[kmeisthax]

Digital lending has no legal basis in either the controlled or uncontrolled format. In fact, the argumentation is suspiciously similar to the ReDigi case. Courts generally have upheld that first sale ends when copying begins, even if the end result is the moral equivalent of a sale rather than a copy[0]. And, indeed, the publishers were grumbling about controlled digital lending (CDL) before IA pulled the National Emergency Library (NEL) stunt.

The lack of legal foundation for CDL is not entirely an accident, however. First sale and similar copyright exhaustion doctrines are hard-fought and won rights of the reader. But these rights rely on the fact that no actual copying is taken place. When you interact with any copyrighted work using a computer, there is an almost gratuitous amount of copying going on. If you so much as cough on the work, you are breaching copyright. Publishers know this, and they have been very successful ramming "licensed and not sold" language through the court system.

The funny thing is, while pirates have been stereotyped as waving their hands in the air and shouting "technology" to opt out of the law, publishers have been way more successful at doing the same, even though they fought tooth and nail against digital distribution.

[0] In the ReDigi case the "digital resale" software was even specifically engineered to erase parts of the file as they were sent to the new owner so that the number of duplicate bits floating around would be negligible at any particular time.

[ghaff]

The history of software licensing is sort of interesting. I had occasion to dive into it a year or so ago for a book and it seems to have been institutionalized with the IBM/360 because 1.) IBM was feeling pressure to sell software independent of hardware for antitrust reasons and 2.) All of the existing IP protection mechanisms seemed pretty iffy at the time.

[kmeisthax]

Software is one of the key aspects of the history of copyright maximalism, too. If you strictly applied the utility rule, software would only be patentable, not copyrightable. However, CONTU made a big mistake and convinced Congress to grant software copyright, which created a whole bunch of unanswered legal questions that are only now getting resolution through judicial legislation[0].

A decade and change later when Intel started asking for hardware copyright[1], Congress actually realized their mistake and created a sui generis right for integrated circuit designs ("maskwork rights"). We never complain about maskwork cases because they are incredibly limited, have a 10 year lifespan, and basically only cover direct copying. Software would have been no different had Congress not made the mistake of handing the full enchilada of copyright monopoly protection - including all those pesky questions about derivative works - to software companies.

[0] e.g. is linking infringement? can you copyright interfaces?

[1] Fun fact: before this, it was entirely legal to X-ray chips and reproduce them. In fact, the NES famously shipped with a bootleg 6502 that only had decimal mode missing because that was the only thing MOS could patent.