Amazon Moves To Head Off NY Times Legal Threat

Facing the threat of legal action from the New York Times over its price-discounting of books on the newspaper’s best-seller list, Amazon.com (Nasdaq: AMZN) filed for declaratory relief in a U.S. District Court in Seattle, Washington Thursday, effectively asking to be allowed to continue the practice.

The company started discounting books on the New York Times best-seller list by as much as 50% on May 17, a practice that was soon followed by its rivals. On May 28, Amazon said, it received a letter from the New York Times alleging that Amazon was infringing on its copyright and trademark by using the list.

The venerable newspaper asked Amazon to cease using the list and stop promoting the price discount, Amazon claims.

The act of seeking declaratory relief is considered to be an effective legal tool in pre-empting a lawsuit. By taking the action, Amazon has established Seattle as a venue for any possible legal action by the New York Times, according to a Maine lawyer who specializes in media and copyright law.

“They’re taking the first step and choosing the forum and that’s always a wise move, particularly if you are a smaller business up against a larger one,” John Sedgewick, of the Lewiston, Maine law firm of Berman & Simmons, told the E-Commerce Times Friday.

Sedgewick said he didn’t feel there was any merit to the New York Times allegations of copyright or trademark infringement, saying that the paper’s best-seller list is in the public forum and Amazon is entitled to mention the list to give its customers a reference point.

“I presume the New York Times is saying that Amazon is trading on its good name and reputation,” remarked Sedgewick. “My instinct tells me that Amazon is doing nothing but helping the New York Times by advertising its best-seller list. I certainly don’t see any economic harm.”

Rivals Echoed Price-Slashing

Shortly after Amazon.com announced the price-discount, Borders.com and barnesandnoble.com followed suit, sparking concerns that the online book and music trio of heavyweights would engage in a life-and-death price war.

That has yet to materialize, but all three companies have been active in positioning themselves for what could be a battle of attrition.

Amazon has not revealed the results of its price-discounting yet. The company has been careful to point out that its sells discounted books on a daily basis that are not on the New York Times list, with savings of as much as 40% on millions of titles.