The Internet Archive Lawsuit Ends with a Whimper

For the past four years, the Internet Archive (IA) has been embroiled in a high-stakes lawsuit with book publishers. 

At issue was the IA’s practice of “controlled digital lending,” or CDL. In this practice, the IA scanned printed books and then “lent” them out digitally, limiting the number of borrowers to the number of physical copies they held.

However, the lawsuit did not go well for the IA. In March 2023, a district court judge granted the publishers a summary judgment. The two sides quickly reached a settlement in the case, but it allowed the IA to appeal the decision. 

The IA did appeal, and in September 2024, the Second Circuit Court of Appeals upheld that decision. It penned a scathing opinion heavily critical of CDL and the IA’s arguments in favor of it.

The IA’s only option was to appeal the decision to the Supreme Court. However, three months later, the deadline to do so has passed. As such, the case ends not with the pounding of a gavel but with a deadline quietly passing by, almost unnoticed.

In a statement published on their site, the IA said, “While we are deeply disappointed with the Second Circuit’s opinion in Hachette v. Internet Archive, the Internet Archive has decided not to pursue Supreme Court review. We will continue to honor the Association of American Publishers (AAP) agreement to remove books from lending at their member publishers’ requests.”

This raised a simple question: Why didn’t the IA file the appeal? While there’s no way to know for sure, there are three likely reasons.

Some Brief Background

Digital lending began as a practice in 2011 when the IA launched its Open Library program. However, it was unclear even then if CDL was legal. Even the earliest mention of the term, which occurred in 2018, said it “may be permissible under existing copyright law.”

The reason was that no one tested the theory. For publishers, the IA was a relatively minor problem. Addressing CDL wasn’t a priority when the internet was filled with pirate sites.

However, in April 2020, the IA launched the “National Emergency Library.” The idea was to make digital books more accessible during the pandemic. To achieve this, they removed all lending restrictions, effectively removing the fig leaf that CDL provided.

In June 2020, a group of publishers filed a lawsuit against the IA over the National Emergency Library. The lawsuit would also challenge the concept of CDL more broadly. 

Most lending is covered under the right of first sale, which gives the owner of a legitimate copy the right to do whatever they want with that copy. However, the IA couldn’t make that argument since it was making digital copies of physical works.

So, the IA attempted to argue that CDL was fair use. But that argument was always a long shot. However, it became much more so after the Warhol ruling, where the Supreme Court narrowed the importance of transformativeness in fair use cases.

As such, both the district and appellate courts ruled against the IA. The Second Circuit decision took a particularly strong stance against CDL as a practice.

The only hope that the IA had left was the Supreme Court. However, they opted not to appeal. 

The only question remaining is why?

Reason 1: It Wasn’t Going to Work

This is the most obvious reason. The Internet Archive had taken significant beatings at both the district and appellate levels. The Supreme Court wasn’t likely to be any more friendly.

It’s unlikely that the Supreme Court would have agreed to hear the case, but if it had, it would have likely ruled in favor of the publishers. The Warhol ruling makes that fairly clear.

As bad as the Second Circuit ruling is for the IA and CDL, a Supreme Court ruling against them would have been even worse. That is particularly important to the third point.

Simply put, the odds were stacked against them. They were unlikely to turn things around at the Supreme Court, and there was a real risk that things could get much worse.

In short, it was a gamble that wasn’t worth taking.

Reason 2: More Pressing Problems

2024 has been a rough year for the IA. In October, the site suffered a DDoS that took it down for weeks and was hacked, revealing the information of 30 million users.

The IA has limited resources. Every dollar spent on litigation is a dollar not spent on maintaining the website or doing other advocacy. Given that they were unlikely to win, it makes sense to spend their time, energy and resources on more pressing matters.

That includes recovering from a disastrous October and trying to rebuild their reputation.

Given that the IA already had a settlement with the publishers and was abiding by its terms, it makes sense not to create more uncertainty. 

While not a “win” by any stretch, the status quo is at least stable. That’s something the IA desperately needs right now.

Reason 3: The Much Bigger Legal Threat

In August 2023, a group of record labels filed a similar lawsuit against the IA. According to them, the IA’s Great 78 Project, which has over 400,000 recordings, is a massive copyright infringement.

Though that case is early, it is not going well for the IA. The judge has already rejected their primary defense, that the claims are time-barred, and has set the stage for a possible trial. Though they can re-raise that defense, it’s not a positive sign.

While the lawsuit is similar to the publisher’s, there’s a key difference. The publishers only sought to challenge CDL. Though the case did involve monetary damages, their primary goal was to establish a precedent against CDL and end the practice.

Conversely, the record labels are seeking over $400 million in damages, which, according to ProPublica, is more than 13 times the IA’s annual revenue. Even if they were only granted a fraction of that, it could be a fatal blow to the IA as an organization.

While the publisher case meant a severe reduction in the Open Library initiative, that is only a small fraction of what the IA does. This case threatens the whole organization.

That threat is not hypothetical. The record labels won a $1 billion judgment against Cox Communications. Though that award has been overturned, it was because of how it was calculated, not because of the amount itself. 

With that in mind, it makes sense to focus on this case, which is a much bigger risk to the IA. Furthermore, a Supreme Court ruling in favor of publishers could have seriously hindered the IA in this case as it is playing out in a different circuit. This means that the publisher’s case will not necessarily be used as a precedent.

Bottom Line

Though many people, including myself, predicted that the IA would appeal to the Supreme Court, the decision not to makes sense.

It was a move with a limited chance of success. It could have established a detrimental precedent and distracted them from larger, more pressing challenges.

Backing away makes sense, especially since they already have a settlement they comply with. 

I imagine the people who will be most upset with the IA’s decision are those who supported it throughout the lawsuit. Many sided with the IA because they felt that CDL is or should be legal under copyright law. 

They will likely feel abandoned by this decision. 

However, for the IA, this is a tactical retreat. They are accepting one defeat with the hopes of preventing much bigger losses down the road.