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By Callum Sinclair, 27 October 2009 12:10

COMMENT

Amazon's Kindle e-book and Google's Book Search will change the way we read books forever. And that will keep the lawyers plenty busy, says Callum Sinclair.

The internet, as the daddy of all disruptive technologies, heralded a new era of litigation. Now with Amazon's Kindle e-book reader available internationally - in the UK and some 100 other countries - and all the controversy over the Google Book Search settlement, it looks like e-book readers are the next space for legislative upheaval.

E-book readers, or e-readers as they are sometimes called, are lightweight electronic devices typically around the size of your average paperback novel (but much thinner). They are capable of storing thousands of books in digital form; users can download these direct to the devices over mobile and wireless networks. Along with books, a wide range of newspapers, magazines and business publications are available for download, and much more content is coming.

There is serious money at stake in this area. Some experts predict the e-book market will be worth $9.5bn by 2010, and many estimate the number to be much higher. Sales of e-readers are expected to double in the US in 2010. Amazon holds just under two-thirds of that market, followed by Sony with a further third and a few smaller suppliers sharing the remainder. Forecast growth curves begin to steepen rapidly after 2010.

Amazon's Kindle e-book reader (Photo credit: Amazon.com)

The explosion of increasingly sophisticated mobile devices, coupled with the recent app phenomenon will also contribute to the proliferation of e-reader technologies, allowing e-publications to be viewed on a vast range of non-dedicated mobile devices. A number of e-reader apps - such as Stanza, Classics and Short Covers - have been available for some time on Apple's ubiquitous iPhone. With the recent launch of Microsoft's app store, Windows Marketplace for Mobiles, more will undoubtedly follow.

Most industry commentators now agree that e-reader technology is moving from the niche stage into the mainstream marketplace. While libraries and private book collections will probably never be completely replaced, e-book technology is starting to overcome some past literary and cultural prejudices. At the same time, environmental considerations are driving a desire for alternatives to paper, creating a path for the e-reader technology to achieve a critical mass in a new generation of students, business people and other frequent book buyers.

All this is leading to a new wave of legal disputes. It will be interesting to observe whether, in due course, illegal e-book file-sharing attracts the same levels of controversy and media attention as illegal music file-sharing. With e-books, the challenge faced by lawmakers throughout the world to ensure copyright and intellectual property legislation keeps pace with the rate of technological change will only grow. It's an issue the UK government has already started to address in part through its recent Digital Britain report.

One recent legal controversy took place in July, when Amazon apologised to its US Kindle users for deleting copies of the George Orwell classics 1984 and Animal Farm direct from their e-reader libraries.

Amazon discovered that a third-party publisher had added the novels to Amazon's library without having secured the necessary licensing rights to sell them. Although refunds were given to affected customers, there was much criticism of this Big Brother approach - and Amazon has agreed to refrain from deleting books in this manner in the future.

Google Books has also been subject to legal debate, starting in 2002 with Google's attempt to create the largest and most comprehensive digital library in history. At this time it started to work with major university libraries to scan and digitise millions of books, including texts which were out of copyright, others which were still in copyright and 'orphan' texts where rights' holders could not be traced. Google claimed rights to scan and display portions of the copyrighted texts on the basis of the so-called 'fair use' doctrine, which creates some exceptions to the rights of copyright holders.

However, Google was sued in 2005 by the Authors Guild and the Association of American Publishers. This group saw Google as benefitting financially from what they believed to be commercial exploitation - and something which by its nature went beyond genuine fair use, and by doing so, depriving its author and publisher members of benefit.

The case reached a complex settlement at the end of last year involving a one-off $125m payment from Google to resolve claims by authors and publishers. It also set out rules allowing copyright holders to partially benefit from future use by Google of their works.

This does not look like the end of the story though: US Justice Department antitrust lawyers have been examining the settlement closely to determine whether more comprehensive legislation should be implemented.

There is also the issue of its applicability outside the US. The German government, for instance, has filed its opposition to the settlement, ignoring Google's claims that only US readers will benefit and stating that the proposed settlement will give Google an unfair advantage over all other digital libraries (commercial and non-commercial) in the US and Germany.

Meanwhile, the European Commission is looking into how to develop a digital library in Europe that would only scan works that are no longer protected by copyright. While this would avoid legal scrutiny, it could also limit the number of works that can be digitised.

Despite these legal concerns, it appears that e-reader technology will only continue to develop and impact the way in which consumers read books. The literary industry must recognise the world is changing, and it is imperative that their business strategies are flexible enough to accommodate these developments.

Callum Sinclair is an associate in the intellectual property and technology group at law firm DLA Piper.