Controlled Digital Lending Respects Rights of Copyright Owners, Say Library Groups

A lower court’s ruling against the Internet Archive that books loaned via controlled digital lending (CDL) would replace the market for commercially licensed ebooks “was flawed,” said an amici brief Friday (docket 23-cv-1260) filed by nine library organizations and 218 librarians in support of defendant IA in its 2nd Circuit U.S. Court appeal.

CDL, a “well-established practice in the library community,” with “strong, legal foundations grounded in copyright law and fair use,” allows patrons to borrow a digitized version of physical books already owned by a library, the brief said. The district court “erred” in calling IA’s Open Libraries program a “commercial activity” for purposes of fair use, the brief said, saying a library is a “non-profit organization that provides access to knowledge and cultural heritage” with a “distinctly non-commercial mission.”

Amici -- eBook Study Group, Library Futures Project, EveryLibrary Institute, ReadersFirst, the Scholarly Publishing and Academic Resources Coalition, Association of Southeastern Research Libraries, Boston Library Consortium, Partnership for Academic Library Collaboration & Innovation and Urban Librarians United -- are librarians, archivists, directors, deans, professors and library staff in the U.S. who have a “significant and substantial interest” in the case, said the brief.

IA is appealing a lower court’s March decision in a 2020 copyright infringement case brought by Hachette, HarperCollins, Wiley and Penguin Random House (see 2303270006), claiming IA has cost them millions of dollars and is a threat to their business. On Aug. 11, U.S. District Judge John Koeltl for Southern New York entered an injunction against IA in connection with 127 covered works, enjoining it from distributing them to the public in any digital or electronic form (see 2308150012). Koeltl narrowed the scope of “covered works” of the injunction in a second order to extend to books that are “commercially available for sale or license in any electronic text format.”

CDL is “based in copyright law” and “respects the rights of copyright holders by acquiring the works legally,” said the brief. Library practices “reflect a commitment to both the economic and access goals of copyright,” it said, including buying books from publishers, vendors and authors; adding them to collections; and establishing loaning programs to provide “open, non-discriminatory access” to copyrighted content legally acquired and “preserving that work for future generations,” it said.

CDL maintains a “1:1 ratio of owned to loaned materials” because the purchased physical book is “sequestered from the public” when the digital surrogate is loaned to one patron at a time, the brief said. That maintains libraries’ mission of “loaning legally acquired books,” it said.

The district court erred when it said CDL was invented in 2018 by “a group of librarians,” the brief said, saying the idea for shared digital collecting was first explored by a former law library director at Georgetown University’s law school in 2002 who was faced with rebuilding a library destroyed by flooding. In 2010, IA partnered with the Boston Public Library and others to begin lending digitized versions of physical library books “to one reader at a time,” a precursor of CDL, it said.

During the first decade that libraries used CDL, known then as “format shifting” or “digitized lend,” the practices were “largely uncontroversial” because it was considered “a logical outgrowth of fair use” and available technology, the brief said. Legal underpinnings of CDL were refined in “A White Paper on Controlled Digital Lending of Library books,” by copyright attorneys, not librarians, in 2018, said the brief.

In 2020, the publishers sued nonprofit IA “during a global pandemic that closed the doors of the vast majority of physical libraries in the United States,” some “18 years after the concept of CDL was established and 10 years after libraries first started utilizing it,” the brief said. Since the COVID-19 pandemic, “dozens” of libraries have developed CDL systems to broaden access to textbooks, reserves and research materials, the brief said. HathiTrust, a consortium of university libraries, used a digital loaning solution, Emergency Temporary Access Service, for its member libraries, “that was hailed as a successful solution to the access-related problems created by pandemic closures,” it said.

Problems with licensed book lending came to light during the pandemic when many libraries lacked the ability to lend physical books they owned. One school library reported paying $27 per student per year for a digital copy of The Diary of Anne Frank, while the same title can be purchased in print by a library for a one-time price, “used without limit, and repaired until the book wears out,” the brief said.

With consolidation in publishing, big publishers have “no incentive to offer competitive rates and terms to libraries,” said the brief. It cited a 2023 New York University report finding publishers and platform aggregators have “circumvented copyright law and centuries of precedent to control and extort the reading public and libraries to maximize profit” even at the expense of authors who don’t see the benefits of “costly licenses.”

Negotiation for ebook access is “virtually nonexistent for libraries” as publishers control “not only the production but also the distribution of materials,” the brief said. “Within this power structure, publishers have routinely denied libraries access to content, which is highly uncommon in the analog world,” it said. Ebook licenses are often offered to libraries “with many restrictions on use, or worse, are unavailable to libraries at any price,” it said. When they are available, they can cost a library three to 10 times the consumer prices for the same book, it said.

The brief noted the difference between ebooks and books available via CDL, giving lack of hyperlinks and other digital features in CDLs as examples of a quality difference. A CDL scan “is a picture of a book” used for reference or preservation vs. an ebook that aims to provide a reading experience “similar to that of a print book," the brief said. A CDL book would likely be used by researchers “out of necessity,” it said.

The “crux” of the district court’s decision in the copyright case was that “it is difficult to compete with a product offered for free,” the brief said, noting “the court’s assumption that books scanned via CDL risk ‘eviscerating the rights of authors and publishers to profit.'" In their brief, librarians countered this, noting that "despite the broad availability of open source office software, Microsoft and Apple iOS remain highly profitable businesses. This is because products that are free often offer a different user experience than those that are not.”