The Day the Libraries Died

Ars Technica has an article up about the recent ruling of the US Court of Appeals for the Ninth Circuit in the case of Vernor v. Autodesk (PDF). In this ruling, the court upheld common provisions of software EULAs (the license agreement you click through blindly when you install software or download music from iTunes) that restrict resale, lease, and lending rights. The backstory is this:

The case is Vernor v. Autodesk, in which Timothy Vernor made his living from selling items (including software) on eBay. Vernor had picked up some old copies of AutoCAD from an architect’s office sale, complete with their serial numbers, and he put them up on eBay noting that they were not currently installed on any computer. Sounds legal, right?

But there’s a catch. Autodesk, the software’s developer, forced all users to accept an agreement before using AutoCAD. This agreement made clear that AutoCAD was merely licensed, never sold, and that one’s license was non-transferable. Further, a licensee could not rent, lease, or sell the software to anyone else; you couldn’t even physically transfer the discs out of the Western Hemisphere (!). Finally, if you upgraded to a new version, the old version had to be destroyed.

The copies Vernor picked up at the architect’s sale were old copies that had not been destroyed as required. Vernor believed he was in the clear to resell them, as he had not agreed to any license. But after putting them on eBay, Autodesk repeatedly tried to shut down his sales. Vernor, on the verge of getting banned from eBay, sued Autodesk and asked the court to declare his sales legal.

A federal court did so in 2008, but Autodesk appealed, and today the appeals court reversed that earlier decision. In its view, US “first sale” protections don’t apply to Vernor, because he didn’t buy the software from a legitimate “owner.” That, in turn, is because the architecture firm had only “licensed” the software, and that license could indeed allow a software company to prevent resale, lending, and even removal from the Western Hemisphere.

This ruling, if it stands, has massive implications for the future. If you think it doesn’t much matter to you, think again. Have you ever been to a library? Have you ever bought a book or a used DVD at a yardsale or on Amazon? Have you ever borrowed a CD from a friend? All of that starts to end now.

Since the invention of the printing press, there has been some form of the notion of First Sale doctrine, but that idea was officially recognized in 1908 by the Supreme Court. This means, in effect, that once you buy a copy of a book (or a VHS tape or CD or whatever), then that copy of the book is yours to do with what you’d like. Copyright protects the publisher of the book by restricting one and only one activity by the purchaser with their new property. You can’t create additional copies. Copyright is aptly named. It quite literally defines the “right” of the “copyright holder” to be the only ones legally allowed to create new copies. Once those copies are created and sold, though, they become the purchaser’s property. You are free to resell the item, loan it out to friends, or burn it if you’d like. The only thing you are restricted from doing is creating additional copies. It is this doctrine that allows libraries to exist.

We are on the cusp of a major sea-change in content distribution, the likes of which society hasn’t really begun to consider. The issue is, of course, that as we head into the 21st Century, books are no longer books, and records are no longer records. That ebook copy of the latest NYT Bestseller you bought on your Kindle or iPad? That MP3 you downloaded from the Amazon digital music store? That scrabble board game clone you bought on the iTunes App Store? Yeah, that’s all software. And that software has a license, and the court has now ruled that:

[A] software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.

And if you are a licensee and not an owner, the publisher can restrict your use of the product however they’d like. If they want to say that you can only read their content in Utah while standing on one leg and humming “In-A-Gadda-Da-Vida”, then that’s the way it is.

Imagine for a second that this same rule applied to paper books. That means that a publisher could put a page at the beginning of the book (or more likely, 68 pages in 8-point type) where they state that you are a licensee and not an owner, and that you are not allowed to “redistribute, transmit, assign, sell, broadcast, rent, share, lend, modify, adapt, edit, license or otherwise transfer” the content, and then require that you burn the book right after you finish reading it. The very idea is absurd, and if publishers started doing that, then people would be immediately up in arms and it would be all over the Sunday morning talk shows. But that is exactly what is happening with all of our digital content, and now the courts say it is legal and that First Sale doctrine doesn’t apply.

That means no less than the end of libraries. It means the most massive expansion of copyright the world has ever seen. No longer does the publisher only have the exclusive right to be the sole creators of new copies of their content, but they also have the power to be the only ones who can legally distribute that content. Oh, and thanks to Disney and an aging pop star, copyright lasts effectively forever now (instead of the original 14 years). And the publishers will use this new power. It finally allows them to stamp out the “used sales” market (which they’ve hated for time immortal), and to charge anything they want for their content. If there is no used market, there is no pricing pressure on the publishers, because they’re the only game in town if you need to read that particular book or hear that particular song.

Right now, buying books and music and other similar products digitally is an option. You can choose to do so for convenience, but if you want to, you can still run out to Borders and buy a good old dead-tree edition (and most people still do). But that isn’t going to last. Just like digital cameras destroyed the film camera market and made film a tiny niche product; digital music, movies, and books are going to decimate the physical media market over the next decade or two. Sure, there will probably still be low-volume production of certain books and music on physical media for some time to come, just like you can still buy certain records on vinyl brand new even today. Those publishers will fulfill a niche market , but as the population that grew up holding physical dead-tree books in their hands ages and dies off, that will surely fade away. When the kids who are in Elementary School now have children of their own and they’re writing their first “book report”, the book in question will almost certainly be a digital copy. The change has already happened with music, and you can see it coming to video and books as well.

And if you don’t have the right to lend that content out, or resell it at a yard sale, then the libraries don’t have that right either. And that means that one day, a child is going to ask their parents: “Mommy, what were libraries like?”