On June 28, 2024, the 2nd Circuit Court heard oral arguments in the Hachette v. Internet Archive appeal. We invited Mehtab Khan, Fellow at the Berkman Klein Center at Harvard University and former Yale ISP Fellow to give this response.

Last week, the US Court of Appeals for the Second Circuit heard oral arguments in Hachette v. Internet Archive. The core question in the case is whether Controlled Digital Lending (CDL) as instituted by the Internet Archive is fair use under US copyright law. Although the panel posed several incisive questions to both sides, I will focus on two aspects of the oral arguments.

First, the panel’s questions on the commercial/non-commercial distinction and potential for market harm.. Interestingly, the panel noted that the Internet Archive was making an effort to not undermine book sales by ensuring books that had been published in the last 5 years are not lent via CDL, demonstrating that the Internet Archive is not trying to profit from its library but rather to expand access to works, particularly those that may no longer be on physical library shelves. This is an encouraging line of questioning as far as the Internet Archive’s case is concerned.

The publishers’ reasoning that copying and lending books without compensating publishers cannot be fair use is based on the TVEyes v. Fox News case, where the court did not find fair use. However, this perspective is misguided. When there are no licensing agreements or books are undigitized or otherwise inaccessible, users are deprived of access to books and the benefits of library structures in the digital realm, in addition to undermining the mission of the Internet Archive and library lending more generally. Therefore, the issue of access extends beyond the consequences of a mere agreement failure; it impacts the broader online information environment, leading to increased control by publishers over what we read and access. A victory for publishers could make ebook licensing the only means of access to digital materials, thereby restricting the rights under copyright law to use a book that has already been purchased. This is why it is crucial to examine current business models that determine access to knowledge, even beyond the question of commercial/non-commercial use. Otherwise, we risk transforming all access to knowledge into a licensing market with terms more restrictive than what copyright law permits.

Second, there is enough precedent that shows that commerciality alone does not determine fair use, particularly when the court finds use to be transformative. The counsel for the Internet Archive argued that "efficiency" makes the use transformative because Controlled Digital Lending (CDL) makes books more accessible. I find this argument compelling. In cases involving new technologies, the normative values embedded in the design and use of the technology, as well as the institutions controlling these aspects, should be crucial considerations, which includes the ease with which a technology upholds the balances that copyright law strives for. Furthermore, courts have recognized that efficiency of delivery of content as well as the public benefit augmented by a technology can weigh in favor of finding transformative use. However, the panel noted that reconciling this efficiency with the ease with which the market for newly published books may potentially be supplanted poses challenges.  

Beyond the legal arguments, this case highlights how users and consumers rely on intermediaries like digital libraries and archives for basic activities such as borrowing a book, looking up a fact or figure, learning, reading, creating, and accessing knowledge—functions traditionally facilitated by physical libraries. While the physical world has clearer boundaries for such uses, maintaining and upholding those boundaries  in the open digital world is more challenging, and a decision that creates a more conducive environment for one-sided licensing terms would shift the balance away from public access to knowledge.