August 11, 2023
Publishers and Internet Archive Submit Negotiated Judgment with Permanent Injunction to District Court in Hachette Book Group, et al, v. Internet Archive
Proposal Follows Decisive Ruling on IA’s Infringing Activities
Today, Hachette Book Group, HarperCollins Publishers, Penguin Random House, and Wiley (the “Plaintiffs”), together with the Internet Archive (IA),submitted a joint proposal to Judge Koeltl of the U.S. District Court, Southern District of New York, regarding the judgment to be entered in Hachette Book Group, et al, v. Internet Archive.
The proposed consent judgment provides for a stipulated permanent injunction preventing Internet Archive from offering unauthorized copies of the Plaintiffs’ books to the global public under the manufactured theory of “controlled digital lending,” and indicates that the parties have reached a confidential agreement on a monetary payment, all subject to Internet Archive’s right to appeal the case. The proposed injunction follows the Court’s decisive summary judgement finding on March 24, 2023 that IA is liable for copyright infringement.
Comment from the Association of American Publishers
Following is the statement of Maria A. Pallante, President and CEO of the Association of American Publishers, on behalf of the Plaintiffs and AAP’s Board of Directors:
“This comprehensive proposed consent judgment—made possible by the District Court’s unequivocal infringement finding—underscores the public purpose of copyright law and the well-established rights of authors and publishers to license and communicate their works to readers through a variety of formats and delivery models.
“As the Court has so clearly reinforced, infringement serves only the infringer, not the public. Copyright protection, on the other hand, incentivizes new works of authorship and the public’s lawful access to them. The Supreme Court made this very point in Eldred v. Ashcroft in 2003, holding that ‘copyright law serves public ends by providing individuals with an incentive to pursue private ones.’
“To this end, we are extremely pleased to have secured broad injunctive relief in the proposed consent judgment, which will extend not only to the Plaintiffs’ 127 works in suit but also to thousands of other literary works in their catalogs representing countless other authors.
“Further, we are pleased to announce that the Association of American Publishers and IA have executed an ancillary agreement that goes beyond the four corners of the lawsuit, to motivate IA to apply the injunction in the consent judgment to all of the AAP’s member companies affected by IA’s infringement, creating an efficient resolution for these aggrieved rightsholders.
“Looking ahead, we note that enforceable copyrights have never been more important as policy makers and courts around the world grapple with how to regulate the rapidly evolving use of artificial intelligence. If we hope to discern the deployment of misinformation, the authenticity of viewpoints, and countless other threats to a stable and secure society in this new era, it seems clear that we will need experienced and dedicated authors and a sustainable publishing industry to keep the public informed.
“Further, as a nation of laws, we should agree that the source of supply matters when it comes to the feeding and training of machines, meaning that no corpus of creative works that is assembled or proffered through acts of infringement should be ethically tolerated in the business chain or legally permitted.
“The AAP thanks the four publishing houses in this case for their unwavering commitment to justice, and for combatting the scourge of digital piracy that damages the livelihoods of so many creators. We hope the extensive analysis of the Court and serious nature of the stipulated judgment will discourage other actors who refuse to account to copyright owners and the law.”
Lawsuit and Infringement Finding
Publishers were forced to file suit against Internet Archive on June 1, 2020 after IA refused to cease—and in fact accelerated—its industrial scale copying of literary works into bootleg ebooks, which it distributed to the global public under the banner of “controlled digital lending,” a contrived theory that violates the most basic principles and precedents of the Copyright Act. At the time of suit, IA had converted some 1.4 million literary works without permission or payment of compensation to the publishers and authors. Today that number is 4.6 million works.
On March 24, 2023, in a comprehensive analysis that cites extensively to prior case law, Judge Koeltl ruled that the Internet Archive’s “controlled digital lending” activities constitute copyright infringement. IA claimed that its activities were fair use because it or its partners maintained one print copy for each digital copy “loaned” to a user. The Court did not agree, revealing IA’s defense to be wholly lacking in any recognized legal basis, and finding IA liable for publicly distributing, displaying, and otherwise making available unauthorized ebooks in competition with lawful business channels.
Judge Koeltl’s summary judgment decision found that all four fair use factors weighed in the publishers’ favor. On the question of market harm, the Court was troubled by IA’s activities and potential expansion of those activities, and that other actors that might follow IA’s lead. The opinion reinforces that publishing houses do “not price print books with the expectation that they will be distributed in both print and digital formats,” and that if IA’s contrived theory were accepted, the markets for both library and commercial ebooks would be eviscerated, and authors would suffer.
Stressing that the Court is “not free to disregard” the plain language of the Copyright Act, Judge Koeltl also rejected Internet Archive’s attempt to expand the first sale doctrine, underscoring that the owner of a physical book has the right to sell or lend that book, not the right to make and distribute reproductions of that book.
The opinion explains that unauthorized “format-shifting” from print to digital formats is not a new issue, but instead has been thoroughly rejected by prior cases. And it underscores that copyright owners may explore, create, and license a variety of copyright markets for their works without fear of appropriation from actors who do nothing to invest in or transform the author’s expression. Further to this point, the opinion repudiates IA’s argument that it serves the public interest, noting that, “Any copyright infringer may claim to benefit the public by increasing public access to the copyrighted work.”
Finally, the Court also found that the Internet Archive’s attempt to use the pandemic as an excuse to launch the so-called “National Emergency Library,” was not fair use. For this project, IA provided unfettered access to scanned books without even the pretense of controls, while fully ignoring the fact that ebooks are already lawfully, robustly, conveniently, and freely available to readers from thousands of public libraries, through their licenses with publishers and authors.
Read AAP’s press release here and its summary of the holding here.
Key Points of Proposed Consent Judgment
In the proposed consent judgment, submitted for the Court’s review in lieu of further court proceedings, the parties have carefully tracked the liability conclusions of the March 24 decision. Here are the key points of the parties’ proposal, all of which are subject to the outcome of any final appeals:
Declaratory Relief
The jointly proposed consent judgment includes a court declaration that the Internet Archive’s activities in engaging in “controlled digital lending” of the works in suit, exercised through its digital distribution businesses including Open Library, constitute copyright infringement. The activities of the Internet Archive in engaging in the “National Emergency Library” in connection with these works also constitute copyright infringement.
Permanent Injunction
The jointly proposed consent judgment offers the Plaintiffs injunctive relief that is appropriately broad. It bars Internet Archive from continuing its infringing activities not only within the United States but also from or into the United States.
More specifically, the Internet Archive, its officers, agents, servants, employees, and attorneys, are prohibited from engaging in any of the following acts with respect to “covered books,” a defined term:
- Distributing, displaying, or otherwise making covered books available to the public without authorization from the copyright owners.
- Reproducing covered books for the purpose of making them available to the public, including through unauthorized public distribution and display.
- Creating derivative works, including ebook formats, of covered books without authorization.
- Inducing, or knowingly and materially contributing to, any individual or entity’s infringing reproduction or activities to make covered books available to the public without authorization in any digital or electronic form, as those terms are used in the law of contributory copyright infringement — which means the Internet Archive must discontinue its long-standing campaign of encouraging public libraries to adopt and implement “controlled digital lending.”
- Profiting from another individual or entity’s infringing reproduction, public distribution, public display or public performance of covered books.
Further, subject to its right to appeal the decision and any of the injunctions, the Internet Archive will apply the terms of the permanent injunction to Plaintiffs’ full book catalogs representing hundreds of thousands of literary works that go well beyond the 127 representative works identified in the lawsuit.
Monetary Payment
Plaintiffs brought this case to defend and affirm a set of legal principles that are both well-established and absolutely essential to publishing in an online, borderless economy—and with the expectation that both IA and other actors will be deterred from future infringements. Therefore, in addition to injunctive relief, the parties have entered into a confidential agreement for a Monetary Judgment Payment, to be paid by IA at the final conclusion of the case if the publishers prevail on appeal. While the sum is confidential, AAP’s significant attorney’s fees and costs in the action since 2020 have been substantially compensated by the Monetary Judgment Payment.
Additional Protections for AAP Members
Through a side agreement that goes beyond the parameters of the parties’ lawsuit, the Internet Archive and AAP have agreed to a structure that will motivate the Internet Archive to apply the negotiated injunction in the consent judgment to the book catalogs of all of AAP member companies. AAP looks forward to working with its member publishers and the Internet Archive so that all AAP member books are no longer distributed by Internet Archive under “controlled digital lending.”
Read the proposal here.