Is Controlled Digital Lending on Borrowed Time?

On March 20, after nearly three years of litigation, a lawsuit challenging the Internet Archive’s program to scan and lend library books under a legally untested protocol known as CDL (controlled digital lending) finally had its day in court. And if the questions asked by federal judge John G. Koeltl are any indication, the Internet Archive is facing an uphill battle.

Filed on June 1, 2020, by four publisher plaintiffs (Hachette, HarperCollins, PRH, and Wiley, organized by the Association of American Publishers), the suit claims the Internet Archive’s scanning and lending effort is brazen copyright infringement on a massive scale. Internet Archive lawyers counter that its program is a carefully conceived effort to preserve the library’s ability to build and lend collections in an increasingly licensed-access digital world, and is protected by fair use.

Over the course of the 90-minute hearing, however, Koeltl sounded skeptical that the practice of CDL has sufficient support in the case law, and seemed unconvinced that the suit is fundamentally about the future of library lending, as the defendants have argued.

“To say that this case is about the ability of a library to lend a book that it owns ignores whether the library has a right to copy wholesale the book,” Koeltl offered during an exchange with IA attorney Joseph Gratz. Rather, the judge suggested, the question at the heart of the case is “whether a library has the right to make a digital copy of a book that it owns and then lend that digital copy, which it has made without a license and without permission.”

Such a right doesn’t exist, argued Elizabeth McNamara on behalf of the publishers. “CDL is built on a fallacy,” she told the court. “No laws support the mass duplication and digitization of millions of books to distribute to the entire world for the identical purpose that they were originally published—to be read—and for good reason. If this conduct was sanctioned, it would destroy the rights and controls of copyright holders.”

Gratz countered that the scanning and lending of legally purchased print library books under CDL protocols is “transformative” because the digital copy at issue is “incidental” to the loaning of a lawfully acquired corresponding physical book. “Lending books by more efficient technological means does not offend the purposes of copyright. Instead, it more effectively furthers those aims.”

But Koeltl peppered Gratz with questions. “A library, whether they hold a physical copy or not, has the ability to license an e-book from a publisher,” the judge observed. “Rather than pay that licensing fee to the publisher, some libraries choose to make their own copy and to lend that copy. Why isn’t it self-evident that that deprives the publisher of the fees that the publisher could otherwise obtain from licensing an e-book to that library?”

At the close of the hearing, Koeltl declined to rule from the bench and did not offer a time frame for delivering his ruling. If the court denies both motions for summary judgment, the case will likely head to trial. But several lawyers have told PW that, with few fact disputes in the case as it pertains to the question of infringement, they expect Koeltl to decide the case, at least in part. Even with a quick decision, however, an appeal is almost certain to follow.

At an online press conference ahead of oral arguments, Lila Bailey, senior policy counsel for the Internet Archive, alluded to a potentially extended legal battle, defending CDL as the latest in “a long history of innovations” developed by librarians. “In the past, publishers stood against microfilm and photocopiers, crying harm. They said they would be harmed by interlibrary loan. They lobbied for decades against libraries being allowed to provide access for the blind and print-disabled. They were wrong. It took years, but eventually the law affirmed each of these things.”

But in a post-hearing statement, the AAP insisted the law is on the publishers’ side: “In several filings, the publishers have documented the considerable and consistent precedent—in multiple circuits—against unauthorized copying and public distribution, particularly when it comes to transmitting entire creative works to members of the worldwide public without a license for the same purpose the works were originally published and in direct competition with established markets. At stake are the livelihoods of authors and the statutory incentives and protections that make creative works possible in the first place.”