Amici Warn of Internet Archive’s Dangerous “Lending” Practice

It’s not often that amicus briefs are filed at the summary judgment stage of a trial in district court, but the stakes are high in a case that could have a lasting impact on the ability of copyright owners to protect and control their works. Over the past few weeks, briefs have been filed on both sides in Hachette Book Group, Inc. v. Internet Archive, a case challenging the Internet Archive’s (IA) so-called “controlled digital lending” (CDL) of massive amounts of copyright protected works.

Most recently, briefs were filed by creator organizations, copyright scholars, international rightsholder groups, and the Copyright Alliance in support of the plaintiff publishers’ motion for summary judgement. And while the briefs vary in focus, they share an underlying message: the Internet Archive’s practices are clearly infringing, do not qualify as fair use, and would devastate creators and creative industries if sanctioned by the court.  

A brief filed by a group of copyright law professors begins by stating that the signatories are interested in ensuring copyright law is interpreted in a manner true to its foundations so that “creativity, dissemination of works, and innovation will continue to flourish.” Explaining that the IA’s “lending” practice has no foundation in copyright’s constitutional and statutory foundations, the brief details how the IA and its amici invented the CDL theory because they know there’s no existing exception to copyright that would allow for its practice of mass scanning and distribution.

The brief goes on to describe how the IA and its amici have tried to convince the court (and the public) that fair use “steps in” to cover situations involving digital reproductions that are not explicitly addressed by the first sale provisions of section 109 of the Copyright Act. But the scholars refute that theory as nothing more than the IA’s attempt to manufacture a wide-ranging exception for its own benefit, calling out the IA and its amici for arguing that “two copyright ‘wrongs’ can make a right.”

Indeed, this mischaracterization of sections 107 and 109 of the Copyright Act is something that copyright experts and commenters have pointed out since CDL was introduced in a white paper in 2018, and the arguments the IA and its amici make now ring just as hollow as they did then. Unfortunately, the IA has taken a page out of the playbook of many tech companies by doing what they want without permission, claiming its for the greater public good, and justifying it after the fact through spurious legal theories.

Citing to ample judicial precedent, the scholars explain that fair use is no defense when unauthorized reproduction and digital distribution disrupts a well-developed market and diminishes compensation to rightsholders and authors. The Internet Archive’s CDL practice results in those exact consequences, and the scholars warn that no “self-defined policy” promoted only by those who stand to benefit from it should be sanctioned. The brief concludes by making a point that’s found in many of the briefs in support of the publishers: the Internet Archive and its amici are not the arbiters of copyright law, and only Congress has the authority to consider expanding the Copyright Act’s limitations and exceptions. 

A group of international rightsholder organizations—including the International Publishers Association, the International Confederation of Societies of Authors and Composers, the International Federation of Film Producers Associations, and others—submitted a brief that reflects their interest in ensuring the U.S. is in compliance with its obligations under international copyright and related rights treaties. The brief explains that the treaties to which the U.S. is party not only guarantee copyright owners certain exclusive rights, but also establish limits on the scope of limitations and exceptions to those rights. Addressing the IA’s “lending” practice, the rightsholder groups make clear that it “squarely infringes” the exclusive rights of the plaintiffs and that qualifying CDL as fair use would run afoul of the standards established by international copyright treaties.

The brief goes on to identify two key concerns for international rightsholders.

  • A decision in favor of the IA “would severely limit the practical ability of rightsholders…to enforce their rights effectively against an Internet platform engaged in unauthorized copying and dissemination of protected works on an industrial scale and thereby threaten to place the U.S. in breach of its international obligations and responsibilities,” and
  • If U.S. law is perceived to allow entities like the IA to function without restraint, there would be a spillover effect in countries that already have lax enforcement measures.

It should be noted that while other countries have limitations and exceptions to copyright law, U.S.-style fair use has not been widely adopted. The brief describes the “three-step test” that restricts limitations and exceptions that can be imposed on the rights granted to copyright owners in countries that are party to the Berne Convention (and three other core international treaties). That test allows for unauthorized reproduction only (1) in certain special cases, (2) provided that such reproduction does not conflict with a normal exploitation of the work, and (3) if it does not unreasonably prejudice the legitimate interests of the author.

The brief explains that the IA’s practices fail this test resoundingly because they (1) put the U.S. in direct conflict with its international treaty obligations, (2) are out of line with the application of exceptions regarding public lending in the EU and elsewhere, and (3) set a dangerous global precedent that would compromise the ability of rightsholders to manage the digital lending and eBook markets for their content. The brief argues that the conduct of the IA violates exclusive reproduction, derivative work, and making available rights under the laws of the European Union and does not guarantee the minimum standards of protection required by international treaties.

Ultimately, the brief warns that if the IA’s standard of fair use takes hold, the broader global rightsholder community will suffer and the U.S. would be out of step with the rest of the world. While the IA and its supporters may not like to admit it, it’s important to understand that because U.S.-style fair use is not the norm abroad, expansive fair use theories that would result in fewer protections for rightsholders would almost certainly be rejected in other countries. Not only that, but the U.S. could be found to be in violation of multiple international treaties if such theories were authorized.

Authors Groups Describe Devasting Impact of IA’s Practices

A large coalition of creator groups—led by the Authors Guild, but also including photographer, dramatists, and visual artist groups—filed a brief that focuses on the significant harm the IA’s practices have caused (and will continue to cause) if condoned by the court. The brief begins by explaining that the IA’s practices are not transformative, do not qualify as fair use, and are totally irreconcilable with the fundamental principles of copyright law. While it doesn’t rehash the extensive arguments against fair use that the plaintiff publishers make in their brief, it does highlight an important point that other amici do as well: the IA is using literary works in their entirety for their original intended purpose and is simply providing a free substitute for licensed eBook lending. The fact that there’s no transformative use and there’s market harm weigh the first and fourth fair use factors—the most important in the analysis—heavily against the Internet Archive.

The brief describes the harm that the IA’s practices cause to all of the amici’s members, especially those who are part of the “long tail” of older published works that earn most of their revenue from licensed electronic uses rather than sales of new copies. And therein lies a critical flaw of the IA’s CDL theory. Part of their argument is that their unauthorized distribution is made up of mostly older books that have lost market value, and so the fourth fair use factor should favor CDL. However, as the brief explains, if the IA’s CDL practice is sanctioned, more libraries will abandon eBook licensing for older titles and thereby hurt the authors who rely the most on that licensing revenue. At the end of the day, a completely free “library,” whether it offers physical or digital books, would create a direct market substitute for the licensed lending that provides royalties to authors.

The Copyright Alliance submitted a brief to address the far-reaching legal and practical consequences the AI’s practices would have not only on books and the livelihoods of authors and publishers, but all other types of copyrighted works, creative professionals, and creative industries. The brief begins by explaining that the IA’s practices do not fit within the bounds of fair use because the works created by this practice serve the exact same purpose as the works they infringe. Additionally, we note that the first-sale doctrine under section 109 does not support the IA’s position, as it does not permit a physical work to be digitized and distributed.

Turning to section 108, which allows for qualified libraries to reproduce and distribute works when there is no indirect commercial advantage or interference with functional markets, our brief explains how the IA’s excessive digital copying and distribution clearly exceeds 108’s conditions. As a private actor, operating entirely online and distributing massive amounts of copyrighted works, the IA falls well outside of the Congressionally considered limitations in section 108 that are meant for traditional community libraries.

While the IA likes to speak grandly about access and the greater public interest its CDL practice serves, our brief highlights the practical considerations and real-world consequences it conveniently ignores. The reality is that if CDL continues on and expands to other works—namely digital versions of music, film, video games, and visual arts—existing markets will be flooded with free alternatives and the incentives to create and distribute new works to the public would be destroyed.

As our brief details, the music and film industries in particular have invested heavily in providing the public with content in a digital format that can be listened to or viewed from any device, anytime and anywhere. These industries contribute massively to the U.S. economy, and they rely on valid licensing regimes to recoup investments, fund future projects, and safeguard the incomes of all who work for them. The IA’s theory of fair use that permits the distribution of unauthorized digital copies of works to users would not only destroy licensing markets, but it would cripple enforcement efforts by providing pirates with a colorable defense for their thievery.

The Copyright Alliance brief concludes by reminding the court that only Congress is empowered to decide whether and under what circumstances to expand exceptions that allow non-rightsholders to digitize and distribute books. It may seem like an obvious point to make, but it’s critical that the court understand that the IA and its supporters have concocted a one-sided fair use theory out of whole cloth, and in doing so have completely disregarded the interest of copyright owners and others who rely on a sensible interpretation of the Copyright Act.

What’s Next?

On September 2, the Internet Archive is scheduled to file a brief in opposition to the publishers’ motion for summary judgement, which will then be followed by the publishers’ opposition brief in early October. The parties have also requested oral arguments be heard in the matter, although a date has not yet been set by the court. Eventually, the court will issue an order in response to the dueling motions for summary judgement, and while it’s difficult to predict how the Judge will rule, we’re hopeful that court will grant the publishers motion and confirm that the Internet Archive’s CDL practices do not qualify as fair use and are an affront to the fundamental principles of copyright law.

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