Today, the Second U.S. Circuit Court of Appeals announced its decision in the case of Hachette v. Internet Archive, affirming the judgment of the U.S. District Court for the Southern District of New York by finding that the Internet Archive’s controlled digital lending program, or CDL, is not a fair use.
Libraries have always worked in a very simple way: They buy books (or someone else buys the books and donates to the library), and then they lend them out. This is exactly what the Internet Archive does, with one addition: It makes library books more accessible to library patrons by allowing readers to access scanned copies online. Under this “controlled digital lending” system, only one patron can access a copy of a book at a time – just like with lending physical books. The Internet Archive argued that any additional copies made during this process should be “fair use” under copyright law.
In 2020, the Association of American Publishers sued the Internet Archive seeking to halt the Internet Archive’s CDL program. In March of 2023, a district court found in favor of plaintiff publishers. The Internet Archive then appealed that judgment, defending the program as a fair use. Last December, Public Knowledge joined the Center for Democracy and Technology and the Library Freedom Project in filing an amicus brief supporting Internet Archive in this case.
The following can be attributed to Meredith Rose, Senior Policy Counsel at Public Knowledge:
“Controlled digital lending is a critical toolkit for libraries to reach their patrons in the digital age. With today’s decision, the Second Circuit undermines those policy goals. We appreciate that the court set the record straight and clarified that a nonprofit’s ‘donate’ button does not magically render a use commercial in nature. However, the rest of the analysis falls short. The court asserts, bafflingly, that the Internet Archive is not entitled to statutory protections because it doesn’t perform ‘traditional functions of a library.’ It is unclear what the Second Circuit believes these ‘traditional functions’ to be, if not ‘lending books to the public.’
“This is a case about the future of libraries, as much as copyright law. On top of funding shortfalls and increasing censorship demands, libraries are being forced to repeatedly buy the same books over and over again, due to publishing industry practices.
“When libraries add print books to their collections, these books don’t expire, even when they are damaged, lost, or stolen. Libraries have the specific statutory right to create new copies of print books and other media, because the preservation of knowledge, and making works available to the public, is core to both the mission of libraries and the purpose of copyright.
“With e-books, libraries have fewer options. When libraries want to add e-books to their collection, they can often only purchase a time-limited license, after which the books expire and have to be repurchased. The court recognizes that ‘the result is regular renegotiation of e-book licenses that often come at a steeper price and for a shorter term than print copies of the same books.’
“Controlled digital lending allows libraries to bypass unfair e-book practices by making their print copies of books more widely available. Today’s decision, if it stands, limits this.
“Moreover, the court creates a gratuitous circuit split. The fourth fair use factor asks a court to examine ‘the effect of the use upon the potential market for or value of the copyrighted work.’ Defendants do not, and often cannot, have access to the market data necessary to prove that their use has not created a market harm. The Archive offered studies from multiple experts indicating that the publishers had not been financially harmed, all of which the court discarded as insufficient and against ‘common sense.’
“Let us be perfectly clear: The court here is asking defendants to prove a negative, while allowing plaintiffs to actively withhold the only information that the court will accept as dispositive. The Second Circuit has replaced the fourth factor analysis with ‘vibes.’ Franz Kafka would be proud.
“We call on Congress to clarify the law surrounding Controlled Digital Lending and reaffirm that libraries can, in fact, lend the books that they own – regardless of format.”
Members of the media may contact Communications Director Shiva Stella with inquiries, interview requests, or to join the Public Knowledge press list at shiva@publicknowledge.org or 405-249-9435.