March 4, 2025 • 33 mins
In this episode of Litigation Nation, co-hosts Danessa Watkins and Jack Sanker dive into a significant ruling from the U.S. Second Circuit that could drastically impact how local libraries lend electronic books. The discussion centers around a lawsuit involving the Internet Archive and major publishers like Hatchett, HarperCollins, and Penguin Random House, which has raised critical questions about copyright infringement and the future of digital lending in libraries.
We explore the traditional model of library lending, where physical books can be borrowed freely, compared to the restrictive and costly nature of digital lending. Libraries often face high fees for e-books, which are time-limited and loan-limited, making it increasingly difficult to provide access to digital materials. The Internet Archive's approach of controlled digital lending—where a physical book is scanned and lent out digitally while the physical copy is sequestered—was challenged in court, leading to a permanent injunction against this practice.
The hosts discuss the implications of the court's ruling, which rejected the Internet Archive's argument for fair use, stating that digitizing books did not transform them in a way that would qualify for this legal exemption. This decision could lead to increased costs for libraries, forcing them to repeatedly purchase e-books rather than lending them freely, ultimately affecting their ability to serve the community.
Throughout the episode, we highlight the broader issues facing libraries today, including funding shortfalls and the rising costs of digital materials, which could diminish their role in providing accessible knowledge. We encourage listeners to support their local libraries and reflect on the importance of these institutions in our communities.
Join us as we unpack this complex legal landscape and its potential consequences for libraries and their patrons.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Danessa Watkins (00:05):
Welcome to Litigation Nation. I'm your
host, Danessa Watkins, here withmy cohost, Jack Sanker. As a
reminder, this is the podcastwhere we bring you the new
exciting legal news from acrossthe country. Jack, what do you
have tee up for us today?
Jack Sanker (00:19):
There's a second circuit ruling that could really
upend the model that many locallibraries use and could make it
nearly impossible for librariesto continue lending electronic
books. We're gonna get intothat.
Danessa Watkins (00:30):
Interesting. Alright. All that and more.
Here's what you need to know.
Jack Sanker (00:38):
So I first came across this story in the, MIT
Technology Review. It's whichwas a a short article, but the
further you dive into this, thebigger a deal it becomes. I saw
some people kind of chattingabout this on Twitter and
everything else. And I'm gonnabe relying on a series of
articles that chronicle theprogress of the actual lawsuit
that were published on a websitecalled, ARSTechnica.com as well
(01:02):
as the MIT Technology Review.I'll do my best to keep that
straight when I'm talking to youall here.
But I'll start for the MIT piecewhich was authored by, Chris
Lewis quote, a ruling from theUS second circuit against the
Internet archive and in favor ofpublisher Hatchet has just
thrown that promise of equalityin a doubt by limiting libraries
access to digital lending. Tounderstand why this is so
(01:24):
important for the future oflibraries, you first have to
understand the dire state oflibrary ebook lending. Libraries
have traditionally operated on abasic premise. Once they publish
a book, they can lend it out topatrons as as much or as little
as they like. Library copiesoften come from publishers but
they can also come fromdonations, used book sales or
other libraries.
However, the library obtains thebook, once the library legally
(01:45):
owns it, it is theirs to lend asthey see fit. Not so for digital
books. To make licensed ebooksavailable to patrons, libraries
have to pay publishers multipletimes over. First, they must
subscribe for a fee toaggregator platforms such as
Overdrive. Aggregators likestreaming services such as HBO's
Max have total control overadding or removing content from
their catalog.
(02:06):
Content can be removed at anytime for any reason without
input from your local library.The decision happens not at the
community level, but at thecorporate run, thousands of
miles away from the patronsaffected. The libraries must
purchase each individual copy ofeach individual title that they
want to offer as an ebook. Theseebook copies are not only priced
at a steep markup up to 300%over consumer retail but are
(02:28):
also time limited and loanlimited. Meaning, the file self
destruct after a certain numberof loans.
The library then needs torepurchase the same book at a
new price in order to keep it instock. So that's a lot of
information to dump on everyoneat the start but what we're
gonna be talking about today andthat kinda sets the scene for
this big decision from the USsecond circuit which granted a,
(02:53):
permanent injunction against acompany called Internet Archive.
Internet Archive is we'll getinto a bit is, a website where
which often partners withdifferent libraries to digitize,
physical copies of books thatthe libraries have and create
basically a digital copy or anebook based on a physical copy
(03:14):
and then to lend it out. We'llget into that lending process.
It's it's fascinating the waythat they actually do the,
controlled digital lending in alittle bit.
But you should know it's I'lltell you how the story ends at
the start here which is there'sa permanent injunction against
this process and many, many,many libraries and folks that
like to use the libraries aregonna be affected by this. So I
(03:38):
mentioned this, a moment ago,the the loan limited aspect of
how ebooks are obtained bylibraries. And it's actually
very interesting. The logic isthat ebooks or at least this is
what the folks publishers willsay. Ebooks are limited in
amount of times you could loanit out because it's kinda meant
to mimic the process of howphysical books would, like, wear
(03:59):
out over time.
So if you lend out a book, youknow, 500 times, like, it's
gonna fall apart. And that'swhat the publishers will say is
why they, limit the amount oftimes an ebook could be lent
out. They're they're trying tomimic that same physical
deterioration. And then once ithits that limit, you know, the
book, you have to pay anotherlicensing fee or something like
(04:21):
that. Of course, libraries locallibraries can and do get a lot
of donations, from other people.
That's where a lot of theirbooks actually come from.
Whereas, you know, ebooks reallyebooks aren't donated. So that
analysis really isn't one forone,
as to, you know, how a
library actually functions. I'mgonna go back to the MIT piece,
(04:42):
back to Chris Lewis here. Quote,some libraries have turned to
another solution, controlleddigital lending or CDL, a
process by which a library scansthe physical books it already
has into its collection, makessecure digital copies and then
lends them out on a one to oneown to loan ratio. The Internet
archive was an early pioneer ofthis technique. I'll pause there
for a moment.
(05:03):
What they would do is physicallyscan an actual book, like a a
paper book that none of us readanymore and, and then, lend out
the, digitized copy for folks toread on their Kindle or whatever
it is.
Danessa Watkins (05:18):
So you're in some ways, though, you're
relying on the the physicalmanpower of the library to do
that. So that costs money.
Jack Sanker (05:24):
Yeah.
Danessa Watkins (05:25):
And then, obviously, the quality is
probably not gonna be as goodas, you know, if if
Jack Sanker (05:31):
Yeah.
Danessa Watkins (05:31):
You're getting it directly from the source.
Jack Sanker (05:33):
That's a good point. But, like, at the outset,
this is someone making a copy ofcopyrighted work. Right? Right.
So if you're immediately ifyou're an attorney or if you've
been around or if you're in thepublishing industry or if you
just know enough aboutcopyright, this should be
raising red flags for youalready.
Going back to the piece, quote,when a digital copy is loan, the
physical copy is is sequesteredfrom borrowing. When the
(05:55):
physical copy is checked out,the digital copy becomes
unavailable. The benefits tolibraries are obvious. Delicate
books can be circulated withoutfear of damage. Volumes can be
moved off-site for facilitieswork without interrupting patron
access and older and endangeredworks become searchable and get
a second chance at life.
Library patrons who fund theirlocal library's purchases with
their tax dollars also benefitfrom the ability to freely
(06:17):
access the books. So the modelhere is that they have a
physical copy, scan and digitizeit, loan it out without, ideally
without being accused of,pirating the physical copy. And
and from the library'sperspective here, so long as
only one copy is being loanedout. Right? So the physical copy
(06:37):
is out, the digital copy isunavailable.
Digital copy is out, thephysical copy, you know, doesn't
get loaned. Right? So there'snever more than two copies going
out from their theirperspective. And I as I
understand some of the argumentsthey made, you know, they're
not, quote, unquote, copying itthen. Right?
I don't know about that. But
Danessa Watkins (06:52):
And this was a this was a wide practice? This
is what libraries were doingacross the country?
Jack Sanker (06:58):
Yeah. We'll get into that. Something like
sixties or so libraries hadpartnered with the Open Library
Project to do this. Mhmm. Andthis, this process, I think, was
I I don't know how commonplaceit was, but it was happening
enough, at libraries all overthe country.
So I I wouldn't say that everylibrary is doing this, but, from
(07:20):
what I could gather, it waspretty common.
Danessa Watkins (07:22):
Interesting. Okay.
Jack Sanker (07:23):
Yeah. So the open lib Open Library Project which,
partners with libraries to scan,print books to the collection
and offer them as lendableebooks. Basically, a bunch of
book publishers, sued them tostop them from this controlled
digital lending project oncopyright infringement grounds,
(07:45):
really just alleging the act ofcopying and lending the bulk
itself is an act of piracy. Nodifferent than, you know,
downloading a song to Napster.God, no one's gonna know that
reference now.
Downloads music. No onedownloads music at all. You know
what I mean. Okay. The plans inthis case were some names you
might know, Hatchet Book Group,Harper Collins, John Wiley and
(08:06):
Sons, and Penguin's RandomHouse.
Quoting from the complaint,which was filed way back in June
of twenty twenty, and by theway, that gives all of you, you
know, non litigators a sense ofhow slow these cases can move.
This case is over four years oldat this point. Defendant IA, and
that's Internet Archive, by theway, is engaged in willful mass
(08:26):
copyright infringement withoutany license or any payment to
authors or publishers. IA scansprint books, uploads those
illegally scanned books to itsservers and distributes verbatim
digital copies of the books inwhole via public facing
websites. With just a fewclicks, any internet connected
user can download a completedigital copy of in copyright
books from the defendant.
(08:48):
The scale of IA scheme isastonishing. At its open library
located at openlibrary.org andarchive.org, IA currently
distributes scanned digitalcopies of over 1,300,000 books
and its stated goal was to do sofor millions more, essentially
distributing free digital copiesof every book ever written.
Despite the open librarymoniker, IA's actions grossly
(09:11):
exceed legit legitimate libraryservices, do violate the
copyright act, and constitutewillful digital piracy on an
industrial scale. Consistentwith the deplorable nature of
piracy, IA's infringement isintentional and systematic. It
produces, mirror image copies ofmillions of unaltered in
copyright works for which it hasno rights and distributes them
(09:31):
entirely for purposes to thepublic for free including
voluminous numbers of books thatare currently commercially
available.
Unquote. So as I understand it,the Internet Archive argued that
the copying of books, in the waythat we've talked about here,
constituted fair use becausethey were, I suppose,
(09:53):
transforming the nature of thebooks by copying them, from, you
know, physical print to digital.That doesn't sound too
convincing to me.
Danessa Watkins (10:02):
Well, before we get into, you know, the the fair
use arguments, I'm just kind ofcurious because what you
described in the beginning asopposed to what was alleged in
the complaint seemed to be atodds, you know, which is
sometimes the way it goes andyou find out in discovery that
what's been alleged isn'tactually the real facts. But,
because it seems like they'realleging that these libraries
(10:24):
are scanning in these books anddistributing them widely.
Beginning, though, is that theyit seemed pretty systematic that
if, you you know, there was onecopy available electronically
that could be used by one personat a time.
Jack Sanker (10:39):
Right.
Danessa Watkins (10:39):
But if somebody had the physical book, then that
wasn't even available todisperse.
Jack Sanker (10:43):
Yeah. I mean, the allegations, collapse those
distinctions. I mean, these areallegations. Right? These are
what the publishers arealleging.
It doesn't mean it's the case.Right. So they're not making
that distinction. What they'resaying is you're copying the
books and putting them out forfree online.
Danessa Watkins (10:58):
Yeah. No. They're simplifying it.
Jack Sanker (10:59):
And what the libraries are saying is, no. No.
We're only making one copy.
Danessa Watkins (11:02):
Yeah.
Jack Sanker (11:03):
Yeah. And we're only, doing one one little
piracy instead of, but that but,the point is is is it copyright
infringement or not, you know,regardless of how bad of
copyright infringement you'redoing. Mhmm. This whole concept
of fair use, I think it's worthtaking a beat to talk about
(11:23):
that, Danessa, if you could helpme.
Danessa Watkins (11:25):
Yeah. I got you. So, so the fair use
doctrine, it's essentially alegal exemption that will allow
a limited use of copyrighted
material without the copyrightowner's permission.
So it's really like a balancedwithout the copyright owner's
permission. So it's really likea balance between the interests
of those holders of thecopyright and the public's
interest in creative work. Thedoctrine kinda looks at four
(11:49):
different factors. The firstbeing the purpose and the
character of the use. So is theuse of the copyrighted material
for commercial purposes or is itnot for profit or educational
purposes, which would tend tolean more towards fair use?
Jack Sanker (12:04):
Right. So for teaching and libraries.
Danessa Watkins (12:06):
Exactly. Exactly. A second factor is
social benefit. So whether thebenefit of having that
copyrighted material used in alimited fashion would exceed the
the loss to the copyrightholder. Here, again, it would
seem that that would weigh infavor of the library.
Jack Sanker (12:24):
Mhmm.
Danessa Watkins (12:25):
Third is the market impact. So whether that
use
that limited use
will hurt the original worksmarket such as displacing sales.
Jack Sanker (12:35):
Mhmm.
Danessa Watkins (12:35):
The way they alleged it in the complaint,
that makes it seem like Right.Of course. Yes.
Jack Sanker (12:40):
They're displacing millions of copies of or
millions of sales of copiesversus just the one.
Danessa Watkins (12:45):
Right. So that would just come down to the
factual inquiry of, you know,what's actually happening at the
libraries. And then the fourthfactor is widespread harm. So
whether the use allowing thislimited use use could actually
cause substantial harm if itbecame widespread. I mean, that
factor, I think, is always gonnaweigh in favor of the copyright
holder because
Jack Sanker (13:05):
Yeah.
That seems kinda baked
Danessa Watkins (13:06):
in there. So it's definitely a case by case
basis, depends on the facts ofeach circumstance. Just some
kind of broad examples of fairuse are criticism, scholarship,
news reporting, and parody. Soyou can pick out sentences of a
book, for example, and make funof it or criticize the writing
(13:30):
or use it in a classroom settingand, you know, teach your class
about it verbatim. There'sreally no specific number of how
many copies or how many wordscan be reproduced without
permission.
Again, it's it's case by case.But, generally, the more
material that you're copyingfrom the original, the less
(13:51):
likely it's gonna be consideredfair use.
Jack Sanker (13:54):
I have a I have a good parody example. Yeah. Did
anyone watch Nathan for you byany chance? No. There there's a
fantastic episode where, he hepitches a business idea, which
is just a one for one knockoffof Starbucks.
The the its exact branding dumbStarbucks. And then he, it it to
(14:19):
according to the bit on theshow, was circumventing,
intellectual property laws byparodying Starbucks just by
making a copy but calling itdumb Starbucks and, referred to
the store as an art gallery andnot a not a chain coffee.
Danessa Watkins (14:34):
Mhmm.
Jack Sanker (14:35):
And, I do believe Starbucks sued, and I think that
they settled it. But, I wouldlove to read a law review order
quote on whether that actuallywas parody or not. Yeah.
Danessa Watkins (14:44):
It might be too close.
Jack Sanker (14:45):
I have a dumb Starbucks mug at home, which is
Big fan. Maybe copyrightinfringement.
Danessa Watkins (14:51):
The only other thing I can say is is, the
courts will also look at whetheryou could get your point across
by copying less of the work thanthan what you're copying. So,
you know, maybe you only need asentence or two, and you don't
need the five paragraphs or thesix chapters. But here, I mean,
they're taking the full book.
Jack Sanker (15:09):
So Right. Like and this is, this is enforced all
over the place in differentways. I know, like, for example,
if you wanna upload a YouTubevideo, maybe you're a film
critic, right, and you wannaupload, bits of a film to talk
about and create a YouTubevideo. YouTube itself enforces
their own policy of a certainamount of time that you could
play a clip for. I don't know ifthat's based on a prior
(15:29):
decision.
I I bet it is. I bet there is adecision which says uploading a
clip longer than, what, thirtyseconds or three minutes? Three
seconds. Oh, three seconds. Oh,boy.
You said you get three seconds.Oh, you get three seconds. Okay.
My producer's telling me it'sthree seconds. But if you upload
a clip longer than three minuteor three seconds, you now have
exceeded, you know, the amountthat you really need to make
your point.
Danessa Watkins (15:50):
Right.
Jack Sanker (15:50):
Otherwise, you could just put the whole movie
up and then at the end go, Iliked it. And, and then you
haven't you know?
Danessa Watkins (15:57):
Well, I was kinda when you told me what you
were covering today, I was kindacurious how this worked with,
like, Facebook and Instagram,where people add music to their
stories or their reels. Ithere's definitely been times
when I've added music to, youknow, some reel I've made, and
then I get a notification fromFacebook that says your music
(16:18):
may appear in some venues, butnot others. Okay. So I kinda
read up on it just to see. Andthere was definitely some
agreement that Facebook madewith, I can't even remember the
name of the company now.
But,
Jack Sanker (16:31):
Probably record label or whatever. It was. Yeah.
I know Sony had a had a similardispute with TikTok.
Danessa Watkins (16:36):
Yeah. Okay. So it's probably something like
that. But but they you know,obviously, Facebook licensed the
songs that it makes available toyou to add to your Mhmm.
To
your content. But they set outparameters of, you yes. The
limits of the time, the factthat you're what you're showing
needs to be more about, like,the photos and the videos as
(16:57):
opposed to the music that'sbehind it.
Jack Sanker (16:58):
Yeah.
Danessa Watkins (16:59):
I it's, you know, it's a gray area. It's
literally case by case, and Ithink it's just one of those
places in our law that you needto kinda tread lightly and
Jack Sanker (17:09):
Yeah.
Danessa Watkins (17:09):
Air on the side of avoiding a copyright suit.
Jack Sanker (17:12):
Mhmm.
So that's kind of background onfair use in in in all this
business. I'll tell you thatjudge Beth Robinson in the
second circuit did not buy theargument that this digitizing
and and, systematized lending,process constitutes fair use. In
(17:33):
the opinion she wrote, thatdigitizing the books, quote, did
not provide criticism,commentary or information about
the originals or alter theoriginal books to add something
new. Internet archives digitalbooks serve the exact same
purpose as the originals,originals making authors works
available to read. Later shesaid that in copyright law
(17:53):
quote, not every instance willbe clear cut, this one is.
To construe Internet archivesuse of the works is transformate
transformative wouldsignificantly narrow, if not
entirely eviscerate copyrightowners exclusive rights to
prepare, or not preparederivative works, unquote. So
(18:16):
the rule that for the fair useexception to the overall, body
of law that is copyrights, didnot apply here. The court had
defined, not only thattransforming physical books to e
books was not transformative inthe way that, you know,
commentary or criticism oranything else would be, but it
also had to rule whetherInternet archives was profiting
(18:38):
off the ebook lending, which itwasn't, and whether the
publishers or authors were beingharmed by this, which is up for
debate. The court ruled in favorof, the publishers on all of
those issues as I understand it.So, what's interesting is the
burden in this analysis, andit's a it's for permanent
injunction.
(18:59):
Injunctive relief in particularhas a lot of burden shifting
back and forth, which, like, Iwould have to go back and and
read before I told any of you.It's been so long since I've
litigated that. But, long andshort of it is there is burden
shifting when you're gettinginto weird remedies like that,
particularly, like, permanentinjunctions. So, and by burden
(19:20):
shifting, I mean, it can becomethe defendant's burden to prove
their innocence effectively on acertain element. So the burden
in this analysis was on InternetArchive to prove that it had not
harmed the publishers.
And, in arguing that point, theyhighlighted the surging profits
of the publishers of the thefour plaintiffs in this case,
(19:43):
which is probably true.Nonetheless, the court rejected
that stating quote, we agreewith publishers assessment of
the market harm and are likewiseconvinced, that unrestricted and
widespread conduct of the sortengaged of by the defendant
would result in substantiallyadverse impact to the potential
market. And this is that fourthfactor that we talked about
(20:05):
earlier that's gonna almostalways
Danessa Watkins (20:07):
Right.
Jack Sanker (20:08):
Go in favor of the copyright holder.
Danessa Watkins (20:09):
Mhmm.
Jack Sanker (20:11):
Quote, the publishers have not provided
empirical data to support thisauthorization, observation, and
we routinely rely on suchlogical inferences where
appropriate, unquote. Andlooking around some of the
statements that were made by thefolks that were invested in
this, it seems as though thepublishers would, like, never
turned over complete data on,like, the economics of how they
(20:31):
were harmed. So there there wasa bit of a complaint of, like,
discovery prejudice here. And,we'll talk about that in a in a
moment. But in any event, whatare the effects of this ruling?
Well, more than 93% of publiclibraries participate in digital
lending of some kind. Whether itis the controlled digital
(20:58):
lending, like we talked aboutthe one for one way or, or other
ways. It's 93% of libraries aredoing it. There were 62
libraries that were partnereddirectly with Internet archives,
so they're all in trouble now.If they can't do this controlled
digital lending method, the onefor one, physical versus digital
lending, as I understand it,their only option As I
(21:20):
understand it, their only optionis to license the ebooks via the
subscription model that mostpublishers do.
And according to at least a lotof the briefing that was
associated with these arguments,those licensing fees are
getting, like, jacked up throughthe roof as you can imagine.
It's getting more and moreexpensive for libraries to do
this. Right.
Danessa Watkins (21:37):
Well and even you said that you could only
download a work for a certainamount of time. So I would
think, let's say it's, I don'tknow, a year. They can increase
the price of that book.
Jack Sanker (21:49):
At the end of the year? Yeah.
Danessa Watkins (21:50):
Yep. And I'm sure they're going to have some
way of tracking how popular itis. Yeah. And then they're gonna
jack up the price on the onesthat are, you know, more
frequently checked out.
Jack Sanker (21:59):
Yeah. Versus, you know, the I mean, if you wanna
put on, like, your, you know,financial analyst hat here,
like, the amortized cost of abook that they bought ten years
ago spread out over you knowwhat I mean?
Danessa Watkins (22:10):
Like Mhmm.
Jack Sanker (22:10):
They buy the book, the book is bought, they have
the book, they can lend it out,you know, versus this ongoing
price hikes on, the book, as itwere, that can go up over time.
Like, the cost of of lending abook theoretically would go down
over time. Right? You boughtbought
the book.
The more times you lend it out,the more cost effective that
(22:31):
purchase was. Mhmm. Here, it isthe opposite. Yeah. So, there's
an advocacy group called PublicKnowledge that is brief in
support of Internet archives andissued a statement afterwards
which is helpful tounderstanding this, which I'll
quote from.
Quote, controlled digitallending is a critical toolkit
for libraries to reach theirpatrons in the digital age. With
(22:52):
today's decision, the secondcircuit undermines those policy
goals. We appreciate that thecourt set the record straight
and clarified that a nonprofit'sdonate button does not magically
render, a use commercial innature. However, the rest of the
analysis falls short. The courtasserts bafflingly that the
United Archive is is notentitled to statutory
protections because it does notperform, quote, traditional
(23:13):
functions of a library.
It is unclear what the secondcircuit, believes these
traditional functions to be ifnot lending books to the public.
This is a case about the futureof libraries as much as
copyright law. On top of fundingshortfalls and in increasing
censorship demands, librariesare being forced to repeatedly
buy the same books over and overagain due to publishing industry
(23:33):
practices is what we're talkingabout. Mhmm. When libraries add
print books to theircollections, those books don't
expire even when they aredamaged, lost, or stolen.
Libraries have the specificstatutory right to create new
copies of print books and othermedia because the preservation
of knowledge and making worksavailable to the public is both
core to the mission of librariesand the purpose of copyright.
With ebooks, libraries havefewer options. When libraries
(23:55):
want to add ebooks to theircollection, they can often only
purchase a time limited licenseafter which the books expire and
have to be repurchased. Thecourt recognizes that the,
result is regular renegotiationof ebook licenses that often
come at a steeper price and fora shorter term than print copies
of the same books, unquote. So,
Danessa Watkins (24:18):
this So the court's acknowledging those
issues, but, ultimately, itdidn't sway Right.
Jack Sanker (24:24):
Ruling. I I think the ruling boils down to, not
great for libraries, but,copying look. Scanning a copy of
a book just feels like scanninga copy of a book, man. It feels
like you're copying it. I don'tknow.
I don't I'm not an intellectualproperty lawyer. Please,
intellectual property lawyers,if you're listening, do not come
for me. But it feels like you'repirating it. Like, it just does,
(24:49):
however you wanna spin it. Andunless there's specific
statutory carve outs, which itseems like there are here, this
is what the statement isreferencing, to which this
website, you know, apparentlydoesn't fall into.
Danessa Watkins (25:02):
I could see concerns from the copyright
holders about the security ofthe online database.
Jack Sanker (25:09):
Sure.
Danessa Watkins (25:10):
But it would seem like that, you know, these
live whatever the 62 librariesthat were using this company, I
mean, that was they were doingtheir due diligence. Maybe they
don't have the the technologicalcapabilities of that company. So
as long as you have, you know, areputable company that's
maintaining these databases,making sure that when somebody
checks out an ebook, it can't bedownloaded, shared, yada yada,
(25:35):
that would seem to at leastaddress the issue of loss of
revenue.
Jack Sanker (25:45):
Yeah. I mean, the loss of revenue thing is
interesting because I I would Iwould put it this way. I think
that publishers, would, youknow, annihilate any and all
exemptions or exceptions tocopyright law if they could. You
know? It's the fact right law ifthey could.
Danessa Watkins (26:00):
Yeah
Jack Sanker (26:00):
know? It's the fact that they're that library
library excuse me. The fact thatlibraries are even allowed to
lend books in the first placeprobably irritates them, you
know, because they're like,you're you're getting your book
for free, and we're not we'rethat's we're not making any
money off of that. Yeah. So,like, the motives the financial
motives, like, are clear here.
Like, this I'm not even sayingpublishers are, like, bad guys.
(26:22):
I'm just saying it would makesense for them to want to
annihilate libraries as a, youknow, a concept. So, yeah. I I
think it's interesting that thecourts, you know, says that
Internet archives does notperform, you know, traditional
functions of a library because,like, it is just lending books.
Danessa Watkins (26:40):
Mhmm.
Jack Sanker (26:41):
That's what it does, at least as far as I know.
I will say this ruling makes mesad, just because I like
libraries, and I have some moresad library facts for you all.
According to a report inPublishers Weekly, which was
(27:01):
originally published in 2021,there's been a 31% decline in
public library building usebetween February and 02/2018.
That's 02/2018. That's prepandemic so it's probably worse.
Mhmm. The fall in public librarybuilding use was, critical
before the pandemic and acontinuing high level of use of
(27:21):
digital materials, so ebooks,will make that worse, the the
report states. The report alsoacknowledges the contentious
state of the digital librarymarket which, the report
suggests does not represent goodlibraries. And most depressingly
(27:42):
here, there's a discussion aboutthe way that funds are allocated
within the actual librariesthemselves because libraries
often do, like, classes, daycares, or, things for
Danessa Watkins (27:54):
After school programs. Yeah.
Jack Sanker (27:55):
Yeah. All those things.
More of
that money now will be sucked upin the licensing these ebooks.
So those things will also bediminished by this process
unless someone could figure itout. Quoting going back to
Publishers Weekly, report,quote, the investment in digital
materials appears to have takenaway significant funds
from that of physical materialsand
the cost per circulation ofdigital material is material. In
(28:23):
stark terms, in most librariesunder current arrangements, it
would be many times cheaper togive a patron the money to just
buy an ebook rather than licensea copy for the library.
Danessa Watkins (28:33):
Wow.
Jack Sanker (28:34):
Yeah. So libraries, bad shape.
Danessa Watkins (28:38):
Yeah.
Jack Sanker (28:40):
And this, this ruling, the second circuit
ruling here does seem to put,the kibosh on, you know, one way
that the kind of traditionallibrary model could be adapted
towards ebooks and things likethat. So, yeah, absent
(29:03):
bargaining power. Right?
Danessa Watkins (29:04):
Mhmm.
Jack Sanker (29:05):
You know, like, your local tax funded library,
like, can't go to Harper Collinsand demand anything. Right. Now
I don't know if there was sometype of, like, collective, you
know, of the all the librariesthat got to, like, a I don't
know, like, a union orsomething.
Danessa Watkins (29:19):
Like a statewide maybe?
Jack Sanker (29:21):
Yeah. Something like that. And they can
negotiate some type of deal, butwhy again, why do the publishers
even care? They don't even wantthey don't wanna deal with the
libraries at all, probably.Yeah.
So it's tough, folks.
Danessa Watkins (29:32):
Do you
think they'll appeal?
Jack Sanker (29:35):
I mean, who knows? One of the statements I read
from the Internet archives folkssaid they're evaluating, whether
they can appeal. I mean, itseems like there are,
evidentiary and discoveryissues, kind of like process
violations that you could getinto that maybe give them
another crack at it. But Mhmm.Overall, I I I'm not
(29:59):
particularly persuaded, by theargument that, you know, copying
something isn't copyingsomething.
Yeah. That they aren't copyingit. Like Right. However you
wanna put it. You know?
If you can and now you can weavethat into the narrow exceptions
and argue public policy and andtry to get it into the under the
fair use category. But, like,you are starting from that bad
(30:21):
fact of, like, yeah. You'reyou're copying the book.
Danessa Watkins (30:23):
Yeah. And, I mean, once again, I think it
goes back to the lack ofcontrol, you know, that the
publishers have.
Jack Sanker (30:30):
You mean once the book is in the hands of the
library?
Danessa Watkins (30:33):
Yeah. And if if they're gonna allow I I don't
you know, where are the checksand balances, I guess, of,
making sure that they actuallyfollow that policy of a hard
copy book is lent out and thedigital one is pulled. A
digital, you know, is lent out,the hard copies like, because
they really have only I mean, Ipossession of one work.
Jack Sanker (30:53):
I I never really understood that's what was
happening, but I I use the, Iuse the Libby app, which which
is, fantastic, if you ever get achance to do it for, like,
audiobooks and stuff. Mhmm. Andoftentimes, I go on there and
look for an audiobook and it's,like, this title is not
available. What do you mean notavailable? It's not how's it not
available?
Like, you you have it. You know?It's a digital Yeah. But I am
I'm Okay. That makes sense.
(31:14):
Yeah. It's checked out. Yeah.I'm stupid for not understanding
that they have a licensed amountof copies
Danessa Watkins (31:18):
Yeah.
Jack Sanker (31:19):
And they can only check out x amount of time, you
know, at a time. So I would justbe like my app's broke. You
know? Can't get can't get thebook. But, yeah, that makes
sense now.
And it but so if they're allowedto do that, I mean, well,
they're paying a license
Danessa Watkins (31:31):
fee. They're paying. Yeah.
Jack Sanker (31:32):
Yeah. They're
Which is gonna crush thelibraries in the long run.
Right. So it seems like it'sjust gonna become more expensive
to borrow ebooks and moreexpensive to borrow physical
books, more expensive tomaintain libraries, more
expensive to for them to put onprogramming, things like that. I
mean, this is gonna be afinancial squeeze for them. And
(31:56):
that's just that's just sad, youknow.
It's just not I mean, I I don'tnecessarily blame the publishers
who who they would say they arefighting for the rights of the
creators or the authors. They,you know, they will say that the
authors are being harmed. Youknow, and and that's I
understand that, but it's justyeah. It feels bad. Yeah.
(32:17):
Unfortunately. Mhmm. Well, thegood news is no
no one reads books anyways. So,so, yeah. Just listen to
podcasts. Who cares? Right.
Alright. That's the show,everyone. Thanks for listening.
As a reminder, there's nothingstopping you from going and
supporting your local library.Doing the research for this show
(32:39):
actually really made me want togo back to the library, which I
haven't been in a long time,start taking my kid there.
So we can reverse this reversethis dynamic on our own. But
thanks for listening to thispodcast in the meantime. And if
you want to support our show,find us on Spotify, Apple
Podcasts, YouTube, wherever youget your podcasts. Leave a
review. Give us five stars.
(33:00):
Help us out, and we'll talk toyou in two weeks.
Welcome to Litigation Nation. I'm your
host, Danessa Watkins, here withmy cohost, Jack Sanker. As a
reminder, this is the podcastwhere we bring you the new
exciting legal news from acrossthe country. Jack, what do you
have tee up for us today?
Jack Sanker (00:19):
There's a second circuit ruling that could really
upend the model that many locallibraries use and could make it
nearly impossible for librariesto continue lending electronic
books. We're gonna get intothat.
Danessa Watkins (00:30):
Interesting. Alright. All that and more.
Here's what you need to know.
Jack Sanker (00:38):
So I first came across this story in the, MIT
Technology Review. It's whichwas a a short article, but the
further you dive into this, thebigger a deal it becomes. I saw
some people kind of chattingabout this on Twitter and
everything else. And I'm gonnabe relying on a series of
articles that chronicle theprogress of the actual lawsuit
that were published on a websitecalled, ARSTechnica.com as well
(01:02):
as the MIT Technology Review.I'll do my best to keep that
straight when I'm talking to youall here.
But I'll start for the MIT piecewhich was authored by, Chris
Lewis quote, a ruling from theUS second circuit against the
Internet archive and in favor ofpublisher Hatchet has just
thrown that promise of equalityin a doubt by limiting libraries
access to digital lending. Tounderstand why this is so
(01:24):
important for the future oflibraries, you first have to
understand the dire state oflibrary ebook lending. Libraries
have traditionally operated on abasic premise. Once they publish
a book, they can lend it out topatrons as as much or as little
as they like. Library copiesoften come from publishers but
they can also come fromdonations, used book sales or
other libraries.
However, the library obtains thebook, once the library legally
(01:45):
owns it, it is theirs to lend asthey see fit. Not so for digital
books. To make licensed ebooksavailable to patrons, libraries
have to pay publishers multipletimes over. First, they must
subscribe for a fee toaggregator platforms such as
Overdrive. Aggregators likestreaming services such as HBO's
Max have total control overadding or removing content from
their catalog.
(02:06):
Content can be removed at anytime for any reason without
input from your local library.The decision happens not at the
community level, but at thecorporate run, thousands of
miles away from the patronsaffected. The libraries must
purchase each individual copy ofeach individual title that they
want to offer as an ebook. Theseebook copies are not only priced
at a steep markup up to 300%over consumer retail but are
(02:28):
also time limited and loanlimited. Meaning, the file self
destruct after a certain numberof loans.
The library then needs torepurchase the same book at a
new price in order to keep it instock. So that's a lot of
information to dump on everyoneat the start but what we're
gonna be talking about today andthat kinda sets the scene for
this big decision from the USsecond circuit which granted a,
(02:53):
permanent injunction against acompany called Internet Archive.
Internet Archive is we'll getinto a bit is, a website where
which often partners withdifferent libraries to digitize,
physical copies of books thatthe libraries have and create
basically a digital copy or anebook based on a physical copy
(03:14):
and then to lend it out. We'llget into that lending process.
It's it's fascinating the waythat they actually do the,
controlled digital lending in alittle bit.
But you should know it's I'lltell you how the story ends at
the start here which is there'sa permanent injunction against
this process and many, many,many libraries and folks that
like to use the libraries aregonna be affected by this. So I
(03:38):
mentioned this, a moment ago,the the loan limited aspect of
how ebooks are obtained bylibraries. And it's actually
very interesting. The logic isthat ebooks or at least this is
what the folks publishers willsay. Ebooks are limited in
amount of times you could loanit out because it's kinda meant
to mimic the process of howphysical books would, like, wear
(03:59):
out over time.
So if you lend out a book, youknow, 500 times, like, it's
gonna fall apart. And that'swhat the publishers will say is
why they, limit the amount oftimes an ebook could be lent
out. They're they're trying tomimic that same physical
deterioration. And then once ithits that limit, you know, the
book, you have to pay anotherlicensing fee or something like
(04:21):
that. Of course, libraries locallibraries can and do get a lot
of donations, from other people.
That's where a lot of theirbooks actually come from.
Whereas, you know, ebooks reallyebooks aren't donated. So that
analysis really isn't one forone,
as to, you know, how a
library actually functions. I'mgonna go back to the MIT piece,
(04:42):
back to Chris Lewis here. Quote,some libraries have turned to
another solution, controlleddigital lending or CDL, a
process by which a library scansthe physical books it already
has into its collection, makessecure digital copies and then
lends them out on a one to oneown to loan ratio. The Internet
archive was an early pioneer ofthis technique. I'll pause there
for a moment.
(05:03):
What they would do is physicallyscan an actual book, like a a
paper book that none of us readanymore and, and then, lend out
the, digitized copy for folks toread on their Kindle or whatever
it is.
Danessa Watkins (05:18):
So you're in some ways, though, you're
relying on the the physicalmanpower of the library to do
that. So that costs money.
Jack Sanker (05:24):
Yeah.
Danessa Watkins (05:25):
And then, obviously, the quality is
probably not gonna be as goodas, you know, if if
Jack Sanker (05:31):
Yeah.
Danessa Watkins (05:31):
You're getting it directly from the source.
Jack Sanker (05:33):
That's a good point. But, like, at the outset,
this is someone making a copy ofcopyrighted work. Right? Right.
So if you're immediately ifyou're an attorney or if you've
been around or if you're in thepublishing industry or if you
just know enough aboutcopyright, this should be
raising red flags for youalready.
Going back to the piece, quote,when a digital copy is loan, the
physical copy is is sequesteredfrom borrowing. When the
(05:55):
physical copy is checked out,the digital copy becomes
unavailable. The benefits tolibraries are obvious. Delicate
books can be circulated withoutfear of damage. Volumes can be
moved off-site for facilitieswork without interrupting patron
access and older and endangeredworks become searchable and get
a second chance at life.
Library patrons who fund theirlocal library's purchases with
their tax dollars also benefitfrom the ability to freely
(06:17):
access the books. So the modelhere is that they have a
physical copy, scan and digitizeit, loan it out without, ideally
without being accused of,pirating the physical copy. And
and from the library'sperspective here, so long as
only one copy is being loanedout. Right? So the physical copy
(06:37):
is out, the digital copy isunavailable.
Digital copy is out, thephysical copy, you know, doesn't
get loaned. Right? So there'snever more than two copies going
out from their theirperspective. And I as I
understand some of the argumentsthey made, you know, they're
not, quote, unquote, copying itthen. Right?
I don't know about that. But
Danessa Watkins (06:52):
And this was a this was a wide practice? This
is what libraries were doingacross the country?
Jack Sanker (06:58):
Yeah. We'll get into that. Something like
sixties or so libraries hadpartnered with the Open Library
Project to do this. Mhmm. Andthis, this process, I think, was
I I don't know how commonplaceit was, but it was happening
enough, at libraries all overthe country.
So I I wouldn't say that everylibrary is doing this, but, from
(07:20):
what I could gather, it waspretty common.
Danessa Watkins (07:22):
Interesting. Okay.
Jack Sanker (07:23):
Yeah. So the open lib Open Library Project which,
partners with libraries to scan,print books to the collection
and offer them as lendableebooks. Basically, a bunch of
book publishers, sued them tostop them from this controlled
digital lending project oncopyright infringement grounds,
(07:45):
really just alleging the act ofcopying and lending the bulk
itself is an act of piracy. Nodifferent than, you know,
downloading a song to Napster.God, no one's gonna know that
reference now.
Downloads music. No onedownloads music at all. You know
what I mean. Okay. The plans inthis case were some names you
might know, Hatchet Book Group,Harper Collins, John Wiley and
(08:06):
Sons, and Penguin's RandomHouse.
Quoting from the complaint,which was filed way back in June
of twenty twenty, and by theway, that gives all of you, you
know, non litigators a sense ofhow slow these cases can move.
This case is over four years oldat this point. Defendant IA, and
that's Internet Archive, by theway, is engaged in willful mass
(08:26):
copyright infringement withoutany license or any payment to
authors or publishers. IA scansprint books, uploads those
illegally scanned books to itsservers and distributes verbatim
digital copies of the books inwhole via public facing
websites. With just a fewclicks, any internet connected
user can download a completedigital copy of in copyright
books from the defendant.
(08:48):
The scale of IA scheme isastonishing. At its open library
located at openlibrary.org andarchive.org, IA currently
distributes scanned digitalcopies of over 1,300,000 books
and its stated goal was to do sofor millions more, essentially
distributing free digital copiesof every book ever written.
Despite the open librarymoniker, IA's actions grossly
(09:11):
exceed legit legitimate libraryservices, do violate the
copyright act, and constitutewillful digital piracy on an
industrial scale. Consistentwith the deplorable nature of
piracy, IA's infringement isintentional and systematic. It
produces, mirror image copies ofmillions of unaltered in
copyright works for which it hasno rights and distributes them
(09:31):
entirely for purposes to thepublic for free including
voluminous numbers of books thatare currently commercially
available.
Unquote. So as I understand it,the Internet Archive argued that
the copying of books, in the waythat we've talked about here,
constituted fair use becausethey were, I suppose,
(09:53):
transforming the nature of thebooks by copying them, from, you
know, physical print to digital.That doesn't sound too
convincing to me.
Danessa Watkins (10:02):
Well, before we get into, you know, the the fair
use arguments, I'm just kind ofcurious because what you
described in the beginning asopposed to what was alleged in
the complaint seemed to be atodds, you know, which is
sometimes the way it goes andyou find out in discovery that
what's been alleged isn'tactually the real facts. But,
because it seems like they'realleging that these libraries
(10:24):
are scanning in these books anddistributing them widely.
Beginning, though, is that theyit seemed pretty systematic that
if, you you know, there was onecopy available electronically
that could be used by one personat a time.
Jack Sanker (10:39):
Right.
Danessa Watkins (10:39):
But if somebody had the physical book, then that
wasn't even available todisperse.
Jack Sanker (10:43):
Yeah. I mean, the allegations, collapse those
distinctions. I mean, these areallegations. Right? These are
what the publishers arealleging.
It doesn't mean it's the case.Right. So they're not making
that distinction. What they'resaying is you're copying the
books and putting them out forfree online.
Danessa Watkins (10:58):
Yeah. No. They're simplifying it.
Jack Sanker (10:59):
And what the libraries are saying is, no. No.
We're only making one copy.
Danessa Watkins (11:02):
Yeah.
Jack Sanker (11:03):
Yeah. And we're only, doing one one little
piracy instead of, but that but,the point is is is it copyright
infringement or not, you know,regardless of how bad of
copyright infringement you'redoing. Mhmm. This whole concept
of fair use, I think it's worthtaking a beat to talk about
(11:23):
that, Danessa, if you could helpme.
Danessa Watkins (11:25):
Yeah. I got you. So, so the fair use
doctrine, it's essentially alegal exemption that will allow
a limited use of copyrighted
material without the copyrightowner's permission.
So it's really like a balancedwithout the copyright owner's
permission. So it's really likea balance between the interests
of those holders of thecopyright and the public's
interest in creative work. Thedoctrine kinda looks at four
(11:49):
different factors. The firstbeing the purpose and the
character of the use. So is theuse of the copyrighted material
for commercial purposes or is itnot for profit or educational
purposes, which would tend tolean more towards fair use?
Jack Sanker (12:04):
Right. So for teaching and libraries.
Danessa Watkins (12:06):
Exactly. Exactly. A second factor is
social benefit. So whether thebenefit of having that
copyrighted material used in alimited fashion would exceed the
the loss to the copyrightholder. Here, again, it would
seem that that would weigh infavor of the library.
Jack Sanker (12:24):
Mhmm.
Danessa Watkins (12:25):
Third is the market impact. So whether that
use
that limited use
will hurt the original worksmarket such as displacing sales.
Jack Sanker (12:35):
Mhmm.
Danessa Watkins (12:35):
The way they alleged it in the complaint,
that makes it seem like Right.Of course. Yes.
Jack Sanker (12:40):
They're displacing millions of copies of or
millions of sales of copiesversus just the one.
Danessa Watkins (12:45):
Right. So that would just come down to the
factual inquiry of, you know,what's actually happening at the
libraries. And then the fourthfactor is widespread harm. So
whether the use allowing thislimited use use could actually
cause substantial harm if itbecame widespread. I mean, that
factor, I think, is always gonnaweigh in favor of the copyright
holder because
Jack Sanker (13:05):
Yeah.
That seems kinda baked
Danessa Watkins (13:06):
in there. So it's definitely a case by case
basis, depends on the facts ofeach circumstance. Just some
kind of broad examples of fairuse are criticism, scholarship,
news reporting, and parody. Soyou can pick out sentences of a
book, for example, and make funof it or criticize the writing
(13:30):
or use it in a classroom settingand, you know, teach your class
about it verbatim. There'sreally no specific number of how
many copies or how many wordscan be reproduced without
permission.
Again, it's it's case by case.But, generally, the more
material that you're copyingfrom the original, the less
(13:51):
likely it's gonna be consideredfair use.
Jack Sanker (13:54):
I have a I have a good parody example. Yeah. Did
anyone watch Nathan for you byany chance? No. There there's a
fantastic episode where, he hepitches a business idea, which
is just a one for one knockoffof Starbucks.
The the its exact branding dumbStarbucks. And then he, it it to
(14:19):
according to the bit on theshow, was circumventing,
intellectual property laws byparodying Starbucks just by
making a copy but calling itdumb Starbucks and, referred to
the store as an art gallery andnot a not a chain coffee.
Danessa Watkins (14:34):
Mhmm.
Jack Sanker (14:35):
And, I do believe Starbucks sued, and I think that
they settled it. But, I wouldlove to read a law review order
quote on whether that actuallywas parody or not. Yeah.
Danessa Watkins (14:44):
It might be too close.
Jack Sanker (14:45):
I have a dumb Starbucks mug at home, which is
Big fan. Maybe copyrightinfringement.
Danessa Watkins (14:51):
The only other thing I can say is is, the
courts will also look at whetheryou could get your point across
by copying less of the work thanthan what you're copying. So,
you know, maybe you only need asentence or two, and you don't
need the five paragraphs or thesix chapters. But here, I mean,
they're taking the full book.
Jack Sanker (15:09):
So Right. Like and this is, this is enforced all
over the place in differentways. I know, like, for example,
if you wanna upload a YouTubevideo, maybe you're a film
critic, right, and you wannaupload, bits of a film to talk
about and create a YouTubevideo. YouTube itself enforces
their own policy of a certainamount of time that you could
play a clip for. I don't know ifthat's based on a prior
(15:29):
decision.
I I bet it is. I bet there is adecision which says uploading a
clip longer than, what, thirtyseconds or three minutes? Three
seconds. Oh, three seconds. Oh,boy.
You said you get three seconds.Oh, you get three seconds. Okay.
My producer's telling me it'sthree seconds. But if you upload
a clip longer than three minuteor three seconds, you now have
exceeded, you know, the amountthat you really need to make
your point.
Danessa Watkins (15:50):
Right.
Jack Sanker (15:50):
Otherwise, you could just put the whole movie
up and then at the end go, Iliked it. And, and then you
haven't you know?
Danessa Watkins (15:57):
Well, I was kinda when you told me what you
were covering today, I was kindacurious how this worked with,
like, Facebook and Instagram,where people add music to their
stories or their reels. Ithere's definitely been times
when I've added music to, youknow, some reel I've made, and
then I get a notification fromFacebook that says your music
(16:18):
may appear in some venues, butnot others. Okay. So I kinda
read up on it just to see. Andthere was definitely some
agreement that Facebook madewith, I can't even remember the
name of the company now.
But,
Jack Sanker (16:31):
Probably record label or whatever. It was. Yeah.
I know Sony had a had a similardispute with TikTok.
Danessa Watkins (16:36):
Yeah. Okay. So it's probably something like
that. But but they you know,obviously, Facebook licensed the
songs that it makes available toyou to add to your Mhmm.
To
your content. But they set outparameters of, you yes. The
limits of the time, the factthat you're what you're showing
needs to be more about, like,the photos and the videos as
(16:57):
opposed to the music that'sbehind it.
Jack Sanker (16:58):
Yeah.
Danessa Watkins (16:59):
I it's, you know, it's a gray area. It's
literally case by case, and Ithink it's just one of those
places in our law that you needto kinda tread lightly and
Jack Sanker (17:09):
Yeah.
Danessa Watkins (17:09):
Air on the side of avoiding a copyright suit.
Jack Sanker (17:12):
Mhmm.
So that's kind of background onfair use in in in all this
business. I'll tell you thatjudge Beth Robinson in the
second circuit did not buy theargument that this digitizing
and and, systematized lending,process constitutes fair use. In
(17:33):
the opinion she wrote, thatdigitizing the books, quote, did
not provide criticism,commentary or information about
the originals or alter theoriginal books to add something
new. Internet archives digitalbooks serve the exact same
purpose as the originals,originals making authors works
available to read. Later shesaid that in copyright law
(17:53):
quote, not every instance willbe clear cut, this one is.
To construe Internet archivesuse of the works is transformate
transformative wouldsignificantly narrow, if not
entirely eviscerate copyrightowners exclusive rights to
prepare, or not preparederivative works, unquote. So
(18:16):
the rule that for the fair useexception to the overall, body
of law that is copyrights, didnot apply here. The court had
defined, not only thattransforming physical books to e
books was not transformative inthe way that, you know,
commentary or criticism oranything else would be, but it
also had to rule whetherInternet archives was profiting
(18:38):
off the ebook lending, which itwasn't, and whether the
publishers or authors were beingharmed by this, which is up for
debate. The court ruled in favorof, the publishers on all of
those issues as I understand it.So, what's interesting is the
burden in this analysis, andit's a it's for permanent
injunction.
(18:59):
Injunctive relief in particularhas a lot of burden shifting
back and forth, which, like, Iwould have to go back and and
read before I told any of you.It's been so long since I've
litigated that. But, long andshort of it is there is burden
shifting when you're gettinginto weird remedies like that,
particularly, like, permanentinjunctions. So, and by burden
(19:20):
shifting, I mean, it can becomethe defendant's burden to prove
their innocence effectively on acertain element. So the burden
in this analysis was on InternetArchive to prove that it had not
harmed the publishers.
And, in arguing that point, theyhighlighted the surging profits
of the publishers of the thefour plaintiffs in this case,
(19:43):
which is probably true.Nonetheless, the court rejected
that stating quote, we agreewith publishers assessment of
the market harm and are likewiseconvinced, that unrestricted and
widespread conduct of the sortengaged of by the defendant
would result in substantiallyadverse impact to the potential
market. And this is that fourthfactor that we talked about
(20:05):
earlier that's gonna almostalways
Danessa Watkins (20:07):
Right.
Jack Sanker (20:08):
Go in favor of the copyright holder.
Danessa Watkins (20:09):
Mhmm.
Jack Sanker (20:11):
Quote, the publishers have not provided
empirical data to support thisauthorization, observation, and
we routinely rely on suchlogical inferences where
appropriate, unquote. Andlooking around some of the
statements that were made by thefolks that were invested in
this, it seems as though thepublishers would, like, never
turned over complete data on,like, the economics of how they
(20:31):
were harmed. So there there wasa bit of a complaint of, like,
discovery prejudice here. And,we'll talk about that in a in a
moment. But in any event, whatare the effects of this ruling?
Well, more than 93% of publiclibraries participate in digital
lending of some kind. Whether itis the controlled digital
(20:58):
lending, like we talked aboutthe one for one way or, or other
ways. It's 93% of libraries aredoing it. There were 62
libraries that were partnereddirectly with Internet archives,
so they're all in trouble now.If they can't do this controlled
digital lending method, the onefor one, physical versus digital
lending, as I understand it,their only option As I
(21:20):
understand it, their only optionis to license the ebooks via the
subscription model that mostpublishers do.
And according to at least a lotof the briefing that was
associated with these arguments,those licensing fees are
getting, like, jacked up throughthe roof as you can imagine.
It's getting more and moreexpensive for libraries to do
this. Right.
Danessa Watkins (21:37):
Well and even you said that you could only
download a work for a certainamount of time. So I would
think, let's say it's, I don'tknow, a year. They can increase
the price of that book.
Jack Sanker (21:49):
At the end of the year? Yeah.
Danessa Watkins (21:50):
Yep. And I'm sure they're going to have some
way of tracking how popular itis. Yeah. And then they're gonna
jack up the price on the onesthat are, you know, more
frequently checked out.
Jack Sanker (21:59):
Yeah. Versus, you know, the I mean, if you wanna
put on, like, your, you know,financial analyst hat here,
like, the amortized cost of abook that they bought ten years
ago spread out over you knowwhat I mean?
Danessa Watkins (22:10):
Like Mhmm.
Jack Sanker (22:10):
They buy the book, the book is bought, they have
the book, they can lend it out,you know, versus this ongoing
price hikes on, the book, as itwere, that can go up over time.
Like, the cost of of lending abook theoretically would go down
over time. Right? You boughtbought
the book.
The more times you lend it out,the more cost effective that
(22:31):
purchase was. Mhmm. Here, it isthe opposite. Yeah. So, there's
an advocacy group called PublicKnowledge that is brief in
support of Internet archives andissued a statement afterwards
which is helpful tounderstanding this, which I'll
quote from.
Quote, controlled digitallending is a critical toolkit
for libraries to reach theirpatrons in the digital age. With
(22:52):
today's decision, the secondcircuit undermines those policy
goals. We appreciate that thecourt set the record straight
and clarified that a nonprofit'sdonate button does not magically
render, a use commercial innature. However, the rest of the
analysis falls short. The courtasserts bafflingly that the
United Archive is is notentitled to statutory
protections because it does notperform, quote, traditional
(23:13):
functions of a library.
It is unclear what the secondcircuit, believes these
traditional functions to be ifnot lending books to the public.
This is a case about the futureof libraries as much as
copyright law. On top of fundingshortfalls and in increasing
censorship demands, librariesare being forced to repeatedly
buy the same books over and overagain due to publishing industry
(23:33):
practices is what we're talkingabout. Mhmm. When libraries add
print books to theircollections, those books don't
expire even when they aredamaged, lost, or stolen.
Libraries have the specificstatutory right to create new
copies of print books and othermedia because the preservation
of knowledge and making worksavailable to the public is both
core to the mission of librariesand the purpose of copyright.
With ebooks, libraries havefewer options. When libraries
(23:55):
want to add ebooks to theircollection, they can often only
purchase a time limited licenseafter which the books expire and
have to be repurchased. Thecourt recognizes that the,
result is regular renegotiationof ebook licenses that often
come at a steeper price and fora shorter term than print copies
of the same books, unquote. So,
Danessa Watkins (24:18):
this So the court's acknowledging those
issues, but, ultimately, itdidn't sway Right.
Jack Sanker (24:24):
Ruling. I I think the ruling boils down to, not
great for libraries, but,copying look. Scanning a copy of
a book just feels like scanninga copy of a book, man. It feels
like you're copying it. I don'tknow.
I don't I'm not an intellectualproperty lawyer. Please,
intellectual property lawyers,if you're listening, do not come
for me. But it feels like you'repirating it. Like, it just does,
(24:49):
however you wanna spin it. Andunless there's specific
statutory carve outs, which itseems like there are here, this
is what the statement isreferencing, to which this
website, you know, apparentlydoesn't fall into.
Danessa Watkins (25:02):
I could see concerns from the copyright
holders about the security ofthe online database.
Jack Sanker (25:09):
Sure.
Danessa Watkins (25:10):
But it would seem like that, you know, these
live whatever the 62 librariesthat were using this company, I
mean, that was they were doingtheir due diligence. Maybe they
don't have the the technologicalcapabilities of that company. So
as long as you have, you know, areputable company that's
maintaining these databases,making sure that when somebody
checks out an ebook, it can't bedownloaded, shared, yada yada,
(25:35):
that would seem to at leastaddress the issue of loss of
revenue.
Jack Sanker (25:45):
Yeah. I mean, the loss of revenue thing is
interesting because I I would Iwould put it this way. I think
that publishers, would, youknow, annihilate any and all
exemptions or exceptions tocopyright law if they could. You
know? It's the fact right law ifthey could.
Danessa Watkins (26:00):
Yeah
Jack Sanker (26:00):
know? It's the fact that they're that library
library excuse me. The fact thatlibraries are even allowed to
lend books in the first placeprobably irritates them, you
know, because they're like,you're you're getting your book
for free, and we're not we'rethat's we're not making any
money off of that. Yeah. So,like, the motives the financial
motives, like, are clear here.
Like, this I'm not even sayingpublishers are, like, bad guys.
(26:22):
I'm just saying it would makesense for them to want to
annihilate libraries as a, youknow, a concept. So, yeah. I I
think it's interesting that thecourts, you know, says that
Internet archives does notperform, you know, traditional
functions of a library because,like, it is just lending books.
Danessa Watkins (26:40):
Mhmm.
Jack Sanker (26:41):
That's what it does, at least as far as I know.
I will say this ruling makes mesad, just because I like
libraries, and I have some moresad library facts for you all.
According to a report inPublishers Weekly, which was
(27:01):
originally published in 2021,there's been a 31% decline in
public library building usebetween February and 02/2018.
That's 02/2018. That's prepandemic so it's probably worse.
Mhmm. The fall in public librarybuilding use was, critical
before the pandemic and acontinuing high level of use of
(27:21):
digital materials, so ebooks,will make that worse, the the
report states. The report alsoacknowledges the contentious
state of the digital librarymarket which, the report
suggests does not represent goodlibraries. And most depressingly
(27:42):
here, there's a discussion aboutthe way that funds are allocated
within the actual librariesthemselves because libraries
often do, like, classes, daycares, or, things for
Danessa Watkins (27:54):
After school programs. Yeah.
Jack Sanker (27:55):
Yeah. All those things.
More of
that money now will be sucked upin the licensing these ebooks.
So those things will also bediminished by this process
unless someone could figure itout. Quoting going back to
Publishers Weekly, report,quote, the investment in digital
materials appears to have takenaway significant funds
from that of physical materialsand
the cost per circulation ofdigital material is material. In
(28:23):
stark terms, in most librariesunder current arrangements, it
would be many times cheaper togive a patron the money to just
buy an ebook rather than licensea copy for the library.
Danessa Watkins (28:33):
Wow.
Jack Sanker (28:34):
Yeah. So libraries, bad shape.
Danessa Watkins (28:38):
Yeah.
Jack Sanker (28:40):
And this, this ruling, the second circuit
ruling here does seem to put,the kibosh on, you know, one way
that the kind of traditionallibrary model could be adapted
towards ebooks and things likethat. So, yeah, absent
(29:03):
bargaining power. Right?
Danessa Watkins (29:04):
Mhmm.
Jack Sanker (29:05):
You know, like, your local tax funded library,
like, can't go to Harper Collinsand demand anything. Right. Now
I don't know if there was sometype of, like, collective, you
know, of the all the librariesthat got to, like, a I don't
know, like, a union orsomething.
Danessa Watkins (29:19):
Like a statewide maybe?
Jack Sanker (29:21):
Yeah. Something like that. And they can
negotiate some type of deal, butwhy again, why do the publishers
even care? They don't even wantthey don't wanna deal with the
libraries at all, probably.Yeah.
So it's tough, folks.
Danessa Watkins (29:32):
Do you
think they'll appeal?
Jack Sanker (29:35):
I mean, who knows? One of the statements I read
from the Internet archives folkssaid they're evaluating, whether
they can appeal. I mean, itseems like there are,
evidentiary and discoveryissues, kind of like process
violations that you could getinto that maybe give them
another crack at it. But Mhmm.Overall, I I I'm not
(29:59):
particularly persuaded, by theargument that, you know, copying
something isn't copyingsomething.
Yeah. That they aren't copyingit. Like Right. However you
wanna put it. You know?
If you can and now you can weavethat into the narrow exceptions
and argue public policy and andtry to get it into the under the
fair use category. But, like,you are starting from that bad
(30:21):
fact of, like, yeah. You'reyou're copying the book.
Danessa Watkins (30:23):
Yeah. And, I mean, once again, I think it
goes back to the lack ofcontrol, you know, that the
publishers have.
Jack Sanker (30:30):
You mean once the book is in the hands of the
library?
Danessa Watkins (30:33):
Yeah. And if if they're gonna allow I I don't
you know, where are the checksand balances, I guess, of,
making sure that they actuallyfollow that policy of a hard
copy book is lent out and thedigital one is pulled. A
digital, you know, is lent out,the hard copies like, because
they really have only I mean, Ipossession of one work.
Jack Sanker (30:53):
I I never really understood that's what was
happening, but I I use the, Iuse the Libby app, which which
is, fantastic, if you ever get achance to do it for, like,
audiobooks and stuff. Mhmm. Andoftentimes, I go on there and
look for an audiobook and it's,like, this title is not
available. What do you mean notavailable? It's not how's it not
available?
Like, you you have it. You know?It's a digital Yeah. But I am
I'm Okay. That makes sense.
(31:14):
Yeah. It's checked out. Yeah.I'm stupid for not understanding
that they have a licensed amountof copies
Danessa Watkins (31:18):
Yeah.
Jack Sanker (31:19):
And they can only check out x amount of time, you
know, at a time. So I would justbe like my app's broke. You
know? Can't get can't get thebook. But, yeah, that makes
sense now.
And it but so if they're allowedto do that, I mean, well,
they're paying a license
Danessa Watkins (31:31):
fee. They're paying. Yeah.
Jack Sanker (31:32):
Yeah. They're
Which is gonna crush thelibraries in the long run.
Right. So it seems like it'sjust gonna become more expensive
to borrow ebooks and moreexpensive to borrow physical
books, more expensive tomaintain libraries, more
expensive to for them to put onprogramming, things like that. I
mean, this is gonna be afinancial squeeze for them. And
(31:56):
that's just that's just sad, youknow.
It's just not I mean, I I don'tnecessarily blame the publishers
who who they would say they arefighting for the rights of the
creators or the authors. They,you know, they will say that the
authors are being harmed. Youknow, and and that's I
understand that, but it's justyeah. It feels bad. Yeah.
(32:17):
Unfortunately. Mhmm. Well, thegood news is no
no one reads books anyways. So,so, yeah. Just listen to
podcasts. Who cares? Right.
Alright. That's the show,everyone. Thanks for listening.
As a reminder, there's nothingstopping you from going and
supporting your local library.Doing the research for this show
(32:39):
actually really made me want togo back to the library, which I
haven't been in a long time,start taking my kid there.
So we can reverse this reversethis dynamic on our own. But
thanks for listening to thispodcast in the meantime. And if
you want to support our show,find us on Spotify, Apple
Podcasts, YouTube, wherever youget your podcasts. Leave a
review. Give us five stars.
(33:00):
Help us out, and we'll talk toyou in two weeks.
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