting record of our time/experience'

    • For technical books, where I may be flipping between pages, I read traditional books. However, for pleasure reading, and books that tend to be read in a linear manner, I read them on my Kindle Paperwhite. It is better than a phone in both optical qualities and in that I am less likely to do anything other than just read.

      That being said, I do not value e-books as much as I value traditional books. That is expressed in my refusal to pay "full-price" for an e-book; or, more correctly, an e-book license.
    • E-books are pretty popular. The purpose-built e-book readers - the ones with the e-ink screens - are kind of niche though. Most people seem to read them on a phone or a tablet. Or if they have an e-book reader, it's one of the ones that's basically a glorified tablet. That's what I have - not that I would buy one, but I was given a Nook Color because the tablet stuff was so outdated as to be useless. But it works fine as an e-book reader. At some point I do want get one with the e-ink display, though

  • etxt books 90% of the price with no resale and printing will cost the 10%

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