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OLR Bill Analysis
sHB 6800
AN ACT CONCERNING ELECTRONIC BOOK AND DIGITAL
AUDIOBOOK LICENSING.
SUMMARY
This bill prohibits contracts or license agreements between libraries
and publishers of electronic literary materials (i.e., electronic books
(ebooks) and audiobooks) that stop, limit, or restrict the library from
performing customary operational or lending functions. It applies to
these agreements entered into or renewed on and after October 1, 2023.
The bill outlines specifically prohibited and allowed terms,
particularly with respect to lending these materials. Under the bill, a
publisher’s violation of these provisions is a Connecticut Unfair Trades
Practices Act (CUTPA) violation and a contract or agreement containing
the prohibited terms is deemed unconscionable under the Uniform
Commercial Code (UCC, see BACKGROUND).
“Electronic literary material” (“material”) means ebooks and digital
audiobooks that can be read or listened to on a computer or portable
electronic device (e.g., tablet or cell phone). “Publishers” are (1) people
in the business of manufacturing, promulgating, licensing, or selling
books, journals, magazines, newspapers, or other literary productions
(including digital formats and digital audiobooks) or (2) aggregators in
the business of licensing access to material collections, including works
from multiple publishers, and entering into contracts with libraries to
sell or license these materials. The covered libraries are public libraries
and public elementary or secondary school libraries; academic, research,
and public archive libraries; tribal libraries; and the Connecticut State
Library.
EFFECTIVE DATE: October 1, 2023 2023HB-06800-R000407-BA.DOCX
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CONTRACT OR LICENSE AGREEMENT TERMS
Prohibited Terms
The bill prohibits contracts and license agreements between
publishers and libraries from stopping, limiting, or restricting a library
from performing customary operational or lending functions. It
specifically prohibits provisions that:
1. prohibit a library from lending material, including through an
interlibrary loan;
2. restrict the number of times a library may loan material over the
course of the license agreement if the agreement also restricts the
library’s loan period;
3. limit the number of licenses a library can purchase on the day the
material is made available for public purchase;
4. prohibit a library from making nonpublic preservation copies;
5. restrict a library from disclosing a license agreement’s terms to
another Connecticut library;
6. restrict the length of the license agreement, unless the publisher
has also offered an agreement (a) based on a pay-per-use model,
or (b) allowing perpetual public use of the material upon
commercially reasonable terms, considering the library’s
mission; or
7. require the library to disclose patrons’ protected, confidential
information (see CGS § 11-25).
Permissible Terms
The bill also specifies terms that do not violate the bill’s requirements.
It allows contracts or agreements to include terms that require:
1. a limit on the number of simultaneous borrowers; and
2. the library to make reasonable use of technological protection
measures that prevent a borrower from (a) maintaining access to 2023HB-06800-R000407-BA.DOCX
Researcher: JSB Page 3 4/4/23
material beyond the loan period or (b) sharing access to the
material with other borrowers.
BACKGROUND
Connecticut Unfair Trade Practices Act (CUTPA)
The law prohibits businesses from engaging in unfair and deceptive
acts or practices. CUTPA allows the consumer protection commissioner
to issue regulations defining an unfair trade practice, investigate
complaints, issue cease and desist orders, order restitution in cases
involving less than $10,000, enter into consent agreements, ask the
attorney general to seek injunctive relief, and accept voluntary
statements of compliance. It also allows individuals to sue. Courts may
issue restraining orders; award actual and punitive damages, costs, and
reasonable attorney’s fees; and impose civil penalties of up to $5,000 for
willful violations and $25,000 for violation of a restraining order.
Uniform Commercial Code (UCC)
Under the UCC’s doctrine of unconscionability, the basic test is
whether, in light of the general commercial background and the
commercial needs of the particular trade or case, the terms involved are
so one-sided that they suggest an unfair bargaining process. If a court
finds that a contract, or any part of a contract, was unconscionable when
it was made, the court can (1) refuse to enforce the contract; (2) refuse to
enforce the problematic terms; or (3) limit the terms to avoid an
unconscionable result (U.C.C. § 2-302, codified at CGS § 42a-2-302).
Related Bill
sHB 6829, reported favorably by the Governmental Administration
and Elections Committee, contains similar provisions on contracts or
agreements that prevent a library from performing customary
operational and lending functions and, among other things, (1) sets a
civil penalty of $500 per violation, up to a total of $4,500, and (2) allows
municipalities to enact an ordinance with equivalent civil penalties for
violations concerning public libraries or school libraries.
COMMITTEE ACTION
Planning and Development Committee 2023HB-06800-R000407-BA.DOCX
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Joint Favorable Substitute
Yea 21 Nay 0 (03/17/2023)