Controlled Digital Lending: What Publishers Don't Want You to Know

What Is Controlled Digital Lending?

Controlled Digital Lending (CDL) is a practice grounded in the First Sale Doctrine, a principle established in copyright law that says when you buy a physical copy of a book, you can lend it, resell it, or give it away without asking the publisher's permission.

CDL applies this same principle to digital books. If a library owns a digital copy of a book, it can lend that digital copy the same way it lends physical copies:

• One library patron at a time
• For a limited checkout period (typically 14-28 days)
• With all the digital restrictions (no copying, no printing, no screenshots) that prevent the loan from becoming a permanent transfer
• Without paying licensing fees to intermediaries

The critical word is one patron at a time. This isn\'t about giving everyone in your community free access simultaneously. It\'s about the library's ability to own digital books and lend them individually, just like physical books.

Why Publishers Call It "Digital Piracy"

The publishing industry frames CDL as theft. They claim libraries are circumventing DRM (digital rights management) restrictions and distributing content illegally. This framing is fundamentally dishonest, but it's been effective at creating confusion and legal pressure.

What\'s actually happening is much simpler: libraries are exercising a legal right they\'ve always had: the right to lend what they own.

The Legal Basis for CDL

The First Sale Doctrine

The First Sale Doctrine, established in Bobbs-Merrill Co. v. Straus (1908) and codified in Section 109(a) of the Copyright Act, says that:

• When you buy a copy of a book, you own that specific copy
• You can lend it, resell it, rent it, or give it away
• The copyright holder cannot control what happens to that specific copy once you've purchased it
• The copyright holder retains rights over future copies and derivative works

This is why used bookstores exist. This is why libraries exist. This is why you can lend a book to a friend.

The Digital Complication

When books became digital, publishers argued that the First Sale Doctrine no longer applied. Their reasoning: "You\'re not buying a book; you're licensing a right to read a file." This distinction has allowed them to:

• Prohibit lending in the licensing terms
• Charge libraries higher prices for multiple simultaneous licenses
• Restrict libraries' ability to cancel subscriptions
• Retain all control over the digital file

CDL says: If a library actually purchases a digital copy (not licenses access, but owns the file), then the First Sale Doctrine still applies.

Recent Legal Developments

In 2020, four major publishers sued the Internet Archive in Hachette v. Internet Archive, claiming their CDL practices violated copyright law. In March 2023, a federal judge ruled against the Archive. The Second Circuit upheld the decision in September 2024. The Internet Archive chose not to petition the Supreme Court, and the deadline for certiorari passed in December 2024. CDL as practiced by the Internet Archive has been definitively ruled not fair use.

The Internet Archive\'s argument was: Libraries that participate in CDL are exercising fair use and relying on the First Sale Doctrine. When you own a book, you can lend it. That principle doesn\'t change when the book is digital.

The publishers' argument: Digital files are inherently different. Lending them is distribution, and distribution is a right reserved for copyright holders.

The courts sided with the publishers. This ruling has reshaped the legal landscape for library digital lending rights. For a deeper analysis, see The Internet Archive Lost Its Lawsuit: What That Means for AI and Your Library.

Why Publishers Are Fighting CDL So Hard

CDL threatens the entire licensing model that has made ebook distribution so profitable. Here's the economic reality:

The Revenue Model They Built

• Library subscriptions generate recurring revenue. Instead of selling one copy of a book to a library (as they would with print), they sell licenses that libraries must renew annually or subscribe to access all titles.
• Multiple simultaneous licenses generate more revenue. If 100 patrons want to read the same ebook, the publisher can charge the library for 100 licenses instead of one.
• Publishers retain control. They can raise prices, remove titles, or change terms at any time. Vendors like OverDrive and Hoopla are the middlemen who enforce these terms.
• No secondary market exists. Unlike print books, libraries can\'t sell their ebook licenses to each other, can\'t donate used ebooks, can't create a robust secondary market that reduces publisher revenue.

What CDL Would Cost Them

If libraries could own and lend digital books the same way they own and lend physical books, publishers would lose:

• The ability to charge per-simultaneous-user licensing fees
• Recurring subscription revenue (one purchase per book instead of annual renewals)
• Control over how libraries manage their collections
• The data about patron reading habits that comes from monitoring all digital lending through vendor platforms

The publishing industry isn\'t fighting CDL because it violates copyright law. They\'re fighting it because it threatens their profit margin.

How Libraries Implement CDL

Option 1: Internet Archive Participation

The Internet Archive runs the largest CDL program. Libraries can:

• Contribute their owned print books by scanning them
• Access scanned books from the Internet Archive's collection
• Lend books through the Open Library platform
• Participate in preservation and access without vendor middlemen

Advantage: No licensing fees, true ownership, direct control.

Challenge: Requires institutional commitment to scanning or access to pre-scanned collections. Publishers actively discourage libraries from participating.

Option 2: Local CDL Implementation

Some libraries are building their own CDL systems:

• Purchase ebook files from vendors who allow it (increasingly rare)
• Implement lending technology that enforces one-at-a-time checkouts
• Host the lending platform locally or through open-source infrastructure
• Maintain direct relationships with patrons rather than through vendor platforms

Advantage: Complete control, no vendor dependence, no recurring fees.

Challenge: Requires technical infrastructure, publisher cooperation (which you won't get), and willingness to operate in legally uncertain territory given the Hachette ruling.

Option 3: Advocacy and Coalition

Most libraries right now are participating in advocacy efforts:

• Supporting the Internet Archive's continued digital preservation mission despite the lawsuit loss
• Joining organizations like the American Library Association (ALA) in advocacy for CDL rights
• Educating boards and communities about why digital lending access matters
• Building the political will to demand CDL rights from publishers and legislators

Advantage: Builds collective power, establishes legal precedent, creates political pressure.

Challenge: Takes time, and your patrons don't get digital access immediately.

The Vendor Resistance Strategy

Publishers don\'t fight CDL directly in every case. Instead, they\'ve built vendor relationships designed to make CDL impossible.

How Vendors Enforce Publisher Control

Licensing Terms Prohibit Ownership: When libraries "buy" ebooks through OverDrive, Baker & Taylor, or Hoopla, the contracts explicitly state that libraries don\'t own the files; they\'re licensing access. This prevents any legal claim to First Sale protections.

DRM Locks: Even if a library wanted to implement CDL, vendor DRM (digital rights management) makes it technically impossible. Files are encrypted, watermarked, and locked to the vendor\'s platform. You can\'t extract the file to lend it independently.

Perpetual Licensing Costs: Instead of selling libraries one copy to own, vendors charge annual licensing fees for simultaneous-user access. This model generates ongoing revenue and ensures libraries remain dependent on the vendor.

Data Collection: Every loan goes through the vendor\'s servers. They collect data on what libraries lend, who reads what, when people read, and how long they keep books. Based on contract terms I\'ve reviewed, publishers can use this data to inform negotiations, and the data itself has commercial value to the platform.

The Real Problem

CDL isn\'t technically difficult. Libraries could lend ebooks easily if files were available in standard, unencrypted formats. Publishers prevent this on purpose. They\'ve deliberately chosen to create a system where libraries remain dependent on vendors and can never exercise ownership rights.

Your Library's Options Right Now

In the Short Term

• Audit your current ebook licenses. Understand which contracts allow lending and which prohibit it. Many older library licenses have lending rights that libraries don't exercise.
• Join the Internet Archive. Participate in the Open Library program and contribute what you can. Even small contributions create redundancy and preservation.
• Support legislative alternatives. With the lawsuit decided against the Archive, advocacy for CDL now shifts to legislation. Your voice matters.
• Document the cost difference. Track what you pay for simultaneous-user licenses vs. what it would cost to own copies outright. Present this data to your board and community.

In the Medium Term

• Negotiate for ownership language in contracts. When vendors try to renew or expand licenses, push back. Ask for contracts that explicitly support CDL if your library implements it.
• Explore open-source ebook platforms. Infrastructure like Omeka and Project MUSE are building alternatives to vendor-controlled systems.
• Build community advocacy. Your patrons care about access. Help them understand that library ebook access is limited by publisher control, not by library choice.
• Connect with other libraries. Collective action matters. Libraries negotiating together have more power than libraries negotiating separately.

In the Long Term

• Build toward legislative solutions. With the Hachette case decided against CDL, the courts aren't going to save this. Libraries that have already built participation and advocacy infrastructure will be positioned to push for legislative protections.
• Invest in technical infrastructure. CDL requires the ability to manage digital files, restrict simultaneous checkouts, and enforce lending terms. Start building this now, even in small ways.
• Demand legislative action. Advocate for state and federal laws that explicitly protect library CDL rights. This is already happening in some states.

The Bigger Question: Why Publishers Get To Decide

The core issue isn\'t technical or legal complexity. It\'s about power. Publishers have convinced legislators, courts, and sometimes librarians themselves that they should control how libraries lend digital materials. This is fundamentally contrary to the role libraries serve in democracy.

Libraries exist because we believe access to information matters. Not just for people with money, but for everyone. Not just for information that's profitable to distribute, but for all knowledge. CDL is a straightforward application of this principle to digital materials.

The fight over CDL is really a fight over whether libraries have agency or whether vendors and publishers control library digital services.

Resources for Your Library

Questions to Ask Your Director or Board

• What percentage of our ebook spending goes to simultaneous-user licenses vs. purchases we could own outright?
• Do our current vendor contracts prohibit CDL, or do they allow it if our library implements the technical infrastructure?
• What would it cost to move 25% of our ebook budget from licensing to the Open Library/Internet Archive model?
• Are we documenting the patron demand for ebook lending that we can't fulfill due to licensing restrictions?
• What's our long-term strategy if CDL becomes legally protected and vendors are forced to offer true ownership options?