Hachette Book Group, Inc. v. Internet Archive

This briefing document summarizes the key arguments and holdings in the Second Circuit Court of Appeals case of Hachette Book Group, Inc. v. Internet Archive, Docket No. 23-1260, decided on September 4, 2024.

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Case Summary

Four major book publishers sued Internet Archive (IA) for copyright infringement based on IA's practice of scanning copyrighted print books, making digital copies, and lending those copies to the public for free through its "Free Digital Library". IA argued its practice was permissible under the fair use doctrine of the Copyright Act. The district court sided with the publishers, finding IA's actions were not fair use and issuing a permanent injunction barring IA from reproducing and distributing the publishers' copyrighted works. IA appealed to the Second Circuit.

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The Second Circuit's Decision

The Second Circuit affirmed the district court's decision, agreeing that IA's actions did not constitute fair use. The court analyzed each of the four fair use factors under 17 U.S.C. § 107 and determined they all favored the publishers.

Fair Use Analysis

• Purpose and Character of the Use: The court found IA’s use of the copyrighted works was not transformative because:

IA merely created digital copies of the print books and distributed them online, serving the same purpose as the original works (making them available to read).

IA's digital copies did not offer criticism, commentary, or new information about the original works.

The purported efficiencies offered by IA’s digital library (e.g., convenience and accessibility) were already provided by the publishers' own eBooks.

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While IA argued its "Controlled Digital Lending" (CDL) model, which mimics traditional library lending, made its use transformative, the court disagreed. The court stated that IA's actions went beyond the traditional functions of a library by preparing and distributing derivative works en masse.

• While the court found IA’s use was non-commercial because it is a nonprofit entity that distributes the digital books for free and does not profit directly from their distribution, the non-transformative nature of its use meant the first factor favored the publishers.
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• Nature of the Copyrighted Works: This factor favored the publishers because the works in question, while including both fiction and nonfiction, contained original expression protected under copyright law, even in the presentation of factual information.
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• Amount and Substantiality of the Portion Used: The court ruled this factor favored the publishers because IA copied the entirety of the works and distributed them to the public. While IA argued copying the entire work was "necessary" for its CDL model, the court pointed out that this argument relied on the premise that IA's use was transformative, which it already found was not the case.
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• Effect on the Potential Market for the Copyrighted Works: The court determined that IA failed to prove its Free Digital Library did not harm the publishers' markets for the works. The court determined the relevant market encompassed both print and eBook formats, as IA's actions potentially impacted both. The court found:

IA's digital books were likely to, and indeed intended to, serve as substitutes for the publishers' print and eBook editions, as evidenced by IA’s own marketing materials.

IA did not adequately demonstrate a lack of market harm. The court found shortcomings in the expert reports presented by IA, noting that they failed to account for other factors that could have influenced sales data and relied on unreliable metrics.

The publishers convincingly argued they suffered present market harm through lost eBook licensing fees and faced potential future harm if IA's practices became widespread.

The court rejected IA’s argument that its actions provided a public benefit by expanding access to knowledge, stating that this argument ignored the potential long-term consequences of allowing widespread, unauthorized copying of copyrighted works.

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Key Takeaways

The Second Circuit's decision in Hachette reaffirms the importance of the fair use doctrine's "transformative use" requirement and the significant weight given to market harm in fair use analyses. The decision clarifies that simply converting a copyrighted work into a different format for free distribution, even under the guise of a library-like lending model, does not automatically constitute fair use, particularly when it potentially harms the market for the original work.

Court Document

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