Library Journal posted an article about the mixed response from Amazon over whether a library can lend a Kindle device with books loaded onto it. An Amazon sales rep said “yes,” Amazon officials said “no,” but the law may say otherwise.

The first sale doctrine is a copyright defense, codified in 17 USC 109, which basically allows an owner of a lawfully made copy or phonorecord (and other tangible media) to sell or otherwise dispose of it, as well as display it to the public.   This allows purchasers of a video game, DVD, or other medium to sell it on e-Bay or to a GameStop. Software companies (and others) try to circumvent this defense by describing the purchase of their products as a “license” rather than a “sale” issuing license agreements and terms of use (”LATU”) to prevent resale of an item, but courts have disagreed with their enforceability.

In Amazon’s LATU there are explicit terms about the digital content on the device, but not the physical device itself. The language from Section 3, Digital Content reads as follows (emphasis added):

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

This language speaks to the digital content - not the device. Amazon understands that the first-sale doctrine clearly prevents them from restricting transfer of the device, but that the gray area of the license agreements allows them some latitude here. When drafted, Amazon likely sought to prevent a Napster situation, with users trading titles and diluting the market for content.

To read the entire article, jump to Mintz’s Words.