Amazon could gain a stranglehold over the second-hand e-book market before it even exists after the US Patents Office granted the company a patent over the creation of an “electronic marketplace for used digital objects”.
The development has raised concerns over how Amazon could develop this area, even though it is not yet clear that a second-hand market for digital content would be legal in the US. In the US a consumer’s right to sell second-hand physical goods, including books, is protected under the first sale doctrine; but a virtual version of the practice has not yet been tested in the courts.
Boston-based ReDigi, which opened the first marketplace for pre-owned digital music in late 2011, is being sued in Manhattan by Capitol Records for copyright infringement. ReDigi offers users the chance to load their music MP3 files onto a cloud server, deleting them from a computer’s hard-drive, and then facilitates the transfer of those files to another user at a cost, with revenue shared with the artist.
ReDigi argues that under its model only the “original” goods are transferred from seller to buyer without any copies being made.
ReDigi has said that it plans to expand into e-books, and bring the service into Europe. The European Court of Justice has already ruled in favour of reselling downloaded games, even when they are locked by Digital Rights Management, or sold under a long-term licence.
Amazon applied for the patent in May 2009, and has made no comment about its success. Though there were fears that the patent gave Amazon a broad monopoly over reselling or lending of purchased digital objects, the patent describes an “electronic marketplace” and a set of systems that would allow users to “effectively and permissibly transfer ‘used’ digital objects to others while maintaining scarcity”. The development, though, has echoes of the ‘1-Click’ patent granted to Amazon in 1999. Amazon sued Barnes & Noble in the US over its similar “Express Lane”, with the case settled out of court in 2002. Amazon also now licences the concept to Apple.
ReDigi said that the Amazon patent was further proof that “the secondary market is the future of the digital space and that there is no turning back”, but claimed that Amazon’s “copy and delete” mechanism differed from its own solution, and could therefore cause further concerns among copyright owners. It also said that Amazon had never compensated artists, authors or copyright holders for the secondary sale of their goods previously.