§ 108 doesn't apply here, in either direction. See footnote 6 of the lower court decision, where the court notes that the Internet Archive doesn't rely on § 108, but instead on § 107 covering fair use, and also notes that § 108 doesn't restrict fair use by libraries: https://storage.courtlistener.com/recap/gov.uscourts.nysd.53...
The reason IA doesn't rely on § 108 is "When a user requests a copy
of an entire work or a substantial part thereof, the library or archives must first make a reasonable effort to determine whether a copy can be obtained at a fair price. If it can, then no copy is allowed to be made." https://www.copyright.gov/policy/section108/discussion-docum...
What you're describing, "public libraries are permitted to make one digital copy and distribute it (lend it) once at a time on separate occasions," is what controlled digital lending refers to, and it would be cool if it was overtly authorized by statute, but it isn't -- the original CDL whitepaper ( https://controlleddigitallending.org/whitepaper/ ) relied on fair use instead. The trial court found that it fails that test, so unless IA wins on appeal, it doesn't exist.
The reason IA doesn't rely on § 108 is "When a user requests a copy of an entire work or a substantial part thereof, the library or archives must first make a reasonable effort to determine whether a copy can be obtained at a fair price. If it can, then no copy is allowed to be made." https://www.copyright.gov/policy/section108/discussion-docum...
What you're describing, "public libraries are permitted to make one digital copy and distribute it (lend it) once at a time on separate occasions," is what controlled digital lending refers to, and it would be cool if it was overtly authorized by statute, but it isn't -- the original CDL whitepaper ( https://controlleddigitallending.org/whitepaper/ ) relied on fair use instead. The trial court found that it fails that test, so unless IA wins on appeal, it doesn't exist.