Ebook Lending Library Infringes Publishers' Copyrights

• Jurisdiction: United States,Federal
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Subject Matter: Intellectual Property, Copyright
• Author: Mr Matthew Samet and Margaret Esquenet
• Published date: 06 June 2023

In a decision that could have wide reverberations on the internet, the U.S. District Court for the Southern District Court of New York granted summary judgment in favor of book publishers and against Internet Archive ("IA") in a copyright infringement action involving ebooks brought by the four leading book publishers in the United States, Hachette Book Group, Inc., HarperCollins Publishers LLC, John Wiley & Sons., Inc., and Penguin Random House LLC (together, the "Publishers"). As explained by the Court, copies of ebooks are typically licensed to libraries from the Publishers for the Publishers' profit. Here, however, IA scanned print copies of the Publishers' copyrighted works without authorization and loaned those scanned digital copies to IA users for free without the Publisher's consent. In response, the Publishers sued IA for copyright infringement.

Under IA's system, as further detailed by the Court, IA made the homemade ebooks available through "Controlled Digital Lending" ("CDL"), instituting a one-to-one owned-to-loaned ratio. In other words, IA loaned books simultaneously only in the number of copies it legitimately acquired. For example, if IA "owns three copies of a title and digitizes one copy, it may use CDL to circulate one digital copy and two print, or three digital copies, or two digital copies and one print."

In response to the Publishers' lawsuit, IA raised the fair use defense. The parties filed cross-motions for summary judgment. In its decision, the Court rejected IA's fair use defense and granted summary judgment in favor of the Publishers.

The Court began its opinion by detailing the four statutory factors of fair use: (1) "the purpose and character of the use"; (2) "the nature of the copyrighted work"; (3) "the amount and substantiality of the portion used in relation to the copyrighted work as a whole"; (4) "the effect of the use upon the potential market for or value of the copyrighted work." It explained that each factor is not exclusive but must be considered on a case-by-case basis, with the results "weighed together[] in light of the purposes of copyright."

Purpose and Character of Use

Regarding the first factor, purpose and character of use, the opinion stated that courts consider the extent to which the secondary work is (1) transformative or (2) of commercial or non-profit use. As to transformative use, the Court explained that a transformative use "adds something new, with a further purpose or different character...