Yesterday the U.S. Copyright Office announced that it is looking for input into revising Section 108 of the copyright law, the section that gives libraries and archives special rights to copy and distribute materials. Although much of Section 108 deals with making physical copies of materials for preservation purposes, some of it is supposed to apply to libraries’ roles in lending books and other materials to users. Yet Section 108’s applicability to lending of e-books and other digital materials is virtually nil.
This inquiry is an opportunity for public libraries to advocate for lending rights for e-books under the law. It follows on the heels of comments from the Register of Copyrights that “Section 108 must be completely overhauled.”
Public libraries normally buy books just as consumers do, and under Section 109 of the copyright law (First Sale), they are allowed to lend them to patrons without any involvement from publishers. But they can’t do this with e-books. Under current law, if you “buy” an e-book, you’re actually licensing it, not purchasing it. That means that the publisher can dictate whatever contractual terms it wants, including limitations or prohibitions on further distribution.
As a result, public libraries can’t just acquire whatever e-book titles they want for e-lending; they have to license them under whatever terms publishers care to offer. This has engendered a small industry of white-label platform providers, such as OverDrive, which support e-lending for libraries. The usual model is this: a library chooses which titles and how many copies of each it wants to “acquire.” It pays the platform provider a fee for each “copy” of each title. It then gets to lend each title in e-book form to up to N users at a time, where N is the number of “copies” it paid for.
But that’s where the similarity with print book lending ends. The Big Five major trade publishers in particular (Penguin Random House, HarperCollins, Macmillan, Simon & Schuster, Hachette) have imposed various restrictions on e-lending, including not making new titles available and limiting the number of e-loans that a library can make per license. Some have also charged libraries prices up to three times consumer retail. These restrictions have eased recently; for example, all of the Big Five now make their entire catalogs available for e-lending. Yet some limitations and inconsistencies still remain; for example, as of January 2016:
- Penguin Random House, Simon & Schuster and Hachette still charge libraries higher than consumer retail prices.
- Simon & Schuster, HarperCollins and Macmillan still set limits on the number of e-loans or time limits on e-lending before a library has to re-license the title, ostensibly to emulate wear and tear on physical books.
As long as any of these limitations remain, the odds that all of the major publishers will converge on similar license terms are virtually zero owing to antitrust concerns. Meanwhile, a few public library systems are creating their own e-lending platforms (instead of relying on third parties like OverDrive), and some indie publishers are agreeing to license their titles to these libraries on unlimited bases and at consumer prices.
Libraries would clearly like to get e-lending rights that enable them to treat e-books as if they were print titles, but Section 108 — which was originally drafted in the 1970s to deal with photocopies — doesn’t help in this regard. Back in 2005, the Library of Congress convened a Section 108 Study Group to look at the impact of digital technologies on copyright law for libraries and archives, and to make recommendations for changes to the law. The members of the Study Group were evenly balanced between publisher and library/archive interests. When the Study Group issued its final report in 2008, the members agreed that something had to be done about the rules for distributing digital works to library users, but they couldn’t agree on what to do. (I consulted to the Study Group; my presentation covered white-label digital licensing platforms, and I was surprised to learn that at least some of the members weren’t familiar with them.)
That was the state of affairs during the period of rapid growth in e-book sales that began after the Study Group made its recommendations and lasted until sales started to plateau in 2012-2013. During that period, libraries and major trade publishers were increasingly at loggerheads over e-lending. The Study Group had disbanded by then, so it seemed that Section 108 was not going to be revised to keep up with actual practices in e-book lending.
I had (semi-seriously) suggested that one way for libraries to overcome limitations on e-lending was to allow libraries to hack the DRMs that e-lending providers used to help ensure that library users don’t abuse their e-loan terms, by providing them with an exception to the anti-hacking law (Section 1201) for that purpose. Then, in 2013, a lobbying group called the Owners Rights Initiative (“You bought it, you own it”) formed to push for full First Sale rights for all digital goods. More recently, the Patent and Trademark Office issued a whitepaper on copyright reform which took the position that full-blown Digital First Sale is too complex an issue to legislate, the market was a better place to look for solutions that satisfy consumers, and the market has provided some reasonable solutions already by focusing on content access rather than ownership.
Section 108 is really the right place for libraries to look for solutions to their e-lending problems without overcomplicating matters or dragging in various extraneous issues. I’d expect that libraries will take advantage of the Copyright Office’s invitation to provide input on Section 108 reform later this summer. In addition, publishers and libraries alike could also use more data on the effects of library e-book lending on sales and discovery, particularly on the degree to which e-book borrowing substitutes for purchases. Some research in this area has been done, but not enough. Although any such research is necessarily a moving target as reading behavior changes in the digital age, it’s bound to be better than nothing in helping forge reasonable solutions to the e-lending problem.
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