On September 4, 2024, the Court of Appeals for the Second Circuit decided Hachette Book Group, Inc. v. Internet Archive, denying the online digital repository’s ability to copy and distribute copyright-protected works for free, and without permission, to the general public.
Internet Archive creates digital copies of print works for posting on its site, making the digital copies freely available in their entireties to the general public. Internet Archive is a 501(c)(3) organization dedicated to creating an online library that makes accessing not just books but other cultural artifacts to the general public. Its mission is focused on providing “Universal Access to All Knowledge.” This philosophy obviously goes contrary to the tenets of copyright law, which adheres to permissions, licenses, and commercial enterprise of those creative works. In 2020, various publishing houses filed suit against Internet Archive for copyright infringement. These publishing houses offer differing licensing schemes for either purchase of the print works, or purchase of an eBook through a license fee.
Factually, the Second Circuit panel found the manner in which users accessed the digital copies important in its analysis of substantial similarity. After scanning the print version of the works, the Internet Archive places the digital version on its website. Account holders – which can be opened for free – have free access to these digital copies. The e-copies of the works can be checked out, like in a traditional library, for fourteen days, or downloaded as an encrypted PDF to prevent the user from further copying or distribution.
The district court found all four fair use factors favored the publishers and enjoined Internet Archive from further copying, reproduction and distribution of the copyrighted works. Internet Archive appealed, but the Second Circuit affirmed the lower court’s judgment, noting that the Copyright Act rewards author’s creative endeavors with a monopoly, thereby enabling these authors to create more works for the general public’s benefit.
The analysis of the substantial similarity test is based on the balancing of the four fair use factors: 1) purpose and character of the use; 2) nature of the copyrighted work; 3) amount and substantiality used; and 4) market effect or harm of the use. The first factor includes sub-factors of transformative use and commerciality/non-commerciality.
As to factor one, the panel found Internet Archive’s copying and posting digital copies of print works did not amount to a new tranformation of the work, in spite of Internet Archive’s argument that it indeed transformed the works through technological means. However, it disagreed with the lower court and found that by offering the digital versions of the works for free to the public, as a non-profit, Internet Archive was conducting a non-commercial venture. Nevertheless, the non-commercial purpose did not outweigh the non-transformative use, and the panel found factor one favored no fair use.
Paradigmatic examples of transformative uses are those listed in the Copyright Act, including criticism, commentary, news reporting, teaching, scholarship, and research.
17 U.S.C. §107
As to factor two, the panel analyzed the works copied by Internet Archive. Expressive and creative works are deemed weaker claims for fair use over those works that are factual or merely informational. Several books copied were, in fact, of this second category. However, the panel focused on one book in particular: Ian Woofenden’s Wind Power for Dummies, which contains facts related to wind power but also includes the author’s own commentary and analysis of those same facts, and reorganizing those facts in a way that an average “dummy” can understand. This is, as the panel explained, is the very essence of the protections the Copyright Act was designed to give. As such, the panel found factor two weighed against fair use.
As to factor three, the panel noted that books were copied, reproduced, and distributed whole, and as such, this factor weighed against fair use.
As to factor four, Internet Archive argued it was offering, by copying and distributing the books for free, a distinct service from the publisher’s eBook licensing service. However, the panel did not agree. “The more copying done to achieve a purpose that is the same as the original, the more likely it is that the copy will compete in the market as a ‘satisfactory substitute for the original.'” (citations omitted). Therefore, factor four weighed against a finding of fair use.
On balance, all four factors favored away from fair use, and consequently, the panel found Internet Archive’s defense of fair use failed as a matter of law.
Hachette is most immediately precedential in the Second Circuit states of New York, Vermont, and Connecticut. However, because intellectual property case law tends to be generated in either the Second or Ninth Circuits, Hachette may be used in opinions originating in the other circuits. Also, Hachette deals a blow to the concept of copyleft, or free distribution of information, which has often had tensions with copyright law. Online digital libraries outside traditional licensing schemes may find themselves on perilous ground after Hachette. Internet Archive does have the option to appeal to the U.S. Supreme Court.
If you have any questions on the Hachette case, copyright law, or any other intellectual property, please contact Yonaxis I.P. Law Group for more information.