Internet Archive lost a major legal battle — in a decision that could have significant implications for the future of Internet history. Today, the U.S. Court of Appeals for the Second Circuit ruled against the long-standing digital archive, upholding an earlier ruling in the case Hachette vs. Internet Archive in which it was found that one of the Internet Archive’s book digitization projects violates copyright law.
Significantly, the appeals court ruling rejected the Internet Archive’s argument that its lending practices were protected by the fair apply doctrine, which allows copyright infringement in certain circumstances, calling it “impressive.”
In March 2020, the Internet Archive, a nonprofit based in San Francisco, launched a program called the National Emergency Library, or NEL. The pandemic-related library closures have left students, researchers, and readers without access to millions of books, and the Internet Archive said it is responding to calls from members of the public and other librarians to facilitate those at home access the books they need.
NEL was an offshoot of an ongoing digital lending project called Open Library, in which the Internet Archive scans physical copies of library books and lets people borrow digital copies as if they were regular reading materials rather than e-books. Open Library loaned books to one person at a time—but NEL removed that ratio rule, allowing huge numbers of people to borrow each scanned book at once instead.
NEL came under fire shortly after its launch, with some authors arguing that it amounted to piracy. In response, the Internet Archive abandoned its emergency approach within two months and reinstated the loan limits. But the damage had been done. In June 2020, major publishing houses including Hachette, HarperCollins, Penguin Random House, and Wiley filed a lawsuit.
In March 2023, the district court ruled in favor of the publishers. Judge John G. Koeltl found that the Internet Archive had created “derivative works,” arguing that there was “nothing transformative” about copying and lending it. After the original ruling in Hachette vs. Internet ArchiveThe parties negotiated terms – the details of which were not disclosed – but the archive filed an appeal nonetheless.
James Grimmelmann, a professor of digital and internet law at Cornell University, says the ruling is “not particularly surprising” given how courts have recently interpreted fair apply.
The Internet Archive did win a Pyrrhic victory on appeal. Although the Second Circuit sided with the district court’s original ruling, it clarified that it did not consider the Internet Archive a commercial entity, instead emphasizing that it was clearly a nonprofit. Grimmelmann calls this the right decision: “I am pleased that the Second Circuit has corrected this error.” (He signed an amicus curiae brief in the appeal, arguing that it was an error to characterize the apply as commercial.)
“Today’s appeals court decision upholds the rights of authors and publishers to license and be paid for their books and other creative works and reminds us in no uncertain terms that infringement is both costly and contrary to the public interest,” Maria A. Pallante, president and CEO of the Association of American Publishers, said in a statement. “If there was any doubt, the Court makes clear that under fair use jurisprudence, there is nothing transformative about converting entire works to new formats without permission or appropriating the value of derivative works, which are a key part of an author’s copyright package.”