The ongoing conversation regarding the DOJ suit against five of the Big 6 publishers and Apple has at times been even more interesting than the case itself in what it says about the publishing industry and those who have a stake in it. I won’t deny for a moment that I’m a fan of the Kindle or that I regularly enjoy many facets of Amazon’s business, so feel free to call me out for being biased, but I think that there are a few strange assumptions being made in some of the more popular Pro-Publisher arguments lately that need to be addressed.
The most popular justification of the Agency Model by far seems to be that without it Amazon would simply have too much control over prices and undermine competition since they could use books as loss-leaders to sell other products. The underlying assumption here is that there was literally no other option available to prevent Amazon from offhandedly destroying a whole industry. This ignores the process that allowed the Agency Model to be imposed on the Kindle Store in the first place, of course.
In early 2010, the publishers dictated their terms to Amazon and a brief conflict ensued. When Amazon resisted raising their prices, Macmillan pulled their titles. It worked, and Amazon caved. Publishers are not, in this case, the helpless bystanders trying to scrape by that they make themselves out to be. They have the choice to leave at any time, and allow Amazon to find their own way to fill Kindles with eBooks. This is exactly what happened recently when IPG was unwilling to agree to Amazon’s contract renewal terms.
The problem is that publishers don’t want Amazon out of the game. Amazon does exactly what they want a retailer to do. The store makes suggestions, up-sells, promotes, and opens the doors to customers anywhere. The problem wasn’t the potential for anti-competitive control; it was that publishers were unwilling to lose access to the channel. It is also why the collusion was necessary. Without that collusion, Amazon could presumably have done without any member of the Big 6 and they would have been left with only comparably inferior vendors to sell their books through.
The other really fun argument is the devaluation of eBooks. Basically that by selling Kindle Editions cheaply, Amazon is making customers expect affordable books and publishers will make less money. This is often tied to the idea that Amazon is trying to sell cheaply enough to get a monopoly, after which they will screw their customers and raise prices. Personally, I see the arguments as contradictory.
If Amazon’s whole Kindle sales model is designed to lower customer expectations in terms of pricing, publishers retail the previously mentioned option of removing their content. Unlike with paper books, there is no possibility of a secondary market. To me this is basically an assertion that the content offered by these publishers is less important to customers than the fact that they can get it on a Kindle. If that is so, then the need for publisher as gatekeeper is a thing of the past anyway.
Let’s assume that Amazon does accomplish lowering expectations, though. How would raising prices on eBooks after driving out the competition work to their advantage? We are talking about digital products, presumably now in a publisher-free world since Amazon ruined them all. In what way would self-publishing authors have trouble selling outside of the Kindle Store? And if that were an option, why would customers pay Amazon’s presumably higher prices after having been acclimated to cheap eBooks over the course of years? I’m not one to say that the free market will solve all your problems, but what incentive does Amazon have to dominate a market and immediately destroy their most profitable approach to it?
Basically, I can’t help but feel that redirecting the issue of Agency Model price fixing to make it appear as if the DOJ is out to appoint Amazon king of publishing is a sign that people know something illegal was done and are now out to justify it. The Kindle may be the best eReading platform out there, but it is far from the only one. Publishers had other options they could have gone with; they simply couldn’t see a legal way to get the higher profits they wanted without losing access to customers who love their Kindles.
The first major change in eBook pricing to come about since the launch of the iPad is at hand. The U.S. Department of Justice has already negotiated settlements with three of the six major publishing houses implicated in a DOJ price fixing investigation only shortly after the filing of the lawsuit. Kindle owners can expect to see an almost immediate drop in many eBook prices, once the court has had a chance to approve the settlement terms. Amazon has already declared this a big win for consumers and announced plans to drop prices on affected titles.
For those who have not been keeping track, the early days of the Kindle brought significantly lower eBook prices than we are now used to. This was the result of Amazon being able to buy their stock wholesale and price things as low as they wanted from there. Publishers were rather unhappy with this arrangement since it meant that customers might well become used to seeing affordable prices on their reading material and cause paper copies of books to lose perceived value.
When Steve Jobs approached the Big 6 publishers with the idea of moving to the Agency Model, wherein publishers would set prices and retailers get a fixed percentage for each unit sold, they jumped on it. As soon as the iBooks store opened, Kindle Edition prices began to rise. There was some drama when Amazon attempted to hold out in protest and pull titles from their store, but without those publishers it is hard to operate a major bookstore.
Since then, prices have remained high and those involved in the Agency Model arrangement have come under investigation in both the US and EU. The biggest being raised by the DOJ, aside from alleged secret meetings and clandestine correspondence between heads of supposedly competing publishers in the days leading up to implementing the Agency Model, is the Most Favored Nation Clause. Apple managed to get this introduced in their agreement with every publisher.
Typically, a MFN is put in place to prevent favoritism from allowing a wholesaler to sell more cheaply to another retailer at a lower price. In this case, since publishers were setting the price, the DOJ is arguing that it was meant to “protect Apple from having to compete on price at all, while still maintaining Apple’s 30 percent margin.”
The result of all this has been artificially inflated eBook prices meant to turn customers away from things like the Kindle. That last point is more fact than opinion, as any look at publisher comments regarding the “troublesome” convenience of eBook borrowing at libraries that has gone along with Penguin dropping out of the library system altogether.
So far we know of settlements with HarperCollins, Hachette, and Simon & Schuster. These will prevent use of the Agency Model for a number of years and create various other consumer protections. Apple, Macmillan, and Penguin are all still denying wrongdoing at the moment, but it remains to be seen how well they can hold out. Even if all three remaining defendents get off somehow, Kindle pricing will be completely altered for the indefinite future. The Agency Model could only be forced on Amazon through solidarity across every major player in the publishing industry. With that gone thanks to these settlements, things can’t help but improve.
Not much is known at this time about what options are being discussed by the publishers under attack by the Justice Department. We do have good information that there are settlement options on the table and that the Agency Model pricing model currently to blame for high Kindle Edition eBook prices will be on the chopping block regardless.
Reports from unnamed informants close to the matter have indicated that there is reason to expect a settlement within the next several weeks. Neither Apple nor the publishers have responded to any requests for comment at this time. The Justice Dept declined to say anything.
Whether this is a sign of consensus among the defendants or merely that one or two are feeling the pressure and wanting to end what they see as a losing battle should not matter much in terms of the outcome. In the event of one publisher involved in the price fixing scheme reaching a settlement, the terms would undoubtedly involve release of evidence necessary for ensuring a successful prosecution of the rest.
Basically, assuming the news is true, this means that the end of the Agency Model is at hand and that the Kindle has made it through possibly the most harmful barrier to eReader adoption without so far becoming irrelevant. A return to the wholesale model, even temporarily, will mean more affordable reading material for Kindle owners. This in turn should spur sales of the eReading line. Amazon’s willingness to take a loss on bestsellers to promote their product line is what game them over 90% of the eReading market before the Agency Model was imposed and there is no reason to see this practice changing overly much if the Agency Model is destroyed.
The big question will be what comes next. Settlement or unfavorable ruling aside, publishers are not going to give up on their position that readers have no right to expect inexpensive books. It is incredibly unlikely that they will all pull out of Amazon in reaction to this, but they’re going to have to find some new way to prevent Kindle customers from being too happy with digital books.
The case at hand is all about how the defendants collaborated to impose the Agency Model on Amazon. The means to achieve this goal is in question, not the model itself. Depending on the terms of the settlement, publishers could be permitted to go back to it in time. They could also turn to something even more unpleasant for potential customers. It is hard to tell at the moment.
In the short term, the clear winners will be customers. Prices on eBooks should drop abruptly, especially in the Kindle Store, following official announcement of the deal being made. In reality, expectations may need to change with regard to how profitable a new bestseller should be per unit sold. Big 6 publishers will be forced to come to terms with this. Beyond the immediate benefits to Kindle customers there is little that can be asserted reliably about the effects of this situation. It will be interesting to see how the situation evolves. Any thoughts or predictions?
Since the rise of the Agency Model that Apple made possible for publishers in a partnership surrounding the release of the iBooks application and store for the original iPad (a partnership now awaiting trial in an anti-trust case), there has been serious talk about how Amazon has set out on a crusade to utterly destroy traditional publishing with the Kindle. This isn’t news, exactly, but it has become an important and popular topic after the recent contract dispute that the company had with the Independent Publishers Group that has resulted in the ongoing absence of IPG titles from the Kindle Store.
There can be no question that Amazon is acting like a bully in this dispute. They want a lot and are in a position to demand rather than ask or negotiate. What has risen up in response to this anti-Amazon sentiment has been shocking to say the least, however. Scattered around popular blogs, we can now see any number of authors and publishers coming out against Amazon and claiming that publishers were somehow right to have engaged in price fixing and that even if it was technically illegal they should be allowed a pass because otherwise Amazon will win.
On the one hand, it is understandable sentiment. Thanks to the Kindle, Amazon controls around 75% of the eBook market already. Without their platform, the rise of eReading as we now know it would slow to a crawl. Nobody else has the resources, or seemingly the interest in customer satisfaction, that Amazon is willing to put into keeping such a platform going.
On the other hand, this is insane. Publishers were unhappy with how poorly the old business model applies to new media and so their potentially illegal activities should be excused. It makes no sense to me, somehow.
This is made to seem like it is a one-sided arrangement. I believe that to be a mischaracterization. If publishers lacked power, they could not have compelled the adoption of the Agency Model in the first place. They were just too concerned at the time with short term profits to be willing to take a stand and risk losing Amazon as a storefront. It was a move that only made sense for every individual company if they knew that none of the competition would be capitalizing on their threatened withdrawal.
Amazon’s acting like a bully aside (because in the matter of the Agency Model and its potential legal implications that that does not apply) they have built the simplest and most usable way for readers everywhere to access eBooks. Nobody else has come close, despite competing efforts from Barnes & Noble’s Nook line, the Kobo, and more. This does not mean that anybody has been compelled to use it.
There would be no case against them if the Big 6 Publishers had come out with their own Kindle competitor and started offering all of their titles through it. The Kindle would still be there attracting self publishers and generally making itself useful in various ways, but it wouldn’t have the content to be so important.
These publishers don’t want to have to deal with building new distribution channels, though. They also don’t want to have to adapt when other people build them. The fact that there is a power disparity is undeniable, but that doesn’t mean that these publishers were ever powerless. Nobody compels them to use the Kindle platform. To say that they should be able to get away with their own anti-competitive and manipulative actions because otherwise the Kindle line will make people start seeing books as more affordable and ruin their profits is just ridiculous.
By now Kindle users have become familiar with the idea of sponsored screen savers on their eReaders when the devices are on standby. They are generally unobtrusive, don’t get in the way of the reading experience, and can even offer some decent deals from time to time when you get lucky. Not many people argue against them anymore, especially since Amazon now allows users to pay the price difference between a Kindle with ads and a Kindle without ads to have the whole mechanism disabled entirely. Unfortunately, the idle screen’s ads have opened Amazon up to a claim of patent infringement from one of the biggest “Patent Trolls” in operation.
The company making the accusation, Network Presentations Solutions, is a shell company operated by Acacia Research Group. Acacia Research Group, as some might remember from last October, has taken on Amazon before with regard to Kindle devices. Last time it was a variety of issues regarding the Kindle Fire. This time around, they have acquired the rights to a patent for any personal computing device that shows ads on a screen after a certain designated period of idling. Naturally this would include all recent Kindle offerings, in addition to other companies such as Kobo that have followed in Amazon’s footsteps, one would think.
What are they hoping to accomplish with this suit? The requested ruling would require Amazon to pay a substantial penalty, recall and destroy every Kindle device ever sold with the Special Offers screen savers, issue a copy of the court ruling along with an admission of wrongdoing to everybody who has ever owned a Kindle, and generally appear contrite and humbled. More realistically, Acacia is hoping for a substantial payday when Amazon settles to avoid the potentially huge ramifications of losing. Patent Trolls are not held in particularly high regard at the moment, but that doesn’t mean they always lose in court. Amazon isn’t exactly the most beloved company around at the moment either, after all.
While there seems to have been no word as to what, if any, progress has been made on the last Acacia vs Amazon lawsuit, it is a fair assumption that Amazon is not in the habit of quietly accepting this sort of thing. They have placed a great deal of faith in the Kindle line, both eReader and Tablet offerings, and such vaguely applicable patents have questionable standing when held up to scrutiny. Remember that a software patent holder needs to be able to prove that its patent involves a non-obvious solution to a problem. It is hard to say whether or not advertisements in place of screen savers would really qualify in the eyes of the court.
Chances are good that this is not the last time we’ll be seeing Amazon hit with patent litigation. Patent Trolling is huge money and there is a lot of profit to be made in anything somebody can make stick to the Kindle. With the next generation of Kindle Fire just around the corner and the possibility of a Kindle Phone being whispered about in vague rumors about the distant future, Amazon is just going to be even more open to these things. Hopefully the added expense of an occasional settlement or legal dispute won’t be enough to scare them off of ongoing hardware development.
Recent reports indicate that later this month we can expect to see Apple host a press conference related to, of all things, eBooks. After news that the Kindle Fire has had a noticeable impact on iPad sales this past quarter, clearly something has to be done. This is not official as of yet, but multiple sources in positions to be aware of such plans have passed along the same information. While we have no way as of yet to know for sure where this will lead, the most common rumors seem to point to Apple’s launching of a digital self publishing platform to compete with the Kindle Direct Publishing program.
In reality, such a move on Apple’s part would be quite surprising. In addition to the fact that simply matching the competition seems to offer far less reward than the effort would be worth given that the iBooks store has failed to really take off so far anyway, Apple is already making about as much on each book sold to owners of their devices as they would be likely to make off a program competitive enough to draw in new authors. Keeping in mind the fact that anybody publishing through Amazon’s KDP program, or even Barnes & Noble’s slightly less popular PubIt, will already be available to iOS users, the only real motivation for Apple here would be to draw authors into an exclusive arrangement in some way to enhance the iBooks selection. Amazon has already begun a similar effort tied into their Kindle Owners’ Lending Library, so this would not necessarily be a shocking move, but there is little reason to suspect that Apple is desperate to suddenly push into the eBook market in a major way.
Since we can be fairly certain that whatever the announcement is about will be related to publishing in some way, however, there are a few other possibilities. Textbook rental is one of the more likely possibilities. While Amazon’s new Kindle Format 8 provides some more robust formatting options to publishers and the Kindle Fire obviously handles the demands of textbooks more easily than E INK reading devices, so far the Kindle Textbook Rental program has failed to draw much attention. Given the iPad’s larger screen and Apple’s strong presence on college campuses, it would make sense for them to jump to fill in this gap in the market before anybody else beats them to it.
It is also possible that this has something to do with the ongoing class action lawsuits against Apple and the Big 6 publishers over price fixing and the imposition of the Agency Model around the time the iPad was released. In the past month the situation has become quite a bit more intense, with the US Justice Department joining in and at least 15 ongoing suits. It would seem unlikely that the company would want to comment on an ongoing legal battle, but given claims of detailed inside information on the part of certain plaintiffs there is always the chance that preemptive spin on an anticipated settlement attempt might be in order.
The one thing everybody agrees on is that this will not be a hardware announcement. While there is still speculation with varying degrees of believability about a smaller iPad meant to compete with the Kindle Fire, that will have to wait until later. For now, it’s hard to know exactly what to expect.
Up until now, Amazon has done a fairly good job of avoiding patent lawsuits. Sure, they’ve run into a few over search technology and such, but overall they’ve been small and unsuccessful. With the release of the Kindle Fire, though, they may have entered into the murky world of mobile computing litigation. What this means for the future of the company’s hardware development line remains to be seen, but there are a few things that we can be quite sure of over the next several months. One of these is that Amazon will rise to the challenge.
In 2011 alone already Amazon has been hit with 11 lawsuits over 30 alleged patent infringements, two of which have been dismissed completely. The majority of them have been in relation to the technology being put in place to pave the way for the launch of the Kindle Fire. This includes cloud computing (admittedly even more useful in other areas, but vital for things like the Kindle Fire’s Silk web browser), streaming services, site personalization, and a number of things that relate to other Kindles as well. Last year, they didn’t face a third so much attention over patents.
As the 15th of Nov. rolls around, whole new areas of vulnerability open up. Android has thus far been a highly disputed OS. Apple has been particularly active in using legal tactics to beat down any potentially successful competing tablets, both in the US and abroad, but they are not the only ones. Microsoft has managed to convince Samsung to pay royalties over supposed Android related patents, for example, though MS has not as yet brought any major action against the source. It’s possible that Google is too big to attack at the moment? That says nothing of the increasingly common “patent troll” crowd that exists for no reason other than to acquire intellectual property and make money suing people over it. The mobile device market is their favorite playground.
While there is a great deal of criticism of the patent system floating about at the moment, chances are good that any reform of that system is a long way off. For the time being this is the environment we are stuck with no matter how much it would seem doomed to stifle any form of innovation in technology.
We’ll see where things go in the next year. Some have predicted Amazon acquiring HP’s WebOS and the associated intellectual properties as a way to bolster their position in the event of extended legal battles. Google made a similar move in acquiring Motorola’s mobile division, so there’s certainly precedent for such a move. Whether or not that happens, though, Amazon has expressed an intent to defend themselves against all comers. This could be enough to scare off potential complaints. Nobody interested in repeating lawsuits for income wants such a high profile case setting precedent against them. The Kindle Fire isn’t likely to be blocked as easily as some other tablets and cell phones have been before now.
On Wednesday, Discovery Patent Holdings LLC filed a lawsuit against Amazon(NASDAQ:AMZN) over the use of technology related to the distribution of, and securing of, digital texts that Discovery feels falls under their patents. It is worth pointing out, at this juncture, that this is not, precisely, a new lawsuit. In March of 2009, Discovery Communications filed a similar suit against Amazon (with Amazon suing Discovery back shortly after) with regard to these patents and the more recent one is simply a reflection of Discovery’s choice to move the patents to a separate corporate entity as they continue proceedings. The main question on peoples’ minds, of course, is what this will mean for the future of the Kindle platform.
While I’m not intricately familiar with patent law, it would seem from an intuitive standpoint that the Kindle is safe. As far as I, or seemingly anybody else covering the topic for that matter, recall, there was no effort made previous to these suits(at least that managed to achieve public recognition) by Discovery to defend their rights in the matter. Given that the patents in question were assigned in 1999 and 2007, it would seem rather late in the game to expect results on this front. Again, I’m no expert and don’t claim to have the only, or even the best, interpretation of what the outcome will be. All I can say is that I’m not terribly concerned for my Kindle.
Kindle DX Lawsuit
When Amazon Kindle DX with 9.7″ eInk screen was announced it was dubbed “academic eReader”. Academic publications and textbooks don’t display well on a smaller 6″ screen. When the device was released, several universities and colleges announced pilot programs aimed at evaluating its effectiveness in replacing classic textbooks. However these programs hit the same roadblock everywhere: despite having Text-to-Speech capability (which not other eBook reader has), Kindle DX wasn’t accessible to vision-impaired students. This mostly had to do with the fact that menus and other controls don’t have audio. After this concern was raised repeatedly, Amazon (NASDAQ:AMZN) promised to address it in a software update that is expected to be publicly released in Q2 2010.
However several educational institutions decided to go ahead with pilot programs regardless. This caused Federation of the Blind (NFB) and the American Council of the Blind (ACB) to file complaints against Princeton University with Department Of Justice. These complaints led to a lawsuit that was recently settled in a peaceful manner. Princeton University was not held accountable for any wrongdoing and in exchange promised to stop pilot program and only resume it after Kindle DX or any other eReader is fully accessible as required by law. Here’s official DOJ letter that settles the case:
U.S. Department of Justice
Civil Rights Division
Disability Rights Section – NYA
950 Pennsylvania Avenue, NW
Washington, DC 20530
Hannah S. Ross, Esq.
Office of General Counsel
120 Alexander Road, Second Floor
Princeton, NJ 08540
Re: Letter of Resolution, D.J. No. 202-48-213 Princeton University
Dear Ms. Ross:
As you know, this matter began with complaints filed by the National Federation of the Blind (NFB) and the American Council of the Blind (ACB) with the Department of Justice, on behalf of the organizations and their members who are current and prospective college students, alleging that Princeton University has violated title III of the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. § 12182, and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 5 947(a), by using the Kindle DX, an innovative, hand-held electronic book reader that is not accessible to students with visual impairments, in a classroom setting. According to the complaints, Princeton University is offering a pilot program that began in the fall 2009 semester. The object of this pilot is to test the utility of the Kindle DX in a classroom setting.
The Department of Justice is responsible for the enforcement and implementation of titles II and III of the ADA. The Department decided to investigate this matter because the Kindle DX is inaccessible to an entire class of individuals with disabilities – individuals with visual impairments. According to its product descriptions, the Kindle DX provides several benefits that make it a potentially superior tool to a standard textbook, including the ability to download all textbooks instantaneously, the ability to carry all textbooks on a hand-held device that weighs just over a pound, the ability to search words and concepts instantly on the device’s web browser, while retaining all the characteristics of a standard text book, such as annotating, highlighting, and taking notes. Under title III, blind students must be provided with “full and equal access” to all of the goods and services of the university, 28 C.F.R. § 36.201(a); must be provided with an equivalent opportunity to participate in and benefit from its goods and services, 28 C.F.R. § 36.202(a), (b); and, must not be provided different or separate accommodations unless doing so is necessary to ensure access to goods and services that is equally as effective as that provided to others, 28 C.F.R. 36.202(c).
The Department acknowledges both that Princeton University denies any violation of the Americans with Disabilities Acts and that it has stated its commitment to ensuring equal access to educational programs, activities and opportunities for students with disabilities.
Both the Department of Justice and Princeton University agree that the emergence of new electronic book reading technologies that benefit the sighted have the potential to benefit blind students and faculty as well. The Department of Justice and Princeton University have decided that it is in their interest to resolve this matter amicably. In consideration of the agreement by Princeton University to undertake the actions set forth below, the United States will close its investigation of this matter.
Princeton University agrees to the following actions:
- The University will not require, purchase, or incorporate in its curriculum the Kindle DX or any other dedicated electronic book reader for use by students in its classes or other coursework unless or until such electronic book reader is fully accessible to individuals with visual impairments. Alternatively, Princeton may comply with the terms set forth in paragraph 5.
- The phrase “other dedicated electronic book reader” means any wireless, hand-held, electronic book reader that has been or will in the future be produced or offered by Amazon.com or any other corporation, such as but not limited to the Barnes and Noble nook, the Sony PRS-600, PRS-700, PRS 505 or upcoming Sony Daily Edition, and others.
- Princeton University will commit a policy reflecting the terms of this agreement to writing within 30 days of the date of the last signature below.
- Princeton University agrees that its commitments in paragraphs 1-4, herein, will, take effect on the date following the last day of the pilot project with Amazon.com, Inc., which will terminate no later than the conclusion of the fall 2009 semester,’and will remain in effect through June 30,2012.
- As a reasonable modification, the University may provide its students with visual impairments with a dedicated electronic book reader that ensures that individuals who are blind or have low vision are able to access and acquire the same information, engage in the same interactions, and enjoy the same services as sighted individuals with substantially equivalent ease of use.
This agreement does not constitute a finding by the United States that Princeton is in full compliance with the ADA, or an admission by Princeton University of fault or noncompliance with the ADA. This letter agreement does not alter nor enlarge the legal obligations of the University, and shall not form the basis for any enforcement action against Princeton University. The decision to close our file in this matter does not affect the rights of private individuals or of the complainants to enforce their rights under the ADA against Princeton University. As indicated in paragraph 4, above, this agreement also has no effect on Princeton University’s current pilot program testing the Kindle DX.
Please countersign and return a copy of this letter to us, indicating your agreement with the representations and terms set forth herein. Once we have received your countersigned copy, we will consider this matter resolved. We will take no further action on this matter unless we become aware of new information suggesting that Princeton is not complying with its obligations under the ADA or this agreement.
We appreciate your cooperation. If you have questions or concerns regarding this agreement, please do not hesitate to contact the Department.
THOMAS E. PEREZ
Assistant Attorney General
Civil Rights Division
SAMUEL R. BAGENSTOS
Deputy Assistant Attorney General
JOHN L. WODATCH
PHILIP L. BREEN
Special Legal Counsel
Disability Rights Section
Civil Rights Division
Disability Rights Section
Civil Rights Division
U.S. Department of Justice
Tel: (202) 5 14-8301
Fax: (202) 305-9775
HANNA S. ROSS, ESQ.
Counsel for Princeton University
120 Alexander Road, Second Floor
Princeton, NJ 08540
Personally, I believe that eBooks and eReaders are the future of education and when done properly they can provide levels of accessibility previously unobtainable. Hopefully the software updates will be released soon and XXI century publishing can finally happen for textbooks.
In the swarm of controversy around Amazon’s book-deletion, Amazon managed to mostly finish cleaning things up with their customers. One thread left unresolved, however, had been the the lawsuit. A student began a suit against Amazon when the deletion of 1984 and Animal Farm from his Kindle resulted in losing the notes for his homework. The suit has now been settled and Amazon owes $150,000.
This amount obviously won’t hurt Amazon. The company probably avoided the pursuit of a larger, class-action settlement by preemptively offering $30 refunds to everyone effected. The amount is what was settled on as appropriate for the plaintiff’s specific damages.
My favorite part about this story has to be the plans of the law firm. This kind of litigation has a reputation of being simple money-grabbing, but that’s not the case here. The lawyers seemed to be involved simply because they didn’t agree with the actions Amazon took. As such, they are donating all of their earnings from this suit to charity. They launched the suit jut to tell Amazon something, and I think that they were successful.
The controversy surrounding Amazon’s deletion of George Orwell Books has now led to a lawsuit against the company. The suit was instigated by a Michigan High School student who was reading 1984 for an AP English class. The basis of the suit is that Amazon didn’t just remove the book from his Kindle, but it also ruined his homework assignment and ability to perform in class. Since he only used the Kindle for reading the book, all of his notes were in the form of annotations added to the eBook.
Interestingly, the annotations themselves did not seem to get deleted. They are, however, completely useless without the passages they are referring to. His notes say things like “this paragraph” or “this section.” Since they are linked to indexing that refers to a now non-existent data file, the lawsuit claims they are completely unsalvageable. I think this is an interesting angle for the suit to take. In a way, Amazon is technically leasing books and retains the rights to do things like remote deletion. User created annotations, however, can’t be said to be owned by Amazon in any way. Perhaps that’s why they weren’t removed along with the books.
So far, a man from California has also jumped on board as a plaintiff and the suit is moving towards class-action status. That’s rough news for Amazon, who has already been faced with another class-action lawsuit this summer. Amazon has already made promises to avoid book deletion practices in the future, but they have been met with some skepticism.
Amazon Kindle DX Leather Cover
The Kindle is an expensive gadget, so many owners take precautions to protect it. One popular Kindle accessory is Amazon’s own leather cover, which adds a layer of insulation to prevent everyday mishaps. The only problem is that the hinges on the cover have apparently cracked the cases on a number of Kindle 2′s and Kindle DX‘s, with the damage sometimes even resulting in a frozen display.
After a $5 million lawsuit filed against the company, Amazon agreed to replace Kindles that have been damaged by the cover. This is a reversal of Amazon’s previous practice of charging $200 for the replacement. Even though Amazon’s now trying to address the issue, the lawsuit has yet to be withdrawn. The company, however, refuses to comment on the suit itself since it’s against their policy to discuss ongoing litigation.
So far I don’t see any traces of damage on either of my Kindles but this piece of news has got me strongly considering investing in another kind of Kindle cover. On the other hand should 3rd party cover crack my Kindle, Amazon would be reluctant to exchange it for free. I’m curious, has anyone run into these problems with the Amazon case?
Arizona State University is one of six schools of higher education that are planning to deploy the Kindle DX this fall. They are, however, coming under fire from both the National Federation of the Blind and the American Council of the Blind over its use.
The two organizations have jointly filed suit against ASU in an attempt to stop the Kindle’s planned usage. While the Kindle does include a text-to-speech feature, all menus and navigation, including the ability to activate text-to-speech, are completely inaccessible to blind students. According to the lawsuit, if any University uses the Kindle as their primary means of textbook distribution, it is in clear violation of federal accessibility standards. A press release detailing the plaintiff’s position can be found here.
Public Universities, being governmental institutions, are required by federal law to meet strict guidelines regarding accessibility. Since the Kindle clearly does not meet these guidelines, there only seems to be two possible ways this could turn out: Either ASU (and the five other schools) cancel their plans to use the Kindle, or Amazon releases an update which adds accessibility features to the Kindle Store and menus. It would be a relatively simple software change for Amazon to make, so hopefully that is the route that things take. Then, the only problem would be the legal issues surrounding text-to-speech itself.
Roughly two months after Amazon was sued by Discovery Communications for patent infringement related to Kindle Amazon is suing Discovery Communications back also for patent infringement. In this case patents in question are related to “search engine and recommendataion technology” used on Discovery’s e-commerce website.
My guess is that legally both comanies are in the wrong but not because they are criminal but because current US patent system is not appropriate for modern intellectual property. Things like double-click get patented left and right. For the most part it’s done to protect against patent predators. So when somebody sues you over a bougus patent you are likely to find some other patent to sue them back for. Usually it ends up with undisclosed out-of-court settlement.
Most likely this will be the case here are well. We’ll see.
Original story can be found at Wall Street Journal.
According to www.broadcastingcable.com Discovery Comminications is filing a law suit against Amazon for patent infringement related to “secure, encrypted system for the selection, transmission, and sale of electronic books” (used in Amazon Kindle and Kindle 2). The patent in question was issued on November, 20 2007 – one day after Kindle US launch. Currently Amazon declined any comments.
Looks like more and more people realize that there is money in eBooks and market is growing day-by-day. Now suddenly everyone wants a piece of this pie. Just recently Authors Guild threatened to sue Amazon over text-to-speech feature in Kindle 2. Then it was Amazon sending “cease and desist” letters to MobileRead.com and possibly other websites about script that allowed books purchased from eBooks vendors other than Amazon to be read on Kindle.
As the market will grow more I’m sure we’ll see more turf wars like this one. As for patents… nowadays for any given thing you can find someone who holds a patent and “believes that he/she is entitled for compensation“…
Engadget reports that undisclosed law firm on behalf of Amazon.com sent cease and desist letter to MobileRead.com admins demanding pages that host instructions on how to use Python script that allows you to read legally purchased DRM protected eBooks in MobiPocket format on Kindle and Kindle 2.
My personal opinion is that it’s not as simple as Engadget and TechDirt would like to portray it. For one, Engadget’s statement that the script “script, which can’t actually be used to break Kindle DRM” is misleading. I will not elaborate why. If you research the matter yourself, you may find out what I mean. I don’t want to take sides on this particular issue, I just want to point out that there’s more to it than meets the eye or what’s written in mainstream news.
While I am personally a big supporter of open information market where content creators and distributors are fairly compensated for their work and law-abiding users are not limited by crippling DRM systems that bind them to specific hardware. But before this can happen market should get big enough. Otherwise it may collapse because of extreme competition. Amazon is currently the biggest driver or eBook market growth. Cut their profits, their eBook business may collapse and there will be no market at all. Recent release of Kindle application for iPhone and iPodTouch is a step in the right direction towards more open information market. Because it allows usage of purchased digital content to be freely used across two different software and hardware platforms. Hopefully soon more steps like this will follow.
Macworld reports that Amazon would allow copyright holders to disable text-to-speech feature which was introduced in 2nd generation Kindle. This seems to be part of the concession with the Authors Guild. Earlier this month Authors Guild accused Amazon that this feature infringes copyright and undermines the market for audio books. In it’s statement Amazon stated that the text-to-speech feature is legal, because no copy is made, no derivative work is created and no performance is given.
Well.. this seems to settle it. In my personal opinion text-to-speech was no threat to audio books because although much better than most voice synthesis systems I’ve experienced so far it still falls way short of professionally read audiobooks. It is also as much copyright infringement as me reading bed time stories to my daughter… But that’s just my personal opinion. It’s amazing what a law suit threat can do in a modern corporate world.
I just hope that few copyright holders would actually choose to exercise this ability to opt-out because this feature actually comes quite handy on long commutes when I don’t have any audiobook to listen to.