The story so far: On September 5, the Internet Archive lost its appeal in the U.S. Second Circuit Court of Appeals where the court examined whether it was “fair use” to scan copyright-protected print books and distribute them freely on a “one-to-one owned-to-loaned ratio,” without the authors’ or the publishers’ permission.

What is the case and the appeal about?

Internet Archive (IA), founded in 1996, has been digitising and preserving media in a variety of formats such as books, e-books, websites, art, TV shows, audio items, software, etc. to ensure public access.

In particular, IA has come under fire for the way it digitises, hosts, and lends e-books to readers, with several traditional publishers claiming that IA has no right to copy and distribute copyrighted works by their authors and without their permission. Apart from such titles, however, IA also has a large collection of historical works and literature that is in the public domain.

IA has argued that its “controlled digital lending” principle, where it loans one e-book to one user at a time based on how many print copies it owns of the book, means it is like a library. However, traditional publishers do not agree with this approach.

On June 1, 2020, the Hachette Book Group, HarperCollins, John Wiley & Sons, and Penguin Random House sued IA for copyright violations. One major point of contention between the publishers and IA was the National Emergency Library that the latter temporarily ran during the COVID-19 pandemic, where it lifted the 1:1 e-book lending limit to allow locked-down readers to access books more freely.

In March 2023, federal judge John G. Koeltl sided with publishers. Due to the case, IA had to remove more than 500,000 books from the collection it could lend out.

What did the appeals court say?

IA appealed the legal order and the case was argued on June 28, 2024, but it still lost. The court rejected IA’s “fair use” defence, saying that its use of the original works was not “transformative.”

“IA creates digital copies of the works and distributes those copies to its users in full, for free. Its digital copies do not provide criticism, commentary, or information about the originals,” noted the court.

In the filing dated September 4, the United States Court of Appeals for the Second Circuit examined both sides of the issue. It said that e-book licensing fees could be burdensome to libraries and decrease readers’ access to literature. On the other hand, the court also pointed out that authors had a right to be compensated when their original creations were copied or distributed.

“IA asks this Court to bless the large scale copying and distribution of copyrighted books without permission from or payment to the Publishers or authors. Such a holding would allow for widescale copying that deprives creators of compensation and diminishes the incentive to produce new works,” said the court in its filing, adding that though IA might prefer such a move, it was not an approach that was permitted under the Copyright Act.

However, unlike the district court before it, the appeals court said that IA’s use of the publishers’ copyrighted works was not commercial in nature.

Though IA is still accessible and offers millions of digital works of literature and books, its failed appeal raises questions about the future of the database and its legal status.

What do publishers and authors think?

Maria A. Pallante, President and CEO, Association of American Publishers, hailed the outcome and noted the way the court critiqued IA’s system of controlled digital lending.

“Today’s appellate decision upholds the rights of authors and publishers to license and be compensated for their books and other creative works and reminds us in no uncertain terms that infringement is both costly and antithetical to the public interest,” said Pallante.

While several authors have expressed their desire to be compensated for their work in a market that often undervalues artists, some have said their fight is not with IA. Even so, many readers worldwide are angry about the outcome of the appeal, with some even lashing out at writers who have little to do with the ruling.

Authors Neil Gaiman and Chuck Wendig, both of whom received hateful comments on X over the appeal’s failure, have in the past clarified they were not part of the legal action against IA.

What was IA’s response?

IA’s Director of Library Services, Chris Freeland, published a short statement expressing the library’s unhappiness with the legal decision.

“We are disappointed in today’s opinion about the Internet Archive’s digital lending of books that are available electronically elsewhere. We are reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books,” he shared on the Internet Archive blog on September 4.

On X, Freeland called upon users to sign a petition to restore access to the approximately 500,000 books removed from IA’s lending collection.

What is the impact of the ruling?

IA has shared stories from its users, who claimed that the database’s offerings helped them complete their education, find reading material for their children, access literature in under-served regions, study rare fields, preserve endangered bodies of knowledge, save money on e-book licensing fees, discover historical rarities, or get their hands on media that was preserved nowhere else.

On another note, readers were upset that while ChatGPT-maker OpenAI is defending the use of copyrighted media for AI training, organisations such as IA are being singled out for providing books—including banned and censored works of literature—​to readers who need them.

OpenAI is also facing legal action over its alleged use of creative works and it too used the “fair use” defence with regards to training AI models.

“Training AI models using publicly available internet materials is fair use, as supported by long-standing and widely accepted precedents. We view this principle as fair to creators, necessary for innovators, and critical for US competitiveness,” said the AI firm in a blog post this year, but added that it provided an opt-out option for users.

It remains to be seen how Internet Archive and its leadership will formally respond to the latest legal setback. ​​