Understanding How Copyright Law Works In The Cloud

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Mar 15, 2021

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Copyright law was born in the era of paper and ink.

The first copyright law, “An Act for the Encouragement of Learning, by vesting the Copies of Printed Books in the Authors or purchasers of such Copies, during the Times therein mentioned” (more concisely known as “the Statute of Anne”), was enacted in 1710 during the reign of Queen Anne of England.

The Statute granted publishers of new books a 14-year period of protection from unauthorized copies, with 21 years of protection for books already in print.

The first US copyright law, modeled on that Statute, was adopted in 1790.

But how should copyright law deal with the modern world of the Internet?

The recent case of Cheryl Smith v. Barnesandnoble.com, LLC. provides some guidance.


Louis K. Smith wrote a book called The Hardscrabble Zone which he published online in 2009 as an ebook via a company called Smashwords.

Smashwords and Smith entered into a licensing agreement in which Smith gave Smashwords the right to distribute samples of the book in order to promote the book and the Smashwords platform.

Smashwords offered a free copy of the book to Barnes & Noble, which made free samples of it available online.

Barnes & Noble customers could store books and samples using a “digital locker” system in the cloud.

In 2011, after no copies of his book had been sold, Smith terminated the license. However, the book wasn’t actually removed from the Barnes & Noble website until about six months after Smith terminated the license.

Copyright Infringement?

The plaintiff, Smith’s widow, argued that Barnes & Noble had committed direct and contributory copyright infringement by giving the public access to the book after the license to Smashwords was terminated.

Last year, a federal judge dismissed the case. Smith’s widow appealed, and the Court of Appeals for the Second Circuit affirmed the dismissal.

Only a single customer had acquired a sample of Smith’s book and stored it in the digital locker.

The court noted:

There is no dispute that the single customer’s initial access to the sample was authorized under the contract and occurred before the agreement was terminated. After Mr. Smith cancelled the agreement with Smashwords, that same customer twice accessed the sample in his or her cloud–based account. Those two instances of access form the basis of the plaintiff’s claim that Barnes & Noble infringed the copyright.

And the court concluded:

Since a customer who has a paper sample may obviously keep it, reread it, and make additional paper copies of it for noncommercial use at will, it follows that the agreement does not provide or imply that a person who obtained a digital sample would lose the license for free access upon termination of the distribution agreement.

Because the license agreement didn’t provide that the license for a sample would terminate after the sample had already been distributed to a customer, the court found that the customer’s continued access to the sample after the license terminated wasn’t a violation of the book’s copyright.

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