We are grateful to Authors Alliance’s research assistant, Derek Chipman, for authoring this post.

The legal battle about Maryland’s e-book lending law continued January 28^th as the Association of American Publishers (AAP) replied to the state of Maryland’s motion to dismiss its suit. Authors Alliance has covered Maryland’s e-book lending law and the ensuing litigation previously, but to recap: the law would require publishers who license e-books to consumers in Maryland to also offer a license on “reasonable terms” to public libraries in the state. This law and other proposed state laws like it were motivated in part by the fact that libraries are often charged much higher prices than consumers for digital literary products. Before the Maryland law took effect on January 1^st of this year, the AAP promptly filed suit to block it. In today’ blog post, we will summarize the latest filings in this lawsuit, which Authors Alliance has been following closely.

In its lawsuit, the AAP seeks a declaratory judgement that Maryland’s e-book lending law is preempted by federal copyright law as well as a temporary and permanent injunction to stop its enforcement. See our recent blog post for a thorough explanation and analysis of the AAP’s preemption argument. AAP’s most recent filing is a reply is to a motion filed by the State of Maryland on January 14^th that sought to have the lawsuit dismissed.

Maryland’s motion to dismiss mainly focuses on framing the bill as a “modest” consumer protection law that does not conflict with federal copyright law. The motion to dismiss focuses on Maryland’s legitimate power to regulate market practices within the state and disagrees with the AAP’s argument that the law functions as a “compulsory license” that runs afoul of the right granted by the federal government to copyright holders. It argues that the bill only requires publishers to “offer to license” e-books to Maryland libraries and does not give libraries any right to dictate terms. Maryland seeks to establish that there is no conflict or inconsistency between copyright law and its e-book lending bill, stating that the bill only seeks to prevent some publishers from “capitalizing on the digital revolution at libraries’ expense.” Maryland further states the bill is consistent with the Copyright Act, working to ensure “that publishers and libraries work together toward mutually acceptable license [terms].” If the judge in the case grants Maryland’s motion, the case and its bid for an injunction would be dismissed, though the AAP could appeal such a ruling.

The AAP’s reply on the other hand, doubles down on its preemption argument and argues that the court should not grant the motion to dismiss and should instead temporarily block the bill from taking effect. The AAP argues that the e-book marketplace is working fine and what Maryland characterizes as “exploitative practices” are standard practices developed over decades by those exercising their exclusive rights under copyright law. The AAP argues that Maryland is attempting to “get more for less” and that the law functions as a compulsory license that infringes on a rightsholder’s right to refrain from entering into commercial transactions (the decision not to grant a license). The AAP further argues that the issue of equitable access is irrelevant and only used by Maryland to “justify an unrelated, preempted, and unconstitutional legislative effort.” The AAP argues that its arguments are strong enough to warrant the extraordinary measure of a preliminary injunction, which would block the law from taking effect while the lawsuit proceeds.

Since the motion and reply were filed, the parties participated in a virtual hearing last week, and Judge Deborah L. Boardman is expected to reach a decision on the AAP’s motion for a preliminary injunction soon. In the hearing, the parties reiterated the arguments made in their briefs. Maryland’s assistant attorney general argued that the statute sought to seek a balance between the interest of rightsholders and the need for equitable access to digital literary products. AAP’s counsel, on the other hand, persisted in arguing that this state legislation intruded into the role of the Congress in establishing U.S. copyright law.

Public-minded authors may find these proceedings and their outcome important, as the lawsuit showcases the tension between libraries and publishers over e-book licensing and equitable access. Authors who want to see their works reach the broadest possible audiences may be surprised to learn how difficult it can be for libraries to acquire digital versions of works compared to physical copies. The legislative efforts by some states are also motivated by the difficulties arising from access to libraries and the increased recognition of the importance of digital mediums since the onset of COVID-19. The outcome of this case could either embolden or weaken equitable access efforts nationwide, as it will inevitably influence how legislators perceive whether such bills are preempted, like the Governor of New York’s veto of a similar bill. While the equitable access argument was dismissed in the AAP’s reply, it was a driving force behind Maryland’s bill and an important issue for authors who want to be read as widely as possible. Authors Alliance will continue to monitor the litigation and provide further updates as the case moves forward.

This week, Authors Alliance submitted a comment to the Copyright Office in response to its recent notice of inquiry (“NOI”) regarding the development of technical measures used to identify or protect copyrighted works available online. Analogous to digital watermarks, these measures can be used by rightsholders to block or limit access to a work or onward uses of that work. In its NOI, the Copyright Office asked stakeholders to comment on their experience with and views on these technical measures.

Authors Alliance’s comment focused on the interests of authors who are not served by the widespread deployment of technical measures to protect works online. Many authors make their own works available on an open access basis without the use of technical measures to block access or onward uses, and the choice to not employ technical measures helps these authors reach their dissemination goals. Moreover, existing technical measures already hamper many authors’ ability to make fair uses of works available online. Authors Alliance emphasized this in our comment in order to show that additional technical measures, or more burdensome measures, would make this situation even worse.

Finally, we argued in our comment that the development of technical measures to protect copyrighted works online should be a process that incorporates the different views of diverse stakeholders. Oftentimes, proponents of stronger technical measures are the loudest voices in this conversation, steering the outcome toward fortifying these measures and leaving out the community of organizations, institutions, and users who do not favor stronger technical measures. We explained that technical measures should be technically neutral and voluntarily adopted in order to be fair to all of these parties.

The Copyright Office has also signaled that this will not be the last investigation into technical measures: in the coming months, it will open a second call for comments about the standardization of these technical measures deployed by rightsholders. We will keep our readers appraised of further developments as the process moves forward.

Read our full comment here.

The following blog post was authored by Becca Lynch, a student clinician with the Samuelson-Glushko Technology Law & Policy Clinic at University of Colorado Boulder under the supervision of Professor Blake Reid, as part of an Authors Alliance student clinic project on library e-book licensing legislation.

Over the past year, various state bills have been proposed that would require publishers to license e-books to public libraries under “reasonable terms,” the most notable of which being the Maryland bill, which passed and was set to take effect on January 1, 2022.

As the pandemic has shown, the importance of public libraries cannot be understated. As a tax-funded institution created solely for public benefit, regulation of e-book licensing terms is important for the sustainability of libraries’ e-book lending. 

On December 9^, 2021, the Association of American Publishers (“AAP”) announced its filing of a lawsuit attempting to keep the Maryland bill from taking effect, and on January 14, the state of Maryland asked the court to dismiss the lawsuit. As this bill is the only bill of its type currently set to take effect, the outcome of this lawsuit could trigger similar lawsuits against other such proposed bills, such as the one currently pending in Rhode Island. While New York passed a similar bill last year, Governor Kathy Hochul recently vetoed the bill, citing the possibility of preemption as a reason for doing so.

The primary component of AAP’s complaint against the Maryland bill is its supposed preemption. “Preemption” is a legal doctrine which applies to block state laws when those state laws are not compatible with federal law. But, contrary to both AAP’s complaint and the United States Copyright Office’s initial letter on the matter, a conflict preemption analysis (which applies when state and federal laws actually conflict) does not provide a clear answer, nor is the handling of conflict preemption by courts a straightforward matter.

Courts have used a wide range of possible approaches to preemption analysis in the context of federal copyright law, the primary ones being (I) a balancing test from a case called In Re Jackson when the state law is alleged to conflict with U.S. copyright law, (II) deference to certain state market interests, and (III) examination of physical impossibility of compliance with both federal and state regulations. As a result, understanding and predicting the analytical approach a judge may take based on those available is a rather complicated process.

The test from In Re Jackson involves balancing a state’s interests (distinct from the interests of copyright law) against the potential for conflict between the relevant state law and federal copyright law. Under this test, the more substantial the state law interest undergirding the state law, the stronger the case is to allow that right to exist alongside federal copyright law. Moreover, there needs to be additional evidence to show that a claim arising from violation of the state law is more than a simple copyright infringement claim in order for the state law to not be preempted.

Under the second approach, deference to state market interests, courts consider whether there are significant state market interests animating the state law. Courts tend to allow state regulations that are designed to ensure a fair market, while finding that copyright law preempts state laws which force a copyright holder to distribute and license her work against her will.

The third approach is one where courts find that federal copyright law preempts state law in situations where compliance with both state law and federal law is impossible. In this situation, since the state e-book licensing laws do not deprive the publishers of their exclusive right to license e-books, complying with both state law and federal copyright law is not impossible. The publishers retain their exclusive rights and maintain control over the decision to license e-books to the general public. Only upon exercising this right must they abide by the reasonable terms within the state licensing law. 

Maryland’s interests motivating its e-book licensing bills is simple, yet compelling: ensuring its citizens have access to culturally and socially significant creative works in the form of e-books. In addition, the law seeks to remedy an inequitable market situation by preventing publishers from abusing their market power to overcharge tax-funded public libraries. These interests are both substantial and distinct from those undergirding copyright law (which include, for example, incentivizing the creation of new creative works). The Maryland state bill would be enforced under state deceptive and unfair trade practice law, and as a result, the elements for bringing a claim under state law would contain much different elements than one under copyright law.

Ultimately, regardless of the analysis used, there is strong evidence that supports a finding that the e-book licensing bills are not preempted by federal copyright law under an implied conflict preemption analysis. 

Although this lawsuit is still in its early stages, Authors Alliance will be monitoring its progress and keeping our members apprised of updates in the case.