Purpose

The bill aims to regulate how libraries license electronic books and digital audiobooks from publishers and aggregators. It would prohibit certain restrictive terms in library license agreements and contracts, to ensure libraries can continue normal lending operations and preserve access to electronic materials for the public.

Key Definitions (core terms used in the bill)

• electronic book: a text document published in a digital format readable on devices
• digital audiobook: a spoken-word recording of a literary work in digital audio format
• electronic literary material: both electronic books and digital audiobooks
• library: publicly funded libraries that provide free access to residents (with certain exclusions)
• loan: the library creates and transmits a copy to a borrower and then deletes it after the loan period
• loan period: the time frame from loan creation to deletion of the copy
• aggregator: a party licensing access to electronic literary material from multiple publishers
• publisher: entity that manufactures, licenses, or sells literary works (including aggregators)
• technological protection measure (TPM): security tech that protects loaned electronic materials
• interlibrary loan: lending material between libraries
• nonpublic preservation copies: copies kept for non-public preservation
• pay-per-use model: licensing model based on individual use
• perpetual public use: license terms that keep materials freely usable by the public over time

Main Provisions

• Applicability and trigger for rules

  • The new licensing rules apply to contracts or licenses with publishers for electronic literary materials only after a threshold is met.
  • Threshold trigger: Minnesota must certify that a substantially similar law has been enacted in other states, with a combined population of at least 7,000,000. This status is updated quarterly.
  • Once the threshold is reached, a 60-day clock begins before the new rules become effective for contracts entered into or renewed after that date.
  • The Secretary of State and the state librarian share notification duties and must post the determination and effective date publicly.

• Prohibited contract terms (effective after the threshold and 60-day waiting period)

  • No contract that precludes or limits a library’s normal operations or lending functions, including:
  • Prohibiting loaning electronic materials (including interlibrary loan)
  • Restricting the number of times a library may loan electronic materials over the contract
  • Limiting the loan period for electronic materials
  • Limiting the number of electronic materials licenses the library may purchase on the date they are made available to the public
  • Prohibiting nonpublic preservation copies of electronic materials
  • Restricting disclosure of contract terms to other libraries
  • Restricting contract duration unless the library has a commercially reasonable option such as pay-per-use or perpetual public use
  • Forcing the library to violate other provisions or making the contract non-severable from prohibited terms
  • Allowing enforcement of prohibited terms outside a judicial forum (non-court enforcement)

• Additional clarifications

  • Libraries are restricted from signing or renewing contracts that undermine customary operations or lending functions, if those terms conflict with the protections described above.
  • If a contract includes any prohibited term, the bill would allow enforcement of that prohibition outside traditional courts (where applicable) and ensures the prohibitions are not severable from the rest of the contract.

Implementation and Impact

• What changes the bill would bring

  • Libraries would gain stronger protections against licensing terms that slow, limit, or block electronic lending.
  • Publishers and aggregators would be restricted from imposing caps on loans, limits on loan periods, limits on number of licenses purchased on a given date, and restrictions on interlibrary loan or preservation copies.
  • The bill pushes libraries toward licensing models that either allow pay-per-use or perpetual public access as acceptable long-term terms.
  • It promotes transparency by limiting nonpublic disclosure of contract terms.

• Practical considerations for libraries and publishers

  • Libraries would need to review licensing agreements with publishers/aggregators to ensure they don’t include prohibited terms once the law becomes effective.
  • Publishers may need to adjust licensing options to comply with allowed terms, particularly regarding loan mechanics, durations, and disclosure.
  • The enforcement provision indicates remedies could occur outside traditional court processes for certain provisions.

• Timeline and eligibility

  • The law is conditional and becomes effective only after the state confirms the analogous laws exist in other states meeting the population threshold.
  • Public postings and notifications are required to inform libraries of the determination and effective date.

Notable Points

• Focus on electronic materials only (e-books and digital audiobooks) and the licensing contracts for those materials.
• Emphasizes protecting library operations, access, and interlibrary lending capabilities.
• Introduces a staged, multi-state trigger before the provisions apply to licenses.

Potential Implications

• Access and equity: Aims to prevent licensing practices that could hinder library access to digital materials for residents.
• Library autonomy: Seeks to preserve librarians’ ability to manage lending programs without overly restrictive vendor terms.
• Market impact: May influence how publishers and aggregators structure licensing terms for libraries, potentially encouraging more library-friendly options.

Relevant Terms - electronic book - digital audiobook - electronic literary material - library - loan - loan period - interlibrary loan - aggregator - publisher - technological protection measure - nonpublic preservation copies - pay-per-use - perpetual public use - licensing contract - license agreement - requirement prohibiting restrictive terms - transparency of contract terms