Last year, a surprising matter of copyright law made headlines in the case of Hatchette Book Group v. Internet Archive. Internet Archive is an expansive digital library that not only provides online access to books and other texts, but also catalogues internet websites and various other culturally relevant media for the public for research. With a stated mission “to provide Universal Access to All Knowledge,” Internet Archive is renowned for being a powerful research tool across almost all areas of scholarship with its substantial collection of several million books, audio recordings, videos (including news programs and full movies), and internet sites (including defunct webpages).[i] Aside from its vast array of information, Internet Archive’s most valuable feature is that it is accessible to any user for free. Much of the media on the site is in the public domain, but Internet Archive’s trove also includes copyrighted works thanks to donations and partnerships with various booksellers. However, hosting some of these materials for free ended up getting Internet Archive in legal trouble.
Internet Archive maintains an Open Library System that allows for the lending of eBooks in a manner similar to a physical library. Through its collection, as well as partnerships with physical booksellers, Internet Archive has scanned full texts and made them available on its website for rental. Through a Controlled Digital Lending (“CDL”) system, Internet Archive would hold physical copies of the books they had scanned in storage and permit only as many users to “check out” the book as there were physical copies on hand. The system remained this way for several years until March 2020, when Internet Archive decided to drastically change its approach.
With mass lockdowns due to the COVID-19 pandemic, Internet Archive launched the National Emergency Library (“NEL”), modifying their one-to-one lending policy by allowing an unlimited number of users to access any text available in the Open Library System at any time. This broadening of the availability of texts was an outwardly altruistic deed, one in service of Internet Archive’s overarching mission. However, the move ran afoul of numerous publishers whose copyrighted works were included in this mass offering.
Led by Hachette Book Group, several publishers mounted a copyright infringement claim in the Federal District Court for the Southern District of New York in June 2020. They alleged in their claim that Internet Archive’s mass sharing of their copyrighted media amounted to piracy.[ii] Internet Archive claimed a defense of fair use on multiple grounds, including the fact that it is a nonprofit organization. It argued that its use of the works is noncommercial and thus does not create a secondary market for the works that harm the publishers in any meaningful way.[iii] The District Court, however, was unconvinced and, when weighing the four factors for fair use, found for the publishers in each case. The case has since been the subject of an appeal, with the Court of Appeals for the Second Circuit affirming the District Court’s decision in September of this year.
Seeing the general public up in arms over this issue has been surprising, given that fair use is a fairly specific and convoluted area of jurisprudence. Fair use is a notoriously difficult area of the law to parse through, given the variety of factors and circumstances that apply. Nonetheless, the topic has become a more prevalent issue as of late with the rise of social media and video-sharing platforms, (particularly YouTube), which have become hubs for cultural conversation. Be it discussions of popular media, history, politics, internet trends, or world news, many in the commentary sphere and the general public frequently use copyrighted media to make commentary on world events and those pieces of media themselves. The proliferation of this kind of commentary has grown in tandem with new methods of media distribution, which continue to stoke the fears of publishers that the works they own are being exploited without their consent (or, at least, without proper compensation). Any Youtuber will likely have horror stories about the platform’s strict policies, which allow for hour-long video essays explicitly dissecting a work for academic or educational purposes to be struck down from the platform just for including a few too many seconds of copyrighted video footage or even a soundbite. Unsurprisingly, given that such policies now hit so close to home, discussions of topics regarding freedom of expression, censorship, and fair use feel more prevalent now than ever before. In that context, the public outcry over this seeming “attack” on Internet Archive based on a well-meaning act read as overwrought and harmful. Moreover, the legal ramifications of this decision would seem even more daunting given Internet Archive’s nonprofit status.
Ask any fair use scholar, and they will tell you that of the four factors used to determine fair use, the one that tends to predominate over the others is that of the “character and purpose of the work.”[iv] While the other factors are relatively cut and dry, the “character of the work” is most extensively argued in cases as it is such a complex factor to analyze. Leaning on the idea that a work is “transformative,” arguments about parody fall under this category in determining whether the infringing use of a work is commenting on or being used to criticize the copyrighted material in some way.[v]These legal arguments tend to get the most attention in the media, given their connections to free speech and other First Amendment issues. What is striking about the Hachette case, however, is that the more prominent discussion is not the “transformative” nature of the use but instead whether the use of work is “commercial.” 17 U.S.C § 107(1) states that one of the factors to be used in considering whether a work constitutes fair use is “the purpose or character of the use, including whether such use is commercial in nature or is for nonprofit educational purposes.”[vi] The Court’s decision in Hachette was so shocking in large part because it found in favor of the publishers partly by stating that Internet Archive’s use of the copyrighted works was indeed commercial despite Internet Archive’s nonprofit status.[vii] While seemingly innocuous and case-specific on its face, this holding would conceivably set a dangerous precedent. While nonprofit status is not considered “dispositive” in fair use analysis, it is still an element to be considered.[viii] Hachette’s holding would arguably have the effect of making nonprofit status weigh less in the analysis. This would place many nonprofits like Internet Archive in greater danger of accidental copyright infringement, severely reducing their ability to operate, which could harm the general public’s access to scholarly information and education materials, particularly in cases with lower-income communities that already have limited access in that regard.[ix]
However, the Second Circuit’s appellate ruling is, thankfully, more thoughtful. While the holding does affirm the district court’s ruling (doing little to assuage the fears of those who are worried about the state of education in this country), the actual text of the decision does include some nuances that subtly protect nonprofits. In reviewing the district court’s decision regarding the four factors, the Second Circuit takes issue with the district court’s holding on the character and purpose of Internet Archive’s use of the copyrighted works. While ultimately agreeing with the holding that this factor leans in favor of the publishers, the Second Circuit comes to this conclusion based not on the commercial nature of Internet Archive’s activity but firmly on the notion that Internet Archive’s use is not “transformative” in nature.[x] In fact, the Second Circuit actively goes out of its way to state that Internet Archive’s use is not at all commercial. While Internet Archive may solicit donations from users, it does not charge any fee for the use of its services.[xi] Thus, the Second Circuit deemed that while Internet Archive may receive incidental profits from its activities and partnerships, these are too attenuated to deem its activities commercial in nature.[xii]
It may serve as little comfort to some given the fact that Internet Archive still lost the appeal, but in the grand scheme of the law, there is good in this opinion. It maintains a precedent that affirms the educational purposes and status of nonprofits in fair use, thereby forging a path for these organizations to continue to function and not be completely hampered by copyright regulations derailing their goals. It does not insulate nonprofit organizations from copyright infringement claims, thereby preserving authors’ rights, but it does not necessarily undermine the nature of nonprofits either. In short, this decision keeps the focus on stopping infringement rather than restricting access to knowledge. To all those worried, educational and scholarly freedom is not dead yet (let’s wait until the Supreme Court weighs in to decide on that).
[i] See generally About the Internet Archive, Internet Archive, archive.org/about/ (last visited Sept. 23, 2024) (showcasing the extent of Internet Archive’s activities and mission).
[ii] See Compl. ¶3, Hachette Book Group, Inc. v. Internet Archive, 664 F.Supp.3d 370 (S.D.N.Y 2023), No. 1:20-cv-04160 (alleging that Internet Archive’s actions constitute mass digital piracy).
[iii] See Hachette Book Group, Inc., 664 F.Supp.3d at 383 (“[Internet Archive] argues that its library is ‘wholly noncommercial’ because IA is a non-profit organization that does not charge patrons to borrow books and because private reading is noncommercial in nature.”).
[iv] See Howard B. Abrams & Tyler Ochoa, 2 L. of Copyright § 15:47 (Oct. 2023) (“[Purpose and Character] has been a major focus in a number of cases and has received a great deal of judicial attention and analysis.”); see generally 17 U.S.C § 107(1)–(4) (listing the four factors for fair use).
[v] See generally Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (analyzing whether a rap group’s parody of a copyrighted song constituted fair use).
[vi] 17 U.S.C § 107(1).
[vii] See Hachette Book Group, Inc., 664 F.Supp.3d at 383–84 (stating that while Internet Archive does not make a direct profit by hosting the publishers’ books, they derive reputational advantages as well as new members and more donations).
[viii] Sony Corp. of America v. Universal Studios, Inc., 464 U.S.417, 448 (1984) (“Although not conclusive, the first factor requires that ‘the commercial or nonprofit character of the activity’ be weighed in any fair use decision.”); Weismann v. Freeman, 868 F.2d 1313, 1324 (2d Cir. 1989) (“The absence of dollars and cents profit does not inevitably lead to a finding of fair use.”).
[ix] See Aaron Moss, As Publishers Beat Internet Archive, Are Libraries The Real Losers?, CopyrightLately (Sept. 8, 2024), https://copyrightlately.com/as-publishers-beat-internet-archive-are-libraries-the-real-losers/ (noting that increased restrictions on digital library lending has the potential stifle literacy in less affluent communities); see also Chris Braly, Internet Archive Loses: Is This the ‘Book Banning’ You Were Looking For?, Bleeding Fool (Sept. 9, 2024), https://bleedingfool.com/news/internet-archive-loses-is-this-the-book-banning-you-were-looking-for/ (noting the long time value of Internet Archive as a resource for researchers and students and how crucial it is to preserve this resource for society); see also Michelle Wu, A Response to Hachette v. Internet Archive from Michelle Wu, Lib. Futures (July 8, 2024), https://www.libraryfutures.net/post/a-response-to-hachette-v-internet-archive-from-michelle-wu/ (noting that the diminishment of Controlled Digital Lending can limit the public access to books to a much smaller number readers).
[x] Hachette Book Group, Inc. v. Internet Archive, No. 23-1260, 2024 WL 4031751 at *1, *10 (2d Cir. Sept. 4, 2024) (stating that since Internet Archive’s use of the works fails to add anything new or different to them, its use is not transformative).
[xi] Hachette Book Group, Inc., 2024 WL 4031751 at *1, *11 (“[Internet Archive] does not profit directly from its Free Digital Library. It offers its services free of charge.”).
[xii] See id. (“Any link between the funds [Internet Archive] receives from its partnership with BWB and its use of the Works is too attenuated for us to characterize the use as commercial on that basis.”).
