Some library books are Adobe PDFs, some are Adobe EPUB (both DRM protected). You can have one or the other - not both types of DRM - on the Reader.
From the Sony website (this was for the 505, but I'm sure it is the same for the 300 and 600).
Quote:
This issue happens when Adobe DRM protected ePub and PDF eBooks which have been borrowed, both exist on the Reader.
To solve this issue, please follow these steps:
1. Delete all borrowed books from the Reader and transfer them again from Adobe Digital Editions or eBook Library.
2. Verify that all borrowed books are of the same format(ePub or PDF) before transferring them to the Reader.
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Pain in the a** I know, as lots of libraries have mixed stock, though many are moving to mainly EPUB.