115 F.4th 163
2d Cir.2024Background
- Four major book publishers (Hachette, HarperCollins, Wiley, Penguin Random House) sued the Internet Archive (IA), alleging its "Free Digital Library" service—which digitizes and lends books online without publisher authorization—violated their copyrights in 127 books.
- IA digitized physical books it or partner libraries own, lending digital copies on a one-to-one owned-to-loaned ratio, and during the COVID-19 pandemic briefly lifted that constraint.
- Publishers claimed IA's service directly substituted their authorized eBook sales and library licensing markets, depriving them and authors of revenue.
- IA asserted a fair use defense under Section 107 of the Copyright Act, arguing its service was non-commercial, benefited the public, and was analogous to traditional library lending.
- The district court granted summary judgment for the publishers, found IA's use was not fair use, and issued an injunction. IA appealed to the Second Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is digitizing and lending full copyrighted works fair use if done by a nonprofit under a 1-to-1 "owned-to-loan" model? | IA simply substitutes for authorized eBooks, depriving market revenue and is non-transformative. | Lending is transformative, improves access/efficiency, non-commercial, serves a public/library purpose. | Not fair use; use is non-transformative and substitutes for publishers’ market (AFFIRMED). |
| Is the use transformative under fair use? | No transformation—the purpose is the same: reading. Only format changes; does not add commentary or new expression. | CDL offers new utility (digital access, linking), and format shift justifies digitization. | Not transformative; copying only makes a derivative (eBook), not a new use. |
| Does commerciality weigh against fair use, even for nonprofits? | Any use that displaces market sales is commercial, regardless of profit motive. | IA is nonprofit, does not charge for use, any incidental donations/proceeds are indirect. | Use deemed non-commercial but this is outweighed by lack of transformativeness. |
| Does the fourth factor (market harm) favor fair use? | IA substitutes for publisher sales/license revenues, harming current and potential markets. | No empirical evidence of market harm, and studies show no demonstrable negative impact on sales. | Likelihood and intent to substitute are sufficient; common-sense inference of market harm applies even without publisher data. |
Key Cases Cited
- Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (Supreme Court precedent on fair use and market harm)
- Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (defining transformative use under fair use)
- Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (nonprofit/non-commercial copying analysis in fair use context)
- Authors Guild, Inc. v. Google, Inc., 804 F.3d 202 (transformative use in context of digitized books, market substitution for full access)
- Fox News Network, LLC v. TVEyes, Inc., 883 F.3d 169 (market harm and transformative use involving repackaging media content)
- Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 11 F.4th 26 and 598 U.S. 508 (current law on transformativeness and allocation of the burden in fair use cases)