In an opinion issued this week, U.S. Register of Copyrights Shira Perlmutter concluded that a court would likely find Maryland’s recently passed library e-book law to be preempted by federal copyright law under a legal doctrine known as "conflict preemption."
But in her 9-page opinion [note: the response begins on page 3], Perlmutter did not find the Maryland law to be “expressly” preempted by the Copyright Act, as opponents of the law have contended, and conceded that the cases she used to reach her "conflict preemption" determination (which relies heavily on a 1999 decision in Orson Inc. v. Miramax) may not be a perfect fit.
“To date neither the Supreme Court nor any other circuit courts (including the Second and Fourth Circuits, which have jurisdiction over New York and Maryland) have had occasion to consider whether state regulations seeking to require licensing of copyrighted works could avoid conflict preemption either generally or under narrow circumstances, such as upon a showing of a state interest that is sufficiently compelling and distinct from the Copyright Act’s purposes,” Perlmutter writes. “Nonetheless, we believe the Orson court’s reasoning is sufficiently sound that a court considering the state legislation at issue would likely find it preempted under a conflict preemption analysis.”
Express preemption applies when Congress explicitly states its intention to preempt state laws, Perlmutter explains in her opinion, while conflict preemption can be found when a “challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”
Further, in a footnote, Perlmutter offered a potentially important caveat: The cases she used to form her opinion, Perlmutter notes, including Orson, involve the “forced commercial exploitations of copyrighted works.” The library e-book laws passed in Maryland and New York, on the other hand ultimately serve "a non-commercial goal of furthering the traditional mission of public libraries to provide free access to materials for their communities.” Perlmutter said it is “unclear whether this would be a significant factor for a court considering the question of federal conflict preemption.”
When it takes effect in January, 2022, the Maryland law (known as SB432) will require any publisher offering to license "an electronic literary product" to consumers in the state to also offer to license the content to public libraries on "reasonable" terms. The bill passed the Maryland General Assembly unanimously in March. In June, New York passed a similar law that is now awaiting the governor's signature or veto and at least half a dozen states are reported to have begun exploring similar legislation.
Specifically, Perlmutter’s opinion comes as a response to a May 26 inquiry from North Carolina Senator Thom Tillis, Ranking Member of the Senate Judiciary Committee’s Subcommittee on Intellectual Property. In his initial letter, Tillis echoed concerns voiced by the Association of American Publishers, including that section 301 (a) of the Copyright Act "expressly" preempts state laws like the one in Maryland.
In an April letter to PW, AAP general counsel Terrence Hart insisted that “one is hard pressed to find a clearer example of the type of law that is preempted by the federal Copyright Act.”
AAP officials this week said that Perlmutter's opinion supported their position.
"In sum, preemption would mean that state e-lending legislation falls outside of the authority of the states," reads an AAP statement. "Moreover, while the government’s preemption analysis is consistent with AAP’s testimony in recent weeks, we have also testified to constitutional and policy concerns that go well beyond that problem. Accordingly, AAP remains deeply troubled by ongoing, coordinated lobbying efforts that seek to dictate and devalue the distribution and pricing of books in what is clearly a healthy, robust, and ever-evolving noncommercial market channel. Such efforts are antithetical to our democracy, which depends upon a vibrant private sector publishing industry that is incentivized to create and distribute original works of authorship to the public."
In its own two-page response memo, the American Library Association agreed with much of Perlmutter's analysis, but criticized her conclusion.
"In sum, the American Library Association does not agree with Copyright Office’s conclusion that a court likely would find the state legislation at issue preempted under a conflict preemption analysis," wrote lawyer Jonathan Band, for ALA, while stressing that any resolution ultimately lies with the courts.
"The Office admitted that there was no controlling precedent suggesting preemption in Maryland or New York and the one precedent from another jurisdiction was readily distinguishable,” Band observed. "Accordingly, the Office had no reasonable basis for concluding that a court considering the legislation ‘would likely find it preempted under a conflict preemption analysis.’”
Despite Perlmutter's conclusion, ALA said the Copyright Office's analysis "further bolsters" ALA's view that state e-book laws are not preempted by the Copyright Act.
“In its advocacy against the state e-book legislation, the Association of American Publishers has focused on preemption under section 301(a). Likewise, Senator Tillis in his letter specifically cited section 301(a)," Band points out. "The Copyright Office has properly dismissed the section 301(a) argument."
Perlmutter's opinion is purely advisory and is likely to have little if any impact on the rollout of the Maryland law or its fate in the courts. However, librarians have expressed concern that the opinion could be used to chill the introduction of similar bills in other state legislatures, or to head off any potential effort in Congress.
