• by Wendy Davis  @wendyndavis, September 4, 2024

The nonprofit Internet Archive infringed copyright with its 13-year-old e-book lending program, which involved digitizing books and loaning the digital versions to consumers, a federal appellate court ruled Wednesday.

In a 64-page opinion, the appellate judges rejected the Internet Archive's argument that its lending program was protected by fair use principles.

A ruling in the Internet Archive's favor “would allow for widescale copying that deprives creators of compensation and diminishes the incentive to produce new works,” Circuit Judge Beth Robinson wrote in an opinion joined by Steven Menashi and Maria Araújo Kahn.

The decision comes in a legal dispute dating to June 2020, when Hachette Book Group, HarperCollins Publishers, John Wiley & Sons, and Penguin Random House sued the Internet Archive over two different initiatives -- the 13-year-old “controlled lending program,” and the “national emergency library,” which only operated between March 2020 and that June.

The “controlled lending program” involves loaning one digital copy at a time for each hard copy that has been scanned and digitized.

The emergency program was launched during the initial phases of the COVID-19 pandemic, when libraries across the country shuttered. That short-lived program offered downloads of the same scanned hard copy to multiple users at once.

The publishers contended that both programs were unlawful, arguing that copyright principles don't allow the Internet Archive to copy and distribute digital book files.

U.S. District Court Judge John Koeltl in the Southern District of New York sided with the publishers, ruling in March 2023 that both programs infringed copyright.

The Internet Archive, referred to in the opinion as IA, appealed to the 2nd Circuit, arguing that its lending program is protected by fair use principles for several reasons. Among others, the nonprofit said the program was “transformative” -- one of the factors that goes into fair use decisions -- because it enables more efficient access to books for rural residents who live far from brick-and-mortar libraries, as well as people with mobility issues or disabilities that make it difficult to read print books.

The appellate judges rejected that argument, writing that the digital library “offers few efficiencies beyond those already offered by publishers’ own eBooks.”

“We conclude that IA’s use of the works is not transformative,” Robinson wrote.

“IA creates digital copies of the works and distributes those copies to its users in full, for free. Its digital copies do not provide criticism, commentary, or information about the originals,” Robinson added. “IA’s digital books serve the same exact purpose as the originals: making authors’ works available to read.”

Numerous outside organizations weighed in on the dispute, including the groups Center for Democracy & Technology, Library Freedom Project, and Public Knowledge, which sided with the Internet Archive. Specifically, they argued that the Internet Archive's lending program could protect readers' privacy better than commercial e-book retailers.

Those groups wrote in a friend-of-the-court brief that libraries traditionally protect privacy, but that lending programs operated by Barnes & Noble, Amazon and other commercial providers collect detailed information about readers, including their annotations and bookmarks.

Others, including the Authors Guild and National Writers Union sided with the book publishers, arguing that the Internet Archive's lending program deprives writers of income.