Amazon’s Kindle and the Doctrine of Exhaustion

Amazon’s Kindle and the Doctrine of Exhaustion

With much fanfare last Monday, released their wireless e-book reader that uses e-ink technology and allows users to purchase books wirelessly over Sprint's cellular network in the United States. Though the product lacks the immaculate design of some other consumer electronics (read: the iPhone), it nevertheless hit the spot for many as the product sold out in a mere 5.5 hours.

As I began my ritual of packing my mounds of readings into my backpack to head off to the library in preparation of upcoming exams, I'd have to admit that the thought of just throwing in a device that is a mere 10.3 ounces into my bag would be a real treat. And how nice would it be if I didn't have to stand in the horrendous Osgoode materials distribution lineup come January, and instead just be able to pull my books down from the internet via the cellular network on my Kindle. But then it dawned on me that if that were the case, I'd likely never be able to sell my textbooks after I used them. And therein lies the genius or grave concern of the device.

Certainly, it may seem like a bargain to buy a book that retails for $26.99 for $9.99 on the Kindle (like Stephen Colbert's latest), and certainly, you'll still be able to read it for that price, but what else don't you get? Since the e-books are restricted with Digital Rights Management (DRM) technology, you won't be able to redistribute the book to anyone. Sure, you can let someone else use your Kindle, but if you're reading other books on it, that is unlikely to happen.

In copyright law, the rights of the author in the physical embodiment of the creative expression are said to be exhausted after the first sale of the work. In the US, this is known as the first-sale doctrine. This doctrine of exhaustion is a well-recognized doctrine in copyright law, and is fundamental to the balance between author's rights and users' rights. Indeed, the Supreme Court of Canada in Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34 stated the following at paras. 31-32,

The proper balance among these and other public policy objectives lies not only in recognizing the creator’s rights but in giving due weight to their limited nature. In crassly economic terms it would be as inefficient to overcompensate artists and authors for the right of reproduction as it would be self-defeating to undercompensate them. Once an authorized copy of a work is sold to a member of the public, it is generally for the purchaser, not the author, to determine what happens to it.

Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long-term interests of society as a whole, or create practical obstacles to proper utilization. (Emphasis mine).

If I've purchased a paper book, I can read it, mark it up, tear out a page, or resell it. Moral rights aside, I can pretty much do anything I want short of making an additional copy, and there is nothing the author can do to stop me. This is the very reason why publishers often release new editions of textbooks, even though there are hardly any changes to the text. Because authors have no additional claims to subsequent sales of their works, a new edition effectively stifles the used-book market because students are encouraged to buy the latest edition instead of the deluge of older editions on the used-book market.

And so it would seem to be the hidden agenda (or at least the unintended side effect) of the Kindle. No longer will you be able to pass your copy of the latest Harry Potter novel to your best friend after you've done with it. Chances are that if you have a Kindle, you won't part with your device, and your best friend will have to buy a copy of it for her own Kindle. In economic terms, it seems Amazon has calculated that the revenue generated from the greater number of Kindle sales will exceed the lost sale of the higher-priced paper copy. But from a IP perspective, one begins to wonder whether such a device upsets the balance inherent in copyright law, and in fact, does end up "creat[ing] practical obstacles to proper utilization."