On Friday the Federal Court for the Southern District of New York (SDNY) ruled in favor of Hachette and other major book publishers, and against Internet Archive (IA) in a lawsuit considering IA’s Controlled Digital Lending (CDL) program, under which IA scanned books and “loaned” digital copies of copyrighted works over the internet. The court found that the activities were clearly infringing (PP. 14-15) and also that
Each enumerated fair use factor favors the Publishers, and although these factors are not exclusive, IA has identified no additional relevant considerations. At bottom, IA’s fair use defense rests on the notion that lawfully acquiring a copyrighted print book entitles the recipient to make an unauthorized copy and distribute it in place of the print book, so long as it does not simultaneously lend the print book. But no case or legal principle supports that notion. Every authority points the other direction. (P. 45).
C-IP2’s Sr. Scholar & Senior Fellow for Copyright Research & Policy Prof. Sandra Aistars drafted and filed a successful amicus brief supporting the publishers in the case. She was joined by twelve other scholars. You can read the court’s Order here and the Copyright Scholars’ brief here.
Considering the fair use factors in turn, on factor one — focusing in this instance on transformative use — the court noted that the HathiTrust and Google Books decisions had foreshadowed the ruling. (P. 19). Those cases delineated the outside boundaries of the fair use/transformative use doctrine by allowing the scanning of entire databases of books in their entirety, but making them available only in limited ways and for limited purposes that added transformative purpose, meaning or message to the works. (PP. 19-20). The court explained:
Importantly, the database did not “allow users to view any portion of the books they [were] searching” and therefore, unlike IA’s Website, “d[id] not add into circulation any new, human-readable copies of any books” or “merely repackage or republish the originals.” [Authors Guild v. HathiTrust, 755 F. 3d, 87, 97 (2d Cir. 2014)].
Google Books similarly found transformative use in Google’s scanning of copyrighted books to create a database that included a “snippet view” search function that allowed readers to view a few lines of text containing searched-for terms. [Authors Guild v. Google, Inc., 804 F.3d, 202, 208 (2d Cir. 2015)]. The snippet view showed the searcher “just enough context surrounding the searched term” to help the searcher evaluate whether the book fell within the scope of the searcher’s interest “without revealing so much as to threaten the author’s copyright interests.” Id. at 208, 216. But the Court of Appeals cautioned that “[i]f Plaintiffs’ claim were based on Google’s converting their books into a digitized form and making that digitized version accessible to the public,” precisely what the Publishers allege in this case, the “claim [for copyright infringement] would be strong.” Id. at 225. If HathiTrust and Google Books demarcated the boundaries of fair use, this case shows what conduct remains squarely beyond fair use. (P. 20).
The court likewise rejected arguments under the first fair use factor that IA expands the utility of the Works in Suit in any way recognized in the Second Circuit: e.g., by using technology to “improv[e] the efficiency of delivering content” to “one entitled to receive the content” in a way that does not “unreasonably encroach on the commercial entitlements of the rights holder.” [Capitol Recs., LLC v. ReDigi Inc., 910 F.3d 649, 661] (citing Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984)); see also [Fox News Network, LLC v. TVEyes, Inc., 883 F.3d 169, 177 (2d Cir. 2018)].” (P. 22). The court noted that to accept IA’s expanded utility argument would be to “ignore the teachings of the Court of Appeals for the Second Circuit in Google Books that there would be a ‘strong’ claim for copyright infringement if Google had distributed digitized copies of complete books.” (P. 24).
The court also found unpersuasive IA’s suggestion that it is a non-commercial user. (P. 26). It explained that the facts (including how “every single page of the Archive is monetized” (P. 27)) demonstrate how “IA stands to profit from its non-transformative exploitation of the Works in Suit. The commercial-noncommercial distinction, like the transformativeness inquiry, therefore counsels against a finding of fair use.“ (P. 28).
The SDNY was utterly unconvinced by IA’s attempts to bootstrap its faulty first sale arguments into its equally faulty fair use arguments, hopeful that two wrongs might together make an exception. (PP. 29-31). The court saw through this charade and rightly pointed out that [i]n ReDigi, the Court of Appeals plainly held that the first sale doctrine has now been codified in Section 109(a), that it does not include a right of reproduction, and that any broader scope of the first sale doctrine should be sought from Congress, not the courts. Id.” (P. 31). It is also worth noting that it did not escape the SDNY’s notice that the IA and its collaborators do not even follow the CDL lending rules they outline for themselves. (PP. 31-32).
The court found that since the works at issue were original works of authorship (including fiction and non-fiction works that were “far removed from the . . . factual or descriptive work more amenable to fair use” (Pg. 35)), the second factor favored the Publishers. (PP. 34-36). The third factor likewise favored the publishers because IA copied the works in their entirety without a transformative purpose and for a purpose that directly competed with licensed eBooks. (P. 37).
Regarding the fourth factor – marketplace harm – evidence that IA pitches its offerings to libraries to supplant licenses from publishers could not be denied. (P. 39). IA offered weak arguments the court did not find persuasive that Publisher profits had increased during the time of the COVID lockdown while IA was pursuing its Emergency Digital Library initiative, but the metrics suggested by IA were at best weakly correlative in nature in the court’s opinion. (P. 43).
Finally, the court considered whether any other public benefits could flow from IA’s services. (PP. 44-45). It rejected the suggestion that any alleged public benefit created by easier access to works outweighed market harm to publishers. (P. 44). While “any copyright infringer may claim to benefit the public by increasing public access to the copyrighted work,” the Works in Suit are already accessible by readers through libraries in a free library lending model supported by widespread legitimate commercial licensing models deploying a variety of lending/licensing options. (PP. 44-45).
While the court’s decision is a resounding indictment of IA’s business model and CDL programs, it should not be read in any way to tarnish the profile or work of libraries. Libraries performed especially important work during the COVID-19 pandemic, and remain bastions of democracy by promoting free thought and learning. It is important that libraries continue to disseminate works to communities that may otherwise lack easy access to them by using a variety of licensed tools and authorized exceptions under the Copyright Act. Should additional exceptions be needed they should be sought (as the court noted on page 31) from Congress, not the courts.
Thanks for C-IP2 Research Assistant Cala Coffman, a 2L at Scalia Law, for her editing assistance.