Shrink Wrapped Books

[Liblicense-L Listowner <liblicen@pantheon.yale.edu>]

The message below was forwarded to me by a copyright attorney colleague.  
Of possible interest, from the ABA (American Bar Association) Journal.

---------- Forwarded message ----------

Friday, July 29, 2005  Volume 4, Issue 31 

SHRINK-WRAP CONTRACTS 'BOOKED'

Publishers Stretch Software-Type Licensing to Ink-on-Paper Products

BY G.M. FILISKO

It looks like the next frontier for those "shrink-wrap" licensing
agreements so common on today's software products will be a
page-turner-literally.

Shrink-wrap agreements, which assert that a customer has entered a
contract just by opening a product's wrapping, have surfaced on reference
books sent to libraries, lawyers and doctors, but it's unclear whether the
agreements are always enforceable-or what's next in the land of
shrink-wrap licensing.

The Maryland State Bar Association is using a shrink-wrap agreement to
limit use of its member directory. It states the MSBA will license the
contents of the directory to members only if they accept all of the terms
in the agreement. Among the terms is a requirement that the directory's
contents "may not, in whole or in part, be reproduced, copied,
disseminated ... except for the user's individual, personal and
confidential reference." According to the MSBA's executive director, Paul
V. Carlin, the association's copyright lawyer advised that the agreement
was "contractual and permissible."

Librarian Paul Deane from Arlington Heights, Ill., says he's seen
shrink-wrap agreements on at least five books in the past four months, one
a directory of medical practitioners, the others reference books.

"Basically, they say that if you open the shrink-wrap, you're agreeing to
the publisher's licensing agreement. The thing that gets me," Deane says,
"is there's no information about the licensing agreement."

Deane says that at the library where he works, "we tear open the
shrink-wrap, tape the agreement into the front of the book" and put the
book on the shelf.

Deane may not need to worry. Peter Brown, an intellectual property lawyer
in New York City and a former co-chair of the ABA's Computer and Internet
Litigation Committee, calls the books Deane is receiving a case of
"overzealous attorneys trying to see if what works on software might work
on books."

Jorge L. Contreras, who specializes in Internet, e-commerce, and new media
law in Washington, D.C., also has doubts about the enforceability of such
agreements. The most obvious, he says, is that "in cases where the license
agreement isn't attached, it would be difficult to enforce."

Contreras also notes the difference between software and books. "On one
hand," he says, "there's a pure contract law issue. You can agree to do
whatever you want within the bounds of the law. If a license says that if
you rip open the shrink-wrap and read the book, you'll be bound by certain
terms as a contractual matter, the license could be enforceable."

On the other hand, Contreras says, the underlying justification for
shrink-wrap licenses in software-protecting the publisher from repeated
and illegal copying of the data on the physical CD or disk-is much less
applicable for books.

Nonetheless, Henry Gabriel, professor of commercial law at Loyola
University New Orleans School of Law, says that if you use a book "with
knowledge or having access to the terms of the license, you're probably
bound to the terms.

"That doesn't make all the terms enforceable," Gabriel says. "You may
still not be bound to terms that are unreasonable."

The bigger and perhaps more important question is why publishers would
enter the shrink-wrap world. In fact, representatives of several national
publishers associations say they are unaware of the practice.

Reno, Nev., publisher Jacqueline Church Simonds says she hasn't heard of
or seen shrink-wrap agreements on books, but isn't "hugely surprised" by
them. "I could see why some publishers would go that way. It's sort of a
Pottery Barn method of selling: You break open the wrap, you've bought the
book."

"The whole idea of putting a licensing agreement on a book is probably to
limit fair use of books," Gabriel says.

That probably won't succeed, Contreras says. "If the license agreement
says you can read the book but can't make fun of it, or you can't excerpt
even a small portion even for educational purposes, it would violate the
fair-use doctrine," Contreras says.

According to Contreras, the MSBA's agreement prohibits copying, and "it's
not entirely clear whether such a contractual prohibition would trump the
fair use doctrine." He adds, "It's very possible the contractual
prohibition would not be enforceable to prevent a fair use."

"The thing that has a lot of legal commentators scratching their heads is
how this relates to the first-sale doctrine," Contreras says. "In the
future, it could be that you download a song and can play it only three
times before it disappears. The same could be true with a book; perhaps
you can read it for only a year before it disappears. And these
restrictions won't be imposed by shrink-wrap agreements, but by
technology."

Gabriel and Brown also believe the agreements are an attempt by publishers
to limit the secondary market, where used books are moved for resale.
"Books are hard to control because there is that secondary market. So
publishers are moving into the paper world the same level of protection
they have in the digital world," Gabriel says. "But if the license says
the book is the property of the publisher, and you can't resell the book,
I'm not sure that's enforceable."

"There are a lot of ideas to limit the secondary market," Simonds says,
"but I don't think that's going to be possible. This just seems like rude
marketing, and all it will do is build up ill will."

"At the end of the day," Contreras says, "I don't think the way people
read or use books will change, because it's hard to police. Publishers
will try imposing restrictions, and courts will have to determine where to
draw the line."

Brown agrees. "I don't see a future where we're licensing everything.
Publishers have made an overzealous effort to make an end run around
copyright law. Courts will impose a reasonableness standard, and in the
end, common sense shall prevail."

In the meantime, Gabriel says, publishers may continue to say, " 'I don't
know whether these terms are enforceable, but I'd rather try them and make
you prove they're not.' "

�2005 ABA Journal