The decision rendered by the Second Circuit Court of Appeal on September 4 focuses on the practice of controlled digital lending (or CDL) which was theorized by American jurists and librarians and is based on a bold use of the rules on the exhaustion of rights and the doctrine of fair use. It consists of digitizing the physical copy of a book purchased by the library, a copy which is then excluded from lending to the public, and lending the digital file obtained according to terms which reproduce, thanks to technical protection measures, the circulation of a physical book: ready for a limited time, to a single user at a time. The library thus creates its own digital book, which allows it to avoid having to resort to commercial licenses offered by publishers, which can impose unfavorable conditions on libraries: reduced catalogs and high prices compared to digital books offered to the general public or imposition of specific contractual restrictions. It can then, according to the supporters of the CDL, lend the digital book legally to its public since it only replaces the physical book with the corresponding digital file, without widening its distribution.
Internet Archive, the defendant in the case discussed, is an American non-profit organization whose main mission is archiving the Internet, but also acts as a digital library through its Open Library project. With Open library, Internet Archive could lend, in 2020, 1.4 million digitized works on an online library platform with a CDL system. During the covid-19 pandemic, Open Library set up an emergency library by temporarily lifting the limit on the simultaneous number of users who can download a book. It is this device that prompted four major publishers, Hachette Book Group, Penguin Random House, HarperCollins and Wiley, to file an infringement action against the Internet Archive for its digital library activities.
A first judgment rendered in 2023 by the District Court for the Southern District of New York (Hachette Book Group, Inc. v. Internet Archive20-CV-4160 (JGK), (SDNY 2023)) had ruled in favor of the plaintiffs, by dismissing the defense of fair use advanced by Internet Archive. The latter then appealed, without contesting that its actions constituted acts of counterfeiting but maintaining its defense of fair use.
The doctrine of fair use
The fair use is a doctrine of American law. This is an open exception to the monopoly imposed by the copyright : the use of a protected work may be authorized if it is a legitimate use. The legitimate character is assessed by the judge according to criteria defined in § 107 of the Copyright Act :
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the objective and nature of the use, in particular whether it is of a commercial or educational nature and not for profit;
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the nature of the protected work;
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the quantity and importance of the part used in relation to the entire protected work;
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the consequences of this use on the potential market or on the value of the protected work.
These criteria must be taken as a whole during a case-by-case assessment exercise which should allow the judge to…
