With the exponential growth of artificial intelligence (AI) and legal controversies brewing about AI’s use of copyrighted materials to train its software, it is a good time to reflect on how big tech has systematically tried to undermine the rights of publishers and authors to exploit their copyrighted works. One of the ways they have done this is by allying themselves with libraries to give an altruistic guise to their scheme.
Nowhere was this more apparent than in the recent Internet Archive case decided in favor of publishers this past spring in federal court. In this case, Big Tech allied itself with libraries in its efforts to use copyrighted material free of charge to develop its own for-profit products and services. The Internet Archive, essentially a multimillion-dollar tech company that tried to guise itself as a public lending library, openly trampled on the rights of publishers and authors.
The Fabricated Theory of Controlled Digital Lending
There has always been an interdependent relationship between libraries and publishers. Publishers provide the material for libraries to fulfill their mission of providing information to the public, while libraries support publishers and their authors by paying for print books, e-books, and audiobooks. But the scheme devised by the Internet Archive circumvented ordinary library licensing under a fabricated theory called Controlled Digital Lending (CDL), which the Internet Archive used to justify its actions.
CDL asserted that owning a print copy of a book allowed the Internet Archive to scan it and lend it out to a number of readers equal to the number of print copies it possesses. This illegal activity directly violated the Copyright Act. As a court previously ruled in the Google Books case, “An author’s right to control and profit from the dissemination of her work ought not to be evaded by conversion of the work into a different form.”
The Internet Archive, under the direction of tech mogul Brewster Kahle, amassed a collection of more than 3 million unauthorized in-copyright e-books and loaned out them over 25 million times annually without obtaining licenses to do so or paying the rightsholders for exploiting their works. Anyone, anywhere in the world, could instantaneously access these stolen works via the websites operated by the Internet Archive.
As the plaintiffs in the case argued: “This lawsuit is not about a billion-dollar industry seeking to hinder the lawful conduct of a real library. It is about a multimillionaire ideologue hijacking the author’s livelihood for his own commercial gain and because he believes he knows best how the world should work.”
United States District Judge John G. Koeltl found in his ruling on the Internet Archive case that “IA copied the Works in Suit wholesale for no transformative purpose and created eBooks that … competed directly with the licensed eBooks of the Works in Suit.”
The Effect on Publishers
Smaller publishers were uniquely affected by the illegal actions of the Internet Archive. Most small and mid-size publishers lack the financial resources to pursue legal action for copyright violations against a large tech company like the Internet Archive. By making these copyrighted works freely available, the Internet Archive devalued them, impacting the bottom line for both publishers and authors. This diminished the incentive for publishers to invest in new formats like e-books and to publish new titles if third parties can unilaterally transform their print books into digital books en masse, republish them for anyone on the internet, and pay the rightsholders nothing for doing so.
The Internet Archive tried to justify its illegal actions by allying itself with the library community and portraying itself as just an ordinary library. The founder, Kahle, argued, “What libraries do is we buy, preserve, and lend books to one reader at a time. Why do we do it? Libraries are a pillar of our democracy. We are a great equalizer, providing access to information for all. We also have an age-old role as custodians of culture, preserving knowledge for future generations.” But under careful examination, the Internet Archive was anything but an altruistic enterprise.
While independent publishers and authors struggled to make their businesses profitable, members of the board of the Internet Archive were each paid in excess of $160,000 per year from monies that the Internet Archive generated by exploiting their works. The Internet Archive was perpetrating a copyright-infringement scheme resembling the Napster case in many respects. A U.S. Copyright Office analysis of A&M Records Inc. vs. Napster Inc. states that “courts are reluctant to find fair use where the original work is merely retransmitted in a new medium,” which is exactly what the Internet Archive was trying to do.
The Internet Archive, although operating under the guise of a nonprofit, tied its activities to the for-profit Better World Books, acquired in 2019 by a shell company, called Better World Libraries, also controlled by Kahle. The Internet Archives’ own director of finance testified that “every single page of the Archive is monetized.” As the court found in its ruling, “IA uses its Website to attract new members, solicit donations, and bolster its standing in the library community.” By offering free books, the goal of the Internet Archive is, in reality, to maximize its user base and generate revenues for itself and its for-profit affiliates.
Better World Books processed and “donated” nearly 3 million books to the Internet Archive between July 2019 and the middle of 2021 and continued to funnel books from its intake to the Internet Archive for shipping to offshore “superscanning” centers in the Philippines, where they were digitized for inclusion on its website. As the plaintiffs rightly stated in their motion for summary judgment, “The highly commercial ‘synergies’ between IA and BWB were hallmarks of commercial activity, like the ‘Purchase at Better World Books’ buttons that appear at the top of the browser window on the Website whenever a book was checked out.”
Undermining Free Speech
In reality, the scheme developed by the Internet Archive had no support in the Copyright Act. Kahle’s declared goal is to make “all the published works of humankind available to people, permanently,” meaning he intends to continue to profit from the hard work of authors and publishers without compensating them for their efforts. This directly threatened free speech and free enterprise, the foundations of a democratic society.
Judge Koeltl outlined the Internet Archive scheme in his ruling: “IA offers users complete eBook editions of the Works in Suit without IA’s having paid the Publishers a fee to license those eBooks, and it gives libraries an alternative to buying eBook licenses from the Publishers. Indeed, IA pitches the Open Libraries project to libraries in part as a way to help libraries avoid paying for licenses…. It is equally clear that if IA’s conduct becomes widespread, it will adversely affect the potential market for the Works in Suit…. New organizations like IA also could emerge to perform similar functions, further diverting potential readers and libraries from accessing authorized library eBooks from the Publishers. This plainly risks expanded future displacement of the Publishers’ potential revenues.”
While the Internet Archive claimed to be an ally of libraries, it was, in reality, quite the opposite. Its success would ultimately lead to the shuttering of real libraries across the country as it would render those institutions obsolete.
The actions taken by the Internet Archive subverted independent publishers who collectively invest millions of dollars to produce quality works that would otherwise be unavailable in the marketplace. These publishers assume the risk of undertaking these efforts. The Internet Archive subverted their efforts and imperiled them by denying publishers and authors proper remuneration for their work. This directly impacted the revenues received by independent publishers and authors who are already struggling in this challenging economic environment.
Ultimately, the actions of the Internet Archive undermined free speech. Instead of promoting it as they claimed, they caused harm to independent publishers. If the actions of the Internet Archive and the multimillionaires who sustain it had been left unchecked by the courts, freedom would have been lost, the goals of a diverse and inclusive society undermined, and the damage to our culture irreparable.
Unfortunately, the Internet Archive case has not ended the efforts of Big Tech to infringe on the rights of publishers and authors. The same tech moguls continue to finance efforts in different states to regulate e-book sales to libraries by dictating terms under which publishers must make their works available. Fortunately, to date, the courts have also sided with publishers on these issues, but their efforts continue in new and varied forms. I am proud of the work that the Independent Book Publishers Association has done, working alongside other organizations, to defend the interests of its members on these issues and many more.
Dr. Kurt Brackob is the director of Histria Books, an independent publishing house with offices in Las Vegas and Palm Beach, which publishes trade fiction and nonfiction, children’s books, and academic titles across its seven imprints. In addition to a career in publishing, he has a background in banking and finance, as well as academics. His books include Scanderbeg, Mircea the Old, and the award-winning Dracul – Of the Father, the Untold Story of Vlad Dracul. Brackob serves on the IBPA Board of Directors and the Advocacy Committee.