Michael Lehr headshotBy Micheal Lehr

Lehr is a law clerk at Dunlap Bennett & Ludwig located out in our Richmond office working with the litigation practice on multiple large intellectual properties and commercial litigation matters.

[08/28/2019 Richmond]  Under 17 U.S.C. § 102, Copyrights protect “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated.” Ownership over a copyright vest initially with the author or authors of a work, but may be transferred in whole or in part to another by way of a license.[1] The latter of those two ownership interests has given rise to a fascinating suit filed against Amazon, Inc. this past Friday in the U.S. District Court for the Southern District of New York. The plaintiffs include some of the world’s most influential publishing houses and members of the Association of American Publishers, including HarperCollins, Penguin Random House, Simon & Schuster, Macmillan, Scholastic Books, and Hachette Book Group.

The suit arose over Amazon’s audiobook company, Audible, and its planned launch of a new feature, “Audible Captions.” Audible was initiated not long after Amazon in the mid-’90s and was purchased by the e-commerce giant for $300 million in 2008. The widely-known subsidiary sells digital audiobooks along with audio versions of magazines and newspapers consumed by millions every day. Audible contracts with publishers and authors across the world, forming licensing agreements for the right to record and playback audiobooks of their written texts. These limited scope agreements are now under threat by the impending release of the new caption feature. Audible Captions features on-screen text similar to subtitles on a television screen, so a listener may also read along as the book is narrated. Seemingly, one will be able to read the entire book by way of these captions, which is the basis of the instant suit.

Each work licensed by Audible and made available to its users is covered under a specific (and likely narrowly drawn) licensing agreement with the owner of the copyright, usually the publisher or author. These agreements are normally lucrative for all involved, as the publishers and authors are paid royalties for the works they license out while Audible grows its business with a larger portfolio of available works. At issue here is the contention that the text-based caption system dramatically expands the agreement between the parties without the approval of the author or publisher.

Further complicating matters, publishers sometimes license the audio rights to a work to one licensee while licensing the written work to another, or additionally print and sell the work themselves, benefitting from multiple revenue streams from a single work. Audible’s attempt to double-dip via the Caption feature drastically interferes with the publishers’ ownership interest in the copyrighted work. Audible is allegedly attempting to distinguish its new Caption feature from traditional reproduction of protected text by claiming the captions are newly-created texts composed using artificial intelligence.[2] But this argument is tenuous at best.  Clearly, the result of this feature is the reproduction of the copyrighted material, which is a violation of 17 U.S.C. § 501(b). Audible has remained quiet since the initial negative blowback from authors and publishers in response to the new suit filed on Friday.

It would be quite a shock to the system if Audible prevails on its novel AI argument because it would essentially undercut hundreds of thousands of licensing agreements which expressly limit Audible’s rights to audio recording and playback. Anything other than an injunction in favor of the publishers may open the door to potentially widespread changes in the audiobook arena.

[1] 17 U.S.C. § 201 (a); (d)(1)

[2] Nick Statt, “Major book publishers sue Amazon’s Audible over new speech-to-text feature,” https://www.theverge.com/2019/8/23/20830057/amazon-audible-speech-to-text-feature-lawsuit-major-book-publishers, Aug. 23, 2019.

Posted in: Copyright, Intellectual Property, Litigation & Disputes