At play in fields of tablets

One of the interesting trends this summer has been the ramp-up of interest in Google’s new tablet, the Nexus 7. Its launch portends far greater fireworks to come. Google has already sold out of its initial stock of the 16 GB version, and is shipping its remaining 8 GB tablets at a fast clip. The tablet, released with the newest version of the Android operating system called Jelly Bean, has received almost unanimously positive reviewsfor its functionality and responsiveness. Its 7″ screen size seems to hit a hand-holdable sweet spot between Apple’s 10″ iPad and large “phablets” like the HTC One X and Samsung Galaxy Note 2, which sport 5″ or 5.5″ screens.

The Nexus tablet was released as a portal device to Google Play, Google’s media catalog roughly comparable to Apple’s iTunes and Amazon’s more chaotic we-sell-everything online store. Early write-ups of the Nexus 7 almost inevitably describe the Google tablet as everything the first generation Kindle Fire tablet should have been – it has better construction, a more fluid user experience, a more open store, and more impressive technical specifications. The comparisons are fitting; Google is not releasing this tablet simply as a Jelly Bean showcase. This is an arms race of dreadnoughts among emerging technology superpowers.

The leaders of today’s tech hegemony are unleashing a “network industrialization” that is creating a new internet-based infrastructure for the global economy. Its core companies have rapidly converged into a homophily which would have been difficult to predict even a year ago: Apple, Amazon, Google, and Microsoft all present comprehensive, consumer-facing content distribution platforms. They have developed more or less self-contained content catalogs, e.g., iTunes and Google Play, that span films, games, music, and books; all have developed or adopted a competitive mobile OS (Apple’s iOS; Google’s Android, also adopted by Amazon; Microsoft’s Windows 8); all have released tablets converging on the 7″ and 10″ form factors; and all have released or are rumored to bereleasing mobile phones. All of them benefit by driving as much network traffic back to their own services as they can – thus, e.g., Apple’s developing its own mobile mapping services, dropping Google’s.

Placed in the context of publishing, this makes Google a critically interesting entrant in the tablet wars. Google has not heretofore made a big splash in digital book sales, although it has long been deeply engaged in publishing for years through its Google Book Search program, which has seen several iterations and re-brandings, not to mention a few “minor”legal skirmishes. Indeed, Google rather ingloriously pulled out of its partnership with independent book stores recently, leaving a market opening that others, like Zola Books, are racing to fill. Yet every indication suggests that books are integral to the Google Play release; as The Verge’s Tim Carmody notes, all of the Nexus 7′s most prominent competitors are reading tablets.

Chief among them is Amazon, whose Kindle store has garnered a significant lead in the market for ebooks and e-ink based reading devices. Despite their congruence on comparable economic strategies, Google and Amazon have strikingly different imperatives. In fact, at the Internet Archive where I work, when we think about which of the giant technology companies is most often on “our side” on critical policy issues, we almost inevitably come back to Google, despite our contention in the GBS settlement litigation. Built into Google’s DNA is an abiding commitment to open standards that is not apparent at Amazon; Apple’s support of open standards is strong but conditional on its own corporate advantage. For Google, open standards are a self-definitional element of corporate culture, and often crucial in its legal and policy positioning. Although it does not always choose open standards over narrower corporate goals, it is biased to do so.

And this is why it is really interesting to watch Google maneuver with the Nexus 7 tablet in digital books and other media content. Apple has dominance in general purpose mobile devices, but Amazon is pre-eminent in non-music content sales. For Google to challenge Amazon is a clash of more than just two big technology companies: it is a clash of corporate priorities. Google is far more likely to endorse open metadata and content standards like EPUB3 than Amazon; it has also made strong contributions to discovery standards within BISG and other industry bodies.

The dominance of technology in book retailing has deep ramifications for publishers; for example, direct to consumer sales efforts are not likely to generate significant return in general trade, although building strong reader-oriented communities may pay dividends in market intelligence. Most critically, if publishers are invested in an open competitive marketplace for books, they would do well to think about their relations with the dominant companies driving media sales. If I were in their shoes, I would seek strong contractual ties with Google and other companies more likely to parallel my strategic interests, and carefully evaluate more parochial complaints over issues such as price maintenance agreements.

If you are a peripheral country, there’s little to gain in encouraging conflict over extraction rights; the main battle is taking place on the high seas. Rather, be a shipyard for the most liberal colonial power.

A New Form of DRM: A Legal and Pragmatic Solution for Protection of E-Books

For those in publishing, the current big issue in digital rights managements is pretty simple: How can we protect our ebooks with effective DRM while freeing them from being trapped in the closed ecosystems of specific reading devices?

The first obvious question is, would publishers see major losses due to copying and distributing of ebooks that do not have DRM?

Many would argue no. First, DRM is easily cracked. Anyone bent on making a copy and sending it to a third-party will do so regardless of DRM. Second, Apple has demonstrated that publishers don’t need DRM. When iTunes first launched, all files contained DRM. Sometime in the past few years Apple quietly dropped DRM. Rather than diminishing, the market for music through legitimate channels continues to climb.

Thus, there is a good argument that the ebook publishing world can go “non-DRM” without suffering any major losses. Pottormore is famously doing so. In January of this year, Anobii CEO Matteo Berlucchi gave a speech at Digital Book World suggesting that major book publishers should abandon the use DRM.

On the other hand, publishers have a legitimate concern for how they might protect works from copying en masse by counterfeiters or distribution through resale, rental or other aftermarkets. In order to protect their works in this class of infringement, publishers will need to rely on the Digital Millennium Copyright Act (“DMCA”). In order to rely on the DMCA, the publisher must have either technology that is circumvented or copyright management information that is removed. And therein lies my solution.

A Legal Solution

What ebook publishers really want to prevent is large-scale file sharing. This is not stopped by DRM. In fact, DRM is futile against large scale file sharing. So, ebook publishers should look for enforcement mechanisms against the intermediaries of large scale file sharing.

There are legal mechanisms for permitting enforcement against used ebook stores, as well as other forms of sharing, renting and reselling of ebooks. The solution that I propose is to use a combination of the existing DMCA rules in order to give a level of protection that is minimally necessary to enforce against used ebook stores, resellers and rental markets.

Publishers need not be afraid of stepping outside of book reader software and devices. In fact, the insistence on heavy DRM by publishers has unwittingly given Amazon power over the ebook market that publishers now regret. Customized DRM on Kindle devices creates a closed system that locks readers in to one retailer, which is potentially far more dangerous to the ebook publishing industry than the threat of piracy, in my opinion. We can free ebooks from DRM software and corresponding hardware and use existing legal mechanisms for enforcement against the worst copyright breakers.

The solution proposed is to create ebooks (in ePub or even PDF) with a watermark randomly placed throughout the book (visible and invisible). The watermark would contain the personal information of the customer who purchased the ebook and a warning not to resell, or distribute the book in any way. The user who purchases such a book will agree to terms and conditions (i.e. a “clickwrap”) that prohibit copying and distribution, as well as a statement that the consumer’s personal information will be prominently displayed on the book as a deterrent from distributing or copying in violation of the agreement.

The point of making a watermark that shows the user’s personal information is to create a disincentive for the user to pass the book along to unknown third parties, deputizing the user to act as a gatekeeper, protecting the book from wrongful distribution. If a file-sharing service or ebook reseller removed the watermark, it could be a violation of the DMCA Section 1201.

The watermark of the personal information could also have the publisher’s serial number embedded. Doing this creates an additional remedy under the DMCA Section 1202, which prohibits the removal of “publisher information” such as serial numbers. (Hat-tip to Cory Verner, who came up with this part of the mechanism. Verner is president of eChristian, Inc., an Escondido, Calif.-based Christian audio-book retailer. He has filed a patent application for the idea.)

The DMCA provides a variety of protections for digital works, such as Section 1201, which prohibits the “circumvention” of “a technological measure that effectively controls access to a work protected under this title.” The DMCA also prohibits the removal of copyright management information (“CMI”) under Section 1202, which includes the work’s title, author, and the copyright owner, as well as certain other “publisher information.”

What makes this “DRM” unique is that the removal of the watermark would likely violate the DMCA’s prohibition on circumventing a technological measure as well as the removal of “publisher information.” While the case law is not clear that this would be considered a circumvention, I present a novel rationale for applying Section 1201 of the DMCA to removal of a watermark.

In previous cases, technologies that are “passive” are generally not considered to “prevent access” under Section 1201. However, I believe that making the user an active participant in the protection of the book, the technology does not operate as a “pass through” the way a username and password would. But, the technology deputizes the user as the means of preventing access to the work by unauthorized third-parties.

This solution will not prevent a user from sharing a book with the user’s family or close friends. But publishers probably don’t want to sue their customers for sharing ebooks with their aunt or sister. Traditional printed books are often shared with family and friends. What ebook publishers need is a way to distribute ebooks with as little hassle as possible, while ensuring that the publisher can sue pirates and stop ebook resale, rental and large scale sharing.

To accomplish this, we don’t need heavy DRM, but something lighter. Why not use a form of DRM that lets the market grow, and reap the rewards of the next technological revolution as the ebook wave brings a massive new volume of sales and sweeps printed books to the side?

Thus, I propose using personal information as a deterrent against wrongful distribution of the book. We can deputize our customers to prevent wrongful distribution. The customer agrees not to distribute the book. If they do, the next reader will see the personal information of the original owner placed throughout the book, both visibly and invisibly. As such, not many users will violate their agreement because they will not want to have their personal information shared with unknown third-parties. Further, if they strip the information, they’re in clear violation of the DMCA.

Readers might “share” book with family and friends who already have their personal information; but they would have been free to do that with a non-digital book in the printed book business. The watermark is likely to confine file sharing to the close family; those with whom the original purchaser has a personal relationship, which is the very type of person with whom paper books are typically shared.

These are the abridged version of my conclusions. I will be publishing a much longer, more detailed piece on the topic titled Digital Rights Management Lite: Freeing ebooks from Reader Devices and Software. Can Digital Visible Watermarks in ebooks Qualify for Anti-circumvention Protection under the Digital Millennium Copyright Act?  (Virginia Journal of Law & Technology, volume 17, Issue 2 (Summer 2012,forthcoming).