On September 4, the U.S. Court of Appeals for the Second Circuit issued its decision in Hachette Book Group, Inc. v. Internet Archive. The Second Circuit panel affirmed a District Court's March 2023 entry of summary judgment against Internet Archive for infringing the copyrights of four book publishers in 127 books.
Internet Archive created unauthorized digital copies of those books as part of its "Free Digital Library" and mostly. Beginning in 2018, the Internet Archive made digital copies of those copyrighted books available online to the public. Starting in 2020, the Internet Archive provided the public access to those copyrighted books on a one-to-one owned-to-loaned ratio under a practice that the Internet Archive called "Controlled Digital Lending" or "CDL." The District Court found that all of the elements for infringement were established by the publishers, and the court rejected Internet Archive's fair use defense.
According to the appeals court, "because IA's Free Digital Library primarily supplants the original Works without adding meaningfully new or different features that avoid unduly impinging on Publishers' rights to prepare derivative works, its use of the Works is not transformative." Although the Second Circuit differed from the District Court in concluding that the alleged fair use was not commercial in nature, it nonetheless held that "because the Works in Suit are 'of the type that the copyright laws value and seek to protect,' the second fair use factor favors Publishers." The court determined that copying and posting the entirety of the work was not secondary to some other use that would offer significant functional benefits not associated with the original works and that "not only is IA's Free Digital Library likely to serve as a substitute for the originals, the undisputed evidence suggests it is intended to achieve that exact result."
The Second Circuit further determined that "IA has not met its 'burden of proving that the secondary use does not compete in the relevant market[s]' and that “[i]ts empirical evidence does not disprove market harm, and Publishers convincingly claim both present and future market harm." The court concluded that "[a]ny short-term public benefits of IA's Free Digital Library are outweighed not only by harm to Publishers and authors but also by the long-term detriments society may suffer if IA's infringing use were allowed to continue." And it found that all of the fair use factors favored the copyright owners.
Aside from its loss in Hachette, Internet Archive faces additional troubles due to alleged infringements of copyrighted music recordings." My September 2023 Perspectives From FSF Scholars, "Internet Archive to Face the Music for Mass Copyright Infringement," analyzes copyright infringement claims raised in UMG Recordings v. Internet Archive. At issue in that case is Internet Archive's "Great 78 Project," which allegedly copied, stored, distributed, and publicly performed thousands of copyrighted pre-1972 music recordings without authorization.
The decision in Hachette may offer persuasive insights for the District Court in UMG Recordings, insofar as Internet Archive again relies on fair use as an affirmative defense to infringement claims. For starters, the "Great 78 Project" involves no apparent transformative use or significant functional new benefit not inherent in the original works themselves. Scratches or analog background noises from digital recordings of vinyl copies of pre-72 recordings being played on turntables are hardly transformative. Expect FSF scholars to have more to say in the future about the ongoing case of UMG Recordings v. Internet Archive.
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