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Originally Posted by alee
A copyright holder has no right to demand the destruction of any kind of physical copy that was legally obtained, which is generally the case for library collections. I thought that libraries are free to lend out their physical copies as they see fit under the first-sale doctrine, which doesn't apply to digital copies, since you're actually copying the bits when you lend them out.
The NYPL actually isn't a government entity; it's a private non-profit organization. Most of the funding for the circulating neighborhood branches does come from the city government, but the research libraries, including the main library on 42nd Street (the one with the lion statues in front) get nearly all of their funding from private donations. The NYPL also only operates in three of the five boroughts of NYC (Manhattan, the Bronx, and Staten Island), while Queens and Brooklyn have separate public library systems, which are also private non-profit organizations.
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I believe IA/OL destroy the physical copies when they create the digital. This may be how they are able to loan the ebook.
NYPL is supported by public funding and is, therefore, required to conform to NY State and Federal laws. According to the Wiki, "The NYPL, like all public libraries in New York, is granted a charter from the Board of Regents of the University of the State of New York and is registered with the New York State Education Department. The basic powers and duties of all library boards of trustees are defined in the Education Law and are subject to Part 90 of Title 8 of the New York Codes, Rules and Regulations."
That's what I mean when I say "government entity." Yes, it has, like most public libraries, a non-profit corporate structure but it still needs to follow the statutes set out by NY otherwise they can lose their funding.