THE CHEAT SHEET. Used ebooks and the future of reselling

Well, it’s a tricky situation. Technically speaking, there is no such a thing called ‘used’ ebook; the ‘leaves’ stay intact even after umpteen uses. But in legal terms, an ebook becomes ‘used’ when it’s first buyer sells it or shares it.

On this, the world of readers, distributors, publishers and authors are now an interestingly divided crowd. In many places consumers can resell similar digital products, such as software and games.

Anyway, come January 13, we will get some clues and clarity on how to solve the ‘used ebooks’ puzzle. This day, a Dutch court will deliver its judgement on a fiercely fought legal battle between second-hand ebooks store Tom Kabinet and the Dutch Publishing Association. The global publishing industry is eagerly waiting for the verdict.

The publishers’ body says the online bookseller should stop selling used ebooks. It believes that Tom Kabinet has been merrily violating copyrights and intellectual property laws. Quoting its own research, the body says almost 90 per cent of the ebooks Tom Kabinet sells on its website are pirated and people are reselling books downloaded illegally.

Hold on. Tom Kabinet, a startup based in Laren in the Netherlands, says it sells only legally purchased copies and puts in its best efforts to ensure that the copies are legal. The website in fact is not a pure reseller; it says it’s a facilitator between book buyers and sellers and takes a commission when a sale is made. On its part, Tom places a watermark on the copies resold so that publishers can identify them easily. The portal fights the case anchoring on a 2012 ruling by the Court of Justice of the European Union, which has the potential to influence the Dutch court’s decision.

In a dispute between software giant Oracle and Switzerland-based UsedSoft, the court ruled that the trading of ‘used’ software licences is legal in Europe. It even said the author of such software cannot oppose any resale. UsedSoft specialises in buying and reselling used software licenses original buyers want to part with. To be fair, Oracle’s license documents says it disallows resale of its software. Interestingly, most ebooks sold by almost all publishers and sellers, including Amazon and Apple, carry similar licence documents. Hence the importance of the Tom Kabinet case.

Granted some ebooks are DRM-protected. DRM or digital rights management is a security technology that protects a digital content from being copied. Amazon uses this. But industry watchers feel that’s only a technical issue which can be addressed. Plus, in the digital world, there are many workarounds. Curiously, Amazon seems to be cool with the idea of a market for reselling books; which means more revenues. In fact, in 2013, Amazon got a patent to set up an exchange for all sorts of digital material. It would earn a cut on each transaction.

Not exactly. Some say the rules of the physical world apply in the virtual market as well. That is, it’s all about the contract between the author and the publisher. As things stand now, it’s highly unlikely that the author gets a slice of second-hand sales.

Well, most publishers are worried. They say: Who will buy a book at full price when a fortnight later everyone else can buy it cheaper? Their fear: Those who create content might see their work devalued, just as they did when Amazon began selling used books over a decade ago. They have reason to worry given that the global ebook market is now valued at $14.5 billion and may reach over $22 billion by 2017.

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