ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Saturday, September 24, 2011

Law Profs, Free Textbooks and $$$

Although this isn’t my first post to the blog, it is the first I’ve written since being officially welcomed (confusing I know, but it has to do with the wonders of time releasing posts…) So, I want to thank Jeremy for the very nice introduction and for the invitation to join my highly esteemed co-bloggers. Now, on to the topic of law profs making extra ca$h!

Over at PrawfsBlawg , Howard Wasserman asks whether a law school may prohibit its professors from reselling courtesy copies of textbooks. I think the answer is that it may as an employment matter, just as it may issue codes of conduct and other rules so long as the prohibition doesn’t run afoul of existing institutional policies, contracts or employment laws (I don’t think any apply to this situation).

What I find more interesting from a contracts prof’s perspective, is whether the publisher may prohibit such resale. As Wasserman notes, "West and Foundation now place stickers on courtesy copies explicitly prohibiting resale." I’m not sure that such a prohibition is valid. As the commenters to his blog post note, the cases in this area are not models of clarity. The critical issue is likely whether the transaction is characterized as a “license or a sale.” If it is a license, the publisher generally can issue restrictions; if it is a sale (i.e. a transfer of title), they probably cannot. With software, courts may permit such restrictions because software transactions are typically viewed as licenses not sales, see Vernor v. Autodesk, for example. (self promotion alert: I disagree – I think it depends upon the transaction, i.e. mass market consumer or customized). With things other than software --notice that I didn’t say goods -- it’s a toss up. A relatively recent case, UMG Recordings v. Augusto, indicates that such a restriction on a label would not be upheld. In that case, the Ninth Circuit found invalid a label prohibiting transfer of ownership of a promotional music CD. The case is at odds with other Ninth Circuit decisions involving software. The ruling in UMG v. Augusto is complicated by the applicability of a federal statute, the Unordered Merchandise Statute, 39 U.S.C. §3009 which provides that mailed unordered merchandise “may be treated as a gift by the recipient, who shall have the right to retain, use, discard, or dispose of it in any manner he sees fit without any obligation whatsoever to the sender.” Although there was no money exchanged for the CD, the court found that there was a “gift or sale” for the purposes of the first sale doctrine because there was a transfer of title.

Another interesting issue is whether digital books constitute “software” or “other things.” As the hardcover textbook cedes more ground to its digital counterpart, the characterization of ebooks as “books” or “software” gains importance although the key issue will remain whether the digital content is licensed or sold. Publishers of ebooks are likely to use the language of “license” rather than “sale” to prohibit transfers of ebook copies. It’s not clear whether the courts will defer; if they do, it will limit the impact of UMG Recordings v. Augusto.

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