Hachette Book Group v. Internet Archive and the Future of Controlled Digital Lending

Since 2020, the Internet Archive has been involved in litigation that holds important implications for the future of Controlled Digital Lending. Controlled Digital Lending is a method and legal theory whereby libraries can lend digital copies of books in their physical collections, expanding their ability to serve their patrons beyond those who can be physically present in those libraries. However, because this kind of lending involves making and distributing copies of books, it raises complex questions under copyright law.  

After losing its case at the trial court last year, the Internet Archive recently submitted its opening brief in its appeal, so this seems like a good time to review what has been going on with this case and what it might mean for how you access books from your local (or university) library.  

The History of Controlled Digital Lending

The fundamental purpose of Controlled Digital Lending is to modernize the way libraries serve their patrons. For hundreds of years, libraries have acquired and provided access to books and other print resources, with a mission to support education, learning, access to information, and access to justice. Until recently, libraries have only been able to serve patrons who could be physically present at these institutions. Today, however, digital technologies like the web allow people to connect, interact, and share in ways that were impossible for most of history. By embracing these technologies, Controlled Digital Lending platforms can help libraries expand their ability to serve their patrons, enabling them to do what they have done for generations – lend the books they own – but in the digital space.  

While libraries can -- and do -- license ebooks to lend electronically to their patrons, these ebooks don’t necessarily serve the same function as books loaned through Controlled Digital Lending. Publishers decide what ebooks to make available to libraries, and libraries own many more books in print than rightsholders make available as ebooks, including many rare and/or out of print books that are not available in any format other than print. The principles embodied in Controlled Digital Lending enable libraries to digitize these unique holdings and lend them to anyone, anywhere. Moreover, Controlled Digital Lending platforms contain exact copies of the print books in library collections, not copies created specifically for online reading. As such, these platforms can preserve and circulate older editions, rare books, even patron-created marginalia in ways that ebook platforms usually do not and in many instances cannot.  

Controlled Digital Lending started as an idea by Michelle Wu, former director of the Georgetown Law Library, for how law libraries could embrace technology to better serve their patrons and survive into the future. In her 2011 paper, Building a Collaborative Digital Collection: A Necessary Evolution in Libraries, Wu argued that libraries should work together to build collaborative digital collections made from copies of books they buy in print, collaborating in the same way that library consortia have shared print resources for generations. She called this idea TALLO (Taking Academic Law Libraries Online).

Wu acknowledged that TALLO raised copyright concerns, since creating an exact copy of a copyrighted work could constitute copyright infringement. But she believed that libraries should be more aggressive in their approach to how copyright law applies to library lending. Wu argued that copyright law should support TALLO because the law’s core purposes -- to benefit the public good and to support learning and education -- align with libraries’ missions. Looking at the history and design of the law, Wu wrote that, “the clear goal of the United States’ Copyright Clause as adopted was not to protect authors—it was to promote advancement of learning and public knowledge.” Copyright law seeks to balance the interests of rightsholders and users, and Wu believed that this balance had tipped in favor of rightsholders. She wrote that libraries should embrace their connection to copyright’s core purposes and use available technology to better serve their patrons and help “restore the balance to copyright.”

Inspired by Michelle Wu’s work, Kyle Courtney and David Hansen further developed the legal arguments for Controlled Digital Lending in 2018. Courtney, Director of Copyright and Information Policy at Harvard, and Hansen, now Executive Director for the Author’s Alliance, based their legal framework on fair use and the first sale doctrine. While fair use is quite famous -- it’s the part of copyright law that allows people to use copyrighted works in ways that would otherwise constitute infringement -- the first sale doctrine receives less popular attention. However, people benefit from the first sale doctrine daily, and it clearly reflects the balance between users and rightsholders that Wu had in mind.  

Codified at 17 USC § 109, the first sale doctrine holds that the legal owner of a copy of a work can distribute that work as they want. They can lend it, rent it, sell it, destroy it, bury it in the ground -- whatever. This means that libraries can loan to their patrons the books they purchase, and rightsholders cannot prevent it. Without the first sale doctrine, rightsholders could require libraries to pay royalties every time someone borrows a book or even deny the right to lend books entirely.  

While first sale allows libraries to loan books they have in their collections, it does not clearly permit them to make copies of the books and loan them out digitally. This is because first sale only limits a rightsholder's ability to control the distribution of their works, and not that rightsholder's ability to prevent others from copying their works. When you borrow a book through controlled digital lending, you’re borrowing a digital copy of that book that someone other than the rightsholder (typically the lending library) created, and not either the book itself or a copy authorized by the rightsholder. For this reason, first sale doesn’t apply. Indeed, even though people often talk about an individual digital “copy,” controlled digital lending platforms constantly make many copies as part of their ordinary function, including the original digital copy of a book and the various copies that the lending library transmits to different users.  

Nevertheless, Courtney and Hansen did not rely on first sale alone, but instead used it to bolster their argument that controlled digital lending is fair use. Courtney and Hansen argued that because library lending is a lawful activity, enshrined in the first sale doctrine, fair use should support a digital version of first sale and allow libraries to use their first sale rights to lend digital books, even if first sale by itself doesn’t permit it.  

Courtney and Hansen further argued that rightsholders (mostly publishers, in this case) don’t suffer any market harm from controlled digital lending because libraries already contributed to the market by buying the print books in their collections. Accordingly, it would not increase a library’s lending power beyond the number of copies they purchased. This is because of what they called the “owned to loaned” ratio. The idea here is that libraries should only lend digital copies of books to the same extent that they own and lend physical copies of those books. The digital copies should operate exactly as if they were physical books, except that a library can distribute them online. If a library lends a digital copy of a book to a patron, it cannot also lend the physical copy at the same, and visa versa.  The digital copies are merely surrogates for the physical copies that libraries already lend.  

Hachette Book Group v.  Internet Archive

Turing now to ongoing the case against the Internet Archive’s implementation of Controlled Digital Lending. The Internet Archive operated its digital lending program for years without running into legal troubles. In collaboration with the Open Library of Richmond, Internet Archive bought or received donations of thousands of books, scanned them, stored the print copies in shipping containers, and loaned digital copies of those books to people on the web. But, like the rest of the world, things changed in 2020 because of COVID-19. On March 24, 2020, when libraries across the world were trying to figure out how to provide access to their collections and were concerned about the distribution of physical materials because of disease transmission, the Internet Archive opened their “National Emergency Library." With the National Emergency Library, the Internet Archive removed the “owned to loaned” restriction from its digital lending platform, and opened up the availability of its collection to the public. In practice, this meant that thousands of people could borrow the same book from the Internet Archive at the same time, even if the Internet Archive only owned a single copy in its digital lending platform, and opened up the availability of their collection to the public.  

Unsurprisingly, this move upset several book publishers, who filed a lawsuit against the Internet Archive in the Southern District of New York in June 2020. The Internet Archive closed the National Emergency Library on June 16, 2020, and after three years of litigation, the publishers prevailed. The court fully rejected the Internet Archive’s argument that fair use protected its digital lending program. Notably, it did not limit its analysis to the National Emergency Library. Instead, the court rejected fair use as it applies to controlled digital lending in general. The Internet Archive appealed and submitted its opening brief to the Court of Appeals for the Second Circuit on December 15, 2023.  

In its opening brief, the Internet Archive primarily focused on the public service it provides through its digital lending program. The Supreme Court has instructed courts to consider the public benefit of a potential fair use and how that use supports the purposes of copyright. Like Wu, Courtney, and Hansen, the Internet Archive argued that its digital lending program should be fair use because it offers a non-commercial public service by lending digital books to its patrons, providing expanded access to information, enabling new uses of library materials that would be impossible with print resources, and broadly supporting copyright’s fundamental purposes. The Internet Archive wrote: “Fair use helps the principles embodied in [first sale doctrine] and [the library use exceptions in 17 U.S.C. § 108] survive in the digital age. It ensures that technological innovation allows libraries to improve access to books, so that advancements in technology can benefit the public rather than only benefiting Publishers.”

A number of amicus curiae also submitted briefs to the Second Circuit. Amicus curiae -- Latin for “friends of the court” -- are parties who are not directly involved in a case, but who hold important interests in its outcome. Amici may support either party and often write to provide additional context that may be helpful to the court’s decision. Here, several of the amici -- including a group of law library directors, a group of copyright scholars, and HathiTrust – wrote to emphasize the importance that Controlled Digital Lending holds for libraries across the country, and potentially to distinguish the Internet Archive and the National Emergency Library from other digital lending programs. These amici seem to hope that, even if the Second Circuit rules against Internet Archive, other libraries should still be able to engage in some form of Controlled Digital Lending.  

Next steps

So what’s next? Right now we’re waiting for Appellees to file their reply brief, which isn’t due until March. After that happens, the Second Circuit will set a time for oral arguments and eventually it will issue a decision in the case. Depending on the outcome, either party may appeal again to the United State Supreme Court, which may or may not hear the case. So it will be a while before this is done. For now, we have to wait to see what happens with the Internet Archive and Controlled Digital Lending.