Internet Archive loses case over eBooks lending in scrap with major publishers

Judge says online library’s lending of eBooks not covered by ‘fair use’ | Four publishers alleged infringement of 127 books | Full details on judge’s reasoning | Morrison Foerster | Association of American Publishers.

Four of the largest publishers in the US have won a copyright case against digital library Internet Archive, in a decision that could impact how libraries lend eBooks.

Hachette, HarperCollins, John Wiley & Sons and Penguin Random House brought the case against San Francisco-based Internet Archive, a non-profit organisation which says it provides “universal access to all knowledge”.

Over the past decade, Internet Archive has scanned millions of print books and made the resulting eBooks publicly available on its website. These are not available for mass download, but lent out in limited numbers at a time, with physical copies of the books in storage.

At the heart of the dispute was the question of whether Internet Archive’s controlled digital lending (CDL) of eBooks constituted copyright infringement or was covered by the doctrine of fair use.

In his judgment last week (March 24), Judge Koeltl of the New York Southern District Court sided with the publishers, concluding that the company does not have the right to scan copyrighted books and lend them out digitally.

‘More efficient lending’

Internet Archive bases its CDL on a one-to-one “owned-to-loaned” ratio, meaning that it makes one digital eBook copy available for every non-circulating print book it keeps in storage. The organisation also partners with libraries to “contribute” the number of their print copies of a book towards the number of lendable copies on its website.

This makes the delivery of library books “more efficient and convenient”, the company says, particularly for those who live far away from physical libraries, have disabilities that make it difficult to hold or read print books, or for those wanting quick and immediate access to books.

Joseph Gratz, partner in Morrison Foerster’s Copyright Group, and co-counsel to Internet Archive, told WIPR that rather than being harmful, the type of copying employed by the Internet Archive “served the purposes of copyright, which is to have a rich culture of library lending”.

“We are here to make library lending more efficient. And we don’t think that is something that ought to be controversial,” he said.

COVID-19 emergency library

However, controversy arose when in March 2020 the Internet Archive launched a “National Emergency Library” in response to libraries being closed due to the COVID pandemic. Estimating that 650 million print books were taken out of circulation as a result of the closures, Internet Archive lifted technical controls enforcing its one-to-one owned-to-loaned ratio, and allowed up to 10,000 patrons at a time to borrow eBooks on the website, according to the court summary judgment.

The Internet Archive ended its National Emergency Library in June 2020 and returned to “traditional controlled digital lending”, which remains in effect.

However, that same month the four publishers filed a copyright suit against Internet Archive, alleging that it had infringed their copyrights on 127 books. These included a range of fiction and non-fiction works, including William Golding’s 1954 classic Lord of the Flies and best-selling management books by Patrick Lencioni.

Internet Archive contested that both during the National Emergency Library and, in general, that its lending of the works constituted fair use.

‘Nothing transformative’

In determining fair use, courts consider the extent to which a secondary work is transformative as well as commercial. On these grounds, Judge Koeltl dismissed the Internet Archive’s fair use defence.

There was “nothing transformative” about the company’s copying and unauthorised lending of these books, the judge said, rejecting Internet Archive’s argument that it was performing a “transformative function” of making the delivery of library books more efficient.

Internet Archive claimed that its library was non-commercial. But Koeltl found that it “exploits the works-in-suit without paying the customary price” and used its website to “attract new members, solicit donations, and bolster its standing”, therefore gaining an advantage or benefitting from the works.

In a further blow to the online library, the judge dismissed the one-to-one owned-to-loaned system as having no legal basis. Fair use did not allow “the mass reproduction and distribution of complete copyrighted works in a way that does not transform those works and that creates directly competing substitutes for the originals”, he said.

Internet Archive: Ruling ‘hurts authors’

Commenting on the decision, Maria Pallante, president and CEO of the Association of American Publishers, said: “The publishing community is grateful to the court for its unequivocal affirmation of the Copyright Act and respect for established precedent.

“In rejecting arguments that would have pushed fair use to illogical markers, the court has underscored the importance of authors, publishers, and creative markets in a global society.

“In celebrating the opinion, we also thank the thousands of public libraries across the country that serve their communities every day through lawful eBook licences. We hope the opinion will prove educational to the defendant and anyone else who finds public laws inconvenient to their own interests.”

The Internet Archive said it intended to appeal. Chris Freeland, director of Open Libraries at the Internet Archive, wrote in a blog post: “Today’s lower court decision in Hachette v Internet Archive is a blow to all libraries and the communities we serve. This decision impacts libraries across the US who rely on controlled digital lending to connect their patrons with books online.

“It hurts authors by saying that unfair licensing models are the only way their books can be read online. And it holds back access to information in the digital age, harming all readers, everywhere.”

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