Anticipating Likely Copyright Battle, Amazon Backs Down Over Kindle 2 Audio Feature

Anticipating a likely copyright battle over its new Kindle 2 audio feature, Amazon has backed down on its previous position and announced that publishers and authors will be able to decide whether to enable the feature.

The Author's Guild first signaled that a fight was brewing when it issued a February 12th alert over the Kindle case, stating as follows:

On Monday, Amazon CEO Jeff Bezos unveiled Amazon's Kindle 2 e-book reading device at the Morgan Library in New York. Most of the changes from the first version of the Kindle are incremental improvements: the new Kindle is lighter and thinner, for example, and Amazon eliminated the scroll wheel. One update, however, is wholly new: Amazon has added a "Text to Speech" function that reads the e-book aloud through the use of special software.

This presents a significant challenge to the publishing industry. Audiobooks surpassed $1 billion in sales in 2007; e-book sales are just a small fraction of that. While the audio quality of the Kindle 2, judging from Amazon's promotional materials, is best described as serviceable, it's far better than the text-to-speech audio of just a few years ago. We expect this software to improve rapidly.

We're studying this matter closely and will report back to you. In the meantime, we recommend that if you haven't yet granted your e-book rights to backlist or other titles, this isn't the time to start. If you have a new book contract and are negotiating your e-book rights, make sure Amazon's use of those rights is part of the dialog. Publishers certainly could contractually prohibit Amazon from adding audio functionality to its e-books without authorization, and Amazon could comply by adding a software tag that would prohibit its machine from creating an audio version of a book unless Amazon has acquired the appropriate rights. Until this issue is worked out, Amazon may be undermining your audio market as it exploits your e-books.

The debate over the legality of Kindle 2 features soon erupted in response to this alert, as experts questioned whether the new Kindle audiobook feature was a violation of copyright law. Amazon's position was that Kindle 2 was legal, since the technology did not make copies or derivative works of the original text, and that the technology did not perform the text. Many copyright experts, however, did not agree with that rationale.

CNET's Peter Glaskowsky articulated the position of the experts who believed that Kindle 2 violated copyright law as follows:

First, the Kindle 2's text-to-speech function is certainly copying and transforming the original work into a derivative of the original and performing this new work for the listener. That can be fair use, or it can be a crime.

Under U.S. law, fair use depends on at least four factors:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substance of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work. . . .

My opinion: the Kindle 2's text-to-speech function, as originally proposed, failed on all four counts. It had a commercial purpose (to help sell the Kindle 2); it applied to commercial copyrighted works in their entirety, and it would have cut into the market for commercial audiobooks. Now that Amazon has backed down, the legality of this feature may never be judged by a court.

If it is a violation, it's certainly true that the violation is being committed by the operator of the Kindle 2, not by the device itself. But as the U.S. Supreme Court observed in deciding Sony of America v. Universal City Studios (1984), also known as the "Betamax case," the manufacturer of a device may be guilty of contributory copyright infringement, if the use of the device is inherently infringing.

Sony was cleared in that case because its Betamax VCRs could be used to make legitimate copies, and Sony had no control over unauthorized use.

But Amazon does have that kind of control over the Kindle 2.

Of course, not every expert agreed with this assessment of the legality of the Kindle 2.

Stanford Law Professor Larry Lessig wrote on the issue as follows:

Amazon rightly argued that this did not violate any of the exclusive rights granted by copyright law to the copyright owners. In that, Amazon is exactly right. But nonetheless, it will now enable publishers to decide whether the Kindle books they sell will permit the book to be read aloud. And of course, that includes public domain books. . . .

But the bigger trend here is much more troubling: Innovative technology company (Amazon (Kindle 2), Google (Google Books)) releases new innovative way to access or use content; so-called "representatives" of rights owners, Corleone-like, baselessly insist on a cut; innovative technology company settles with baseless demanders, and we're all arguably worse off.

We're worse off with the Kindle because if the right get set by the industry that publishers get to control a right which Congress hasn't given them -- the right to control whether I can read my book to my kid, or my Kindle can read a book to me -- users and innovators have less freedom.

Similarly, the Electronic Frontier Foundation's Deeplink Blog took up Amazon's position, arguing as follows:

Luckily for parents, teachers, and everyone else who likes to read aloud, the Authors Guild is simply wrong. . . . . Under the Copyright Act, a derivative work is "a work based upon one or more preexisting works . . . which, as a whole, represent[s] an original work of authorship." While a book read aloud may be useful (or not—let's remember this is a speech synthesizer, not a human being, reading the book), where is the originality that makes the version read aloud on a Kindle 2 creative, independent of the original book? The design of this new nifty feature may have been creative, but its use is not. . . .

Maybe the Authors Guild would then argue it's an unlawful reproduction, and the Copyright Act forbids the making of copies (subject to things like fair use, see below). True enough, but in order to be a "copy," the allegedly infringing thing must be "fixed." And fixation requires that the copy be "sufficiently permanent or stable to permit it to be . . . reproduced . . . for a period of more than transitory duration." Here, the audio version is presumably buffered in RAM on the Kindle 2 for mere moments. Last summer, the Second Circuit Court of Appeals held that copies retained for 1.2 seconds in RAM buffers on Cablevision DVRs were not "fixed." So there are no unlawful "copies" being made when Kindle 2 users read books aloud.

Moving down the copyright checklist, there's no unlawful distribution. Amazon distributes the e-books (with permission!), not the version read aloud, which is created on the fly by the Kindle 2. . . .

And it's not an unlawful performance. The Copyright Act grants copyright owners control over performances of their work, but only public performances. Listening to a book you purchased being read to you by your Kindle 2 is not a public performance.

So was the Kindle 2 inherently infringing or was it a perfectly legal technological advance? Clearly, those of us in the copyright world were eager to see this case decided in a court of law, as there clearly was a split of opinion on the issue and there were good arguments that could have been made on both sides given the case law. However, Amazon decided to take the legal advice that I am sure it was getting on the issue and to work with the Author's Guild. Evidently Amazon felt that it was not in the company's best interests to be the test case on this particular subject. Why march into the fire when there is way to avoid the flames altogether? As a transactional attorney, I have to say that I agree with Amazon's decision: there was an easy fix to this issue and in a bad economy, the best move for most companies is to try to resolve the dispute.

In response to Amazon's decision, the Author's Guild wrote to its members that this "was a good first step," stating:

At the end of the business day on Friday, Amazon announced that it would allow publishers (and thereby many authors) to block text-to-speech audio functionality on a title-by-title basis for its Kindle 2 reading device. . . . Amazon's initial implementation of Kindle 2 would have added audio playback to your e-book regardless of whether Amazon had properly acquired audio rights. For most of you, Amazon's announcement means that it will now respect your contractual right to authorize (or not) the addition of computer-generated audio to your e-books sold for the Kindle. . . ..

So, for now, both sides are going to work with one another contractually. While that may not be the ideal result for the legal community who wanted to see this issue resolved at court, it was likely the best result for both sides of the argument.