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Should the process of lending an electronic book (“e-book”) be treated differently than lending a book from your local library, and should universal access to books be at the crux of the answer? A new ruling might shed some light on this. On September 4, 2024, the Court of Appeals for the Second Circuit held in Hachette Book Group v. Internet Archive[1] that the circulation of “legitimately acquired digital copies of books” is not supported by the Copyright Act.[2] Internet Archive (“IA”), the defendant in this lawsuit, vehemently disagrees.
This case comes after 650 million print books were taken out of circulation in March of 2020.[3] At that time, the COVID-19 pandemic abruptly immobilized society by imposing a stay-at-home order where all non-emergent public spaces, including public libraries, were shut down.[4] In an effort to reduce the lack of accessibility to physical books during the pandemic, IA launched its National Emergency Library (“NEL”), which temporarily allowed a multitude of online users to borrow one or more e-books simultaneously.[5]
The lawsuit, initially filed on June 1, 2020 by publishers Hachette Book Group, HarperCollins Publishers, John Wiley & Sons., Inc., and Penguin Random House LLC (collectively “Publishers”), alleges that IA infringed their copyrights in 127 works by scanning print copies of their books and lending digital copies to users of their website without their permission.[6] IA asserted a defense of “fair use” regarding its e-book lending guidelines for both its general online library and for the NEL.[7]
IA, a non-profit digital library, asserts that its mission is “to provide universal access to all knowledge.”[8] It acknowledges that “not everyone has access to a public or academic library with a good collection, so to provide universal access, we need to provide digital versions of books.”[9] IA performs the traditional function of a library by lending only a limited number of [e-books] at a time through Controlled Digital Lending (“CDL”).[10] A library that utilizes CDL “seeks to loan simultaneously the number of copies that it has legitimately acquired.”[11]
On March 24, 2023, the district court granted summary judgment to the Publishers, contending IA’s infringement was not excused by the defense of fair use.[12] IA appealed the district court’s decision; however, the Court of Appeals recently affirmed the lower court’s decision, ultimately holding:
…[A]uthors have a right to be compensated… [for] their original creations…and large scale copying and distribution of copyrighted books without permission from or payment to the Publishers or authors… is not an approach that the Copyright Act permits.[13]
The District Court focused on the degree to which IA’s claimed secondary use was transformative. [14] Transformative uses “add something new, with a further purpose or different character, and do not substitute for original use of the work.”[15] IA claims digital lending is transformative because it “facilitates new and expanding interactions between library books and the web.”[16] The district court disagreed and held that the IA was “merely repackaging or republishing the original” works.[17]
In their analysis, the Second Circuit further considered the Publishers’ view that to hold IA’s use as transformative would “destroy the value of [their] exclusive right to prepare derivative works,” including the right to publish their authors’ works as eBooks.[18] The Second Circuit concluded that AI’s digital copies “do not provide criticism, commentary, or information about the originals…instead, IA’s digital books serve the same purpose as the originals: making authors’ works available to read.”[19] Proponents of CDL say it uses “system design choices and collection decisions” to select books that are orphaned, out of print, or books that are non-fiction or primarily factual– and thus should be considered transformative.”[20]
James Grimmelmann, a professor of digital and information law at Cornell University postulates the Second Circuit’s decision is “not terribly surprising” given “how courts have recently interpreted fair use.”[21]
As the commodification of digitizing every aspect of our social lives continues to catapult, the question of accessibility lingers. While library lending programs are just one way to bridge the literary gap, they undoubtedly provide “essential tools for education, workforce development, and community engagement…and ensure that all [communities] have access to the digital resources they need to succeed.”[22] Chris Lewis, CEO of Public Knowledge, a consumer advocacy group that works to shape technology policy in the public interest, echoes “libraries are in crisis, caught between shrinking budgets and growing demand for services. Congress must act now to ensure that a pillar of equality in our communities isn’t sacrificed on the altar of profit.”[23]
One commentator on the Internet Archive Blog vocalized, “People are worried about book bannings and the defunding of libraries, but I don’t know that there is an awareness of what’s going on in the movement toward license-only access to electronic material.”[24] Another writer indicates that “libraries have never been required to get permissions or pay extra fees to lend books… and as a practical matter, the data shows that CDL has not and will not harm the publishers’ bottom line.”[25]
Notably, the Second Circuit for the Court of Appeals also referred to a declaration in support of the Publisher’s summary judgment motion submitted by author Sandra Cisneros:
“I worked hard to earn the financial security that I now have…royalty revenues I receive from the sales of books I have written are precious and must be closely guarded…I went on the Internet Archive’s website and saw that scans of my books were being distributed to anybody who wanted them for free–without my permission or any payment– I was appalled…It was like I had gone to a pawn shop and seen my stolen possessions on sale.”[26]
The Second Circuit further notes that “… with each digital book IA disseminates it deprives publishers and authors of the revenues due to them as compensation for their unique creations.”[27]
IA affirms that it is “reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books.”[28] For the time being, publishers, authors, readers, and intellectual property lawyers alike continue to consider the ramifications of the Second Circuit’s decision on the longevity of digitized lending, as a final appeal could potentially be taken to the Supreme Court.[29]
[1] Hachette Book Grp., Inc. v. Internet Archive, F.4th No. 23-1260, 2024 WL 4031751 (2d Cir. Sept. 4, 2024).
[2] Martin Adams, Hachette v. Internet Archive Update: Second Circuit Court of Appeals Rules Against Internet Archive, Authors Alliance (Sept. 5, 2024), https://www.authorsalliance.org/2024/09/05/hachette-v-internet-archive-update-second-circuit-court-of-appeals-rule s-against-internet-archive/.
[3] Hachette Book Grp., Inc. v. Internet Archive, 664 F. Supp. 3d 370, 377 (S.D.N.Y. March 24, 2023), aff’d, No. 23-1260, 2024 WL 4031751(2d Cir. Sept. 4, 2024).
[4] Id.
[5] Hachette Book Grp.,, supra note 3 at 377.
[6] Id.
[7] Id. at 372-377.
[8] About the Internet Archive, Internet Archive (Sep. 30, 2024), https://archive.org/about/.
[9] Id.
[10] Hachette Book Grp.,, supra note 3 at 376.
[11] Id. at 377.
[12] Id. at 391.
[13] Hachette Book Grp., supra note 1 at 21.
[14] Hachette Book Grp., supra note 3 at 380.
[15] U.S. Copyright Office Fair Use Index, Copyright.gov (Nov. 2023), https://www.copyright.gov/fair-use/.
[16] Hachette Book Grp., supra note 3 at 383.
[17] Id. at 380.
[18] Hachette Book Grp., supra note 1 at 7.
[19] Id.
[20] Martin Adams, Authors Alliance Supports Controlled Digital Lending by Libraries, Authors Alliance (Sep. 28, 2018), https://www.authorsalliance.org/2018/09/28/authors-alliance-supports-controlled-digital-lending-by-libraries/.
[21] Kate Knibbs, The Internet archive Loses Its Appeal of a Major Copyright Case, Wired (Sep. 4, 2024), https://www.wired.com/story/internet-archive-loses-hachette-books-case-appeal/.
[22] The State of Library Device Lending Programs 2024, kajeet (Sep. 30, 2024), https://www.kajeet.com/en/blog/the-state-of-library-device-lending-programs-2024#:~:text=Library%20device%2%200lending%20programs%20are,to%20bridge%20the%20digital%20divide.
[23] Chris Lewis, Why a Ruling Against the Internet Archive Threatens the Future of America’s Libraries, MIT Technology Review (Sep. 11, 2024), https://www.technologyreview.com/2024/09/11/1103838/why-a-ruling-against-the-internet-archive-threatens-the-future-of-americas-libraries/.
[24] Chris Freeland, Internet Archive Responds to Appellate Opinion in Hachette v. Internet Archive, Internet Archive Blogs (Sep. 4, 2024), https://blog.archive.org/2024/09/04/internet-archive-responds-to-appellate-opinion/.
[25] Chris Freeland, Internet Archive Responds to Appellate Opinion in Hachette v. Internet Archive, Internet Archive Blogs (Sep. 4, 2024), https://blog.archive.org/2024/09/04/internet-archive-responds-to-appellate-opinion/.
[26] Hachette Book Grp., supra note 1 at 20.
[27] Id.
[28] Freeland, supra note 24.
[29] Eli Tan, Internet Archive Loses Court Appeal in Fight Over Online Lending Library, The New York Times (Sep. 4, 2024), https://www.nytimes.com/2024/09/04/technology/internet-archive-appeals-court-ruling.html.