Frankfurt debate ponders digital content resale issues

Frankfurt debate ponders digital content resale issues


Author: Alastair Gray

Shoosmiths' Laurence Kaye has helped highlight problems concerning resale of digital content that could hit publishers, consumers and libraries.

Differences in how European and US courts interpret reselling of pre-owned digital content could have widespread implications for all three parties.

Publishing and digital media specialist Kaye was moderating a debate on the issue at CONTEC, part of the Frankfurt Book Fair, the world's largest trade fair for books.

It featured Peter Balis, vice-president and director of business development at Global Digital Books; and Gerald Leitner, secretary general of the Austrian Library Association.

Kaye said: "This issue is a great example of what happens when you apply 'offline law' to the online world, and recent cases on both continents have revealed potential problems for publishers, consumers and libraries should national courts come to different conclusions.

"At the moment, US courts say buyers of digital content can't resell it if licence terms prohibit it; whereas the European Court of Justice says it's legitimate for software and, possibly, other forms of digital content to be resold."

Balis and Leitner said it is in everyone's interest to get licences right, arguing that they enable buyers of digital content such as e-books and e-textbooks the ability to use the content how they wish across a range of devices. At the same time, they recognised the need for publishers to get a decent return on investment.

Kaye added: "A lot of time was spent discussing the effect on pricing of physical and digital content if the doctrines of 'exhaustion of rights' (Europe) and 'first sale' (US) means content owners can't charge different prices in different territories.

"Many publishers say they charge lower prices in developing countries to help facilitate access to their content. If those same low prices follow content into mature territories like the US, it will lead to higher prices all round."

The panel also looked at the US Supreme Court case of Wiley v Kirtsaeng, which considered how these legal doctrines apply to physical books.

Supap Kirtsaeng went to study in the US. His family in Thailand bought lower priced English language editions of books which they shipped to Mr Kirtsaeng, who resold them in the US at a profit. The US Supreme Court said the first sale doctrine had no geographic limit, so the publisher could not stop him importing the lower priced editions into the country.

Kaye said: "The case helps show that law is clearly still developing in this area, but is already having an impact on business models.

"The audience noted that the doctrines of 'exhaustion/first sale', which treat licences as sales, do not apply to business models based on rental and streaming. So we'll no doubt see more business models based around this."

The debate took place as part of the CONTEC Frankfurt programme, which runs just ahead of the five-day book fair.

Kaye was at Frankfurt fresh from speaking at the European Association of Search and Database Publishers (EASDP) Congress, in Amsterdam, which focused on the importance of data.