District Court Used 'Too Broad a Brush' in Internet Archive Case, Says Digital Library Group

IA is appealing a lower court’s March decision in a 2020 copyright infringement suit brought by Hachette, HarperCollins, Wiley and Penguin Random House (see 2303270006 claiming IA cost them millions of dollars and was a threat to their business. On Aug. 11, U.S. District Judge John Koeltl for Southern New York entered an injunction against IA in connection with 127 covered works, enjoining it from distributing them to the public in digital or electronic form (see 2308150012). Koeltl narrowed the scope of “covered works” in a second order to books that are “commercially available for sale or license in any electronic text format.”

HathiTrust, based in the University of Michigan Library, is a secure library of over 18 million digitized library items drawn from collections of over 50 libraries, including works from over many centuries, in multiple languages, “covering almost every subject imaginable.” Its amicus brief is in support of neither party.

The district court asserted that organizations, including libraries, “have no 'right under fair use to make whatever copies of [their] print books are necessary to facilitate digital lending of that book’ -- even where ‘only one patron at a time can borrow the book for each copy that has been bought and paid for,'” said the brief. That “is an extraordinarily sweeping statement because it would condemn as infringing a wide range of conduct with strong claims to fair use,” it said.

By failing to confine its analysis to IA’s conduct at issue, the district court’s opinion “casts a cloud over the myriad ways in which libraries routinely preserve, use and lend digitized copies of physical materials they purchased and owned,” the brief said. It cited SCOTUS in Google v. Oracle America, describing fair use as an “'equitable rule of reason’ that ‘permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.’”

HathiTrust urged the court to emphasize that when it comes to fair use, to take each case on its own facts. “The curated digital lending practices of HathiTrust’s member institutions were not before the district court, they are not before this Court, and they should stand or fall on their own merits,” it said.

HathiTrust’s Emergency Temporary Access Service (ETAS) permits access for member libraries that suffer an unexpected or involuntary, and documented, disruption to normal operations, said the brief. During the COVID-19 pandemic, it enabled member library patrons to obtain “lawful access to specific digital materials” in its digital library that corresponded to physical books held by their own library, said the brief. HathiTrust “strongly controls access to copyrighted works via ETAS, using technology to enforce an 'owned to loan' ratio for the library using the service," it said. Users can access only books they would have been able to access if the library were operating normally, it said.

IA operates differently from ETAS, said the brief. IA’s partner libraries contribute the number of their print copies of a book toward the number of lendable copies on its website, making those copies “available to users that are not patrons of the partner libraries themselves,” said HathiTrust’s brief, referencing the district court decision. Rather than confining its analysis to that use case, the district court said publishers would be “entitled to revenue from all formats of the Works in Suit, regardless [of] whether IA lawfully acquired the Works in print first,” the brief said.

That broad language “could be construed as condemning as ‘unfair’ a variety of curated digital lending practices in which libraries loan digitized copies of the owned physical works in their own collections,” said the HathiTrust brief. “Like ETAS, many of these practices have strong claims to fair use, and again, none was before the district court in this case,” it said.

The first fair use factor questions the “purpose and character of the use,” including whether it is of a commercial nature or for nonprofit educational purposes, the brief noted. The district court found IA’s conduct commercial because it uses its website to attract new members and solicit donations “and bolster its standing in the library community,” said the ruling. “The overwhelming majority of libraries in the United States engage in most or all of these activities,” said HathiTrust, adding they do so without losing tax-exempt status.

The district court painted too broadly when it said an organization has no right to “'make whatever copies of its print books are necessary to facilitate digital lending of that book, so long as only one patron at a time can borrow the book for each copy that has been bought and paid for’ -- regardless of the organization doing the lending and the circumstances surrounding it,” said the brief. The court based the statement on its findings of a “thriving ebook licensing market for libraries,” concluding that IA “usurp[s] a market that properly belongs to the copyright-holder.” The court determined publishers are “entitled to revenue from all formats of the Works in Suit, regardless whether IA lawfully acquired the Works in print first.”

The district court “presumed market harm,” based on a “deeply flawed analysis,” said HathiTrust’s brief. Markets are difficult to define, it said, estimating that 80% of the copyrighted books in its collections aren’t currently in print and most aren’t available for license in digital format; also, at least half of copyrighted books in academic libraries are unavailable for sale or digital license, it said. Its collections were built with “great care” and expense “because the market for many academic works is fleeting at best," it said. Giving access to digitized copies of works in such cases “promotes research, teaching, and learning with no genuine harm to the copyright holder,” the brief said.

HathiTrust cited the district court’s finding that “IA does not dispute that it violated” publishers’ public performance rights through the “read aloud” function on its website. But the court “broadly misconstrued” the relationship between sections 106 and 107 of the Copyright Act of a copyright holder’s exclusive right to reproduce derivative works and that fair use is not copyright infringement. The court also “inadvertently collided with this Court’s ruling in HathiTrust,” it said, citing its own appeal of a case brought by The Authors Guild in which the 2nd Circuit found its use of copyrighted material was fair for creation of a full-text searchable text and for providing access for the print-disabled.

“When any defendant raises fair use as a defense, it necessarily asserts that its use is ‘not an infringement of copyright,’” so the court erred in presuming that IA asserting its fair use rights conceded a violation, said the brief. “Defendants who claim fair use are unambiguously asserting that they made non-infringing uses authorized by Congress,” it said: “The district court’s misunderstanding of this point impairs its analysis throughout the opinion by presuming an admission of infringement.”

In their Dec. 22 amicus brief on behalf of IA, Wikimedia Foundation, Creative Commons and Project Gutenberg Literary Archive Foundation said the funding nonprofits need to function is typically unrelated to, and not used to acquire, fair use content. Amici are concerned that the district court’s approach to fair use “could render any nonprofit secondary use of copyrighted material ‘commercial’ under the first fair use factor," and thus “severely undermine nonprofit fair use," said the joint brief.

Under the district court’s view, a secondary use is likely to be found commercial if a nonprofit solicits donations “or stands to gain reputation from its services (as most do),” said the brief. That will likely be true even where the nonprofit’s secondary use and its revenue-generating activities are "completely independent from one another,” it said.

The district court “erroneously concluded” that IA’s secondary use of copyrighted materials was commercial under section 107 of the Copyright Act, “erasing the explicit statutory distinction between uses of a 'commercial nature' and nonprofit educational purposes,” said the brief. The district court’s ruling threatens nonprofit organizations that make fair use of copyrighted works, it said. Adopting the district court’s approach “would threaten both the processes of nonprofit fundraising and the methods by which educational nonprofits provide their services,” it said.