Internet Archive Fails in Appeal Against Book Publishers

Assessing what this loss means for libraries

Posted on September 16, 2024 in Blog Posts

Authors:

Daniel Pfeiffer
A gavel in front of a set of books, symbolizing the Internet Archive court case loss

The US District Court for the Southern District of New York issued its opinion in Hachette v. Internet Archive affirming the lower court’s decision in favor of Hachette, HarperCollins, John Wiley, and Penguin Random House. The lawsuit alleged that Internet Archive’s Open Library violated copyright law by providing free digital copies of copyrighted materials to users, creating “a direct substitute for established markets.” In March 2023, a lower court ruled against Internet Archive, finding that their activities violated copyright law, and this month, an appeals court affirmed this decision. 

Taking a look at the court’s Internet Archive opinion 

The opinion frames the issue at the heart of the lawsuit as follows: 

Is it “fair use” for a nonprofit organization to scan copyright-protected print books in their entirety, and distribute those digital copies online, in full, for free, subject to a one-to-one owned-to-loan ratio between its print copies and the digital copies it makes available at any given time, all without authorization from the copyright-holding publishers or authors? 

The court determined no, hinging its opinion on a few different considerations.  

The concept of “fair use” allows entities that do not hold a copyright to disseminate copyrighted materials under specific conditions. The court drew on two factors: whether the secondary use is “transformative” and whether it is commercial in nature. Transformative use means that the copyrighted material is altered in some way to give it a different function or purpose from the original.  

Case law adds some breadth to the meaning of transformative use to include changes that augment the efficiency of the material. For instance, the court upheld Google’s ability to digitize full books because its “snippet” view added a new and efficient function to the copyrighted material.  

In this current case, the court disagreed with the Internet Archive’s assertion that its controlled digital lending (CDL) practices rendered its use transformative. Ultimately, the court concluded that Internet Archive’s “digital books serve the same exact purpose as the originals…. IA’s Free Digital Library is meant to—and does—substitute for the original Works.” 

This point is interesting for librarians, many of whom came out in defense of Internet Archive since the beginning of its legal woes. The lower court sidestepped the issue of whether Internet Archive was, in fact, a library and as such benefited from the privileges that libraries hold under copyright law. The appeals court made a stark ruling on this line of argumentation: 

IA does not perform the traditional functions of a library; it prepares derivates of Publishers’ Works and delivers those derivatives to users in full. That Section 108 [of the Constitution] allows libraries to make a small number of copies for preservation and replacement purposes does not mean that IA can prepare and distribute derivative works en masse and assert that it is simply performing the traditional functions of a library. 

This dovetails into the second factor: commerciality. The appeals court disagreed with the lower court’s decision and stated that the Internet Archive’s use of these works was not commercial in nature. Its “Donate” link, for instance, was not a form of profiteering off copyrighted materials. However, offering access to these eBooks even without seeking compensation nonetheless competes directly with publishers’ eBook sales. As the opinion quips, “[I]t is difficult to compete with free.”

The court agreed with the publishers’ claim of market harm and warned that if other entities were to mirror Internet Archive’s practices, “it would decimate Publishers’ markets for the Works in Suit across formats.” 

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Following the fallout of the Internet Archive decision 

Internet Archive has removed more than 500,000 books from its digital library. It has not said much in the wake of the ruling, but it has started a petition to have the books restored and has made a call for users to share how this ruling has affected them. 

The implications of the opinion for libraries and their digital services are up in the air, given that the court was cautious to distinguish the Internet Archive from “traditional” libraries. Inside Higher Ed ran a piece observing that many academic institutions set up similar CDL programs under COVID for students, faculty, and researchers, which may now be in jeopardy. Chris Lewis, CEO of Public Knowledge, echoes this concern in MIT Technology Review. He warns that this decision could destroy CDL programs, which would lock libraries “into an e-book ecosystem designed to extract as much money as possible while harvesting (and reselling) reader data en masse.” 

I reached out to Jonathan Band, a copyright lawyer who represents the Association of Research Libraries whom we previously interviewed on the first ruling. As he explained, “Neither the district court decision, nor the affirmance, will have any impact on the controlled digital lending projects of research libraries, which focus on older, out of commerce titles which are not available from publishers in any format.” The Internet Archive, in contrast, offered popular titles that were also available on OverDrive, creating market overlap. But Band notes that “this decision does foreclose the possibility of using CDL as a means of countering the price-gouging public libraries experience with respect to ebooks lent by OverDrive.” 

This conclusion will likely dismay many librarians and many other researchers have already voiced their concern. This case has undercut the possibility of a large-scale digital library on the internet.

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