In early January, the eTextbook vendor Kno sued the publisher Cengage Learning for the premature termination of their licensing agreement, highlighting potential problems that could arise between publishers and third parties in the creation of interactive eTextbooks. The licensing agreement allowed Kno to digitize and sell Cengage’s printed textbooks. The publisher is claiming copyright infringement as their decision for dropping the agreement, however Kno disagrees and seeks to cover damages and ensure their right to continue selling Cengage’s eTextbooks.

Problems started to form last August when Kno announced new features for their eReader platform. One of the tools, called Journal, allowed users to take notes and make excerpts for later reference. A month later, Cengage claimed the note-taking tool enabled copyright infringement by permitting the creation of derivative works. The publisher gave Kno 30 days to resolve the issue.

As Kno worked to find a solution, they supposedly removed Cengage’s textbooks from their catalog. However, despite their efforts, Cengage decided to terminate their license agreement at the end of October.  Kno disregarded the termination of the agreement and decided to continue to offer Cengage eTextbooks during the legal battle.

Kno is arguing that they have a valid license to digitize and distribute the textbooks, and that they are not infringing Cengage’s copyright. Their reasoning is based on the idea of fair use, stating that users’ notes do not qualify as derivative works. According to the eTextbook vendor, Cengage’s copyright claims will cause “monetary and irreparable” harm because a quarter of their sales are through the publisher’s textbooks. If Cengage does not abide by the original licensing agreement, Kno is worried that users may begin to look for other options within the eTextbook market if their required titles are not available.

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