The Association of American Publishers finds international backing for its lawsuit of Maryland’s new library digital book licensing law.

By Porter Anderson, Editor-in-Chief | @Porter_Anderson

Pallante: ‘We Take This Encroachment Very Seriously’

With a hearing date of February 7 set by Judge Deborah Boardman, international support has come in over the holidays for the Association of American Publishers‘ (AAP) lawsuit in the United States—an attempt to block the state of Maryland’s new law on library ebook licensing.

The Maryland law was passed in the spring of 2021 and has been set to take effect on Saturday (January 1). Essentially, it requires publishers to offer their digital products to libraries, as AAP puts it, “according to timing, pricing, and other terms mandated by the state under threat of penalty.” A key phrase here is “reasonable terms.” The law requires publishers to offer what the state—not the publishers—establish as “reasonable terms” when negotiating and working with Maryland’s libraries.

A quick timeline here:

• The AAP sued on December 9 to block the Maryland law
• The AAP then filed for a preliminary injunction against Maryland, seeking to stop the law from going into effect on January 1 as the publishers’ association’s case is in play
• The publisher-plaintiffs were cheered on December 29 when New York’s governor, Kathy Hochul, vetoed a bill that the AAP sees as “largely identical” to that of Maryland

Basic Elements of the AAP Position

The publishers’ association refers to the Maryland law as “unconstitutional” (more on that in a moment), and argues that Maryland’s legislation “gives libraries unprecedented control over basic copyright transactions that are clearly reserved to those who write, develop, invest in, distribute, and make publicly available the invaluable array of novels, biographies, historical and political works, poetry, scholarship, and course materials that are the mission of publishing, and which together fuel entertainment, human empowerment, and scientific progress on a global basis.”

As to constitutionality, AAP president and CEO Maria A. Pallante—who is also a former “register of copyrights,” or chief, of the United States’ Copyright Office—has said, “Maryland does not have the constitutional authority to create a shadow copyright act or to manipulate the value of intellectual property interests.

“It’s unambiguous that the US Copyright Act governs the disposition of literary works in commerce—and for that matter, all creative works of authorship. We take this encroachment very seriously, as the threat that it is to a viable, independent publishing industry in the United States and to a borderless copyright economy.”

The AAP’s complaint, filed in federal court in Maryland, argues that the Maryland law not only is thus preempted by American national copyright law—and “interferes with interstate commerce”—but that it also violates the Constitution’s “due process” clause by mandating “vague and unspecified licensing requirements.”

Pallante’s response to the news of New York’s gubernatorial veto of a similar law is further reflective of the AAP’s stance.

“Maryland does not have the constitutional authority to create a shadow copyright act or to manipulate the value of intellectual property interests.”Maria A. Pallante, Association of American Publishers

Pallante says that New York’s bill “posed an unjustified attack on the creative industries of New York. Shockingly, the bill would have forced authors, publishers, and other copyright owners to grant involuntary, digital licenses to New York public libraries under state-imposed terms, in full conflict with the US Copyright Act and the comprehensive purpose that it serves. The bill attached penalties for non-compliance, effectively chilling copyright owners from pursuing the full benefit of their copyright interests and literary properties within the state.

“We thank Governor Hochul for taking decisive action to protect the legal framework that has long incentivized the American private sector to invest in, publish, and distribute original works of authorship to the public, in service to society. The bill that she vetoed was rushed through the state legislature in response to a coordinated, misinformation campaign, supported by Big Tech interests and lobbying groups that are notorious for wanting to weaken copyright protections for their own gain.

“Contrary to the rhetoric employed by the bill’s proponents, there’s no such thing as ‘mild harm’ or ‘minor preemption’ when it comes to violating the US Constitution, and there is nothing judicious about undermining the free expression protections and licensing decisions that make books and other invaluable creative works possible and sustainable in the first place.

“It goes without saying that publishers strongly support public libraries, without which the world would surely have fewer readers. But today the governor has affirmed that New York has a deep appreciation and enduring respect for the cultural and economic contributions of authors and publishers, and a clear understanding that our public libraries also depend upon a vibrant creative economy.”

International Messages of Support

The International Publishers Association (IPA)–of which AAP is a member-organization–on December 22 issued a strong statement, backing the American association in its efforts to overturn the Maryland law. That statement reads:

“The International Publishers Association supports the Association of American Publishers’ lawsuit challenging as unconstitutional a State of Maryland law that would impose fundamental limitations on the exercise of exclusive rights.

“The legislation would establish an obligation to license under terms and conditions mandated by the state, thereby impairing publishers’ contractual freedom, and undermining the international legal framework as set out in the Berne Convention and in the WIPO [World Intellectual Property Organization] Copyright Treaty, to which the United States is a contracting party.

“IPA secretary general José Borghino said: ‘We are outraged that one US state has enacted legislation that not only undermines its own publishers and authors, but also publishers and authors from across the country and around the world. Treaty obligations clearly prevent this aggression.’

“The Maryland law was passed last summer despite strong evidence-based objections from the AAP and the United States’ Authors Guild and is currently set to go into effect in January 2022.”

And the Federation of European Publishers (FEP) preceded the IPA statement with a more extensive commentary of its own, dated December 15.

As our international readership knows, the federation represents European national publishers’ associations from 29 markets and its message provides some useful comparative perspective between the European and American library arenas. Its statement reads:

“The Federation of European Publishers supports the filing by the Association of American Publishers of a suit against the State of Maryland challenging the Maryland law requiring publishers to license ebooks to public libraries on so-called ‘reasonable terms,’ set to go into effect in January 2022.

“Similar calls have been made in several European countries. With the pandemic, the recourse to ebooks has accelerated, while the budget of libraries has at best remained stable or at worst diminished. Publishers have made extraordinary efforts to serve readers to overcome these difficult times, yet these are not sustainable in the long run.

“The ‘public lending right’–which in Europe is accompanied by a remuneration due at least to the authors, is a limitation to copyright, and as such it has to follow the three-step test of the Berne Convention, including not undermining the commercial exploitation of the work.

“The terms of the licenses agreed between publishers and librarians are meant to establish a level playing field with the online retailers, including independent bookshops with libraries.

“A behavioral study in Germany has shown that when libraries’ patrons are using online library services, they tend to buy fewer or no more books. In Europe, it’s estimated that public libraries’ acquisition of trade books represents some 4 percent (in the best cases) of the turnover of the sector while 96 percent is bought by individual readers. Any change in this balance puts at risk all authors and publishers, as well as booksellers.”

In addition, “cultural diversity risks being seriously affected. This is why German authors in October at the 2021 Frankfurter Buchmesse, started a Fair Lessen campaign [Fair Reading].

“The United States is bound by its legislation based on the WIPO Internet Treaties. This includes the 1998 Digital Millennium Copyright Act, which preceded the European Union 2001 Copyright in the ‘Information Society Directive.’

“European publishers are worried that the [Maryland] law would apply to foreign authors; that it unduly encroaches upon the author’s exclusive right to control the transmission of his or her creative work; and that it raises serious concerns regarding compliance with the three-step test.

“Intergovernmental leaders paved the way for the very innovations that led to ebooks and audiobooks, and which will, no doubt, lead to future exciting formats made possible by a free market. A European Court of Justice decision allows libraries to e-lend a ‘born digital’ book under very specific circumstances and, on top of that, the judges have ruled that additional protections for the rights holders can exist at a member-state’s [national] level.

“Another Court of Justice decision has reaffirmed that the concept of first sale (exhaustion of rights) does not apply in the digital sphere.

“For all these reasons the federation supports the American association on its filing of a suit against the State of Maryland, challenging the Maryland law requiring publishers to license ebooks to public libraries on so-called “reasonable terms” and set to go into effect in January 2022.”

More on the Issues

The US Authors Guild has issued a statement, timed with the announcement of the AAP lawsuit, with Guild CEO Mary Rasenberger saying, in part, “The law is not only an unconstitutional overreach into an area of federal authority, it’s also an encroachment on the exclusive rights guaranteed under copyright, a federal law that by its terms preempts all state and local laws.

“Alarmingly, several similar laws are currently pending in other state legislatures, suggesting that this is a concerted effort to roll back copyright protections that are integral to how publishing generates a return on investment and how authors earn income.”

And Publishing Perspectives readers know that the international industry refers frequently to the digital acceleration prompted by the coronavirus COVID-19 pandemic, one predictable manifestation of that being an upturn in library patrons’ interest in ebooks and audiobooks they can download as library patrons. Clearly that plays into the narrative here as more states (New York, Massachusetts, Rhode Island among them) are in various stages of following Maryland in working to levy state-imposed “reasonable terms” on library access.

If you’d like to look at the ground-level arguments involved here, a good place to start is with Hiawatha Bray’s article from December 31 at The Boston Globe, which of course is written for the lay (non-publishing-industry) audience. It’s good to get a look at how perceptions can be parsed “at street level” outside the industry.

“Alarmingly, several similar laws are currently pending in other state legislatures, suggesting that this is a concerted effort to roll back copyright protections that are integral to how publishing generates a return on investment and how authors earn income.”Mary Rasenberger, Authors Guild

Bray notes that a Massachusetts bill now is in play, one “modeled after a law enacted in Maryland” to “ensure that libraries can get access to every published ebook and audiobook.” One underlying issue here has been that Amazon Publishing—the traditional publishing house, not the self-publishing platform programs—has not made its digital editions salable to libraries, though Bray points out that “APub” has recently begun licensing ebooks to libraries in a deal with Boston-based Digital Public Library of America, and is expected to follow with a similar arrangement for audiobooks through Amazon’s Audible subsidiary.

And Bray also lays out the cost question, which offers some representation of the library community’s viewpoint.

“According to the American Library Association,” she writes, “libraries currently pay three to five times as much as consumers for ebooks and audiobooks. Thus, an ebook selling for US$10 at retail could cost a library $50. In addition, the library can only buy the right to lend the book for a limited time—usually just two years—or for a limited number of loans, usually no more than 26.

“James Lonergan, director of the Massachusetts Board of Library Commissioners, believes that publishers settled on 26 checkouts after calculating that this is the number of times a printed book can be checked out before it’s worn out and in need of replacement. And that’s what happens to a digital book after 26 checkouts. The library must ‘replace’ it by paying full price for the right to lend it out 26 more times.”

In the wider context, the Maryland law and the AAP lawsuit form another inflection point in a frequently strained relationship between publishers and libraries relative to digital products. There have been many instances of contention in the past decade’s “digital disruption”—a term that now seems quaint. Libraries and the publishing industry have found themselves at odds during these moments about how and at what price libraries can make ebooks and/or audiobooks available to library patrons.

At its most essential level, the very ephemeral nature of an ebook—as opposed to a print copy—was once a point of deep discussion as both sides, the industry and librarians, grappled with how to offer and meter digital book products. And this format-based factor has surfaced many, many times over the years, in controversies both in ebooks and in audibooks about how–and on whose authority–these copyrighted works can be used.

Over time, these disagreements–this one being generated at the American state-government legislative level–help to refine and clarify the fundamental importance of copyright and of fair and properly remunerated access by the public to the products created by authors and their publishers. While the rhetoric tends to run white hot in litigation, the outcome of such an exercise can be ultimately of value, drawing new, crisper lines around the practical, ethical, and even aspirational efforts of cultures’ understandings of how creative work is not only sold but also protected.

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More from Publishing Perspectives on the Association of American Publishers is here, more on libraries is here, and more on copyright is here.

Publishing Perspectives is the world media partner of the International Publishers Association.

More from us on the coronavirus COVID-19 pandemic and its impact on international book publishing is here.