Book Publishers Win at Second Circuit: Internet Archive’s Free Library is Not Fair Use

Source: Fight for the Future. Photographer: Randi Rosenblum

The U.S. Court of Appeals for the Second Circuit today affirmed a district court judgment that granted a group of book publishers’ motion for summary judgment that  the Internet Archive (IA) infringed their copyright in 127 books via IA’s “Free Digital Library.”

As predicted by author Devlin Hartline in a February article for IPWatchdog, the Second Circuit agreed with the publishers—Hachette Book Group, Inc; Harper Collins Publishers LLC; John Wiley & Sons, Inc.; and Penguin Random House LLC— that it is not a fair use for IA to scan copyright-protected print books and distribute them for free without permission from the publishers or authors.

The case is a major blow to IA, which said in a statement today that it is reviewing the court’s opinion and “will continue to defend the rights of libraries to own, lend, and preserve books.”

IA’s stated mission “is to provide universal access to all knowledge.” According to the Second Circuit opinion, IA “works with libraries, museums, universities, and the public to preserve and offer free online access to texts, audio, moving images, software, and other cultural artifacts.” IA is the creator of the “Wayback Machine” and, in 2011, launched the Free Digital Library. This was expanded in 2018 to the “Open Libraries Project,” which allowed libraries to contribute their noncirculating print books to the number of concurrent checkouts available to users—IA operates on “one-to-one owned-to-loaned ratio” by which, prior to 2018, it allowed only as many concurrent “checkouts” of a digital book as it had physical copies in storage, a practice It calls “Controlled Digital Lending” (CDL), which it claims is analogous  to traditional library lending of print books.

But with the Open Libraries Project, IA expanded lending capacity “while remaining within the confines of CDL,” said the Second Circuit opinion, as it could now include the books owned by the participating libraries. During COVID, IA launched the “National Emergency Library” (NEL), which allowed its books to be checked out  by up to 10,000 users at a time, regardless sof the number of physical copies in its archive. IA has acknowledged this as a “deviat[ion] from controlled digital lending” and ended the practice in June 2020.

According to the Second Circuit’s opinion, “IA hosts over 3.2 million digital copies of copyrighted books on its website. Its 5.9 million users effectuate about 70,000 book ‘borrows’ a day?approximately 25 million per year.”

On appeal, IA argued its lending practices are a fair use under the Copyright Act. But in its analysis of the fair use factors, the Second Circuit said IA failed to prove as much overall.

With respect to whether IA’s use of the works was transformative, IA attempted to argue it was because “it uses technology ‘to make lending more convenient and efficient’ and ‘deliver[s] the work only to one already entitled to view it—the one person borrowing the book at a time.” But the appellate court said “IA’s digital books serve the same exact purpose as the originals: making authors’ works available to read. IA’s Free Digital Library is meant to and does substitute for the original Works.”

Turning to commerciality, the Second Circuit disagreed with the district court that the use was commercial. The district court had said that, despite IA’s nonprofit status, its solicitation of donations and taking a cut when users purchase physical books from a partner site made the use commercial, but on appeal the court said “[it]t is undisputed that IA is a nonprofit entity and that it distributes its digital books for free,” and that considering donation requests from nonprofits a commercial use “would greatly restrain the ability of nonprofits to seek donations while making fair use of copyrighted works.” However, since transformativeness is the “central focus” of the first fair use factor – the purpose and character of the use  – the first factor favored the publishers overall, said the Second Circuit opinion.

On the second fair use factor, the nonfiction works at issue are “of the type that the copyright laws value and seek to protect,” said the court, finding this factor also favored the publishers.

The third factor, the amount and substantiality of the use, weighed sharply in favor of the publishers as well, since IA clearly copies the entirety of the works and distributes them in full. And since the use is not transformative in nature, it merely serves to substitute the publishers’ books, said the court.

On the fourth factor, “the effect of the use on the potential market for or value of the works,” the Second Circuit first determined the relevant market for its analysis to be “the market for the Works in general, without regard to format,” since “the Copyright Act protects works in whatever format they are produced.”

The court went on to explain that IA failed to show it caused no market harm and also said that any public benefit of the Free Digital Library is outweighed by harm to the publishers’ markets. In fact, the court concluded, “both Publishers and the public will benefit if IA’s use is denied.” The opinion added:

“Though IA and its amici may lament the consolidation of editorial power and criticize Publishers for being motivated by profits, behind Publishers stand authors who are entitled to compensation for the reproduction of their works and whose ‘private motivation . . . ultimately serve[s] the cause of promoting broad public availability of literature, music, and the other arts.’… IA’s Free Digital Library undermines that motivation.”

At least one supporter of IA has come out against the ruling so far, calling it “a myopic and dangerous blow from a federal court.” Lia Holland of Fight for the Future, “a queer women and artist led human rights organization,” said:

“With more people than ever before opting to read digitally, the Internet Archive has been fighting a very important battle for the future of reading against some of the world’s most powerful corporations. Big Tech’s greed has infected Big Publishing, causing them to abandon the concept of ownership for digital books, and to force all libraries and readers to buy licenses that lock them into spyware-ridden apps that turn data on readers into a new product for publishing.