E-book lending: Internet Archive loses copyright case

Contents

While Google Books is legal in the USA, this does not apply to the Internet Archive's e-book library. This has now been confirmed by a US federal appeals court on Wednesday. Accordingly, the Internet Archive's loans infringe US copyright and do not fall under its fair use provisions. This is a bitter setback for the project. "We are disappointed," says the Internet Archive, "We will continue to defend the right of libraries to own, lend and preserve books." At least the ruling contains an important decision in favor of fair use in general, but this is not enough for the specific project to overturn the first instance ruling altogether.

The Internet Archive scans books and then lends them out as DRM-locked e-books, which users can also have read aloud. The Internet Archive originally made sure that it never issued more electronic copies at the same time as it had paper copies of the respective book in its own warehouse. Later, the Internet Archive also added the printed holdings of partner libraries to this count. In any case (except a phase during coronavirus-related restrictions), there were no additional items in circulation, but there were electronic versions instead of printed ones.

This meant that the Internet Archive thought it was legally on the safe side of fair use. However, this is not the case, as the US Federal District Court for Southern New York has now been followed by the Federal Court of Appeals for the Second Circuit. The lawsuit is being brought by four major publishers.

Fair use

The aim of US copyright is to "promote the progress of science and useful arts". If it helps to achieve this goal, a third-party work can be used even if the rights holder does not consent. This doctrine is known as fair use. However, the law does not conclusively regulate when exactly fair use exists. That would also be very difficult.

In the event of a dispute, four elements must be examined: The purpose of the use matters – commercial, non-commercial or for education – as well as the nature of the work, the excerpts used in comparison to the work as a whole and finally the impact on the potential market or value of the work. Together with the purpose of the use, it must also be examined whether the third-party works are simply adopted 1:1, which would be contrary to fair use, or whether they are used in a transformative manner. Finally, the four assessment results must be weighed against each other.

Element 1: Important decision for non-profit projects

This is what the three judges of the Court of Appeal did. The judges did not agree with the Internet Archive's argument that its e-library is "transformative use" because it makes borrowing more convenient and efficient and ensures that only one person can use the e-book at a time. The complete provision of the books without commentary, criticism or additional information is not transformative because nothing new is created, no other purpose is achieved and no different character is expressed.

The Internet Archive was successful in the next step: The District Court classified the use as commercial; although the books were borrowed, not rented, the Internet Archive solicited donations and earned commissions when readers surfed via a link to a partner bookseller and bought books there. The Court of Appeal takes a different view: the Internet Archive is indisputably a non-profit organization, but it has to finance itself somehow. Donations and the partnership with a bookseller are no basis for classifying the service as commercial.

Although this is an important decision regarding other non-profit projects, it does not help the Internet Archive in this case. In the absence of a change in use, the first element of the fair use test is still against the Internet Archive.

Element 2: Nature of the books

Here the judges make short work of the case, the books in question are clearly in the core area of US copyright. (Public domain books are not part of the lawsuit.) The second element therefore weighs heavily in favor of the plaintiff copyright holders, namely Hachette, HarperCollins, John WIley & Sons and Penguin Random House.