Imagine this: You could walk into a building and borrow, rent, or buy used books. We could call these buildings “libraries” or “used book stores”. Heck, while we’re at it, let’s also imagine people giving books that they’ve just finished to their friends.

If you look at the copyright law — 17 U.S.C. 106 — you may be surprised to see that the law explicitly says that these transactions cannot occur, at least without permission of the copyright holder. Really:

[T]he owner of copyright under this title has the exclusive rights to do and to authorize any of the following: [. . .] (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.

See? Illegal, all of it.

But of course, we know better. We know that libraries and used book stores exist, lawfully so at that, and (correctly) discount the idea that these institutions have cleared copyright with every single author and publisher whose work appears in their inventory. We also know that no one gets in trouble for passing a book to a friend.

That’s because of the First Sale Doctrine. Originally stemming from a 1908 Supreme Court case and codified at 17 USC 109 in 1976, the First Sale Doctrine, in a nutshell, says that the copyright holder only holds rights of distribution in order to put the product into the stream of commerce. Once the product is lawfully sold once, the right of distribution evaporates. So yes, go ahead and send me copies of books you think I should read.

But what about e-books?

Imagine, then, this: You could fire up your laptop or Amazon Kindle and borrow, rent, or buy a used book. Heck, while we’re at it, a friend could lend of give you a used copy of their book, too.

Right now? Unlawful. An exception to the First Sale Doctrine may render it irrelevant, and in any event, the digital transaction necessarily involves copying — thereby impinging on the copyright holder’s exclusive right at 17 USC 106 (1): “to reproduce the copyrighted work.”

Seems silly, but that’s the lay of the land.



Both John Battelle and Mike Shatzkin have posts today about e-books, and both touch on this. Shatzkin discusses best practices for e-book publishers to combat piracy while Battelle complains about features his Kindle lacks:

You can’t share a Kindle book with anyone else. That’s just nuts. The sharing of a book is perhaps one of the most intimate and important intellectual acts between humans, ever. I’m not stuck on whether or not that sharing is physical. I’m stuck on the inability to share. It’s a crime.

The juxtaposition shows the problem. The consumer (Battelle) demands the ability to share (“It’s a crime” that he can’t!) while the publisher (through the eyes of Shatzkin) is desperately trying to maintain control over the distribution of e-books, with the effect of controlling downstream distribution as well. These goals are irreconcilable, so something has to give.

Which brings me to the used book store in the cloud. Say an annual fee — $50? $100? — gave you the ability to rent a book directly to your Kindle or other device. The fee could be built into the price of a Kindle; as well as selling the current version for $259 without this service bundled, Amazon could offer it for $200 plus a $100 annual fee and multi-year contract, much like a cellular phone. Either way, one would still be able to purchase — permanently — a copy of an e-book whenever they see fit.

The books would actually live “in the cloud” — that is, on the publishers’ or distributors’ (Amazon’s? B&N’s?), and be pushed to your device as-needed, with some liberal allowances made for things like flying, etc., when wifi and cellular connectivity is lacking. Copying the file could be made difficult, especially if the service were limited to e-readers such as the Kindle. You could have a certain mumber of rented books on your device at a time, say three, but maybe fewer. And while your friend could not just give you a book he or she purchased, they could definitely recommend them to you via some sort of social network-like interface. But each of these digital copies would exist in a finite space, as determined by the publisher and policed by the distributor. Quite literally, we’d be applying the First Sale Doctrine to e-books as much as possible by re-introducing scarcity to (e-)books.

For Battelle, this would allow him, effectively, to share books with friends, so long as his friend was part of the renting ecosystem. As the annual fee would be easily incorporated into the Kindle’s price, this would be even more palatable. Further, I bet that one of his other gripes — that you can’t put the actual, physical book on your shelf — would be mitigated as the marginal cost to acquire the book would be offset in kind.

For Shatzkin and publishers, this would massively reduce the incentive to “pirate” e-books, especially among those consumers who would be likely to purchase books if otherwise available for a rental/browse/borrow discount. It would certainly cut into the number of sales of e-books, but because of the lack of permancy, not into the sale of paper-and-ink books. It probably is a net negative compared to the revenue stream provided by a world without e-books at all, but that universe is gone and not coming back.

The irony? While the publishing world looks toward saving the present structure, they’re doing so by ignoring the First Sale Doctrine — a common-sense point of law in both contexts. Adopting a First Sale Dotrine for e-books would be a huge step toward meeting everyone’s needs.