NORTHERN CALIFORNIA INDEPENDENT BOOKSELLERS ASSOCIATION

HOLT UNCENSORED #105
by Pat Holt

Friday, November 5, 1999:

AMAZON V. AMAZON: THE SETTLEMENT

LETTERS

AMAZON V. AMAZON: THE SETTLEMENT

Well, okay, the suit is settled, and we should cheer. Heaven knows the relief was palpable in the voice of Barb Weiser of Amazon Bookstore in Minneapolis as she spoke on the phone yesterday about settling the trademark infringement suit against Amazon.com of Seattle.

Of course she couldn't talk about the elements of the case, but it seemed clear the deposition stage had exhausted the energy and the funds of the five owners at Amazon Bookstore, and it was time to move on.

So it's great the Amazon v. Amazon suit is settled, isn't it? Though lordy, the language is awfully constipated when it comes to expressing the basis of the settlement, which is this:

"Amazon Bookstore Cooperative will assign its common law rights in the Amazon name to Amazon.com and Amazon.com will then give a license back to Amazon Bookstore Cooperative for use of the Amazon name."

That's pretty clear, and come again? Let's see: Somewhere in there at least an acknowledgement is made that Amazon Bookstore does own the rights by common law to the name "Amazon" - or did.

The way it's phrased, you'd think Amazon.com in all generosity has allowed the little engine that sued to give up the name "Amazon" and then in some kind of coded legalese nobody can understand, given back to Amazon Bookstore the use of the name it itself has held for 30 years.

So that's great, and now let's turn to the other part of the settlement that says "certain steps" will be taken "to ensure that there will not be any confusion among the public about the association of the two companies." Very good! Very clear and very promising. And what are the certain steps? Oh well, they can't talk about THAT. It's only the key to the whole lawsuit, but please, don't ask about specifics.

So the bad news is that Amazon v. Amazon now becomes one of those cases in which neither plaintiff nor defendant can say Word One about the settlement, which means we'll never know who gave what to whom, or what issue if any has been resolved, or whether the confusion that has thrown Amazon Bookstore into disarray will ever get better.

One assumes that Amazon Bookstore, which has been struggling like many independent bookstores for some years, and which has encountered considerable expense from customers and vendors misidentifying it as a bricks-and-mortar version of Amazon.com, has "assigned" its name to Amazon.com and gets it back for what supporters hope is A HEFTY SUM OF MONEY.

The owners at Amazon Bookstore are going to need it when confusion turns to chaos again this holiday season, because without direction from somebody, more people than ever are going to confuse the Minneapolis store with the Seattle online bookseller.

Had Amazon.com agreed to post a little notice on its website explaining that it's not the same as Amazon Bookstore, perhaps its customers would know, up front, not to call or visit the Minneapolis store and demand to pick up their Amazon.com packages, and vendors would know, before they make the trip, that Amazon.com is in Seattle, not Minneapolis.

Apparently, though, Amazon.com is not going to make this gesture. It is not going to put up a tiny sign on its home page to acquaint readers with the fact that you can't buy from Amazon.com and pick up your books at Amazon Bookstore. Not even a teensy statement or a single sentence in small print.

So this leaves a big question unanswered - the same question many people ponder about tobacco companies and oil companies and asbestos manufacturers and IUD makers that are sued and end up settling and walk away without a word.

We've settled, they announce, but we don't admit any wrong-doing. We just threw money at the problem and it went away. Don't bother our opponents; they're being paid to shut up. Now we'll continue with business as usual, so what's the problem?

Well, there once was a principle involved. It was not about futzing around "assigning" names and getting them back again. It was about trademark infringement. It was about a small, established and respected bookseller losing its identity to a big, out-from-nowhere nouveau-riche bookseller. Now that it's over, one has to ask: Why did the lawsuit take place at all, if this is the outcome? What happened to the matter of trade infringement? Why does the store that has held the name for 30 years have to clean up the confusion created by the store that's had the name for five years?

Besides, here was a chance for Amazon.com to look good: A little notice on its home page would have had the effect of saying, Hey look, this is America and this is the book industry - there's room for everybody, and we're happy to coexist with our namesake. So please respect the difference and don't confuse us with them.

I'm told by trademark lawyers that asking Amazon.com to make any kind of concession is like asking for the moon. Founder Jeff Bezos hasn't spent hundreds of milions of dollars branding American backsides with Amazon.com to allow some sniggling little feminist bookstore to set a tiny toe on his website.

Yes, Amazon Bookstore had a case, they say, but who knows about juries these days? Everybody loves Amazon.com, and by the time of the trial (March of 2000), maybe jurors won't remember that Amazon.com started out selling books. Or maybe the jury will decide in favor of Amazon Bookstore and award them one dollar. Or maybe Amazon Bookstore will win big: Do you think Jeff Bezos is going to allow the hundreds of millions of dollars he spent on branding Amazon to fly out the window without appealing the case for the next dozen years?

And remember, these lawyers say, it's a whole new cyber world out there. The Internet has exploded on the scene like the new frontier it is and a company like Amazon.com, even though it's still losing hundreds of millions of more dollars (and is finally looking a little shaky even to Wall Street) is not going to be held accountable by the old rules.

Had the big Amazon.com sued the little Amazon, the thinking goes, everybody might have gotten angry in the same way that people get mad when McDonald's sues anything with "Mc" in it, the McFop, the McFascist, the McOpoly that it is. But since the old-fashioned Amazon Bookstore - the oldest independent feminist bookstore in the country - sued the hip and dazzling Internet pioneer, the former would never, ever, ever win this lawsuit in a hundred years.

So just think of Amazon v. Amazon as THEATER, these lawyers say, instead of an attempt at justice. Look at the publicity the smaller bookstore got by standing up to the big baddie. Heaven knows, after Amazon.com tried to bully the Amazon Bookstore owners by asking if they were lesbians during the deposition stage, the case got tried in the media. Now everybody's aware of the difference between the two Amazons, which granted will probably last for about two minutes. The difference today is that Amazon Bookstore, thanks to the settlement, can pay for the expense of being confused with Amazon.com.

Well, at least Barb Weiser and the other co-owners of Amazon Bookstore are not going to lose the name "Amazon," or the store, or their plans announced last month to join with a nonprofit women's group in the building of a women's center in which Amazon Bookstore will play a key role. So that's great.

But if you want to talk about theater, let's not forget the real lesson learned from this little morality play: However terse the language of this settlement, one lone independent bookstore got the colossus of our industry to pay attention to the human beings it was stepping on during its high-stakes game of King of the Hill.

True, Amazon.com is currently getting hammered by Wall Street for trying to cover bigger and bigger losses with its usual false bravado. But perhaps even more important, it's been caught using slugfest tactics (see #100) in the deposition stage of this lawsuit and, realizing it couldn't get away with such behavior, finally figured a protracted lawsuit wasn't going to pay off (thank you, angry Amazon.com customers!).

So why did Amazon Bookstore accept a settlement without a disclaimer on the Amazon.com website that might have stopped the confusion? Oh, trademark lawyers look at this question and laugh. Are you kidding? they say, holding up the NY Times financial page. Who says that by March of 2000, when the trial was set to begin, there will even BE an Amazon.com to pay the damages?

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LETTERS

Dear Holt Uncensored:

You make a good point about sales tax. The alternative to making every Internet bookseller pay would be to exempt books entirely from sales tax as is done with magazine subscriptions and newspapers in most states. That would serve the First Amendment and level the playing field.

Albert Henderson
Editor, PUBLISHING RESEARCH QUARTERLY
70244.1532@compuserve.com

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Dear Holt Uncensored:

I think there's some confusion in your column [about sales tax]. Independent Booksellers don't PAY sales tax on customer purchases, we COLLECT sales tax from the customers and forward it on to the state authorities.

And there are a few states where there is no sales tax, and, I believe, a few where books are exempt. So not all booksellers are currently collecting sales tax on purchases in their stores.

Though I appreciate the ABA's concern for a level playing field, I have not supported their efforts on internet sales tax because I believe the American people are already terribly overtaxed. People will naturally try to avoid paying taxes, and that is one of the attractions of internet shopping.

But you are right in your point that the actual collecting and paying of the taxes could probably be done quite easily for the large companies. But what about when the small shop tries to open an online storefront? Will I be able to efficently deal with these payments? How much time or software investment will this require for me? The more complicated the establishing of a web presence, the less likely the small firms will be able to compete with the already established online sellers.

Ed Hopkins
Inklings Bookshop

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Dear Holt Uncensored:

The lack of internet taxation may be competitively unfair but it will not cause the collapse of the governmental infrastructure and the ruin of civilization.

Internet commerce has generated a tremendous increase in tax revenues from sources other than the sales tax in virtually every community and state. These increased government revenues come from income, property, inventory, and other levies.

Commerce is not a zero-sum game. In the case of e-commerce, it can be reasonably argued that much - if not most - e-commerce represents additional sales, not a relocation of sales. It is the taxation of this newly-generated wealth that provides governmental entities with increased revenues.

Scare tactics like fewer police and children sharing textbooks in the dark insult our intelligence. Efforts toward leveling the playing field (by more stores engaging in e-commerce and forcing the current ones to play by the same, existing rules) will be much more productive. And honest.

Jerry Huling

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Dear Holt Uncensored:

. . . .The problem is not that internet retailers don't collect sales tax for out of state purchases but that the sales tax is an extremely poor form of taxation.

The poorest members of society bear the biggest burden of the sales tax and only around 80% of what is collected finds its way into state coffers. Moreover, keeping track of the sales tax puts a burden on small retailers and causes the state to set up an enormous machine to collect and verify its payment.

The ABA's attempt to promote some form of National sales tax or sales tax collection agency is not only short sighted, it is blind to the fact that any sales tax places an additional burden on the freedom to read. Moreover. a National sales tax once established will eventually have to be collected by all booksellers. And finally, as the recent loss of Harry Potter sales to the UK revealed, the internet is not National, so any National sales tax can easily be avoided by the larger internet retailers.

Sales tax or any tax on books is contrary to American ideals and should be eliminated.

James Lawton
Brookline Village Books
Brookline MA

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Dear Holt Uncensored:

I appreciate the argument for charging sales tax on Internet sales. Just one flaw, however: the sales tax is by nature a viciously regressive tax, i.e., it takes a greater portion of income from poor folks than from rich folks. The only thing worse is the value-added tax, which some ignorant people would like to introduce in the U.S. (I've lived in Europe and know whereof I speak.) Here in MN the effects of the sales tax are somewhat mitigated by the fact that it is not imposed on food or clothing; still, it hits the poor harder than the rich.

I daresay the rich (and, being slightly above the median income, I have to include myself) are more likely to shop online than the poor, which makes things even worse when no sales tax is charged on online sales. Nevertheless, the solution is surely not to encourage states to continue imposing and raising sales taxes by making them more collectible in more venues. Instead, the really progressive thing to do would be to campaign for the elimination of all sales taxes and the substitution of progressive state income taxes. I suppose that's utopian, but hey, it's a new millennium soon (well, after next year), so why not dream millennial dreams?

Linda Maloney

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Dear Holt Uncensored:

Re writers as celebrities. Within living memory (a moving window as we age) I recall a letter to the editor, perhaps in Ms. Magazine, from a disgruntled woman who felt that Doris Lessing was not allowed, in her opinion, to dislike meeting the public or fielding impertinent (my word) personal questions from them. These may well be the same people who feel that all a writer's work is thinly disguised autobiography, and eating the writer afterwards is only the next ingestion step.

Having watched Lessing being extremely gracious to an extremely inept interviewer, I have nothing but admiration for her public persona. Grafton sounds cheerful and outgoing. Some of us writers are low-energy, introverted and grumpy (with long names, to boot), and we would fare less well being handled by the public. What I object to, as usual, is "should." If you want to be a Writer, you "should" take the public abrasiveness as cheerfully as the adulation. Without complaining. Without, in fact, venturing an opinion.

I didn't like the letter-writer to Ms. "Lessing belongs to me, she does not have a right to voice her opinion," was the way it came across . . . On the other hand, reading Carolyn Heilbrun's account of some interaction with May Sarton in full rage, I felt for the first time the range of Sarton's humanity, never really present in her journals, and recalled the last night she spoke at Herbst (Theater in San Francisco), when, as she ventured on stage, clearly not too sure of her legs, the auditorium seemed to rise as one in applause.

Readers' applause, Heilbrun writes, was never enough for Sarton. It seems to me, however, there were no demands, that night, on either side. I was glad to give my applause, glad to have been there, did not need my picture taken with her (nor she with me).

Maybe what bothers me about the superstar status of some writers is the rise in some readers' assumption of rights: "I bought / read your book, therefore you . . . " I can't accept that. It's without humor, without distance; in fact, contemptuous of distance. How have we lost our live-and-let-live attitude? Our respect for privacy? . . .

Gretchen Herbkersman

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Dear Holt Uncensored:

Marvin Wolf tells an amusing story about Russell Means's acquisition of children on his book tour. But guess what, Marvin, Mr. Means had those children BEFORE the tour, too. Just didn't pay attention, I guess. What a hero for our times!

Holt responds: I asked Marvin Wolf about this, too. Here is his response:

Most of these kids were conceived in the early 70s, when Means, by his own account, was often drunk. He was then a much admired hero of all Indians, and none admired him more than the young women who flocked to American Indian Movement gatherings . . .

At the signings, the kids -- most in their early 20's -- would wait until absolutely everyone else had left, and then they'd come up and shake Russell's hand and blurt out something like, "Mom says you're my father," while staring holes in the floorboards. Russell was skeptical at first, but gentle with the kids. He questioned them thoroughly, but always in a kind way. And he never committed to paternity until he had a chance to think back and reflect. But I knew they were his kids immediately. One look was all it took. All the Means clan has a certain look; they are all obviously sisters and brothers, and they all bear a strong familial resemblance. These kids had it as well. Incidentally, I should correct a misstatement. Means has two adopted children, including a daughter by his first wife . .

Marvin Wolf

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Dear Holt Uncensored:

I have just returned from the Frankfurt Bookfair. One of the more interesting conversations I had at a party was with the owner of an independent bookstore in Paris. I asked him what the situation was like in France between the large chains and independents. He looked puzzled, and then responded, "Ah, we dealt with that problem years ago."

From my understanding (the party was loud, wine was consumed), the government places a cap on book discounting (5%, I think) applicable across the board, large and small. While I don't know if there is also a cap for wholesalers, at least the field is level at the consumer level. This level of regulation may not fly in our ultra-capitalist system, and price regulation is no panacea--but I couldn't help but admire the simplicity and elegance of the solution.

Sarah Read
New York City

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Dear Holt Uncensored,

I have forwarded #100 [about Amazon.com's questions regarding the sexual orientation of the owners of Amazon Bookstore] to lots of people who have bought books from Amazon.com but who could never understand why I objected to that company. They now understand (I think).

And, I must confess that when I first heard about it, I thought Amazon.com was the Web site for the Amazon Bookstore. I thought, "Wow, that bookstore has figured out what people want to do--write to each other about what they read." I never really paid much attention to the other aspects, such as the loss leaders.

Margo Sasse'

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