US Court of Appeals rules in favour of book publishers in legal dispute with Internet Archive platform

US Court of Appeals rules in favour of book publishers in legal dispute with Internet Archive platform

On 4 September, the United States (US) Court of Appeals for the Second Circuit ruled that one of the projects to make books available for free on the Internet Archive platform, called Free Digital Library, constituted a violation of the US Copyright Act. The case involves a legal dispute between the four largest US book publishers and the virtual platform, and the main argument in the case was whether or not this practice of digitizing and lending copies of books qualified as fair use under the US Copyright Act.

The Free Digital Library service, founded in 2011, created digital copies of printed books and published them on the Internet Archive website, where users could access them in full, free of charge. In 2020, book publishers sued the platform on the grounds that the service infringed their copyright by making available for free 127 books to which they had exclusive publishing rights. The Internet Archive, for its part, argued in its defense that the platform was covered by the fair use exception, which allows the use of copyrighted material without the need for authorization from the copyright holder (as in the case of journalistic material, teaching and research, for example), subject to certain requirements, under the terms of Section 107 of the US Copyright Act.

At first instance, the US District Court for the Southern District of New York rejected the Internet Archive’s defense, holding that this was not fair use, and arguing that the platform’s use of the book copies: (i) was not transformative, since the website reproduced the works in their entirety; (ii) was commercial, even though the Internet Archive is not-for-profit, the platform exploited the works by soliciting donations on its website and receiving a share of the profits when users buy a physical book through a certain link; (iii) that the website was copying the books and; (iv) the Internet Archive acted as a ‘competing substitute for e-book licenses, usurping a market that properly belongs to the copyright holder’.

On appeal, the platform argued that its Free Digital Library is transformative because it uses technology ‘to make borrowing more convenient and efficient’ and ‘delivers the work only to those who already have the right to view it – the one person who borrows the book at a time’. In addition, the defendant stated that the service ‘enables uses that are not possible with printed, physical books’, such as allowing authors who write articles online to link directly to a digital book in the library.

Thus, firstly, the appeals court concluded that Internet Archive’s use of the books was not transformative, since it created digital copies of the books and distributed these copies to its users in their entirety, free of charge. Furthermore, the judge emphasized that the digital copies did not provide criticism, commentary or new information about the originals. Nor did they ‘add something new, with an additional purpose or a different character, altering the originals with new expression, meaning or message’. The ruling added that the platform’s digital books ‘had exactly the same purpose as the originals: to make the authors’ works available for reading’.

Next, the ruling considered whether the use made of the books was for commercial or merely educational purposes, the first factor used to analyze fair use. Here, unlike the district court, the appeals court found that the Internet Archive’s use of the digital works was not commercial in nature. On this point, it reasoned that the platform is a non-profit organization and that it distributes its digital books free of charge, even if it solicits funds to maintain itself through donations. It also analyzed that the site did not profit directly from the Free Digital Library, since it offered the service free of charge, and that the partnership with a bookshop was too weak an argument to characterize the use as commercial.

As for the quantity and substantiality of the part used in relation to the totality of the copyrighted work, another factor used to analyze fair use based on 17 U.S.C. § 107(3) of the Copyright Act, the court sided with the publishers on the grounds that the platform had in fact copied the copyrighted works in their entirety and distributed the copies to the public in their entirety. The decision also found that Internet Archive had not met its ‘burden of proving that the secondary use of the books does not compete in the publishers’ relevant markets, given that ‘if Internet Archive’s use of the works were approved, there would be little reason for consumers or libraries to pay publishers for content they could access for free on the site’.

Finally, the court ruled that the benefits generated for the public by the Free Digital Library service, such as facilitating the access to reading and knowledge, cannot be placed above the laws that protect authors’ works in the long term. Without them, according to the ruling, there is no incentive to produce new creative works, which is why, on this point, the publishers were also right. In this way, the appeals court ruled to recognize copyright infringements by the Internet Archive, denying that the book availability service was a form of fair use on the part of the platform and upholding the Internet Archive’s order to cease its ‘Free Digital Library’ service.

The judgement can be accessed via the link: Hachette v. Internet Archive

Note: For quick release, this English version is provided by automated translation without human review.