The Internet Archive loses its right to scan and lend out e-books.

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A federal judge has ruled against the Internet Archive in Hachette v. Internet Archive, a lawsuit brought against it by four book publishers, deciding that the website does not have the right to scan books and lend them out like a library.

Judge John G. Koeltl decided that the Internet Archive had done nothing more than create “derivative works,” and so would have needed authorization from the books’ copyright holders — the publishers — before lending them out through its National Emergency Library program.

The Internet Archive says it will appeal. “Today’s lower court decision in Hachette v. Internet Archive is a blow to all libraries and the communities we serve,” Chris Freeland, the director of Open Libraries at the Internet Archive, writes in a blog post. “This decision impacts libraries across the US who rely on controlled digital lending to connect their patrons with books online. It hurts authors by saying that unfair licensing models are the only way their books can be read online. And it holds back access to information in the digital age, harming all readers, everywhere.”

The two sides went to court on Monday, with HarperCollins, John Wiley & Sons, and Penguin Random House joining Hachette as plaintiffs.

In his ruling, Judge Koetl considered whether the Internet Archive was operating under the principle of Fair Use, which previously protected a digital book preservation project by Google Books and HathiTrust in 2014, among other users. Fair Use considers whether using a copyrighted work is good for the public, how much it’ll impact the copyright holder, how much of the work has been copied, and whether the use has “transformed” a copyrighted thing into something new, among other things.

But Koetl wrote that any “alleged benefits” from the Internet Archive’s library “cannot outweigh the market harm to the publishers,” declares that “there is nothing transformative about [Internet Archive’s] copying and unauthorized lending,” and that copying these books doesn’t provide “criticism, commentary, or information about them.” He notes that the Google Books use was found “transformative” because it created a searchable database instead of simply publishing copies of books on the internet.

Koetl also dismissed arguments that the Internet Archive might theoretically have helped publishers sell more copies of their books, saying there was no direct evidence, and that it was “irrelevant” that the Internet Archive had purchased its own copies of the books before making copies for its online audience. According to data obtained during the trial, the Internet Archive currently hosts around 70,000 e-book “borrows” a day.

The lawsuit came from the Internet Archive’s decision to launch the “National Emergency Library” early in the covid pandemic, which let people read from 1.4 million digitized books with no waitlist. Typically, the Internet Archive’s Open Library program operates under a “controlled digital lending” (CDL) system where it can loan out digitized copies of a book on a one-to-one basis, but it removed those waitlists to offer easier access to those books when stay-at-home orders arrived during the pandemic. (CDL systems operate differently than services like OverDrive, which can lend you publisher-licensed ebooks.) Some weren’t happy about the Internet Archive’s choice, and the group of publishers sued the organization in June 2020. Later that month, the Archive shut down that program.

The Internet Archive says it will continue acting as a library in other ways, despite the decision. “This case does not challenge many of the services we provide with digitized books including interlibrary loan, citation linking, access for the print-disabled, text and data mining, purchasing ebooks, and ongoing donation and preservation of books,” writes Freeland.

“The publishing community is grateful to the Court for its unequivocal affirmation of the Copyright Act and respect for established precedent,” Maria A. Pallante, president and CEO of the Association of American Publishers, said in a statement. “In rejecting arguments that would have pushed fair use to illogical markers, the Court has underscored the importance of authors, publishers, and creative markets in a global society. In celebrating the opinion, we also thank the thousands of public libraries across the country that serve their communities everyday through lawful eBook licenses. We hope the opinion will prove educational to the defendant and anyone else who finds public laws inconvenient to their own interests.”