Controlled Digital Lending: What It Is and the Fight Now Brewing

Library lending of scanned print books may not be legal under current copyright law; author and publisher associations are beginning to protest

Last year, if you were paying really close attention, you saw a new term floating around the academic and library communities: controlled digital lending. Often abbreviated as CDL, controlled digital lending may be the next big battle over fair use.

On the face of it, controlled digital lending is a simple concept: it allows for libraries to digitize print books in their collection, then lend out the digital edition just as it would the print edition. So, if the library has a single print copy in its collection, it can remove it from circulation, scan it, then lend the digital edition instead of the print edition—in a secured form, to prevent copying or further distribution—to one person at a time.

Is CDL legal under existing copyright law? Author and publisher organizations, such as the Authors Guild and the Association of American Publishers, say absolutely not. But in this position statement and this white paper, you’ll find an argument that CDL is defensible under fair use; signatories to the position statement include the Internet Archive, the Authors Alliance (an author advocacy group based in California), the Digital Public Library of America, and more than a dozen libraries across the country—not to mention a range of librarians and law professors from major universities.

Adherents of controlled digital lending state that “CDL is not intended to act as a substitute for existing electronic licensing services offered by publishers. Indeed, one significant advantage of CDL is addressing the ‘20th-Century Problem’ of older books still under copyright but unlikely to ever be offered digitally by commercial services.”

That “20th-century problem” is of concern primarily to researchers and those in the academic community. We talked to a range of people about CDL (although no one wishes to go on the record), and what surfaced immediately is how CDL helps solve the orphaned-works problem, i.e., the problem of accessing books no longer in print that may not ever be offered electronically. However, the Authors Guild, in its statement against CDL, brushes that off, arguing that while true orphans do exist, they are a small minority. They add, “CDL’s proponents seem completely ignorant of the large and growing markets for ebooks of older works.”

Nevertheless, the Internet Archive has been digitizing and lending such works—with help from numerous libraries and individuals—as part of its Open Library. Founded in 1996, the nonprofit Internet Archive is probably best known for its Wayback Machine, which maintains a historical record of websites accessible to the public. Its mission is to promote access to knowledge and literacy. Early in this decade, the organization started pushing the boundaries of copyright law, digitizing print books outside of the public domain and making them available through Open Library. Partly, they are taking advantage of a provision in the 1998 Sonny Bono Copyright Term Extension Act that offers libraries wide latitude to reproduce works in the last 20 years of their copyright terms—but they’ve also put into circulation modern and contemporary works not in that category.

Jill Lepore profiled the Internet Archive and founder Brewster Kahle in The New Yorker in 2015. As made clear in that article, the organization works on an opt-out policy: you have to contact the organization if you don’t want your work available. Historically, the Internet Archive, seemingly respectful of copyright, has quickly complied with takedown requests from people who’ve discovered their in-copyright materials available. So, for years, publishers and advocacy organizations have looked the other way (that is: not launched a lawsuit). But the Internet Archive’s approach may be changing.

This month, according to the Authors Guild, the Internet Archive has responded to takedown notices by saying it operates in a manner consistent with the principles of controlled digital lending. As of this writing, we have not heard back from the Internet Archive confirming that this is the case. However, we did some spot-checking of the Open Library and looked for titles from active, contemporary authors we know. Once we created an account, we were able to read online and download encrypted digital editions of several works by Kristine Kathryn Rusch, Debbie Macomber, Alain de Botton, and Jodi Picoult. To be clear, Open Library has created these digital editions themselves from print copies (quality varies tremendously, we might add) and does not pay the author or publisher for such use, as it operates under the premise of CDL. Open Library, by offering a range of bestselling authors to choose from, is clearly serving as more than just an access point for orphan works, and now risks a lawsuit from authors and publishers by not complying with takedown notices.

In November 2018, Matt Enis at Library Journal reported on CDL, with insights from Kyle K. Courtney, one of the authors of the CDL position statement. He says, “This is how things start. You put out a position statement, you back it up with a white paper, and you see the conversations that happen.” The white paper gets very deep into the argument for fair use, on multiple levels, but these are its high-level questions:

• Does CDL fall under first-sale doctrine? A year ago, the answer might have been murky—but not as much since the resolution of the ReDigi case. The digital music reseller ReDigi (now out of business) tried arguing that reselling copyrighted music files was fair because of first-sale doctrine, which allows used copies to be sold without further payment to the copyright holder (who cannot control distribution of the product once it has been sold the first time). But the court determined first-sale doctrine did not apply because ReDigi was violating reproduction rights. You can read commentary here on the implication for CDL.
• If CDL use isn’t transformative, can it still be defensible? In the Google and HathiTrust cases involving Google’s scanning of books, the court determined that Google’s digitization of print books was fair because it was transformative, enabling access to information via search functions. The white paper admits that CDL is “not clearly transformative”; however, it adds that the courts have been clear that transformative use is not necessary for a finding of fair use. Instead, CDL could be fair use if it is considered non-commercial and if “it is aimed at opening up access to readers for research and learning purposes.”

The white paper also argues there’s a strong fair-use case if and when there’s been a “broad market failure” in digitizing 20th-century works. But that of course doesn’t apply when works are already available digitally for purchase. In its statement on the issue, the Authors Guild writes, “Needless to say, if Internet Archive’s plans to expand Open Library broadly to all libraries are realized, it would eventually decimate the market for library ebooks, put a massive dent in the ebook market in general, and usurp authors’ rights to bring their older works back into the market.” The Association of American Publishers also strongly disputes the white paper’s findings, writing, “CDL is expressly designed to allow libraries to create their own substitute ebook editions. … It is clear that CDL copying would create direct market substitutes for publishers’ extensive licensed offerings.”

There are indeed indicators that libraries are interested in how CDL can broadly benefit them—especially as they face increased digital borrowing rates and tight budgets. We wrote about this challenge late last year. In July 2018, a policy news blog hosted by the American Library Association’s Washington office posted notice of a webinar on controlled digital lending; it reads, “In a time of limited resources, libraries are always seeking to maximize their reach with decreasing funds. One way to accomplish this goal is through collaborative digitize-and-lend, or controlled digital lending (CDL). … Libraries perceive copyright as a roadblock to this vision, and this session seeks to demonstrate why copyright can be a library’s ally instead.”

Bottom line: The Authors Guild has already suffered two significant defeats on fair use—both involving book scanning—against Google and HathiTrust. At the time, some accused the Guild of wasting its resources because the intent of Google and HathiTrust was never to make copyrighted books fully accessible in digital form, but to make them searchable. As of today, the Open Library is making copyrighted books digitally accessible under the premise of CDL. Fighting yet another fair-use battle, this time against a popular nonprofit in the tech community, may not be immensely attractive for any advocacy organization. We’ll be closely watching CDL discussions and what the Internet Archive does next.