E-book lending: Internet Archive loses copyright case

While Google Books is legal in the USA, this does not apply to the Internet Archive's e-book library. A US federal appeals court confirmed this on Wednesday. According to the court, lending from the Internet Archive violates US copyright law and does not fall under its fair use provisions. This is a major 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 for fair use in general, but for the specific project this is not enough to overturn the first instance ruling altogether.

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The Internet Archive scans books and then lends them out as DRM-locked e-books, which users can also have read to them. The Internet Archive was originally careful not to issue more electronic copies at the same time than it had paper copies of the book in its own warehouse. The Internet Archive later added the printed holdings of partner libraries to this count. In any case (with the exception of a phase during coronavirus-related restrictions), there were no additional copies in circulation, just electronic versions instead of printed ones.

The Internet Archive believed that 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 also ruled in 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 art”. If it helps to achieve this aim, someone else's work can be used even if the rights holder does not consent. This doctrine is known as fair use. However, the law does not provide a definitive definition of when exactly fair use occurs. That would be very difficult.

In the event of a dispute, four elements must be examined: the purpose of the use – commercial, non-commercial or educational – as well as the type of work, the excerpts used in comparison to the entire work and finally the impact on the potential market or value of the work. Along with the purpose of the use, it must also be examined whether the third-party works are simply copied 1:1, which would be against fair use, or whether they are used in a transformative way. The four test results must then be weighed against each other.

Element 1: Important decision for non-profit projects

That is what the three judges of the appeals court did. The judges did not agree with the Internet Archive's argument that its e-library was “transformative use” because it made lending more convenient and efficient and ensured that only one person could use the e-book at a time. Making the books available in their entirety without commentary, criticism or additional information was not transformative because nothing new was created, no different purpose was achieved and no different character was expressed.

The Internet Archive can claim success in the next step of the review: The district court classified the use as commercial. Although the books are borrowed, not rented, the Internet Archive asks for donations and earns commissions when readers surf via a link to a partner bookseller and buy books there. The appeals court sees things differently: The Internet Archive is indisputably non-profit, but it has to finance itself somehow. Expenses and the partnership with a bookseller are not a basis for classifying the offer as commercial.

While this is an important decision with regard to other non-profit projects, it does not help the Internet Archive in this case. In the absence of a transformative use, the first element of the fair use test still counts against the Internet Archive.

Element 2: Type of books

Here the judges make short work of it, 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 also weighs heavily for the plaintiff rights holders, namely Hachette, HarperCollins, John Willey & Sons and Penguin Random House.