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New York federal judge shoots down online e-book lending

The judge found that the Internet Archive had infringed on publishers' copyrights.

NEW YORK — The online library known as the Internet Archive took a big hit on Friday when a federal judge in New York granted summary judgment to a group of publishers who said that its lending practices infringe on copyrights. 

Judge John Koeltl of the Southern District of New York found that the Archive’s Open Libraries project, under which users could “borrow” purchased and scanned e-books — one user per book at a time — did not qualify as fair use.

“IA’s distribution of e-book copies of the works in suit without a license deprives the publishers of revenues to which they are entitled as the copyright holders,” Koeltl, a Clinton appointee, wrote in his 47-page ruling.

He noted that if the Archive’s practices became widespread, they could seriously threaten the potential market for copyrighted works. 

The Internet Archive was founded in 1996 with the goal of documenting online history by archiving public web pages on its “Wayback Machine.” Established as a nonprofit with the stated objective of providing “universal access to all knowledge,” it has since extended its collections to include information that didn’t originate on the internet, including books, movies, software and audio files. 

The Archive’s inclusion of books in its collection and practice of lending scanned copies to patrons gained it the less-than-friendly attention of Hachette Book Group, HarperCollins Publishers, Penguin Random House and Wiley, four of the largest book publishers in the U.S. The publishers sued the Archive in 2020, alleging that it had improperly scanned and distributed print copies of 127 of their books. 

The suit came partly in response to the Archive’s peak Covid-era “National Emergency Library” program, during which the site stopped enforcing the one-to-one owned-to-loaned ratio from March 24, 2020 to June 16 of the same year. In the two years since, Koeltl pointed out in his order the Archive’s user base increased almost threefold, from 2.6 million to around 6 million. 

In oral arguments earlier this week, attorneys for the Archive said that its e-book-lending practices were merely a tech-savvy extension of the mission of brick-and-mortar libraries and that they didn’t do any harm to the publishers. “Lending books by more efficient technological means does not offend the purposes of copyright,” attorney Joseph Gratz told Koeltl at that hearing. He pointed out that because the books were being lent on a one-per-copy basis, publishers weren’t losing out on revenue any more than they do when a library lends a hard copy. 

Gratz also argued that the process of scanning the books and formatting them into e-books was “transformative” and thus made the products a fair use of the copyrighted material. 

Koeltl issued his ruling just four days later, giving little credence to those arguments. He pointed out that the Archive had explicitly pitched its Open Libraries project to participating libraries as a way to access e-books without paying for licenses from publishers. “IA thus ‘brings to the marketplace a competing substitute’ for library e-book editions of the works in suit,” he wrote. 

“IA argues that it does not compete in the library e-book market because it only offers libraries a way to ‘lend a copy the library owns,’ while library e-book licenses ‘are not tied to what print books the library owns or what the library does with them’” Koeltl added. “But IA’s free library e-book model need not mimic the publishers’ licensing schemes in every respect to provide a significantly competing substitute.” 

Koeltl requested that the parties submit proposals “or preferably a joint proposal” for the procedure to determine the judgment he should enter within two weeks. He also rejected the Archive’s request that statutory damages be remitted, finding that it was premature and noting that it could renew that argument in those judgment proposals. 

In a post on its website, the Internet Archive lamented Koeltl’s decision and promised to appeal.

“Today’s lower court decision in Hachette v. Internet Archive is a blow to all libraries and the communities we serve,” Open Libraries director Chris Freeland wrote. “This decision impacts libraries across the US who rely on controlled digital lending to connect their patrons with books online. It hurts authors by saying that unfair licensing models are the only way their books can be read online. And it holds back access to information in the digital age, harming all readers, everywhere.” 

Categories / Law, Media, Technology

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