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Dispatches from the Digital Revolution

The Amazon patent, part two: What does it mean?

Yesterday we posted an article that discussed the recent Amazon patent that has the digital blogosphere up in arms. Check out that overview or read the full text of the patent. In this article we hope to answer a looming question: What does this legal language mean for us?

Amazon doesn’t seem to have released an official statement about the patent, which makes me wonder if the general online hysteria is quite justified. What’s the endgame? As others have noted, just having a patent doesn’t mean much. Is Amazon really planning to burst onto the digital resale market in the foreseeable future, or is this patent a way for Amazon to cover themselves on other fronts? In the words of the patent:

As use of digital objects increases, users may wish to transfer the digital objects to other users. These transfers may include a sale, a rental, a gift, a loan, a trade, etc. However, several problems manifest when transferring a digital object.

It may be that this move is less to establish a digital resale market and more to create a system for digital gifts and digital loans—two aspects of physical books that consumers have (frequently) lamented in the shift to digital. Besides that, the language of the patent leads one to believe that their ulterior motive is creating better services and options for paid Prime members.

However, that’s not to say that a digital resale market is out of the question; it could certainly be a profitable move for Amazon, and it’s not unprecedented. Since 2011, the startup company ReDigi has been pioneering the digital resale model.

Perhaps the most important question here (all moral and ethical considerations aside) is that of legality. ReDigi devotes an entire page to reassuring its customers that it’s not facilitating illegal activity, and it tends to be something we’re fuzzy on in general when it comes to digital files—ownership. (Which, as they say, is nine-tenths of the law.) Do we as ebook purchasers, or purchasers of any digital file for that matter, actually own the content? Or are we licensing it? A flurry of controversies a couple of months ago—the head of Random House erroneously stating that libraries can own RH ebooksAmazon pulling Kindle files from a customer’s account—have made it pretty clear to most of us that digital content is a licensing game.

I guess my question is, what’s the point of a widespread digital resale market? Sure, Amazon would get a cut. Sure, customers would be happy. (And that’s one thing Amazon does really, really well: keeping its customers happy.) But if digital products can suddenly be resold, publishers lose a big incentive to put out digital editions, and lose a big factor that has helped rationalize lower ebook prices.

If Amazon creates a resale market, the argument that “Kindle ebooks should be less expensive because there’s no resale market” is pretty well shot to bits. You’ve still got the rationale that “ebooks don’t use paper, which is expensive,” but publishers have never really bought that one anyway. I imagine Amazon itself would back down from the $9.99-or-less Kindle price if a digital resale market became a thing. Well—maybe $9.99 for the normal no-share no-resell ebook; but if you want sharing rights, you pay physical book price. Or higher. It’s like paying a fee to be DRM-free (ish). In fact, could Amazon spin this as a way to pacify publishers? (Not that they generally care too much about pacifying publishers, but stranger things have happened [cough, Penguin Random House, cough].)

So what happens next? Keep a wary eye. While Amazon may be bursting onto the digital resale market, I suspect it might be something subtler, at least at the start. Or perhaps this patent will join a host of other patents in the digital basement, being saved as insurance for the slippery and uncertain digital future.

About Leah Thompson

Writing and publishing professional in the Boston area.

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This entry was posted on February 20, 2013 by in Business, Technology.

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