Some Unexpected Sanity in the Hachette v. Internet Archive Lawsuit

This month, a federal judge weighed in on negotiations between the Internet Archive and the publishers suing it over its e-book lending library – and the decision was surprisingly sound.

This month, a federal judge weighed in on negotiations between the Internet Archive and the publishers suing it over its e-book lending library – and the decision was surprisingly sound.

For anyone who hasn’t been following along at home: Four publishers (Wiley, Hachette, Harper Collins, and Penguin-Random House) sued the Internet Archive, alleging that its controlled digital lending (CDL) program violated copyright laws and inflicted millions of dollars in lost sales. In March, the judge rejected Internet Archive’s argument that its lending program was a fair use, and found in favor of the publishers. The Archive, though it plans to appeal the decision, entered into negotiations with the publishers over the terms of the final judgment. Those negotiations have been happening behind closed doors, and the first trickle of public information came recently, when the parties approached the judge to settle their one remaining disagreement about the terms of the settlement.

In short, the parties disagreed about which works the Archive would have to stop lending during the appeals process. Publishers insisted that the Archive needed to stop lending any of the publishers’ works that were “commercially available,” regardless of format; the Archive argued that they should only be barred from lending books that were already commercially available as e-books.

The judge, surprising many observers, sided with the Archive. The publishers’ entire case, the judge reasoned, was based on works for which they were already producing e-books. That was the basis of the complaint, the fair use analysis in the case, and the judgment itself. Books for which there were no officially licensed e-books presented an entirely different fair use analysis, which neither of the parties had briefed. The publishers could not, the judge held, use a settlement to backdoor a ban on lending a much broader class of works than had been at issue in the suit.

While it’s true that this decision (a trial court judge serving as a tiebreaker between two parties negotiating a proposed judgment) doesn’t create a terribly useful legal precedent, from a policy perspective it is huge. Publishers have long argued that library loans are “replacements” for consumer sales – that every time someone borrows a book, they lose valuable income. If you accept that (spurious) argument, the follow-on question needs to be: a sale of what? An e-book? What about books for which there is no e-book? The argument that “if a library user couldn’t get an e-book, they would definitely buy the physical book (which, by the way, we’re no longer printing)” is several leaps of logic removed from reality. 

Part of this is wishful thinking on publishers’ part (and posturing – of course they want to claim that all of their publications are immensely valuable), but it’s also due to the way the law structures damages. Statutory damages are a legal tool which allow plaintiffs to recover a set rate, without having to prove any actual economic harm. Even if the books at issue were (like a certain pundit’s recent autobiography) a total flop, and the publisher suffered $0 in lost sales from a library digitizing and lending copies of it, that publisher could still demand $150,000. Statutory damages treat all works as bestsellers, and are an enormous part of what makes copyright lawsuits so chilling. 

Monday’s decision, though, brings a much-needed degree of rationality to this whole lawsuit. Publishers cannot simply claim that lending = harm without actually bringing legal arguments to bear. And that’s a good thing.