Hachette v. Internet Archive

Hachette Book Group, Inc. v. Internet Archive, No. 20-cv-4160 (JGK), 2023 WL 2623787 (S.D.N.Y. 2023), is a case in which the United States District Court for the Southern District of New York determined that the Internet Archive committed copyright infringement by scanning and distributing copies of books online. Stemming from the creation of the National Emergency Library (NEL) during the onset of the COVID-19 pandemic, publishing companies Hachette Book Group, Penguin Random House, HarperCollins, and Wiley alleged that the Internet Archive's Open Library and National Emergency Library facilitated copyright infringement. The case involves the fair use of controlled digital lending (CDL) systems.

On March 25, 2023, the court ruled against the Internet Archive. In August 2023, the parties reached a negotiated judgment, including a permanent injunction preventing the Internet Archive from distributing some of the plaintiffs' books. In September 2023, the Internet Archive appealed the decision.

Background
The Internet Archive is a non-profit organization dedicated to preserving knowledge and based in San Francisco, California; the Archive maintains Open Library, a digital library index and lending system. As many of the works in the Internet Archive are under copyright, the Archive uses a controlled digital lending (CDL) system, a practice that relies upon digital rights management (DRM) to prevent unauthorized downloading or copying of copyrighted works. Open Library can generate digitized material (ebooks) from print copy. The Open Library CDL system ensures that only one digital copy is in use for each print copy or otherwise authorized ebook copy available.

On March 24, 2020, as a result of shutdowns caused by the COVID-19 pandemic, the Internet Archive opened the National Emergency Library, removing the waitlists used in Open Library and expanding access to these books for all readers. Two months later on June 1, the National Emergency Library (NEL) was met with a lawsuit from four book publishers. Two weeks after that, June 16, the Internet Archive closed the NEL, and the prior Open Library CDL system resumed after the 12 weeks of NEL usage.

Lawsuit
On June 1, 2020, Hachette Book Group and other publishers, including Penguin Random House, HarperCollins, and Wiley, filed a lawsuit against the Internet Archive for the National Emergency Library. The plaintiffs argued that the practice of CDL was illegal and not protected by the doctrine of fair use. Furthermore, they argued that the Internet Archive was not abiding by CDL, as it had acknowledged that its partner libraries were not always withdrawing their physical copies from their shelves.

Both sides filed motions for summary judgment. Judge John G. Koeltl ruled on March 24, 2023, against Internet Archive in the case, saying the National Emergency Library concept was not fair use, so the Archive infringed their copyrights by lending its ebook copies without the waitlist restriction. The 127 publishers' books in the suit are also available as ebooks from the publishers. The Internet Archive said afterwards it would appeal this ruling, but otherwise would continue other digital book services which have been previously cleared under case law, such as books for reading-impaired users.

Internet Archive press conference
Shortly before oral arguments, the Internet Archive held a press conference with comments from several people who implied that the issues in this case were much broader than the 127 books specifically named in the suit. All presenters agreed that book publishers need to make money to pay their expenses including authors. The question is whether the National Emergency Library (NEL) actually harmed the publishers. Lila Bailey, Senior Policy Counsel for the Internet Archive, noted that: "In the past, publishers stood against microfilm and photocopiers, crying harm. They said they would be harmed by interlibrary loan. They lobbied for decades against libraries being allowed to provide access for the blind and print disabled. They were wrong. It took years, but eventually, the law affirmed each of these things, and the public benefitted. With this lawsuit, publishers have repeated those same claims of massive harm from controlled digital lending. ... When asked under oath, their own executives admitted this. ... [They even] instructed their own 950 dollar per hour expert not to even try to measure economic harm. ... On the other hand, when we invited economists from Northeastern University and the University of Copenhagen to look at the sales and library lending data produced in this case, they came to a singular conclusion: The Internet Archive's digital lending had no measurable effect on the market whatsoever."

Bailey's conclusion was supported by other speakers.

Harvard Law School Professor Lawrence Lessig said that book publishers need to make a profit to serve the public, but the material available to the public should not be limited to what commercial enterprises find profitable. Netflix, for example, offers subscribers access to thousands of movies and television shows but routinely stops offering content for which the demand is too low. That doesn't happen with libraries. Without controlled digital lending, out-of-print books become essentially unavailable to the vast majority of humanity. "We need access to our past, not just the part of our past that is economically or commercially viable."

Expert reports
An expert report filed with the court by Northeastern Econ Prof. Imke Reimers also reported that "sales in the first five years after an edition's publication account for up to 90% of lifetime sales."

On the other side, University of Chicago computer science professor Ian Foster reported that the Internet Archive's actual CDL practices sometimes violated their claims, lending out more copies than they physically had.

Final judgment
Judge John G. Koeltl held that the Internet Archive's scanning and lending clearly constituted a prima facie case of copyright infringement and that the Internet Archive's fair use defense failed all four factors of the "fair use test". He rejected the Archive's argument that their scanning and lending of books was "transformative" in the sense of copyright law.

While Judge Koeltl issued a summary judgment in favor of the plaintiffs and against the defendant, he did not assess damages. Instead, he directed the parties to brief the court on how they thought the case should be resolved in a way that comports with the judge's decision that the National Emergency Library was not fair use.

Internet Archive founder Brewster Kahle declared their intention to appeal the ruling, but did not do so while the parties continued to negotiate to try to agree on a procedure to determine the judgment to be entered in this case. The deadline for submitting such a procedure was extended several times; the final extension was granted on July 28, extending the deadline to August 11, with Judge Keoltl writing, "No further extensions."

On August 11, 2023, the parties reached a negotiated judgment. The agreement prescribes a permanent injunction against the Internet Archive preventing it from distributing the plaintiffs' books, except those for which no e-book is currently available, as well as an undisclosed payment to the plaintiffs. The agreement also preserves the right for the Internet Archive to appeal the previous ruling. As a result of the lawsuit, more than 500,000 books were made unavailable for borrowing. The Internet Archive appealed the takedown, hoping to restore access to the affected works.

Appeal
On September 11, 2023, the Internet Archive filed a notice which appealed the ruling to the United States Court of Appeals for the Second Circuit. On December 15, 2023, the Internet Archive filed its opening brief in its appeal. Shortly afterwards, several other organizations filed friend of the court briefs.

The oral argument phase of the appeal occurred on June 28, 2024. The judges will decide the case later in the term, sometime in 2024 or 2025.

Association of American Publishers
The Association of American Publishers released a press statement that said, "In celebrating the opinion, we also thank the thousands of public libraries across the country that serve their communities everyday [sic] through lawful eBook licenses. We hope the opinion will prove educational to the defendant and anyone else who finds public laws inconvenient to their own interests." The AAP has been critical of the Internet Archive for suggesting that libraries engage in the same practices that they do, arguing that only 13 public libraries in the US had cooperated with the Open Library.