Expanded Access in a World of Corporate Capture: Hachette v. Internet Archive

By Jennie Rose Halperin (Executive Director Library Futures, NYU Engelberg Center on Innovation Law & Policy)

After four years of litigation, Hachette v Internet Archive case closed not with a bang, but with a whimper. In 2024, four years after the Internet Archive announced its “National Emergency Library,” the Second Court of Appeals ruled in favor of the publishers on all four factors of fair use, claiming that the Internet Archive’s specific way of providing access to scanned print copies of in copyright books was infringing. The court ordered them to take down all the materials that had an eBook surrogate, amounting to approximately 500,000 books in their now 3.4 million volume collection.

This is not to say that the court’s opinion was correct, and the further restrictions on fair use and the right of first sale for libraries will prove problematic over time. The opinion is profoundly damaging and could have larger implications that stretch far beyond the facts of the case. But, as Author’s Alliance wrote shortly after the decision, … the Court focused its analysis on the facts of the case, which was really about IA lending digitized copies of books that were already available in eBook form and licensable from the publishers. The legal analysis in several places turned on this fact, which we think leaves room to make fair use arguments regarding programs to digitize and make available other books, such as print books for which there is no licensed eBook available, out-of-print books, or orphan works. CDL will remain an important framework, especially considering the lack of an existing digital firstsale doctrine.

As they write, it is important to remember the facts of the case when considering the future of whole book digitization and lending, which does not roll off the tongue quite so easily as “Controlled Digital Lending.” CDL began as a niche academic concept proposed in a paper by Georgetown Law Library Director Michelle Wu in 2011. In the paper, “Building a Collaborative Collection: A Necessary Evolution,” Wu writes, “This article proposes that academic law libraries pool resources through a consortium to create a centralized collection of legal materials, including copyrighted materials, and to digitize them for easy, cost-effective access by all of its members” (Wu, 2011 1-2). Wu is circumspect and lawyerly, proposing that “The [digitization] policy should exclude items frequently accessed by users (e.g., textbooks, reporters) and focus on scholarly materials less in demand (e.g., monographs in “law and” fields, laws in the American colonies, foreign law) but still useful for research” (2011 535). At the heart of the paper is the concept that a digitized copy of a book is a format shift, and if digitized in copyright books are lent out on an “owned to loaned” basis, where the physical copy is sequestered as the digitized copy is loaned, that copyright would still be respected. This concept was expanded upon by Dave Hansen and Kyle K. Courtney in their 2018 whitepaper on the topic, and a statement was signed by a few dozen libraries and many individuals. In the paper, they coin the term “Controlled Digital Lending” and define it as such CDL enables a library to circulate a digitized title in place of a physical one in a controlled manner. Under this approach, a library may only loan simultaneously the number of copies that it has legitimately acquired, usually through purchase or donation… Essentially, CDL must maintain an “owned to loaned” ratio. Circulation in any format is controlled so that only one user can use any given copy at a time, for a limited time (Courtney and Hansen 2018, 2).

When the Internet Archive began their “Open Libraries” program in 2018, they took this concept and supercharged it. Buying up entire libraries and digitizing the print books, or digitizing entire library collections through their “partner” program, many of the print surrogates are warehoused in a massive offsite storage facility in Richmond, CA. Still others remained at partner libraries and were sequestered based on an algorithm that prompted librarians to remove materials as they were lent digitally. By March 2020, there were 1.4 million books available for lend (Freeland 2020). According to the catalog available online, that number is now 3.4 million. At the time, Chris Freeland, Director of the project, told Library Journal, “We really want to tell this story of library reformatting and our long-term storage of both the physical object as well as its digital surrogate…because we want to offer libraries a way of dealing with space issues and crowded collections… We see ourselves fitting into a unique niche for the library community (we are accepting donations to make the scholarship available to the world, not resell it), and we want the community to know more about what we’re doing” (Enis 2019).

In 2020, the Internet Archive was sued for mass copyright infringement for an expansion of the project called the “National Emergency Library,” which ended lending limits on their materials during the pandemic closure of physical libraries. At the time, opinions on the National Emergency Library were mixed. Jill Lepore called it a “gift to all readers” and NPR called it “compelling,” even as publishers and some authors decried it as piracy (Lepore 2020) (Dwyer) 2020. Among libraries and library workers, opinion was split. While many individual librarians and libraries came out vocally in support, many others stayed silent, and some individual librarians voiced their displeasure at having digital lending brought into the mainstream and challenged. They believed this could potentially create negative case law in an underexplored legal arena and divert resources away from already challenged libraries.

From an outsider’s perspective, the legal and cultural fight surrounding Controlled Digital Lending has felt perplexing from the very beginning; the Archive was compliant with takedown requests and publishers could have chosen to simply ask the Internet Archive to end its “National Emergency Library” or to take down individual titles that they felt were infringing instead of immediately suing. The legal fiction they created, that scanned copies of paper books represented a legitimate threat to authors, simply didn’t seem to hold water. Scanned CDL books are not the same as licensed eBooks, and the initial filing made that clear; rather than focusing on their books’ competition with the licensed eBook market, they went into detail about how the

Internet Archive’s poorly rendered scans would depreciate the market for legitimate eBooks due to their poor quality. In later filings, the prosecution transitioned their argument, convincing the court that the CDL scanned books directly compete with the “thriving” licensed eBook market. But, as anyone who has worked with eBooks knows, the licensed eBook market is a rentier system characterized by corporate capture, private equity, surveillance, and monopoly (Ebooks for Us).

A surprising amount of the final decision hinged not on the program itself, but on how the Archive marketed the program. In their view, a library serves only its patrons in a geographic area, not the whole world. Further, the court writes, “IA markets its lending services to libraries as a free alternative to Publishers’ print books and eBook licenses,” particularly pointing out the phrase “You Don’t Have to Buy it Again!” in their materials (Hachette 48). The marketing of libraries as “free” has been taken up by other library writers as potentially problematic. In a 2013 article for American Libraries Magazine, D.J. Hoek writes, “But libraries, as we know, do not exist for free. They cost their communities — whether composed of taxpayers, tuition-payers, donors, or a combination — a substantial amount of money” (Hoek 2013). Even so, many libraries do market themselves as free alternatives to publishers’ books, and the Open Libraries program costs the nonprofit Internet Archive an enormous amount of money. In a 2023 blog post, Brewster Kahle writes, “For those of us tending libraries of digitized and born-digital books, we know that they need constant maintenance — reprocessing, reformatting, re-invigorating or they will not be readable or read (Kahle 2022). To be clear, the Archive does buy the books they lend, and in then lending them to the public, they operate like a library. CDL, as many have pointed out, provides the author money in the initial purchase of the book, much like a physical copy. What is unique about the Archive’s program is that they purchase entire libraries and vastly expand the access rights from a physical library constrained by location to a digital library of millions of people. While not changing the terms of copyright, this does change the fundamental purpose of the collection. From a fair use perspective, evaluating this expansion in terms of commerciality feels like the wrong metric; a better evaluation would be in the purpose and character of the use, or whether this access was expanded for nonprofit and educational use. Part of the reason why the court’s writing is dissatisfying could be because this expansion of access does not have a clear analogue in law. The collection and loan of physical objects are limited to the people who can physically touch them. But the court’s evaluation could have thoughtfully considered the promise of access from a nonprofit, educational purview. Expanded access is one of the great innovations of the digital age and should be celebrated, not gatekept. While the expansion of access through whole book digitization changes the lending paradigm, communities of book lovers could consider this an opportunity to reach new audiences, work with libraries and small presses, and experiment with new forms of delivery in order to support both access and the public good as well as the continued viability of publishing.

Another issue with the court’s decision is the role of monopoly middleware in the digital market, which is completely overlooked. The only applicable digital reading statistics the court can cite are from Overdrive. Overdrive, owned by private equity firm KKR, likely controls up to 96% of all public library eBook loans (Halperin 2024). Even then, the data is limited, “Checkouts of eBooks on OverDrive by library patrons increased dramatically between 2010 and 2020,” they write. “This surge in lending translates to greater profits for Publishers, some of whom find library eBook licenses occupying an increasing percentage of their overall eBook revenues” (Hachette 9). But profits are not the goal of libraries lending books to patrons, and the court’s insistence that this underregulated market is ”thriving” is naïve at best, dangerous at worst. The court further takes issue with the “Better World Books” link at the top of books, another innovation in discoverability that does not square with a narrow definition of library lending. For hundreds of years, libraries helped maintain a virtuous cycle of book sales and lends — while the BWB link introduces some level of commerciality into the Open Libraries program, ultimately the court positions the program as competing with licensed eBook sales, which is false by any numeric metric. The decision refers four times to “common-sense inference” for this justification. In this “common-sense inference,” any lending of in-copyright, in-print materials should be prohibited because they might compete with the market, despite established laws of first sale. As Jason Schultz and Aaron Perzanowski write in their excellent book The End of Ownership, this distinction means that digital content is subject to a “mutant form of contract law” that is a “private regulatory scheme with restrictions” (Schutz and Perzanowski 2018 66, 58). Like with many other forms of technology, public institutions are the canary in the coalmine — when libraries can never actually buy the materials, how can they build a digital collection?

Ultimately, the Hachette Case proves the axiom that “no good deed is left unpunished” and perhaps that “capitalism always wins.” The idiosyncrasies of the Archive’s digital lending program were built with the best of intentions to improve discoverability of out-of-print works through sharing and their Better World Books sales program, to benefit collection reach through innovative digital programs, and to provide access to collections at a time when most libraries were closed. Instead of litigation, this case could have opened a conversation between publishers and libraries about access to collections, library marketing, and how to meet the needs of the reading public. Publishers could have asked themselves why librarians are so displeased with the licenses on offer and innovated with their customers to build a better system. But publishers and aggregating middleware care about their bottom line, while libraries care about expanding access. This tension and values misalignment consistently come into play in digital library spaces, and the Archive became the scapegoat for publishers to intimidate libraries looking to assert their rights. If this sounds like a conspiracy, look no further than “Protect the Creative Economy,” an astroturfed “Coalition” fighting librarian-led eBook bills around the country and endorsed by the American Booksellers Association, Association of American Publishers, Copyright Alliance, and others (Protect the Creative Economy).

Finally, like many other regulatory decisions made by U.S. Courts in the past thirty years, the Hachette decision passes the risk assessment for digitization of in copyright books onto the individual or individual institution rather than setting appropriate regulations that might clarify the law in the favor of the public interest. Murky regulatory environments almost always benefit capital, which leads to poor outcomes for the public. The emphasis on commerciality in the court’s decision means that each individual institution must do their own risk assessment rather than relying on a clear set of standards for digital ownership, particularly in the case of dual editions or rare and out of print copyrighted work. The CDL whitepaper specifically addresses the “Twentieth Century Problem,” or the lack of access to twentieth century works due to copyright restrictions coupled with a lack of commerciality. This was one of the major problems that CDL was supposed to solve, and it still can. The murkiness of the law even after the case is a double-edged sword: It does not close the door on CDL or other forms of digitization, but it does change the risk profile and means that continued advocacy for clearer guidelines on digital ownership is necessary.

As library workers and supporters, we must ask ourselves if our alignment with the publishers and middleware that make our digital collections into a “Proquest,” “Overdrive,” “Elsevier,” or “EBSCO” library are truly in line with our values. Together, we must consider how we can collaborate with independent publishers in favor of ownership and clearer discoverability and marketing that benefit the public, not just corporations.

We must work together to expand access to and control of collections to resist censorship and digital peonage that keeps us tied to publishers as they change the terms of our licensing agreements. Don’t let corporations erase our past or steal our right to lend — together, we can fight it.

Bibliography

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