Legal Question in Technology Law in New York

e-book Law- My business

I have an online business that's all about e-books. I show people how to create, buy, sell, and advertise e-books. The main thing i also do is advertise other people e-books by referral, and so i can get a commission every time they click, and earn money. Now that's called affiliate marketing. My 2nd problem is opening this club called e-Book Club. Basically you have to pay a membership fee to join in, and once you start paying the fee, you get access to unlimited e-books, and premium news article and etc from my database. Now the question that I'm having problem with is if its violating copyright rules. I'm not familiar wit (digital) e-book,or electronic book laws, but I'm not selling any e-books, what the people are buying are the membership free to get into the club, but the e-books they get for free when they sign up and pay for their membership. So, basically is it legal to do that, and i consider my e-book giving sharing e-books , i find it similar to giving my own cousin, a of Wikipedia information about Sony and sending it to him to share, or giving a book of mines that i don't need anymore to him for free.

Asked on 7/17/08, 9:34 am

2 Answers from Attorneys

John Friedman Law Office of John K. Friedman

Re: e-book Law- My business

What you are describing is likely a violation of copyright laws. You don't own the right to copy and distribute the content. The fact that you're not being "paid for the e-books" is irrelevant.

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Answered on 7/17/08, 10:08 am
Gerry Elman Elman Technology Law, P.C.

Re: e-book Law- My business

You are thinking of the principle of copyright law called the first-sale doctrine (also known as the first-sale rule or the exhaustion rule). As provided in sec. 109 of the copyright law, the purchaser of a single lawfully-made copy of a copyrighted work has the right to give it away or sell it, provided that no additional copies are made.

However, what you describe as sharing e-books doesn't sound like it would fall within that provision, because the member of the club would get an additional copy of the book and you would still have the original copy in your database. Also it would probably be inconsistent with the terms of the license you clicked on and accepted when you first opened the e-book.

Coincidentally, the U.S. Supreme Court recently had occasion to address a different but somewhat analogous question in the case of Quanta Computers Inc. v. LG Electronics Inc. The case dealt with patents rather than copyrights, and here the Court held that the patent exhaustion doctrine covers not only patented articles, but also patented methods. This strengthens the rights of buyers of patented subject matter to use them without being concerned that the patent owner will sue them for performing a patented method.

Nevertheless, the Quanta case doesn't weaken the requirement that the recipient of a copyrighted work must not have or make a copy of the originally-sold book or other embodiment of the work of authorship.

Beware, this posting is not legal advice. You should communicate confidentially with a lawyer who deals in intellectual property law for any advice on your particular situation.

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Answered on 7/17/08, 11:52 am

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