IP Law Daily, COPYRIGHT—S.D.N.Y.: Parts greater than the whole: Non-profit famous for archiving the entire internet cannot lend out copyrighted books, (Mar 27, 2023)

By Matthew Hersh, J.D.

The Internet Archive’s “e-lending” service was not protected by fair use.

A non-profit made famous for archiving the entire public internet could not use the fair use defense for running a separate service that lent out digital copies of books, the federal court for Manhattan has held. The court, in granting summary judgment to book publishers who challenged the Internet Archive’s e-lending service, found that none of the traditional fair use factors favored the non-profit’s activities (Hachette Book Group, Inc. v. Internet Archive, March 24, 2023, Koeltl, J.).

The lawsuit involves the Internet Archive, the non-profit organization perhaps known best for archiving every public webpage on the internet through the archive.org website. The organization, founded by Brewster Kahle, also works with libraries, museums, universities, and the public to preserve and offer free online access to texts, audio, moving images, software, and other cultural artifacts. But that is not all the Internet Archive does. The organization also buys up (or collects donations of) print books, scans them, and lends them electronically to users through an “e-library” function.

The Internet Archive’s e-library raised the ire of a number of major book publishers, among them Hachette, HarperCollins, Wiley, and Penguin Random House. Those publishers, noting that many of the books in this e-library were protected by copyright, filed a lawsuit against the Internet Archive in 2020. (Simon & Schuster and MacMillan, the two other major publishers, did not join the lawsuit, for reasons not immediately apparent from the face of the principal pleadings).

The Internet Archive claimed fair use, leading to this opinion.

Fair use. The court roundly rejected the fair use defense, granting summary judgment in the case to the publishers. The court’s opinion, while touching all four fair use factors, focused most extensively on the first factor. That fair use factor, the court explained, addresses “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” Under current Supreme Court dating back to 1994 (though under reconsideration now in the Warhol v. Goldsmith case), consideration of the first factor focuses chiefly on the degree to which the secondary use is “transformative”—that is, whether it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message, rather than merely superseding the original work.” The Internet Archive raised a number of arguments why that factor should favor its e-library model, but the court rejected each one.

Most importantly, the court emphasized, this case was nothing like other cases in which fair use had been upheld. In Authors Guild v. Google, Inc., 804 F.3d 202, 215 (2d Cir. 2015), the Second Circuit found that fair use protected a service that enabled users to search the text of books within a database of copyrighted material. But that database provided only a “snippet view” search function, the court noted, that allowed readers to view a few lines of text containing searched-for terms. That was nothing like the case here. Similarly, services that provided books in braille, a database that allowed teachers to detect plagiarism, or that displayed tiny, low-resolution “thumbnail” art reproductions that link to the websites containing the originals, the court noted, were also not on point. The Internet Service lent out full copies of the books to all users, the court emphasized, not just snippets.

Nor did the so-called “first sale” doctrine play a role in the fair use analysis, the court held. Under that doctrine, anybody who purchases a copyrighted work may always sell their copy to a third person without running afoul of the Copyright Act. Here, the Internet Archive argued, it ostensibly used copyright protection technologies to prevent more than one user at a time from taking out a particular book. But in the case of Capitol Records, LLC v. ReDigi Inc., 910 F. 3d 649 (2d Cir. 2018), the court noted, the Second Circuit rejected the application of that concept here, since the transfer of a digital copy of a work—like in the e-library here—did not constitute a transfer of a copy, but rather a reproduction of a copy. That concept would not help the Internet Archive here.

With the first fair use factor out of the way, the other factors fell easily. The nature of the works—published books, some fiction—were obviously creative and entitled to high protection. The Internet Archive took all of the books, so the third factor was no help. And of course, the publishers had plenty of ways to monetize e-libraries on their own—and already did so. All four fair use factors therefore favored the publishers.

Commentary: As a side note, Brewster Kahle has long been a bane of copyright owners. In the early 2000s he offered testimony about the potential non-infringing use of peer-to-peer file-sharing services in a lawsuit against two of those services by movie studios and the record industry. Although the Supreme Court, in the landmark case of MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), unanimously ruled for the copyright owners on other grounds, Kahle’s testimony was the subject of a spirited debate between the concurring opinions of Justices Ginsburg and Breyer.

The Case is No. 1:20-cv-04160-JGK-OTW.

Attorneys: Carl Mazurek (Davis Wright Tremaine LLP) for Hachette Book Group, Inc. Joseph C. Gratz (Morrison & Foerster LLP) for Internet Archive.

Companies: Hachette Book Group, Inc.; HarperCollins Publishers LLC; John Wiley & Sons, Inc.; Penguin Random House LLC; Internet Archive

Cases: Copyright TechnologyInternet NewYorkNews GCNNews