IA: CDL Adheres to Same Owned-to-Loan Ratio as Physical Book Lending

Two “critical misconceptions” underlie publishers’ attempt to rebut Internet Archive’s showing of fair use concerning its controlled digital lending program (CDL), the appellant said Friday in a reply brief (docket 23-1260) before the U.S. 2nd Circuit Appeals Court.

IA’s brief supports its appeal in a copyright infringement lawsuit that publishers Hachette, HarperCollins, Wiley and Penguin Random House brought Sept. 12, 2023, which the plaintiffs won in U.S. District Court for Southern New York in Manhattan last spring. IA is appealing the decision in which U.S. District Judge John Koeltl ruled fair use factors favored the publishers and that nothing in copyright law or precedent supported CDL.

IA’s free digital library is noncommercial, and publishers "identify no profit to it," said the brief. The publishers “disregard the key feature” of CDL: the controls that ensure borrowing a book digitally “adheres to the same owned-to-loaned ratio inherent in borrowing a book physically,” said the brief. Publishers “repeatedly compare” IA’s lending to “inapposite practices” that lack that feature, it said.

CDL is not the equivalent of posting an ebook online for anyone to read or copy or of peer-to-peer music file-sharing that companies like Napster do, said IA’s brief. Neither practice is based on use of a library’s “lawfully acquired physical copy,” said the brief. In addition, neither ensures that only the person entitled to borrow the book, or recording, can access it at a time, it said.

CDL is also different from the digital resale considered in Capitol Records, LLC v. ReDigi, Inc., which involved commercial resale, the brief said. ReDigi held that the first-sale defense did not apply to making digital copies and that the use in that case, a commercial marketplace for digital resale of music, was not fair use, said the brief. "It said nothing about other, fundamentally different uses like nonprofit controlled digital lending," the brief said.

CDL is fair use, and because of the “huge investment required to operate a legally compliant controlled lending system and the controls defining the practice, finding fair use here would not trigger any of the doomsday consequences for rightsholders that Publishers and their amici claim to fear,” said the reply.

Also, said the brief, publishers present an “erroneously cramped view of libraries’ missions.” Libraries don’t acquire and lend books just to make them physically available to patrons within a “restricted geographic area.” Instead, they provide readers “more egalitarian access to a wider range of books, overcoming socioeconomic and geographic barriers by sharing resources with other libraries through interlibrary loans,” it said.

Libraries also build “permanent collections to preserve books, including older editions, for future generations,” and they protect reader privacy, “preventing disclosure of patron records that could chill access to information,” said the brief. Libraries, including IA, implemented CDL “because they care about these core aspects of their mission and recognize that Publishers’ restrictive ebook licenses do not advance them,” it said.

“Properly understood,” CDL helps libraries carry out their missions “in the more efficient and effective way digital technologies allow,” the brief said. On IA’s side, the “outpouring of amicus support” from libraries, authors, scholars, and other stakeholders shows CDL’s “established importance,” it said. CDL is “so entrenched in library practice that the National Information Standards Organization has issued standards for its implementation,” it said.

IA’s CDL program serves a different purpose from physically lending books it owns, said the brief. Both allow patrons to read content, but CDL “serves a different purpose” by allowing libraries to lend the books they own to “a broader range of people for whom physical lending would be impractical,” it said.

Publishers clam that CDL doesn’t expand utility because their ebook licenses provide the same efficiency, said the reply brief, but that argument reflects publishers’ “fundamental misunderstanding” of CDL and the “multi-faceted mission of libraries.” CDL expands the utility of physical books libraries own, something licensing access to ebooks can’t do, it said. CDL permits libraries to lend books when patrons can’t physically visit the library or when interlibrary loan “is too inefficient to be practical,” said the brief. Publishers’ ebook licenses, by contrast, “limit such lending by imposing geographic restrictions and prohibiting use in interlibrary loans,” it said.

Affirming the Southern District of New York’s decision would not only harm IA but also the libraries and people they serve, the brief said. The 2nd Circuit should reverse and grant summary judgment to Internet Archive, it said.