Running Head: Digital Propriety Regarding Libraries and Providers

Digital Propriety Regarding Libraries and Providers: A Case Study Dan Brower LI866: Copyright and Licensing Emporia State University Fall 2011

Digital Propriety Regarding Libraries and Providers 2 Introduction According to a Library Journal survey in 2011, approximately 82% of public libraries offer eBooks to their patrons. This number increased 10% from 2010 (Miller, 32). EBooks are yet another way for libraries to offer free access to information and the same Library Journal survey showed that many libraries have seen new users at the library (Miller, 33). Overdrive is currently the leading supplier of eBooks to public libraries, boasting over 650,000 digital titles and has negotiated numerous contracts with individual libraries and library consortiums across the country and around the globe (OverDrive). However, there are competitors in the market, and as any free-market will dictate, those purchasing a product may move to a different brand, or in this case, a different provider. Overdrive Media, along with its competitors, offer eBooks to libraries with DRM (Digital Rights Management) technologies imbedded in the digital files. This is to control and maintain copyrights held by the authors of available published works. How do these restrictions change when libraries switch providers? If there are provisions restricting the movement of libraries to another provider, would it in fact be a crisis of copyright? In this report, these topics will be addressed, along with the issue of whether or not libraries own the digital copies purchased from providers such as Overdrive Media.

Digital Rights Management Digital Rights Management technologies, or simply DRMs, are used to protect the copyright of authors. It is a method of limiting access by users so as to not infringe on the owners copyright. Different companies create different eBook formats. Each of these formats has its own unique DRM scheme. Some of the DRMs limit eBook distribution to a single device,

Digital Propriety Regarding Libraries and Providers 3 or a specific kind of device. Others may limit the number of times an eBook can be viewed. Still others may limit functions, such as text-to-speech options (Schiller, 42). The most recent and notorious instance of this is Harper-Collins 26 checkout restriction for libraries. In order to counteract the restriction, OverDrive has separated these titles from their regular collection. In this way, libraries can choose if they want to deal with the restriction (Hadro). Again, DRMs are used to protect copyright and prevent piracy, or the illegal copying and use, of files. However, with no uniform standards on how DRMs should handle files, users typically have no idea how they can and cannot use files. Complicating the matter is the possibility of a transfer between providers. Since every company has their own format and subsequently their own DRM schemes, switching eBook providers can be not only a challenge, but also expensive.

Kansas State Libraries vs. OverDrive During ALAs 2011 annual conference in New Orleans, 3M unveiled their new eBook lending service, Cloud Library. 3M jumped into the eBook business by doing so. They also made an impact by announcing that one of their beta testers would be the Kansas Digital Library Consortium (KDLC), a subscriber to OverDrive Medias eBook service (Kelley, Jun). Jo Budler, the Kansas State Librarian made the decision to leave OverDrive because of two reasons. First, the price would increase by almost 700% by the third year in a contract renewal. Secondly, the ownership of purchased eBooks would lie with OverDrive, not the library as had been the case previously (Cummings). This is a key difference between OverDrive and 3M. 3Ms new lending program would allow libraries to keep their purchased content if they decide to switch providers, as long as the respective publishers allow the transfer of their titles and the

Digital Propriety Regarding Libraries and Providers 4 one copy, one user DRMs are respected (Kelley, Oct). When Budler did not renew the contract with OverDrive, she asserted that the content, on which the KDLC spent over $500,000, was owned by the KDLC (Hoffelder). OverDrive contended that the content was leased and licensed (Kelley, Jun). It is interesting that OverDrive took a firm stance on the issue, considering that the contract agreed upon between Digital Library Reserve, the parent company, and the KDLC allowed for the transfer of the content (DLR, 6). According to Section 4.2 (Cost of Materials) of the Digital Library Reserve Application Services Agreement: Participating Libraries shall be entitled to purchase rights to Digital Products (content, i.e, eBooks, digital audiobooks, etc.) for contribution to the Consortium collection from DLR under the terms and conditions associated with the Digital Products (DLR, 3). Budler further contended that OverDrive must allow KDLC to keep their purchases, as it is explicitly described under the Termination section (11.4) of the contract: Upon termination of this Agreement, and except as otherwise provided in this Agreement, the license granted to Participating Library by this Agreement shall be terminated immediately; Participating Library shall make no further use of all or any part of the Application Services or any confidential information received from DLR, except that DLR shall reasonably cooperate with Participating Library to support its Patrons who have accessed Content or existing users of Application Services. In the event of termination, DLR will cooperate with Consortium to transfer any and all Digital Products and Content purchased from DLR or independently owned by Consortium to another service provider to permit Library to continue to serve its Patrons with the Digital Products. For Digital Products that Consortium has purchased from DLR, Consortium shall obtain permissions and consent from the owners of the Digital Products authorizing DLR to transfer the Content (DLR, 6). Since the phrase content purchased is used, the library has grounds to claim that they are the owners of the content. The clause (11.4) has since been rewritten to give exclusive ownership to OverDrive: Consortium shall make no further use of all or any part of the Application Services (including any and all Content), (Kelley, Jun). The case is ongoing, but Budler has been

Digital Propriety Regarding Libraries and Providers 5 able to acquire permission from respective publishers and hopes to receive more responses to increase their available eBook collection for patrons.

Library Implications Jo Budler has caused libraries and eBook providers to reexamine their practices and agreements between each other. Digital copyright has been an issue since services like napster made music available online. However, since eBooks have made an increasing presence in the digital world, the only limitations on them are the lending restrictions from publishers and DRMs. Digital content providers are now rewriting contracts to explicitly state that any content acquired through their service is leased and solely the property of the provider and cannot be used once a client leaves their service. As more companies offer eBooks and other digital content, the latter will become more important. It will create competition in two ways. First, if a provider allows only current subscribers to use their content, then they can be assured that they can retain users. They can then negotiate lower prices for somewhat similar digital catalogs. The second way to boost competition is by extending the purchased content to the libraries. By doing so, they can become a lucrative competitor in the market because they allow libraries to keep the items that they purchased. This is unlike any print issue that libraries face today. While print materials may be purchased and retained by libraries, digital content cannot. Libraries may use print materials as they wish as allowed by the Copyright Laws provisions for First Sale (17 U.S.C. 106) , Fair Use ( 107) and Reproduction by Libraries and Archives (108), and later dispose of those materials according to their needs. Digital content that is copyright protected by authors

Digital Propriety Regarding Libraries and Providers 6 and publishers must be protected by the lending restrictions and DRM technologies in order to prevent the piracy of the exclusively copyrighted works. It is far easier to copy a digital file than a 600-page book, but DRMs do not prevent piracy completely, and in some cases those technologies are in effect useless (Schiller, 42). Publishers continue to apply print copyright restrictions to eBooks, which are purely digital. This is not good practice because the two are fundamentally different. One copy of a book is one copy, but one digital copy means that there are effectively an unlimited number of copies (Griffey). Applying such rudimentary print rules to non-print media creates the issue of finding common ground between the publishers, providers, and customers. For true competition to exist, and for libraries and providers to find common ground, there needs to be a way to regulate the file sharing of digital content offered by publishers. With the advent of cloud computing, and the eagerness of companies to join the trend, digital content should not be limited to a single provider. An analogy in the physical world for this issue would involve buying novels from Barnes & Noble through a contractual agreement. However, if the same library decided to not renew said contract and begin again with Books-AMillion, they would have to forfeit all books purchased while under contract with Barnes & Noble. This is not how it works in the physical world. Granted, digital books and physical books are not the same things: they are different in production and distribution. They are essentially the same though: their content is exactly the same, and their appearance is identical. Digital content should not be restricted in this way though, and new copyright standards or revisions to the Digital Millennium Copyright Act need to be addressed.

Digital Propriety Regarding Libraries and Providers 7 Outside of creating a Digital Bill of Rights or revising the DMCA, a great innovation would be allowing libraries to purchase a single copy of an eBook and be able to retain it on a local server. In this way, an unlimited number of patrons could check out the same eBook (Hirtle). The Wolfner Talking Book and Braille Library already uses this method for their audiobooks. They store eAudiobooks in the cloud, and allow an unlimited number of users to download the book at the same time. Volunteers read the books and record them for a third party company that has a unique partnership with the Wolfner Library. Through this partnership, the Wolfner Library is able to retain full copyright of the eAudiobooks and can therefore distribute them freely (Smith). Gaining this exclusivity poses a challenge to libraries because of the landscape that has already been created. This exclusive right for libraries to distribute eBooks would be possible as long as it was explicit that libraries owned, not licensed, the eContent.

Ownership vs. Licensing Kansas State Librarys basic contention is that they (The Kansas Digital Library Consortium) own the eContent that they purchased from OverDrive. According to Section 4.2, libraries purchase the rights to content (DLR, 3). Further, in section 11.4, the provider will cooperate with libraries to transfer the purchased content. However, within the same section, the contract states that the license will be terminated (DLR, 6). This reveals an interesting and not unimportant issue: Ownership vs. Licensing. The term owner is not defined within the Copyright Act. If someone gains possession of a copy, they could be considered an owner as well. This act does not prohibit them from being so (Laughlin, 25-6).

Digital Propriety Regarding Libraries and Providers 8 Another peculiarity concerning copyright involves software companies. Program creators make multiple copies of their works and subsequently distribute and sell them. These companies do not sell distributable copies though; they are selling licenses for use of the products (Laughlin, 25-6). Recent developments involving Amazon and their deletion of purchased eBooks have brought to light this issue as well. Amazon deleted copies of George Orwell books because the companies did not have exclusive permission to distribute them. This was done unbeknownst to the owners of the eBooks. Oddly enough, Amazons user agreement gives the purchaser a non-exclusive right to keep their own copy. However, having this copy does not entitle them to ownership, as was illustrated in the Orwell removals (Laughlin, 29-33). Somewhat parallel to what OverDrive claims, this is the opposing viewpoint to the KDLC. OverDrive, like software companies, claims that they sold only a license to the Kansas Digital Library Consortium for use of eContent. For this reason, and because competition has arrived, DLR is changing the wording of future contracts to reflect the true nature of users purchases.

Conclusion As pioneers of intellectual freedom and free access to information, libraries would be wise to monitor cases such as the Kansas Digital Library Consortium. Purchasing digital content is not the same as purchasing physical items, but both are explicitly purchased. Standards need to be established for the distribution and use of digital content, just as they have been for print materials. The term purchase may be used ambiguously in contracts, and as it stands now, the difference between owning and leasing is ultimately a decision left to the service providers, such as OverDrive Media and 3M. The movement between providers should be allowed, and as

Digital Propriety Regarding Libraries and Providers 9 long as publishers approve of the files being transferred, there should be no issue. No library should have to spend millions of dollars to not retain any product. As with every contract, the consequences should be weighed before a library chooses or switches providers. Ultimately what is best for the librarys clients should be in the librarys interest and direct their decision. Service providers should be able to cooperate with their largest customers in this way. The future is so far uncertain, but with proper standards in place, the landscape of eBooks could change for the better with regards to libraries. The struggle between Kansas State Library and OverDrive will be pivotal in the future handling of eContent. If Kansas State Library successfully transfers their purchased content from OverDrive to 3M, it will fundamentally change the landscape of how e-Content providers interact with libraries and set a precedent for other libraries to own the purchased content (Goat in the Stacks).

Digital Propriety Regarding Libraries and Providers 10 References

Cummings, I. (2011, November 1). Kansas libraries lead way in e-book access. In The University Daily Kansan. Retrieved November 13, 2011, from http://www.kansan.com/news/2011/nov/01/kansas-libraries-lead-way-e-bookaccess/?news DLR, Inc. (2005). Digital Library Reserve Application Services Agreement. Retrieved November 13, 2011, from http://www.scribd.com/doc/52439233/OverDrive-s-current-contractwith-Kansas-State-Library Griffey, J. (2010, August 15). Ebook Sanity. In Library Journal. Retrieved December 2, 2011, from http://www.libraryjournal.com/lj/communityopinion/885940274/ebook_sanity.html.csp Hadro, J., & Fialkoff, F. (2011, March 1). HarperCollins, OverDrive Respond as 26 Loan Cap on Ebook Debate Heats Up . In Library Journal. Retrieved November 13, 2011, from http://www.libraryjournal.com/lj/home/889500264/harpercollins_overdrive_respond_as_26.html.csp Hirtle, P. (2011, February 6). Kindles and Libraries. In LibraryLaw Blog. Retrieved December 2, 2011, from http://blog.librarylaw.com/librarylaw/2011/02/kindles-and-libraries.html Hoffelder, N. (2011, June 20). Kansas Library Consortium now leaving OverDrive & taking their ebooks with them. In The Digital Reader. Retrieved November 13, 2011, from http://www.the-digital-reader.com/2011/06/20/kansas-library-consortium-nowleaving-overdrive-taking-their-ebooks-with-them/ Kansas Library to switch to 3M Another Litmus Test for E-content provision. (2011, June 23). In The Goat in the Stacks. Retrieved December 2, 2011, from http://goatinthestacks.wordpress.com/ Kelley, M. (2011, January 17). ALA Midwinter 2011: Thorniest Reference Question of the 21st Century: How Do I Use My Ereader?. In Library Journal. Retrieved November 13, 2011, from http://www.libraryjournal.com/lj/home/888827264/ala_midwinter_2011_thorniest_reference.html.csp Kelley, M. (2011, June 20). Kansas State Librarian Argues Consortium Owns, Not Licenses, Content from OverDrive. In Library Journal. Retrieved November 13, 2011, from http://www.libraryjournal.com/lj/home/891052264/kansas__state_librarian_argues.html.csp

Digital Propriety Regarding Libraries and Providers 11 Kelley, M. (2011, October 10). Kansas State Librarian Can Transfer Thousands of Titles from OverDrive to 3M at No Charge. In Library Journal. Retrieved November 13, 2011, from http://www.libraryjournal.com/lj/home/892348264/kansas_state_librarian_can_transfer.html.csp Laughlin, G. K. Digitization and Democracy: The Conflict Between the Amazon Kindle License Agreement and The Role of Libraries in a Free Society. University of Baltimore Law Review, 40(3), 3 52. Retrieved December 2, 2011, from http://law.ubalt.edu/downloads/law_downloads/Law_Review_Laughlin_01.pdf Library Journal Publishes Library eBook Survey Results Sample Data Here (2011, February 9). In No Shelf Required. Retrieved November 13, 2011, from http://www.libraries.wright.edu/noshelfrequired/2011/02/09/library-journal-publisheslibrary-ebook-survey-results-sample-data-here/ Miller, R. (2011, October 15). Dramatic Growth. Library Journal, 136(16), 32-34. Minges, J. (2011, March 4). The Death of Libraries: Overdrive, Harper-Collins and You. In Northeast Kansas Library System. Retrieved November 12, 2011, from http://www.nekls.org/the-death-of-libraries-overdrive-harper-collins-and-you/ OverDrive. (2011). About. In OverDrive. Retrieved November 13, 2011, from http://www.overdrive.com/About/ Price, G. D. (2011, June 22). Kansas Digital Library Plans to Terminate Contract With OverDrive, Argues Consortium Purchased Material + Primary Document. In INFOdocket. Retrieved November 13, 2011, from http://infodocket.com/2011/06/22/kansas-digital-libraryplans-to-terminate-contract-with-overdrive-argues-consortium-purchased-materialprimary-document/ Schiller, K. A Happy Medium: Ebooks, Licensing, and DRM. Information Today, 27(2), 1, 42, 44. Retrieved November 13, 2011, from Library Literature & Information Science Full Text. Smith, R. J. (2011, October). Meeting the Challenges of Mobile Technology A Variety of Approaches. Presented at the annual meeting of the Missouri Library Association, Kansas City, MO.