Ever since ebooks first started getting popular in the past decade, various companies all over the world have experimented with a used ebook marketplace. The most popular in North America was ReDigi which started in 2011 and a lawsuit from various publishing organizations shut it down in 2013. Ever since then, the case has been through various courts and last week the Second Circuit Court of Appeals shut it down, making it almost impossible for a service like this to exist in the future.
In a narrow, 26-page ruling, the appeals court agreed with district court judge Richard Sullivan that ReDigi’s service was illegal because it involved the creation of unauthorized reproductions.
“We conclude that the operation of ReDigi version 1.0 in effectuating a resale results in the making of at least one unauthorized reproduction,” wrote circuit judge Pierre Leval, writing for the court, adding that the law is clear: such unauthorized reproductions “violate the rights holders exclusive reproduction rights” and are therefore not protected by section 109 of the Copyright Act, commonly known as the doctrine of First Sale, the provision of copyright law that enables consumers to resell or otherwise dispose of their legally acquired books, CDs, or records.
The one flaw in the Redigi business model was that a reproduction occurred when a seller sold something to the buyer. A copy of the title was briefly stored on the Redigi server, similarly, when a ReDigi user downloads a new purchase from the ReDigi website to their computer, yet another reproduction is created.
In order for a company to facilitate the resale of an ebook, a digital backup must never be created or stored. The book needs to be immediately transferred from the seller to the buyer, bit by bit and the at the same time, the original copy needs to be destroyed bit by bit.
The ReDigi case had also been closely watched by the publishing industry, Amazon and Apple have drafted up patents for a used ebook marketplace in the past few years.
In a statement yesterday, AAP president and CEO Maria Pallante praised the Second Circuit’s decision. “In applying the plain meaning of the Copyright Act, the Court confirmed that when a defendant makes unauthorized reproductions of copyrighted works and distributes them, it is not merely reselling or transferring used works in the manner of a used bookstore,” Pallante said. She also praised the Court for “rejecting the invitation from law professors to overtake Congress” on matters of policy. “This case is critical in that it reinforces the underlying equities of the copyright law, in which the rights and investments of copyright owners are a valuable part of the marketplace of innovation, not to be minimized or appropriated in the name of expediency.”