Fair use is a commonly-raised affirmative defense in copyright infringement cases. However, the ever-changing nature of technology continues to spark debate over what counts as fair use. More importantly, to increase public access to resources through the Internet, the recently decided case of Hachette Book Group v. Internet Archive raises the question: what counts as a library? The Second Circuit Court of Appeals, affirming the ruling of the New York District Court, has conclusively established that Internet Archive (a popular digital archive offering millions of free books, television programs, and movies) does not perform the traditional functions of a library. Thus, its Controlled Digital Lending (“CDL”) program is not protected by a fair use defense.

Libraries are permitted to lend books without invoking copyright issues under the first sale doctrine, which authorizes “the owners of copyrighted works to sell, lend, or share copies without obtaining permission or paying fees.” Typically, the act of scanning a complete work and posting it to the open internet is grounds for a copyright infringement claim. While fair use does allow limited use of copyrighted material for “research, scholarship, and teaching purposes,” fair use does not automatically apply when the use in question is for educational purposes.

According to its website, Internet Archive’s purpose is to build “a digital library of Internet sites and other cultural artifacts in digital form.” The platform works to create a program to digitize books that has been active since 2005. A free Internet Archive account gives users the ability to download books published in or before 1928, and to borrow modern books through the CDL program of its Open Library. 

The crux of Internet Archive’s Controlled Digital Lending (CDL) model is a “one-to-one owned-to-loaned” ratio, meaning that the number of concurrent “checkouts” of a digital book allowed is limited by the number of physical books it owns. The borrowing process is similar to that of a traditional public library, in that the digital copies must be “checked out” in order for a user to borrow a book. Like a real library, there is a limit to the number of people who can borrow certain books at a time due to availability. This model was expanded in 2018 to include books that were physically owned not just by Internet Archive but by other libraries that chose to participate as well.

The origin of Hachette’s lawsuit began in 2020 when Internet Archive launched the National Emergency Library (NEL) in response to the COVID-19 pandemic. The NEL abandoned the CDL one-to-one ratio and instead allowed digital books to be checked out by up to 10,000 users at a time, regardless of the number of corresponding physical copies. Hachette and other book publishers filed suit alleging that scanning and distributing full digital copies of the publishers’ books without the authorization of the copyright holders was copyright infringement. Internet Archive asserted the fair use defense, specifically stating that the CDL model transforms the book lending process because each digital book “serves a new and different function from the original work and is not a substitute for it.”

Both the New York District Court and the Second Circuit Court of Appeals rejected Internet Archive’s fair use claim and found that the CDL program was not transformative. Moreover, the court’s holding established that Internet Archive’s lending does not mirror the functions of a traditional library but instead simply distributes copies of works by Hachette’s authors. This case definitively strikes down CDL as a method of fair use, as its operation is merely “reproducing and making publicly available the copyrighted works in their entirety.”

While many agree with the Second Circuit’s position, this ruling sparked controversy. Those who side with Internet Archive argue that, from a public policy standpoint, the CDL model increases resources for those who do not have access to public libraries. Proponents of CDL further assert the importance of digital accessibility in an age where book banning and the defunding of libraries is a concern. On the other hand, advocates on the publishers’ side stress the importance of maintaining all rights granted to a copyright owner, particularly derivative rights. 

After the ruling, Internet Archive stated that it would “continue to defend the rights of libraries to own, lend and preserve books,” suggesting that the publishers should prepare for the possibility of an appeal to the Supreme Court.

Alyssa Norwillo is a second-year law student at Wake Forest University School of Law. She holds a B.A. in Criminology from Villanova University. Before law school, she worked as an estate planning legal assistant in Newton, New Jersey.

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