The Internet Archive lawsuit highlights the tricky economics of e-books and libraries

Janet Nguyen Mar 30, 2023
A view of the Rose Main Reading Room at the New York Public Library. Drew Angerer/Getty Images

The Internet Archive lawsuit highlights the tricky economics of e-books and libraries

Janet Nguyen Mar 30, 2023
A view of the Rose Main Reading Room at the New York Public Library. Drew Angerer/Getty Images

The Internet Archive — a nonprofit, online library that lent out digital books during the pandemic  — was found to infringe four publishers’ copyrights in a ruling made public last week. 

Back in March 2020, the Internet Archive launched the National Emergency Library, a collection of books that were accessible online at a time when schools and brick-and-mortar libraries were shut down. Users could borrow books without having to be part of a waitlist, in effect bypassing the rules that govern controlled digital lending.

Under controlled digital lending, libraries can digitize a physical book and lend out the digital version of it. But the catch is that if the digital version is lent out, then you can’t lend out the physical book at the same time.

Essentially, what got the Internet Archive into legal trouble is that it was lending out more copies than it had purchased, explained Dennis Prieto, an associate professor and reference librarian at Rutgers Law School. 

Several months after the National Emergency Library launched, the publishers Hachette Book Group, HarperCollins, Penguin Random House and John Wiley & Sons sued the Internet Archive for “willful mass copyright infringement.” 

Judge John G. Koeltl said scanning and lending out these works did not constitute fair use — the argument the Internet Archive put forth when defending this practice — because these were “derivative works.” The judge said the organization did not add anything new to these works “with a further purpose or different character” nor did it alter the works “with new expression, meaning or message.”

In a statement on its website, the Internet Archive said: “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 Internet Archive said that it plans to appeal the decision. It also noted that the ruling will not affect the nonprofit’s other resources, including its interlibrary loan service or its collection of material for the print-disabled. 

Some are celebrating the news, including the Authors Guild, which said this decision will end “the massive copyright violations” of the Internet Archive’s Open Library. 

“This is a victory not just for publishers, but for all authors,” Mary Rasenberger, CEO of the Authors Guild, said in a statement on the guild’s website. “For years, the Internet Archive has shown a shocking disregard for the protests and pleas of authors to stop the illegal copying and distribution of their works. It turned a deaf ear to our proposal for a licensing solution that would enable Open Library to legally distribute the scans. It ignored the fact that authors earn income—typically 25 percent—from library licenses.” 

Prieto said he does not think the judge’s call was “patently wrong,” and that the Internet Archive’s strategy was to “maximalize” the concept of fair use. 

But at the same time, Prieto said he respects that strategy. “If we don’t affirmatively and aggressively defend fair use, publishers are eager to snap it up and eat at the little bits that we left behind,” he said.

Last year, “Marketplace Tech” spoke with Aram Sinnreich, a professor at the American University School of Communication, about the lawsuit and how publishers want to see digital lending operate. 

“The publishers believe that digital lending should essentially be a right that they license to libraries and that every time a library wants to loan something to a reader, the publishers should get paid a licensing fee,” Sinnreich told Marketplace.  

But licensing models can be burdensome for institutions that are largely underfunded. 

Public libraries use different licensing models, but the most common is the two-year license, explained Alan Inouye, leader of the American Library Association’s public policy and advocacy office.  

He noted that libraries and publishers deal with intermediary distributors, like OverDrive, who are the ones who serve the ebooks to patrons. 

The prices can range, but some libraries might expect to pay $50 to $55 per book under two-year licenses, according to Inouye.  

Some loan models are based on quotas, as opposed to time limits. HarperCollins, for example, has employed a model that enables libraries to loan out a book 26 times, Inouye said. The price for that also varies, but it might cost about half the price of the two-year license. 

 And some libraries use models where they pay a fee each time a book is loaned out.

The cost difference between licensing and print books is “substantially different,” Inouye said. Not only might a print book’s list price be cheaper, but libraries get discounts from distributors, which can be as high as 40%, he explained. 

Academic libraries also have to deal with their own set of licensing issues, namely when it comes to electronic journals, which put a massive strain on library budgets.The price of scholarly journals has surpassed the rate of inflation, said Anne Gilliland, scholarly communications officer at the University of North Carolina, Chapel Hill. 

“In some ways, [publishers] have a captive audience in that almost no journal is exactly equivalent to another,” Gilliland said.

Librarians have chronicled journal price changes over the years, finding that some titles could cost between about $50 and $220 in the 1980s. Now, those same titles range between about $18,900 and $40,300. 

Inouye said he thinks both libraries and individuals have fewer rights in our digital environment. 

Say you decide to purchase an e-book.

“Can you give it to your friend? Not likely, the license probably does not allow you to do that. Can you sell it? Not likely. When you pass, will it pass to your heirs? Almost certainly not. Can you give it to a library? No, you can’t do that,” Inouye said. “There are all these things you used to be able to do with print books that you cannot do with digital books.”

He noted that part of the role of big libraries is to “preserve the cultural heritage of the country.” 

But he said that you can’t preserve a book if it has a two-year license. 

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