Have they been sued over digital lending in general or because they lent out more digital copies then they owned physically?
Either way, I think that there is no legal "digital lending". What makes people buy things is that they can not get them for free easily. Copyright is there to benefit the author. It puts a certain burdon on the consumer: They have to buy a copy. Or - if they want to breach the law - they have to find someone who illegally makes a copy for them.
"Digital lending" would allow the 3rd party to legally make a copy to the consumer. Because bits are not lended. They are copied. That is not how copyright sets the balance between author and consumer.
Either way, I think that there is no legal "digital lending". What makes people buy things is that they can not get them for free easily. Copyright is there to benefit the author. It puts a certain burdon on the consumer: They have to buy a copy. Or - if they want to breach the law - they have to find someone who illegally makes a copy for them.
"Digital lending" would allow the 3rd party to legally make a copy to the consumer. Because bits are not lended. They are copied. That is not how copyright sets the balance between author and consumer.
I would be surprised if the IA wins this.