586 F.Supp.3d 379
D. Md.2022Background
- The Association of American Publishers (AAP) sued Maryland and its Attorney General after Maryland enacted a law requiring a publisher that "offers to license an electronic literary product to the public" to also "offer to license" that product to Maryland public libraries on "reasonable terms."
- The Act covers ebooks and digital audiobooks, permits certain license terms (limits on simultaneous users, loan length, TPMs), forbids limits on the number of licenses a library may buy, and imposes civil and criminal penalties under Maryland consumer‑protection law for violations.
- AAP challenged the Act on multiple grounds, focusing its preliminary injunction motion on federal preemption under the Copyright Act (express and conflict preemption); it also pleaded Dormant Commerce Clause and Due Process claims.
- The Court analyzed preemption under the Supremacy Clause and found the Act likely conflicts with the Copyright Act by interfering with the § 106 exclusive distribution right (including the right to refuse or condition distribution).
- The Court found AAP would suffer irreparable harm absent an injunction because publishers would have to (a) stop offering works to the public, (b) risk prosecution for refusing libraries, or (c) accept forced licensing terms with unquantifiable damages—monetary relief would be inadequate.
- The Court granted a preliminary injunction enjoining enforcement of the Maryland Act pending final resolution, relying principally on conflict preemption and related equitable factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Maryland Act is preempted by the Copyright Act (conflict preemption) | Act compels publishers to offer licenses to libraries and thus stands as an obstacle to Congress's allocation of exclusive distribution rights under §106 | Act regulates state consumer/trade practices and does not commandeer distribution rights; it merely protects libraries and only requires an "offer to license" | Likely preempted: Act likely stands as an obstacle to §106 exclusive distribution rights; injunction granted |
| Whether the Act effects an unconstitutional compelled distribution (right to refuse to license) | Forcing offers to libraries effectively strips publishers of the right to decide to whom to distribute | State: libraries are noncommercial and Act does not force commercial exploitation; distinguishes other cases | Court: right to refuse/distribute extends regardless of licensee's commercial status; forcing offers conflicts with federal rights |
| Whether AAP showed irreparable harm | Monetary damages insufficient; three real, immediate harms (stop public offerings; criminal/civil exposure; forced licensing with unquantifiable injury) | Harms speculative; digital lending already available; injunction would reduce library access | Irreparable harm shown: harms are imminent, non‑quantifiable, and not remediable by damages |
| Balance of equities & public interest | Protect federal copyright regime and publishers' exclusive rights pending final decision; avoiding irreversible marketplace changes | Public interest favors library access—vulnerable populations rely on e‑lending | Weighs for AAP: enforcement of a likely‑preempted state law is not in the public interest; equities favor injunction |
Key Cases Cited
- Orson, Inc. v. Miramax Film Corp., 189 F.3d 377 (3d Cir. 1999) (state law that compelled expanded distribution conflicted with §106 distribution right)
- Stewart v. Abend, 495 U.S. 207 (1990) (copyright bundle includes right to refuse to license)
- Allied Artists Picture Corp. v. Rhodes, 679 F.2d 656 (6th Cir. 1982) (upholding state trade regulations that did not compel distribution)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (preliminary injunction standard)
- United States v. South Carolina, 720 F.3d 518 (4th Cir. 2013) (conflict‑preemption framework and irreparable‑harm analysis)
- Leaders of a Beautiful Struggle v. Baltimore Police Dep’t, 2 F.4th 330 (4th Cir. 2021) (constitutional‑violation harms can support irreparable‑harm finding)