Court Declares Maryland's Compulsory Licensing Law for Ebooks Unconstitutional

On Monday June 13, the U.S. District Court for the District of Maryland entered a final judgment in AAP v. Maryland. At issue in the case is a state law that forced publishers of literary works in ebook and digital audiobook formats to license their works to public libraries on what the state or state courts decide are "reasonable terms." In February of this year, the District Court issued a preliminary injunction that barred Maryland's enforcement of the forced access law. Based on its earlier opinion, the court declared on June 13 that "[t]he Maryland Act is unconstitutional and unenforceable." The court's judgment is fully justified, as it is solidly based on preemption principles and judicial precedents. 

Free State Foundation President Randolph May and I analyzed the court's opinion in from February in our March 2022 Perspectives from FSF Scholars, "State Laws Forcing Publishers to License Ebooks to Libraries Are Unlawful." As we explain in our Perspectives: "[U]nder Section 106 of the Copyright Act, copyright owners possess exclusive rights to decide who can distribute or make available their copyrighted works and on what terms and conditions. State laws that force publishers to license copyrighted works to libraries clearly conflict with federal law." Our Perspectives made the point that the court's opinion in AAP v. Frosh should be persuasive to state legislators or other courts considering similar laws 

 

According to Supreme Court jurisprudence, "conflict preemption" occurs when state laws pose "an obstacle to the accomplishment of a significant federal regulatory objective" or when it is impossible for a party to comply with both federal and state laws. In AAP v. Maryland, the District Court correctly concluded that the Maryland law is conflict preempted because it poses an obstacle to the objectives and purposes of the Copyright Act in securing copyrights owners' exclusive right to distribute. Copyright owners enjoy an exclusive right to distribute their works to persons of their choice. 

 

FSF President May and I also focus on the problems of price regulating ebooks in our May 2022 Perspectives, "State Restrictions on Ebook License Prices Are Preempted by Federal Law." In that Perspectives, we explain that "[p]rice regulation of ebook licensing to libraries is unwise and contrary to federal copyright law. States interested in expanding public libraries' ebook collections should instead dedicate additional money from state treasuries to libraries."