Amazon Cloud Drive, It’s Kinda Like a Big Deal – Part 2

Last week we wrote about Amazon’s bold new Cloud Drive service (read part 1 here). In Part 2 of this short series we’ll look at the legal challenges that the music industry will likely mount.

First-Sale Doctrine

To briefly recap, Amazon’s Cloud Player allows users to store their music in the cloud where they can stream and download that music from a computer or Android phone. It appears that Amazon is claiming this service is legal partially on the basis of somehing called the “First-Sale Doctrine”. The first-sale doctrine basically states that once someone has obtained a legal copy of a copyrighted work they have a right to transfer that copy however they wish. This is the basic principle that allows video rental stores to buy copies of DVDs and then rent those copies out however they choose (also the rule that allows libraries to function). The first-sale doctrine first came into existence in 1908 when the Supreme Court ruled on Bobbs-Merrill Co. v. Straus. In this case the copyright holder stipulated that his book must be sold for no less than a dollar and sued a bookstore under copyright law when the store offered the book on sale for 89 cents. The Supreme Court ruled in favor of the defense and decades later a narrow interpretation of this first-sale principle was written into law in the Copyright Act of 1976 (17 U.S.C. § 109). The concept as applied to Amazon’s situation is that there is a limit to the stipulations copyright holders can place on their work and once a user has bought an mp3, they have the right to transfer that copy as they wish (via the Cloud Drive). However this argument alone is quite weak for several reasons, not the least of which is that when you download an mp3 from your Cloud Drive, you are making a copy, not transferring the mp3. The first-sale doctrine does state that consumers have a certain freedom in what they do with their copies of copyrighted works but these rights deal specifically with resale/lending and trying to apply those principles to a service that can make copies of mp3s is more than a stretch. As an aside and a thought experiment, do you think you could legally resell songs you bought on iTunes under the first-sale doctrine? I’m guessing Apple would take you to court to find out.

Space Shifting

Space Shifting is a hotly debated legal idea that piggy backs on the established concept of Time Shifting (sounds very Sci-Fi I know). Time Shifting states that it is legal to record a copyrighted broadcast for the purposes of being able to replay that content at a more convient time. This arguement was born out of the Sony Corp. of America v. Universal City Studios, Inc. case which made Betamax legal and paved the way for the VCR, TiVo and more. Space Shifting argues that it is similarly legal to copy a copyrighted work for the sake of playing it on a more convenient platform (i.e. Ripping a CD to your mp3 player). This legal concept was used somewhat successfully in Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., Inc. which allowed personal mp3 players to copy songs from the owner’s computer. However this argument failed twice in cases involving the internet (A & M Records, Inc. v. Napster, Inc and UMG Recordings, Inc. v. MP3.com, Inc.). Because of these later cases, it is unlikely that Space Shifting alone would provide a successful defense to Amazon’s Cloud Player, though it should be noted that both Napster and Mp3.com were doomed for reasons other than space shifting.

The Unknown

The Amazon Cloud Player fiasco is so intriguing because it involves so many technological realities that have yet to be addressed in the courts. Up until now services like Dropbox and other digital lockers have been presumed to be legal but no one has ever challenged them in court to find out for sure. The whole world of cloud computing and cloud storage is so young there is very little definitive case law, and even less in the way of legislation. However, the primary issue herer seems to be the concept of streaming. It is problematic to argue that streaming via the Cloud Player is analogous to music radio broadcasts because in the case of the Cloud Player the listener already has purchased a copy of the music which they are listening to. This itself doesn’t even acknowledge the raging war between internet radio and broadcast radio which has resulted in two separate licensing and regulatory schemes.

Your Rights

While businesses and the courts will focus on the specifics, this debate really comes down to whether customers that purchase music are purchasing the rights to listen to that song as they please, or whether copyright owners can issue restrictions on the medium over which the music is enjoyed. While the RIAA initially fought against CD ripping for personal use, as well as argued that all mp3s were illegal, the pervasiveness of the practice forced the RIAA to change its tactic. At this moment we are at a similar crossroads where the music industry wants customers to pay additional amounts for the right to stream their own music. While the right to stream their own music may be a no brainer for consumers, we can only hope that older-generation judges, and the heavily lobbied legislators agree.