The US Second Circuit Court of Appeals on Wednesday affirmed a lower court ruling that the Internet Archive's digitization and electronic distribution of copyrighted print books violates American law.

The Internet Archive was sued in 2020 by four large publishers - Hachette Book Group, HarperCollins Publishers, John Wiley & Sons, and Penguin Random House - over the non-profit's Free Digital Library.

The San Francisco-based Internet Archive has been scanning printed books and distributing them online - without the consent of copyright holders - through a process called Controlled Digital Lending (CDL). The idea is that the Internet Archive can lend readers one digital copy as a proxy for each physical book in its control without violating the law.

That idea has been rejected by US courts, first by Judge John Koeltl from the Southern District of New York in March 2023, and now by Second Circuit Judges Steven J. Menashi, Beth Robinson, and Maria Araújo Kahn.

The appeals court decision [PDF] states, "This appeal presents the following question: Is it 'fair use' for a nonprofit organization to scan copyright-protected print books in their entirety, and distribute those digital copies online, in full, for free, subject to a one-to-one owned-to-loaned ratio between its print copies and the digital copies it makes available at any given time, all without authorization from the copyright-holding publishers or authors?"

The answer from the US justice system so far is no, it's not fair use.

"Today’s appellate decision upholds the rights of authors and publishers to license and be compensated for their books and other creative works and reminds us in no uncertain terms that infringement is both costly and antithetical to the public interest," said Maria A. Pallante, president and CEO of the Association of American Publishers, in a statement provided to The Register.

"Critically, the court frontally rejects the defendant’s self-crafted theory of 'controlled digital lending,' irrespective of whether the actor is commercial or noncommercial, noting that the ecosystem that makes books possible in fact depends on an enforceable Copyright Act. If there was any doubt, the court makes clear that under fair use jurisprudence there is nothing transformative about converting entire works into new formats without permission or appropriating the value of derivative works that are a key part of the author’s copyright bundle."

The Internet Archive has taken its case to the court of public opinion in the form of an online petition, while it considers its legal options.

"We are disappointed in today’s opinion about the Internet Archive’s digital lending of books that are available electronically elsewhere," said Chris Freeland, director of library services at the Internet Archive, in response to the ruling. "We are reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books."

We are reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books

The CDL program prompted opposition from the National Writers Union (NWU) prior to the publishers' lawsuit. The NWU says that it tried to raise the issue with the Internet Archive as far back as 2010 but was ignored. The issue, as the NWU put it, is that "everyone involved in producing CDL e-books is getting paid - except the authors."

The authors of the 127 infringed works cited in the publisher lawsuit can expect to be paid though. Statutory damages for copyright infringement range from $750 to $30,000 per work but can reach up to $150,000 if the infringement is considered willful. That could mean a penalty of more than $19 million, nearly half of the Internet Archive's 2019 budget of $36.7 million.

The Association of American Publishers and the Internet Archive last year submitted a joint proposal to settle the case, assuming the absence of an appeals court reversal. The agreed-upon monetary judgment payment, which includes publisher court costs, is confidential.

Lia Holland, campaigns and communications director for advocacy group Fight for the Future, condemned the court ruling for depriving the public of the opportunity to read without the digital tracking and surveillance that often accompanies the apps used to read e-books, a matter of heightened concern following the Dobbs decision.

"By scanning and loaning the print books they own, the Internet Archive maintained the only meaningful digital reading alternative to this system of surveillance, and hope for a future where libraries might build alternatives that center the privacy needs of their patrons and the literary community at large," said Holland, who argued that state and federal legislation is needed to strengthen the rights of libraries and readers against digital restrictions. ®

https://www.theregister.com//2024/09/05/appeals_court_internet_archive_copyright/