Controlled Digital Lending Fact Sheet

The authors of the Controlled Digital Lending ("CDL") Position Statement and the White Paper thought it would be useful to address misunderstandings about CDL.

Q: What is CDL?

A: CDL is the digital equivalent of traditional library lending. A library can digitize a book it owns and lend out a secured digital version to one user at a time, in place of the physical item.

CDL has three core principles:

  1. A library must own a legal copy of the physical book, by purchase or gift.
  2. The library must maintain an "owned to loaned" ratio, simultaneously lending no more copies than it legally owns.
  3. The library must use technical measures to ensure that the digital file cannot be copied or redistributed.

Beyond these core principles, libraries may choose to implement CDL in different ways. Given that a fair use analysis is highly fact-specific, it is recommended that any library considering implementing CDL work with a competent attorney to develop an appropriate program. For an in-depth look at what factors are important to consider when implementing CDL, see Kyle K. Courtney & David R. Hansen "A White Paper on Controlled Digital Lending of Library Books."

Q: What is the purpose of CDL?

A: The purpose of engaging in CDL can vary widely from library to library, depending on each library’s mission. Some important goals CDL can serve include:

  • Making print materials more easily discoverable, thereby leveling the playing field across physical holdings;
  • Making materials that have not circulated in decades more visible and accessible, thereby bringing older and less popular resources a new life;
  • Providing more convenient and efficient delivery of library resources;
  • Creating digital formats that are more accessible to those with print and physical disabilities; and/or
  • Preserving and protecting library collections, providing access to materials during natural disasters, severe weather and health emergencies.

There may be many additional reasons libraries may wish to implement CDL.

Q: Is CDL intended as a replacement or substitute for existing electronic licensing services offered by publishers?

A: No. CDL allows libraries to retain the use of works that they have legally acquired despite format and technology changes. We are not aware of any library that has implemented CDL in order to cancel their eBook subscriptions. These services are completely complementary.

Q: Is it true that CDL allows a library to digitize an item and provide unrestricted access to the e-copy to an unlimited number of people simultaneously?

A: No. A key principle of CDL is the "owned to loaned" ratio, which means that a library cannot circulate more than the number of copies it owns. In order to ensure that it meets this obligation, the lending library controls a digitized work through digital rights management (DRM) software. CDL libraries use the same technical protection measures that publishers do, so the DRM controls are the ones that are already established and accepted as secure in the industry.

Q: Does CDL support a library lending more copies than it owns?

A: No. CDL only supports a library lending up to the number of copies that the library owns. Fair use and other exceptions and limitations in the law support additional library activities. For example, preservation copies have long been permitted under 17 U.S.C. Sect. 108 (with limitations) and copies to make works accessible to readers who are print disabled is permitted under 17 U.S.C. Sect. 121 (with limitations) and under U.S. case law.

That said, depending on the platform used and coding of the file, encrypted files may remain on users’ computers. The files are inaccessible unless the user circumvents the DRM controlling the file in violation of 17 U.S.C. Sect. 1201. This is true of many licensed eBooks or e-files, as well as the files distributed by CDL libraries.

Q: Is it true that a user could "work around" the DRM of downloaded CDL books?

CDL libraries are following industry standards by using the same technical protections that commercial players use for their in-print eBooks, such as Adobe Digital Editions. These are encrypted downloads that expire after a set period of time (e.g., 2 weeks). If it is possible to "work around" (i.e., hack) this security, then this is an industry-wide issue that should be addressed as such. Moreover, breaking DRM is illegal under 17 U.S.C. Sect. 1201, unless it falls within one of its narrow exceptions or exemptions.

Q. For CDL programs that allow in-browser reading, does the browser keep a cached copy of a book borrowed such that a user can subsequently access the text without restriction?

CDL libraries that allow in-browser reading use industry standard mechanisms to prevent copying and redistribution of the digital files, such as disabling the ability to print or take a screenshot of the page, and are intended to work in the same way as the Google book reader and the Overdrive in-browser system work. Caching is not a function of CDL but rather a mechanism used by browsers to make reading or navigating faster, and caching has generally not been seen as infringement (see, e.g., Perfect 10 v. Google, 508 F.3d 1146 (9th Cir. 2007)). While CDL libraries, or any other provider, may code their files to try to limit caching by browsers or require validation before caching, browsers may ignore such code.

Q: Can a library choose to the destroy the print copy and just lend the digital copy?

A: Yes. CDL libraries may destroy the original print book, keep only the digital copy, and use only the digital copy, so long as the library never lends out more than it legally acquired in the first place. Libraries opting for destruction are strongly recommended to keep copies of records showing both ownership and destruction.

Q: Can a library choose to resell or give away the physical books it lends digitally?

A: No. This would violate the "owned to loaned" requirement as the library would no longer own the item. Libraries may not sell or give away the physical books it lends digitally.

This does not mean that the library can never resell or give away the print item, but it does mean that they would have to destroy the e-copy before doing so.

Q: Does CDL require the permission of copyright owners?

A: We do not believe so. As the Supreme Court explained in Campbell v. Acuff-Rose Music: “If the use is otherwise fair, then no permission need be sought or granted.” Campbell, 510 U.S. 569 at 585 n.18 (defendant had sought and been denied permission). CDL proponents believe that the conversion from one format to another, for a use consistent with a library’s mission, and where the copyright owner has already been compensated for a legitimately acquired item, is fair use. For a more detailed analysis, see Kyle K. Courtney & David R. Hansen "A White Paper on Controlled Digital Lending of Library Books."

The principle that fair use does not require permission has been recognized in numerous cases. Examples include Blanch v. Koons, 467 F.3d 244, 256 (2d Cir. 2006), Bill Graham Archives v. Dorling Kindersley, Ltd., 448 F.3d 605 (2d Cir. 2006), Castle Rock Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132, 146 (2d Cir. 1998); Lennon v. Premise Media Corp., 556 F. Supp. 2d 310, 325 (S.D.N.Y. 2008); SARL Louis Feraud Int’l v. Viewfinder Inc., 627 F. Supp. 2d 123, 130-31 (S.D.N.Y. 2008).

Q: Is CDL legally permitted outside the United States?

A: It depends on the country. The legal analysis presented in the Statement and White Paper is based on U.S. law and only applies in the U.S. This does not mean that other countries’ laws might not support a similar effort, but the current analysis is based on U.S. law only. Institutions outside the United States interested in implementing CDL would need to conduct their own legal analysis.

Q: What does the ReDigi decision mean for CDL?

A: Proponents for CDL have largely determined that ReDigi does not change the landscape for CDL. If anything, a new test for transformative use articulated by the court could further tip the fair use analysis in CDL’s favor, as it arguably “utilizes technology to achieve the transformative purpose of improving delivery of content without unreasonably encroaching on the commercial entitlements of the rights holder.”

See Michelle Wu’s article, Kevin Smith’s blog post, or Kyle K. Courtney & Dave Hansen’s blog post for a more detailed analysis.

Q: Does digitization cannibalize sales of print books?

A: A recent study found that digitization might benefit copyright holders through increased discovery of less popular works, rather than cannibalizing demand. “In particular, our finding that digitization, on the whole, increased sales suggests that concerns about market replacement effects are likely overblown. In contrast, copyright holders might be able to increase demand through digitization, especially for less popular and out-of-print works.” See Nagaraj, Abhishek and Reimers, Imke, “Digitization and the Demand for Physical Works: Evidence from the Google Books Project” (February 21, 2019).

Q: Do physical books wear out faster than digital books?

A: Yes and no. Containers, whether paper (print book) or a virtual drive (e-book), require maintenance and upkeep, and any container can fail. The question really appears to be whether or not a print work is more likely to wear out during the course of a copyright term. The assumption underlying the question is that print books regularly wear out, and libraries will repurchase them, resulting in new income for the copyright owners.

However, the question is faulty in its premise. After all, many academic libraries have print books which are centuries old, and some which have circulated hundreds, if not thousands, of times. While they may be repaired multiple times over the years, they are not “worn out” in the manner described in the context of copyright (i.e., unusable). Other libraries may have wildly popular best sellers that wear out to the point that they are unusable and not repairable. However, even in those cases, libraries do not always purchase replacement copies (e.g., if popularity has dwindled) and if they choose to purchase a replacement, they may choose to purchase a used copy instead of new, which results in no new income for the copyright owner.

Further, many books in academic library collections are rarely checked out at all, and do not wear out despite being quite old. See e.g., Allen Kent et al. Use of Library Materials: The University of Pittsburgh Study (1979) (indicating that fewer than 40% of books purchased in the preceding 10 years had circulated at all, and predicting that fewer than 2% ever would); Cornell University Library, Report of the Collection Development Executive Committee Task Force on Print Collection Usage 2 (2010) (approximately 55% of monographs purchased since 1990 have never circulated). These older, less popular books are prime candidates for CDL. Because of low market value, they are unlikely to ever be made available in e-book form except through CDL, which could give them new life as digital learners are more likely to find them online than in the stacks.

Q: Are libraries making money from CDL?

A: No. CDL is intended to be conducted on a noncommercial basis, carried out by libraries in fulfillment of their public-service mission. Libraries engaged in CDL do not charge for the use of these materials. Further, although we hope that costs of digitization, storage, and digital lending technology will come down over time, experience to date is that libraries who undertake CDL do so at substantial cost to themselves.

Q: Does Section 108 of the Copyright Act limit what copies libraries can make?

A: No. The Copyright Act contains several provisions that allow libraries and archives to reproduce and distribute copyrighted works. Section 108 is one very specific provision that acts as a sort of "safe harbor" for libraries and archives to make a specific number of copies for preservation purposes, as well as for provision to users. Section 108 by its terms does not limit what libraries can do, but rather acts as a complement to other provisions, such as fair use. The court in Authors Guild v. HathiTrust, 755 F. 3d 87 (2d Cir. 2014), explicitly held that Section 108 does not foreclose application of fair use to library uses.