I grew up as an avid book reader and frequent patron of my school or local library. Public libraries provided the wonderful service of loaning books for free. Yet, in the last decade, the whole notion of a book' has been turned on its head.

Many readers younger than age forty have grown accustomed to information that can be read quickly, transported easily and rapidly downloaded onto various devices. Physical books do not fit this mold and the popularity of libraries have suffered. While the beauty of libraries is that they loan free books, the downside of libraries is that they loan physical books at a time when digital content is rapidly growing in popularity. Most people use MP3s as their main musical format, and now ebooks are quickly following suit as the preferred literary format of younger readers. It makes sense that libraries would try to adapt with these times by lending out ebooks and the devices that support them.

Libraries had no problem loaning out physical books because under the Copyright Act, the library had this right under the “first sale” doctrine. The “first sale” doctrine is a limitation to the Copyright Act that allows the owner of a copyrighted work to transfer (i.e., sell, lend or give away) a copy of the work without permission once it has been obtained. This doctrine is extended to also protect used bookstores, allowing them to build a business buying and selling previously owned books.

However, libraries lending out ebooks and portable devices might be breaking the law. Case in point: ebooks in the Amazon Kindle format.

Amazon retains ownership of the digital content (an ebook) that is downloaded onto a Kindle and will not license the content to libraries. Amazon also will not let libraries lend ebooks out on Kindles they’ve purchased. This violates the “single user” terms and conditions clause Amazon has with its users.

Then there is the license agreement that comes with the Kindle itself. The Kindle license agreement is very straightforward. Two paragraphs in the Digital Content section of the agreement specifically apply to libraries. Under “Use of Digital Content” it states that you (the licensor) have a:

“…non-exclusive right to view, use, and display such Digital Content an unlimited number of times, solely on the Kindle or a Reading Application or as otherwise permitted as part of the Service, solely on the number of Kindles or Other Devices specified in the Kindle Store, and solely for your personal, non-commercial use”

What is personal and non-commercial use? A general definition of “non-commercial” use would mean that the licensee is not getting any form of compensation from the products being licensed. A library is really not in danger of violating this type of use since it lends its books out for free.

The issue of personal use is a little more ambivalent. Although the patrons are probably borrowing the ebook for their personal use, the library, the direct licensee, is not limited to “personal” use, and therefore in violation of the agreement.

Later in the paragraph labeled “Limitations,” the license agreement states:

“Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense, or otherwise assign any rights to the Digital Content or any portion of it to any third party…”

A library patron would be considered a third party and libraries would be distributing the content.

Initially, some libraries tried to get around directly infringing the license agreement by purchasing a Kindle, paying for the e-book the patron wanted to “borrow”, but then erasing the e-book copy after the patron was finished with the book.

Libraries do not fit the mold of a typical “licensee.” Most licensors look to licensees for some sort of revenue, whether a one-time license fee or a series of royalty payments. Libraries are not turning a profit or stealing revenue from Amazon, which is probably why Amazon did not go after libraries that were lending out Kindles and ebooks. Amazon probably realized that libraries would only help expand Kindle sales in the long run. It was basically free marketing for Amazon. A lot more of the population, those that were not already reading ebooks on devices, would be exposed to the Kindle and possibly consider purchasing one on their own.

This particular story does have a happy ending. Amazon announced last month that it would start Kindle library lending, to eventually reach 11,000 public libraries across the U.S. Library patrons will be able to check out e-books from their local library on all Kindle models as well as other Kindle app-equipped products.

There is a chance that libraries may use their limited budgets on digital content and neglect the physical content supplied to its patrons. There is growing demand for both ebooks and physical books, and libraries will probably cater to both of these needs. What will be important for the future of libraries is to collect statistical data on digital content patrons versus physical content patrons and to adapt accordingly in the future, since right now, digital content remains in the minority.

Younger readers seem to prefer the convenience of portable ebooks. And with ebooks being carried on Kindles, smart phones, iPads, etc, it will be that much easier for people to access ebooks in a manner similar to physical books, from their local library.