Amazon wins broad patent on reselling and lending ‘used’ digital goods

In the real world, lending a book to a friend or selling your used music collection isn’t exactly groundbreaking. In the digital world, it’s patentable.

Amazon.com has been awarded what appears to be a broad patent on a “secondary market for digital objects” — a system for users to sell, trade and loan digital objects including audio files, eBooks, movies, apps, and pretty much anything else.

The patent, originally filed in 2009 and granted on Jan. 29, covers transferring digital goods among users, setting limits on transfers and usage, charging an associated fee, and other elements of a marketplace for “used” digital goods.

The Seattle company is already implementing the approach in its feature for lending Kindle books, but the bigger question is whether the newly granted patent could impact others pursuing similar businesses, such as ReDigi — a “pre-owned digital marketplace” that has attracted legal attention from major music labels.

[Follow-up: Rival shrugs off Amazon patent on resale of ‘used’ digital goods]

One of features of Amazon’s approach is the ability to “maintain scarcity” of digital objects. From the patent …

… an object move threshold (“OMT”) may be set. The OMT may limit the number of transfers of a used digital object to other personalized data stores when the used digital object has been moved more than a threshold number of times, thereby helping to maintain the scarcity of the digital object in the marketplace. For example, a popular used digital object such as a song may have an OMT of three, only allowing three permissible moves of the song to other personalized data stores. After the OMT is reached, the used digital object is no longer permissibly moveable to another personalized data store…

Read the full text of the new Amazon patent here.

  • http://www.facebook.com/r.scot.johns R. Scot Johns

    Wow, this is huge! Amazon gains a patent to sell used digital goods, cornering a market that hasn’t even developed yet. That’s thinking WAY ahead of the curve. Enormous implications for future commerce.

    • Nathan Alden

      I agree. This is a huge, huge development that will probably go unnoticed by many. I for one am very concerned about this patent, although I find it hard to believe there wasn’t already prior art; someone out there must be reselling used digital goods.

      This story needs to go viral, and not for the benefit of Amazon!

  • fiz

    Information wants to be free…

    • Reality Calling

      Yes, but the creators of that information–the author who wrote that spy novel you love–need to be paid or they will stop creating the “information.”

  • http://twitter.com/HufflepuffBR Fábio Emilio Costa

    Looks like Greedy Island arc from Hunter x Hunter

  • Chris Collins

    Back in the day, before I had the good sense to by an iPod, I had a Sony Minidisc player. The software that came with it (Sonicstage) allowed you to copy music from CD to minidisc, but only allowed you to ‘check out’ that file to up to 3 minidics, effectively stopping you from making multiple digital copies. If you wanted another copy, you had to ‘check in’ an existing copy so it could be removed from existing minidiscs.

    Since then we’ve had much written on both sides about the positive and negative effects of DRM systems such as this. To me, Amazon is building a marketplace around a similar DRM system. History has shown that DRM systems are unliked by end users. End users want the ability to lend and share, yet media companies and market places continue to ignore this need (or haven’t figured out how to monetize it). MP3 is much more popular than Minidisc now, and in my opinion this is because they are much easier to share.

    This development doesn’t worry me in the slightest. DRM systems will remain broken, and digital goods will continue to be copied freely. This is the nature of the Internet. Your only option is to embrace it.

  • http://twitter.com/stephenjbell Stephen Bell

    Organizations that are able to “maintain scarcity” are monopolies or cartels. I hope some other digital publishing company is able to step up and work around this nonsense.

    And honestly, if digital books are going to 1) cost nothing to distribute and 2) keep us from doing things with them that we can do with regular books (like lending as many times as we want), they had better make digital books a lot cheaper than printed books.

    As it stands now, you’re only able to lend a Kindle book once, and for a limited amount of time. Their example of moving content three times looks almost generous by comparison.

  • http://twitter.com/mtthckmn Top Cat

    Artificial scarcity is the heart of any monopoly.

  • PenkDooo

    Looks like Amazon is getting cooler by the day dude.

    Net-Privacy.us

  • http://www.facebook.com/brendahb Brenda Hiatt Barber

    Hm. Potentially very disturbing. So far, haven’t seen anything on whether digital content creators (aka authors) would receive any compensation…

  • Martin

    ReDigi is already doing this. There has been a lot of talk about ReDigi’s technology, which does not rely on Amazon’s intended method of “copy the file, then delete the original”. ReDigi works differently and I am quite sure they have their own patents for it. In summary, ReDigi, from what I can tell, has already created a secure marketplace for used digital goods and it will likely prevent Amazon from monopolizing the used digital market as they intended on doing.

  • rmstallman

    Amazon e-books implement ersatz “lending”, and it might implement
    ersatz “resale”, or even ersatz “giving”. But if you have to follow a
    company’s rules to lend, sell or give your copy, it wasn’t yours to
    begin with, and that means it’s no damn good.

    See stallman.org/ebooks.pdf.

  • Emmett McAuliffe

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