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Apple follows Amazon with patent for resale of e-books, music

Copyright owners remain concerned that digital resale will devalue their work.

Apple follows Amazon with patent for resale of e-books, music

Is Apple looking to get into the digital lending and resale game? A recently published Apple patent application indicates as much, making publishers wonder whether Apple is truly their friend or foe. The patent addresses how licensed content such as e-books, music, movies, or even software can be moved between users while attempting to respect the rights of copyright holders. But even with provisions that would pay copyright holders a portion of the content's resale price, publishers and musicians are unlikely to cheer, as they see digital resale as a threat to their existing revenue models.

Apple's patent application describes a system that would include embedded user information as part of the DRM of each file. When the file is given or resold to another user, the ownership of the data would change and the original purchaser would no longer be able to access the file—only the new owner would be able to open it. Ideally, this would address concerns about simply making copies of files that both the original and new owner can access.

But this isn't just about figuring out who can access the files and when they can do it—Apple also included provisions for when money is exchanged for the "used" file. "As part of the change in access rights, the transferee may pay to obtain access to the digital content item. A portion of the proceeds of the ‘resale’ may be paid to the creator or publisher of the digital content item and/or the entity that originally sold the digital content item to the original owner," reads the application.

But while this sounds like a boon to digital customers and libraries, the legality of reselling digital files remains up for debate. As an example, Capitol Records accused a company describing itself as "your favorite pre-owned record store, but for digital music files" of facilitating rampant music copying in early 2012. The company, ReDigi, fought back against a copyright infringement suit by saying that no "copying" was taking place between users, and it only facilitated the sale of files between buyers and sellers.

On the flip-side, a European court ruled last June that customers do have the right to resell purchased software regardless of whether it came on physical media or via the Internet.

The reason some publishers are worried is that they think the resale of digital files—whether music, or e-books, or anything in between—will devalue their original purchase price and eventually ruin the market. "The resale of e-books would send the price of new books crashing," Authors Guild President Scott Turow told the New York Times. "Who would want to be the sucker who buys the book at full price when a week later everyone else can buy it for a penny?"

Indeed, a second-hand market for digital files could complicate things between publishers and the stores that sell their content—they would likely have to negotiate very favorable resale licensing deals before publishers get on board. And Apple's not the only one looking at how to do this: Amazon has filed its own patent application for the resale of digital content, which was published earlier this year. With digital powerhouses like Apple and Amazon seemingly on the same wavelength, content owners may be feeling the pressure to comply, even if they think their work is being devalued.

There's another angle to these patents as well. If Apple and Amazon were to create markets for used digital goods, it would put them in conflict with the software industry. The software industry has fought hard for the right to stop resales it doesn't like—and it has generally won the argument that digital goods are "licensed" and can't be resold. The key case here was Vernor v. Autodesk, which was won by the software industry.

Of course, patent applications are just that: applications. And even if the USPTO were to grant them full patent status, there's no guarantee that either Apple or Amazon will end up making their ideas into a reality. Both companies own deep patent portfolios for ideas that will never see the light of day, so publishers don't have to start shaking in their boots just yet. That said, it's clear these companies are at least thinking about how to make their digital content offerings more appealing to users, so it seems unlikely that this will be the last we'll hear about such ideas.

Channel Ars Technica