June 17, 2016

No, really, what the eff is an ebook?


The object in question.

The object in question.

Two cases currently under review in the European Court of Justice (ECJ) could have a dramatic effect on the resale and library market for ebooks.

As reported by Natalia Drozdiak at the Wall Street Journal, Maciej Szpunarthe, Advocate General to Europe’s highest court, released an opinion this week that “that the making available to the public, for a limited period of time, of electronic books by public libraries may indeed come within the scope of the directive on rental and lending rights.”

The opinion, as Jennifer Baker reports for Ars Technica, was delivered in response to a case between the association of Dutch public libraries—Vereniging Openbare Bibliotheken (VOB)—and Stichting Leenrecht, an authors’ rights collecting foundation. At question is a 2006 directive that bestows sole authority over questions of rental and lending to the copyright holder of a given work, but grants countries the right to supersede that authority for the purpose of “public lending,” provided the copyright holder is fairly reimbursed.

Of course, since nobody actually understands what the fuck an e-book is or who owns one, they have been generally considered beyond the scope of this ruling. It’s this de facto exemption that the VOB is challenging in its suit against Stichting Leenrecht. By their lights, e-books, incorporeal though they may be, should not exist in a legal category unto themselves, and should be governed by the same laws that govern the distribution of physical books. What a novelty!

To this end, the VOB instituted a “one copy, one user” system, which permitted a single copy of an ebook to be lent to a single patron for a fixed period of time, at whose expiration the patron’s copy would be de-activated and made available to other borrowers. Under the current regime of e-book exceptionalism, this system is forbidden, as it fails to acknowledge the ultimate authority of the copyright holder (in this case represented by Stichting).

What is ultimately at question is wether or not an ebook should be considered so different a class of object as to merit special treatment in the eyes of the law. This is a general question that e-book retailers all over the world are currently dealing with, and which we’ve written about before. Whether or not Spunarthe’s opinion will ultimately sway the court remains to be seen.

The second case, on which David Meyer reported for Ars Technica,  is somewhat broader in scope, and perhaps more generally significant in terms of its potential international impact. It concerns the right of e-book owners and retailers to buy and sell used e-books (and by extension other software objects and goods).  The parties involved are Tom Kabinet, an online retailer of used e-books, and the Dutch Publishers Association (DPA).

The case has its roots in a landmark 2012 decision by the ECJ. In that case, the court ruled in favor of UsedSoft, a German company trading in used group software licenses. They were being sued by Oracle (Go Warriors!) for infringement of their terms of use, which explicitly banned any transfer of rights. The EJC ultimately ruled that these restrictions were illegitimate and the rights of the seller were “exhausted” after the initial sale. This principle, known in US as the “first-sale doctrine,” has been widely in use since the EU 2009 Software Directive, but had to this point been largely restricted to the distribution of software on physical media like CDs, DVDs, and flash drives.

It was this ruling that paved the way for Tom Kabinet’s business model, which looked to expand the rights outlined in the 2012 decision to include e-book sales. Dutch publishers, of course, were none too keen on this idea, and both parties have been locked in litigation since 2014, when the DPA attempted to shut down Tom Kabinet. While they were ultimately rebuffed by the Amsterdam district courts, Tom Kabinet was forced to revise its business practices to ensure that pirated material wasn’t entering circulation through its platform.

The hearing scheduled at the Dutch supreme court has been postponed several times in the last year, and it’s currently unclear when the next stage of hearings will occur. But the crucial issue is that that there are a significant differences in interpretation between the Dutch and German courts over the 2012 ruling, and, under the auspices of the European Union, they can’t both be right. Ultimately the ECJ will have to issue a ruling.



Simon Reichley is the Director of Operations and Rights Manager at Melville House.