This is a follow up to my previous post on the iBooks Author End User License Agreement (EULA) and what it actually means. Rather than posting an update to that post, I decided to follow it up with a simple breakdown of why all of the people who believe the EULA takes away (or tries to take away) your copyright are wrong.
Transfers of copyrights, and exclusive licenses, must be in writing and signed by the owner of the copyright
Max Kennerly over at Litigation & Trial wrote that the iBooks Author EULA attempts to create an exclusive license but fails to do so. He’s wrong about the attempt to create an exclusive license, and I’ll outline why below, but he’s correct that it fails to create an exclusive license under U.S. copyright law. (Probably because that was never the intent.)
Section 204 of the Copyright Act of 1976 states that:
(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.
Section 101 of the of the Copyright Act of 1976 defines a transfer of copyright to include exclusive licenses. This means that any exclusive license must meet the transfer requirements of Section 204 above. Apple’s EULA fails to do this, and therefore fails to meet the requirements of an exclusive license.
The iBooks Author EULA defines a work as the output generated by the program for the purpose of the license
The iBooks Author EULA defines a “Work” as what you generate using the iBooks Author software. Specifically, the EULA states:
IMPORTANT NOTE: If you charge a fee for any book or other work you generate using this software (a “Work”), you may only sell or distribute such Work through Apple (e.g., through the iBookstore) and such distribution will be subject to a separate agreement with Apple.
A work is not a work as used in copyright law, but rather the output generated by the iBooks Author program. This is poor contract drafting because the terms Apple’s iBooks Author EULA uses are technical terms in copyright law, but the definition they are using is different than the technical definition of those terms. Further, even if Apple or someone else were to later argue that this use of the term “Work” includes the copyright in the text of the book, it would fail under the above Section 204 requirements for the transfer of a copyright.
The iBooks Author EULA specifically disclaims ownership over the text and other content displayed or accessed by the Apple Software
Section 2.D of the EULA states as follows:
2. Permitted License Uses and Restrictions.
. . .
D. Copyright and Content. [. . .] Title and intellectual property rights in and to any content displayed by or accessed through the Apple Software belongs to the respective content owner.
This passage may be intended to apply to the stock graphics or other materials that come with the software, but it also clearly disclaims ownership of any copyrighted material “displayed or access through the Apple Software.” This indicates Apple’s recognition that the copyrighted works of third parties, which would include authors/publishers using iBooks Author, are separate and distinct from the copyright in iBooks Author itself.
Might it be said that the “exclusive transfer” Kennerly and others focus on is in the copyright of the eBook file generated by iBooks Author?
Yes, and this the only argument that may be made along these lines. The argument goes something like this.
- iBooks Author is software that is copyrighted.
- The user of this software is granted a license to use it based on certain conditions, including how it is distributed.
- Anything outputted by this software falls under the software’s copyright either directly or indirectly as a derivative work.
- Therefore, if someone creates an eBook using the iBooks Author software and sells it on their own website instead of through Apple’s iBooks store, then this person would be violating copyright by violating the copyright license (the EULA).
Any litigation attorney worth his or her salt would make such an argument, and they would have a legal basis for doing so. I’m not sure this argument will be bought by the judge, however. It is also problematic from a litigation standpoint.
For example, copyright law requires you to register a copyright before you can sue upon it. Section 411 of the Copyright Act of 1976 states that “no action for infringement of the copyright in any work shall be instituted until registration of the copyright claim has been made in accordance with this title.” In a lawsuit based on violations of the EULA, what is the copyright being sued upon?
If the copyright being sued upon is the iBooks Author copyright, then it is likely the work is registered and the lawsuit can proceed. But where is the infringement? It is using a copy of the program in violation of the license, which appears to be a single infringement. Plus, Section 4 of the EULA provides an out: “[u]pon the termination of this License, you must cease all use of the Apple Software and destroy all copies, full or partial, of the Apple Software.” If this term is met, then what are the damages? Can the statutory ones even be brought?
If the copyright being sued upon is the generated output of the program, then there is a question of whether this needs to be registered with the copyright office individually or if it can piggyback on the registration of the iBooks Author software. And what elements of it are copyrightable? The issue with the exclusive license will also come into play, leaving the license unenforceable in this kind of action.
In short, attempting to enforce the iBooks Author’s distribution restrictions based on copyright would be difficult. Further, courts may have a hard time swallowing the arguments Apple will be forced to make. Instead, Apple may bring contractual claims against someone who has violated the EULA.
Contractual claims based on the iBooks Author EULA are more enforceable, but less harmful
Mr. Kennerly and myself have already outlined why the EULA fails to create an exclusive license, and the above section outlines the difficulties of a copyright case based on violations of the EULA. Apple, however, can bring a lawsuit based on contract law rather than copyright law, and it will have stronger arguments on its side. Thankfully, the harm to a user if Apple were to win (which is not a foregone conclusion anyhow) is much less.
The EULA is a contract between the user and Apple. In the contract, the user has agreed not to distribute the eBook files generated by the iBooks Author program. The user is breaching this contract if he decides to sell the eBook on his own website.
The question is what form of remedy may Apple receive for this breach? Apple would need to show the damages it suffered through the breach in order to receive economic damages. It is highly likely this amount, if one can even be proven, will be less than the statutory damages one faces in a copyright action.
Apple may seek specific performance under the license, but courts are loathe to grant specific performance in most cases. While it is more likely this kind of situation will be the kind in which a court grants specific performance, Apple still has a tough argument to make. Further, they will have to pay court costs and attorney fees in order to make it.
The distribution language is likely targeted at large publishers, not individuals
The likely reason the distribution terms are in the iBooks Author EULA are to precent large publishing houses from using the software to create iBooks-compatible eBooks and distribute them on their own websites. These publishing houses have the means to provide a viable distribution method comparable to the iBooks store. Individual authors, however, likely do not.
The distribution platform provided by Apple through its iBooks store is superior to what most individuals can create. It also requires much less expertise and time than a roll-your-own solution. This is why Apple takes a 30% cut. This may seem high, but if you have 500% more sales then that 30% cut isn’t so bad.
The important take away is that the copyright in your work is safe
Nothing in Apple’s iBooks Author EULA transfers the copyright in your work to Apple. This means that you can take your book and put it into another eBook format with no penalty. The iBooks Author EULA can’t stop you.
What you get from iBooks Author is professional-quality eBook creation software that typically only large publishers get. In fact, I’m not even sure how eBooks using Apple’s format that were sold in the iBooks store were created before iBooks Author. It is likely that publishers were given something similar to iBooks Author, along with a similar license. (It may have even been more restrictive.) The only other way I know to publish through the iBooks store was through the open ePub format. (And this lacked DRM, if that was important to you.)
You also have the output you create from this software locked behind Apple’s walled-garden. As I wrote in my first post on the iBooks Author EULA, there are certainly negative aspects of this. Further, I think the walled-garden approach will be a loser in the end. Still, the garden, protected by those Apple walls, is rather pretty at the moment.
