While Google Books is legal in the US, the Internet Archive’s e-book library is not. A US federal appeals court confirmed this on Wednesday. Accordingly, loans from the Internet Archive violate US copyright and do not fall under its fair use rules. This is a major setback for the project. “We are disappointed,” says the Internet Archive, “but we will continue to defend libraries’ right to own, lend and preserve books.” At least the decision includes a significant ruling in favour of fair use in general, but for the specific project it is not enough to overturn the prima facie decision as a whole.
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The Internet Archive scans the books and then distributes them as DRM-locked e-books that users could also read aloud. The Internet Archive originally ensured that it never released more electronic copies at the same time than it had paper copies of the corresponding book in its own warehouse. The Internet Archive later added the printed holdings of partner libraries to this count. In any case (except for a phase during coronavirus-related restrictions) there were no additional workpieces in circulation, but rather electronic versions of printed workpieces.
This meant that the Internet Archive believed it was legally on the safe side of fair use. However, this is not the case, as the US Federal District Court for Southern New York has now been followed by the Federal Appeals Court for the Second Federal Circuit. The suit is being brought by four major publishers.
Fair Use
The purpose of US copyright is to “promote the progress of science and useful arts.” If it helps achieve this goal, someone else’s work can be used, even if the rights holder does not agree. This principle is known as fair use. However, the law does not conclusively regulate when exactly fair use is. That would be very difficult, too.
In the event of a dispute, four elements must be examined: the purpose of the use – commercial, non-commercial or educational – as well as the nature of the work, the fraction used compared to the work as a whole and finally the effect on the potential market or value of the work. As well as the purpose of use, it must also be examined whether the third-party work is simply adopted 1:1, which would go against fair use, or is used in a changing (transformative) way. The four test results must ultimately be weighed against each other.
Element 1: Important decisions for charitable projects
This is what three judges of the appeals court did. The judges did not agree with the Internet Archive’s argument that its e-library was a “transformative use” because it made borrowing more convenient and efficient and ensured that only one person could use an e-book at the same time. The complete availability of books without comment, criticism or additional information is not transformative because nothing new is created, no other purpose is achieved and no different character is expressed.
The Internet Archive can claim success in the next trial phase: the district court classified the use as commercial; although these are borrowed books, not rented, the Internet Archive solicits donations and earns commissions when readers surf to a link to a partner bookseller and buy books there. The appeals court sees it differently: the Internet Archive is unquestionably non-profit, but it has to finance itself somehow. Donations and a partnership with a bookseller are no basis for classifying the offer as commercial.
Although this is an important decision with respect to other charitable projects, it does not help the Internet Archive in this case. In the absence of a changing use, the first element of the fair use test still speaks against the Internet Archive.
Element 2: Type of books
The judges here make short work of it; the books in question clearly fall within the core area of ​​US copyright. (Books in the public domain are not part of the suit.) So the second element weighs heavily in favor of the plaintiff rights holders, namely Hachette, HarperCollins, John Wiley & Sons, and Penguin Random House.
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