From Rebecca Tushnet’s 43(B)log:
This putative class action alleged that Amazon overcharged and “[d]eceived consumers by misrepresenting that it was selling them Digital Content when, in fact, it was really only licensing it to them[.]” Plaintiffs brought claims under California, New York, and Washington consumer protection law, and common law claims for unjust enrichment.
Plaintiffs alleged that Amazon offers cheaper “rent” options for some of its content, but more expensive “buy” options as well. When consumers “buy” digital content, it’s stored in a folder called “Video Purchases & Rentals.”
But, in fact, Amazon does not cannot pass title of any of this content to consumers. “If the licensing agreement for any of the Digital Content is terminated, Amazon has to pull the Digital Content from not only its site but from all consumers’ purchased folders, ‘which it does without prior warning, and without providing any type of refund or remuneration to consumers.’”
Amazon argued that Article III standing was absent because plaintiffs haven’t lost access to their digital content, and that their claims of overpayment also rested on the mere threat of future unavailability. The court disagreed: there’s a plausible difference in value between owning outright versus purchasing a revocable license.
“Buy” was also plausibly deceptive. Amazon argued that “buy” didn’t mean perpetual ownership, and that it sufficiently disclosed the risk of losing access. Plaintiffs pointed out that Amazon also allows real, non-repossessable purchases with the “Buy” button for tangible goods. Again, the court agreed with plaintiffs: it was plausible that “buy” could be materially misleading. The court hypothesized a consumer who paid nearly $40 for Barbie and Oppenheimer, but whose Barbenheimer (first judicial appearance?) weekend was ruined because Amazon suddenly lost one license. “Understandably, this consumer ‘might feel a little miffed [or go nuclear] if she were told that she received exactly what she paid for.’”
Link to the rest at Rebecca Tushnet’s 43(B)log and thanks to C. for the tip.
In former days, PG had the occasion to deal with Amazon’s in-house attorneys regarding various matters relating to his clients. He found these lawyers to be intelligent, competent and reasonable (a trifecta that not all lawyers/legal departments can pull off).
PG speculates that the mess described in the OP originated with the marketing department’s decision to proceed on a path contrary to the legal department’s strong recommendations.
In most businesses with which PG has dealt, in such battles, the marketing department often wins. After all, marketing and sales are how a company makes money, and legal is always a cost item that invariably slows down the release of new products and services (often deeply resented within corporate middle management).
Intellectual property in digital form is always licensed, not sold. One of the primary reasons for this legal/practical decision is that digital property is almost always easily duplicated—bits can multiply extremely rapidly in a digital device and thereafter be sent digitally anywhere in the world at the speed of light.
Yes, physical books can be duplicated and shipped anywhere in the world, but a printing press and lots of paper is required to do so. Therefore, you own the single printed copy of a book you purchased at Barnes & Noble (or Amazon), but you license the ebook you receive from Amazon or Barnes & Noble because they are operating under the terms of a license they have received from the indie author or a publisher which has the author’s consent to print, publish, license or sell the book.
But Marketing said, “Customers will be confused if we have, ‘License now with 1-Click®‘”
End of license v. sale discourse.
Part of the problem here is that copyright is a one-size-fits-all statute… but even the military knows that there need to be two sizes (too large and too small).
Most of the law regarding “transfer of licenses” and “limitations on end-users’ license rights” derives not from static materials like e-books, digitized music and audiobooks, digital graphics, and digital audiovisual presentations (film, television, streaming, and soon-to-be etc.), but from toolkits like AutoCAD that also interface with patent law (and the same for virtually any other computer program). If there’s a patent underlying the program, the horrible issues of “practicing the invention” from patent law are in play — and unlike the Copyright Act, the Patent Act explicitly uses the term “license” regarding its default transaction, and “exhaustion” is a detailed and fact-specific inquiry that’s fundamentally inconsistent with “copy.” In the middle, there are videogames.
Both the lawyers and the judges involved have been and remain oblivious to the problems here. I disagree that a nonoperative copy is properly the subject of a license — only the right to make further copies is properly the subject of a license. But this is the kind of argument that ends up in law journal articles with several hundred footnotes and even worse writing than the Copyright Act itself.
I get the part about ebooks not being operative but the BPHs shut down Amazon’s plan for universal TTS as a Kindle feature by claiming that ebook displays and TTS are performances. Most ebooks aren’t static presentations like dead treeware or fixed format pdfs but user adjustable, with interactive presentation. Wouldn’t that render them operative at least in part? 😉
(Advocating for the guy in the nether realms, here.)
Felix, as I have been of That Guy’s party longer than you’ve been alive (in that, I take after Milton himself), I profess myself slightly put out that you would make such a claim and would respectfully request that you leave such advocacy to Toby himself.
That said:
There’s a difference between the text that is being turned to speech (which is nonoperative) and the mechanism used to turn it to speech. That is the distinction with “nonoperative content” — or, by analogy, the difference between source code (which is a proper subject of copyright) and executable code (which is not). The source code is not a proper subject for transfer-by-license-only; the executable code, because it is “just a tool,” can be treated like a Xerox machine in the 1970s (when they were only available by lease, with Xerox retaining ownership…). And more to the point, by the reasoning of the digital distributors, a printed book should also be treated only as a “license” (which has been rejected repeatedly — not least in Kirtsaeng), because you, or I, or anyone else could also do “text to speech” upon it — but because our “text to speech” (or that of an e-reader) is not itself a fixation, it’s not within the scope of copyright.
Yet that’s what the BPHs floated when they sued Amazon over TTS. Sounded silly but Amazon caved.
(shrug)
Maybe the courts today use a different logic for digital licenses because it’s only for books that anybody whines over the buy button. Not video, not music, not games.
Maybe it isn’t really about the buy button but about Amazon that sticks in their craw.
That’s actually not true. There are a lot of gamers who are not happy about the “license vs. own” thing
Agreed about lawyers and judges, C.
I’ve always believed that this matter should be viewed under the “reasonable person” rule.
Buy means ownership. That it is digital is, honestly, not a thing that makes the term different from its application to any other product.
After all, a music or video disc is digital. But I own my (legally) purchased physical copies of them; the owner(s) of the copyright(s) cannot come to my house and repossess them under any circumstances.
The term “copyright” should be the controlling meaning here. The owner of the copyright has the exclusive right to PRODUCE copies. They do not have the right to CONTROL those copies after they are (legally) transferred to another party. The other party, of course, does not have the right to PRODUCE copies, but do have the right to ENJOY the copy that they have (again, legally) brought into their possession.
(OT – is the fascination of reCAPTCHA with motorcycles an indication of PG’s interest – or that Alphabet is having trouble with their image analyzer?)
BAEN uses your approach for their ebooks and music studios for MP3s.
Both are implicitly working on the honor system.
Regardless, the reasonable digital native understands the buy button is selling a non-transferable license to access and enjoy the content.
As you say, context matters and the rules for hard to reproduce and *distribute* matter-bound product do not translate to the digital realm. Attempting to force the former unto the latter is in no way reasonable.