"Maryland State House, Annapolis, Maryland" by Ken Lund is licensed under CC BY-SA 2.0

House Bill 518/(SB432) became law in Maryland on June 1. The law—which the Maryland Senate and House of Delegates both passed unanimously in April—requires publishers to offer electronic "literary product" licenses to Maryland libraries “on reasonable terms,” and prohibits publishers from instituting embargo periods during which ebook and electronic audiobook licenses are available for sale to the public but not to libraries. When the law takes effect in January 2022, the state will view violations as “an unfair, abusive, or deceptive trade practice subject to certain enforcement.” The bills were sponsored by Delegate Kathleen M. Dumais (D-15) and Senator Nancy J. King (D-39). Although similar legislation has been proposed in New York and Rhode Island, this is the first state law of its kind to successfully pass.

“This bill is really all about Maryland's readers,” Michael Blackwell, director of the St. Mary’s County Public Library, MD, and an organizer of the ReadersFirst coalition, told LJ. “Everyone should have the same access to quality information. Library users shouldn't be shut out because they can't afford to pay or because they choose to access information by pooling their resources through libraries.”

The law passed without the signature of Maryland Governor Larry Hogan, in accordance with Article II, Section 17(c) of the Maryland Constitution, which states that “Any Bill presented to the Governor within six days (Sundays excepted), prior to adjournment of any session of the General Assembly, or after such adjournment, shall become law without the Governor's signature unless it is vetoed by the Governor within 30 days after its presentment.”

It may still face challenges in court [ed note: This article was originally published online June 1, 2021]. On March 24 the Association of American Publishers (AAP) submitted written testimony opposing the bill, stating that “Federal copyright law prohibits this type of regulation of copyrights by state governments. Moreover, SB432 raises significant Commerce Clause and Due Process Clause concerns and would likely be found to violate the U.S. Constitution.”

The testimony, written by AAP General Counsel Terrence Hart, goes on to argue that the law conflicts with a publisher’s exclusive right to distribute copyrighted works by mandating the sale or licensing of those works to specific customers under specific terms, and “impermissibly regulate[s] both interstate and out-of-state commerce by specifying conditions on which out-of-state publishers do business…. Finally, the proposed legislation raises fundamental due process concerns, as it does not define what ‘reasonable terms’ are or provide any means for publishers to know whether the terms they offer violate the law and expose them to penalties.”

Blackwell said that he “can see somebody trying to have a legal injunction against the implementation of this,” but that he had not heard any rumors about pending lawsuits. Regarding AAP’s testimony opposing the bill, he said “I'm not an attorney, and my opinion is no doubt uninformed, but I have a hard time understanding AAP's point. It seems like they want to pick and choose between licensing and copyright, using only what suits them at the moment, insisting on general principle that libraries can't use works except under license but then saying that it violates their copyright if we want licenses.”

Blackwell also pointed to a formal response to the testimony written by Jonathan Band, a Washington DC-based intellectual property lawyer, copyright expert, and library advocate.

“First, the bills are not preempted by federal copyright law,” Band wrote. “The AAP cites section 301 of the U.S. Copyright Act as authority for its argument that federal copyright law preempts the bills. In fact, section 301 was adopted by Congress in 1976 to preempt state copyright laws—laws that created rights that are ‘equivalent to any of the exclusive rights within the general scope of copyright.’ Courts around the country have repeatedly held that section 301 does not preempt state laws relating to contracts because contract rights are not “equivalent” to the exclusive rights of copyright.”

In addition, Band contends that the bills do not impermissibly regulate interstate commerce, and “The bills do not force publishers to transfer any of their exclusive rights; the publishers’ rights remain undiminished. The bills simply provide that if a publisher licenses an e-book to the public in Maryland, the publisher must also license the e-book to a public library on reasonable terms. In other words, the bills prevent unreasonable discrimination against public libraries.”

Regarding AAP’s complaint that “reasonable terms” of sale to libraries are unclearly defined by the law, Blackwell said that “our legislators have focused on equity of access to content and wisely refrained from setting the terms of the marketplace. This legislation provides a fair framework in which libraries can share titles while respecting the publishers’ rights to license content and authors' need for fair compensation. The publishers will still have full say in what they think are reasonable terms.”

Blackwell said that, in his opinion, publishers that currently license ebooks to libraries are already compliant with the “reasonable terms” standard, even though many librarians may be unhappy with pricing, circulation caps, or other aspects of ebook licensing.

“This doesn’t really go as far as a lot of people in the library community would like,” he said. “I think it’s fairly modest. The state has a legitimate interest in guaranteeing that its citizens can read ebooks that are otherwise [for sale] to the public.”

Blackwell added: “We in libraries look forward to working with any publisher on mutually beneficial agreements for the good of all readers and learners. Our bill is not anti-publisher…. It is reasonable. Existing licenses under which we have been working will not need revisions.”