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Internet Archive Loses Their CDL Appeal

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The Internet Archive’s Controlled Digital Lending (CDL) lends out scans of physical books, ensuring that each scan is lent to one person at a time. Publishers sued, and the Archive lost thoroughly in April 2023. The Archive appealed the decision to the Second Circuit court in New York. As I said at the time, the appeal seemed like a long shot since that is the same court that said that Google Books was OK, mostly because it didn’t provide full copies of the books.

Yesterday the court published its decision and unsurprisingly, the Archive still lost.

In 64 double-spaced pages, the decision disposed of most of the Archive’s arguments. Its main claim is that CDL is allowed because it falls under the fair use exception to copyright law. Fair use depends on four factors listed in the law. The trial court analyzed them in turn, and when the appeals court redid the analysis, it didn’t entirely agree with the trial court, but the differences didn’t matter.

The first factor is the “purpose and character” of the use, including whether it is transformative and whether it is commercial. The Archive argued that its scans serve a different purpose than the publishers’ e-books, but the court didn’t agree. Whatever the difference between the Archive’s PDFs and the publishers’ e-books, they both let people read the book.

The trial court found that the Archive’s use was commercial because they had affiliate links that let people buy physical books from which they got a small commission and because they had donated buttons on each page. That caused considerable consternation in the non-profit community, with a lot of amicus briefs pointing out the chaos that would ensue at every non-profit that had donate buttons. Fortunately, the appeals court agreed with the Archive on this point, the affiliate links and donate buttons did not make them commercial, a great relief to all of the other non-profits. But it didn’t matter to the overall analysis,

The second factor is the “nature of the copyrighted work.” In general, facts have less protection than fiction, with the extreme situation being that mere lists of facts cannot be copyrighted at all. The Archive argued that a lot of the CDL books are non-fiction, but the court said, naah, non-fiction books are not just collections of facts; they are quite copyrightable; this factor still favors the publishers.

The third factor is the amount of work used, where everyone agreed that the CDL copies include the whole book.

The fourth factor is the effect on the potential market for the works. The Archive submitted an expert report comparing e-book sales before and after their emergency library allowed unlimited loans, arguing that e-book sales did not increase when the emergency library ended, and another trying to analyze Amazon sales numbers. The court was unimpressed, noting that the emergency library was in the middle of the COVID pandemic when a lot of other stuff was going on, and the Amazon numbers were too distantly related to be persuasive. The court agreed with the argument that one of the main points of copyright is to let authors charge for copies of their work, so it is reasonable to assume that free copies would hurt them, and nothing the Archive said disproved that. The court compared this case to American Society for Testing & Materials v. Public.Resource.Org in which a court said it was OK for PRO to publish copies of the ASTM’s standards that had been incorporated into state laws. In ASTM there was a specific public benefit that people have a right to know what the law is, and there was limited damage to the publisher since there were a lot of versions of the standards not in the law and not available from PRO that people still bought.

Overall, other than the issue of whether the use was commercial, the appeals court agreed with the trial court, and they upheld the decision.

The publishers’ original suit only complained about CDL copies of books for which they were selling e-books, so the trial court said OK, if that’s all you asked for, that’s all you get so the Archive was only prohibited from distributing scans of books that have e-book editions, with the much larger set of scans of old books without e-books still allowed. The appeals court said nothing about that, so it doesn’t change. The reversal on the commercial issue means that the Archive and other non-profits can still have donate buttons and affiliate links.

To me, the only surprise is that the decision came so soon. The trial docket listed a dozen parties that wanted to file amicus briefs supporting the publishers, but they didn’t, the court presumably believing that it wouldn’t affect the result. (Amicus briefs supporting the Archive were submitted earlier, but other than perhaps on the commercial issue, they didn’t matter either.)

In theory, the Archive could ask for an “en banc” review by the full circuit court or the Supreme Court, but it’s hard to see why either would accept it since the Archive would just be making the same arguments that two courts already rejected. So this case is over.

By John Levine, Author, Consultant & Speaker

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