23-1260 Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page1 of 64
Hachette Book Group, Inc. v. Internet Archive

In theUnited States Court of Appeals
For the Second Circuit
August Term, 2023
Argued: June 28, 2024

Decided: September 4, 2024

Docket No. 23-1260

HACHETTE BOOK GROUP, INC., HARPERCOLLINS PUBLISHERS L.L.C., JOHN WILEY &SONS, INC., PENGUIN RANDOM HOUSE LLC,
Plaintiffs-Appellees,–v.–
INTERNET ARCHIVE,
Defendant-Appellant,
DOES 1–5, INCLUSIVE,
Defendants. *Before:*MENASHI, ROBINSON, and KAHN, Circuit Judges.

The Clerk’s office is directed to amend the caption as reflected above.

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Defendant-Appellant Internet Archive appeals from a judgment of
the United States District Court for the Southern District of New York
(Koeltl, J.) denying its motion for summary judgment and granting
Plaintiffs-Appellees’ motion for summary judgment.
Internet Archive creates digital copies of print books and posts thosecopies on its website where users may access them in full, for free, in a
service it calls the “Free Digital Library.” Other than a period in 2020,
Internet Archive has maintained a one-to-one owned-to-loaned ratio for its
digital books: Initially, it allowed only as many concurrent “checkouts” of adigital book as it has physical copies in its possession. Subsequently,
Internet Archive expanded its Free Digital Library to include other libraries,
thereby counting the number of physical copies of a book possessed bythose libraries toward the total number of digital copies it makes available
at any given time.
Plaintiffs-Appellees―four book publishers―sued Internet Archive in
2020, alleging that its Free Digital Library infringes their copyrights in 127
books and seeking damages and declaratory and injunctive relief. Internet
Archive asserted a defense of fair use under Section 107 of the CopyrightAct. The district court rejected that defense and entered summary judgment
for Plaintiffs.
This appeal presents the following question: Is it “fair use” for a
nonprofit organization to scan copyright-protected print books in their
entirety, and distribute those digital copies online, in full, for free, subject toa one-to-one owned-to-loaned ratio between its print copies and the digitalcopies it makes available at any given time, all without authorization fromthe copyright-holding publishers or authors? Applying the relevant
provisions of the Copyright Act as well as binding Supreme Court andSecond Circuit precedent, we conclude the answer is no. We therefore
AFFIRM.

ELIZABETH A. MCNAMARA, Davis Wright
Tremaine LLP, New York, NY (Linda J. Steinman,
John M. Browning, Jesse M. Feitel, Carl Mazurek,
Davis Wright Tremaine LLP, New York, NY; Scott2

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A. Zebrak, Matthew J. Oppenheim, Danae Tinelli,
Oppenheim + Zebrak, Washington, D.C., on thebrief), for Plaintiffs-Appellees.
JOSEPH C. GRATZ, Morrison & Foerster LLP, San
Francisco, CA (Joseph R. Palmore, Diana L. Kim,
Aditya V. Kamdar, Morrison & Foerster LLP,
Washington, D.C.; Corynne M. McSherry,Electronic Frontier Foundation, San Francisco,CA, on the brief), for Defendant-Appellant.
Jason M. Schultz, Sunoo Park (admission
pending), Jake Karr, Technology Law and Policy
Clinic, New York University School of Law, New
York, NY, for Amici Curiae Copyright Scholars
Jonathan Askin, Patricia Aufderheide, Dr. Patrick
Goold, Stacey M. Lantagne, Sari Mazzurco, Sunoo
Park, Aaron Perzanowski, Blake E. Reid, Jason
Schultz, Pamela Samuelson, and Jessica Silbey, in
support of Defendant-Appellant.
Christopher T. Bavitz, Cyberlaw Clinic, Harvard
Law School, Cambridge, MA, for Amici Curiae
Kevin L. Smith and William M. Cross, in supportof Defendant-Appellant.
Jennifer M. Urban, Samuelson Law, Technology& Public Policy Clinic, U.C. Berkeley School ofLaw, Berkeley, CA, for Amicus Curiae Center for
Democracy & Technology, Library Freedom
Project, and Public Knowledge, in support ofDefendant-Appellant.
Rachel Brooke Leswing, Authors Alliance, Inc.,
Berkeley, CA, for Amicus Curiae Authors Alliance,
Inc., in support of Defendant-Appellant.
Max Rodriguez, Pollock Cohen LLP, New York,
3

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NY, for Amici Curiae Former and Current Law
Library Directors, Professors, and Academics, in
support of Defendant-Appellant.
Yuliya M. Ziskina, eBook Study Group,
Biddeford, ME, for Amici Curiae eBook Study
Group, Library Futures Project, The EveryLibrary
Institute, ReadersFirst, The Scholarly Publishingand Academic Resources Coalition, Association ofSoutheastern Research Libraries, Boston Library
Consortium, Partnership for Academic Library
Collaboration & Innovation, Urban Librarians
Unite, and 218 Librarians, in support of DefendantAppellant.
Catherine R. Gellis, Sausalito, CA, for Amicus
Curiae Floor64, Inc. D/B/A the Copia Institute, in
support of Defendant-Appellant.
Rebecca Tushnet, Cambridge, MA, for Amici
Curiae Patricia Aufderheide, Mark Bartholomew,
Michael A. Carrier, Zachary Catanzaro, Bryan H.
Choi, Christine Haight Farley, Jim Gibson, Patrick
Goold, James Grimmelmann, Laura A. Heymann,
Michael Karanicolas, Edward Lee, Yvette Joy
Liebesman, Glynn S. Lunney, Jr., Mark P.
McKenna, Amanda Reid, and Rebecca Tushnet, in
support of Defendant-Appellant.
Jef Pearlman, USC Gould School of Law, IP &Technology Law Clinic, Los Angeles, CA, for
Amici Curiae Wikimedia Foundation, Creative
Commons, and Project Gutenberg Literary
Archive Foundation, in support of DefendantAppellant.
Matthew J. Keeley, Michael Best & Friedrich,Washington, D.C., for Amici Curiae International
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Publishers Association, Federation of European
Publishers, International Association of Scientific,
Technical and Medical Publishers, International
Confederation of Societies of Authors andComposers, International Federation of Film
Producers Associations, International Video
Federation, IFPI, Association of CanadianPublishers, Brazilian Book Chamber, Sindicato
Nacional dos Editores de Livros, and Syndicat
national de l’édition, in support of PlaintiffsAppellees.
Elaine J. Goldenberg, Sarah Weiner, Munger,
Tolles & Olson LLP, Washington, D.C., for Amici
Curiae Recording Industry Association ofAmerica, National Music Publishers’ Association,
Motion Picture Association, Inc., andNews/Media Alliance, in support of PlaintiffsAppellees.
Joshua J. Simmons, Kirkland & Ellis LLP, New
York, NY, for Amici Curiae 24 Former Government
Officials, Former Judges, and IP Scholars, in
support of Plaintiffs-Appellees.
Jacqueline C. Charlesworth, Charlesworth Law,
Sherman Oaks, CA, for Amici Curiae Professors
and Scholars of Copyright and Intellectual
Property Law, in support of Plaintiffs-Appellees.
Nancy E. Wolff, Elizabeth Safran, Cowan,
DeBaets, Abrahams & Sheppard LLP, New York,NY, for Amicus Curiae Copyright Alliance, in
support of Plaintiffs-Appellees.
Roberta Clarida, Reitler Kailas & Rosenblatt LLP,New York, NY, for Amici Curiae the Authors
Guild, Inc., American Photographic Artists,
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American Society for Collective Rights Licensing,
American Society of Media Photographers, Inc.
Association of American Literary Agents,
Canadian Authors Association, Dramatists Guildof America, European Visual Artists, theEuropean Writers’ Council – Fédération desAssociations Européennes d’Ecrivains,
International Authors Forum, National Press
Photographers Association, National Writers
Union, North American Nature Photography
Association, Romance Writers of America, Sisters
in Crime, Society of Authors, and Writers’ Union
of Canada, in support of Plaintiffs-Appellees.
Brandon C. Butler, Jaszi Butler PLLC,
Washington, D.C., for Amicus Curiae American
Library Association and Association of Research
Libraries, in support of neither party.
Joseph Petersen, Sara K. Stadler, KilpatrickTownsend & Stockton LLP, New York, NY, for
Amicus Curiae HathiTrust, in support of neither
party.
ROBINSON, Circuit Judge:
Defendant-Appellant Internet Archive appeals from a judgment of theUnited States District Court for the Southern District of New York (Koeltl, J.)
denying its motion for summary judgment and granting Plaintiffs-Appellees’
motion for summary judgment.

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Internet Archive creates digital copies of print books and posts those copies
on its website where users may access them in full, for free, in a service it calls the“Free Digital Library.”

Other than a period in 2020, Internet Archive has

maintained a one-to-one owned-to-loaned ratio for its digital books: Initially, it
allowed only as many concurrent “checkouts” of a digital book as it has physicalcopies in its possession. Through its Open Libraries Project, Internet Archive
subsequently expanded its Free Digital Library to include partner libraries’
collections, thereby counting physical copies of a book possessed by partner
libraries towards the total number of digital copies it makes available at any given
time.
Plaintiffs-Appellees―four book publishers―sued Internet Archive in 2020,
alleging that its Free Digital Library infringed their copyrights in 127 books andseeking damages and declaratory and injunctive relief. Internet Archive asserted
a defense of fair use under Section 107 of the Copyright Act. The district court
rejected that defense and entered summary judgment for Plaintiffs.
This appeal presents the following question: is it “fair use” for a nonprofit
organization to scan copyright-protected print books in their entirety anddistribute those digital copies online, in full, for free, subject to a one-to-one
owned-to-loaned ratio between its print copies and the digital copies it makes
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available at any given time, all without authorization from the copyright-holding
publishers or authors? Applying the relevant provisions of the Copyright Act aswell as binding Supreme Court and Second Circuit precedent, we conclude theanswer is no. We therefore AFFIRM.
BACKGROUND 1
Plaintiffs-Appellees Hachette Book Group, Inc., HarperCollins Publishers
LLC, John Wiley & Sons, Inc., and Penguin Random House LLC (“Publishers”) are
four of the leading book publishers in the United States. They obtain from authors
the exclusive right to publish their works in multiple formats, including
hardcover, paperback, and eBook. Publishers and their authors profit from thisarrangement via sales in each format.
In addition to selling traditional print books, Publishers collectively invest
millions of dollars in developing new formats and markets suited for the digitalage, including the eBook market. Publishers distribute eBooks in two principal
ways. First, they sell eBooks direct to consumer through electronic retail platforms
such as the Amazon Kindle Store.

Second, Publishers―via commercial

distributors such as OverDrive―license eBooks to libraries under a one-copy, one-Unless otherwise noted, the facts are drawn from the parties’ respective Rule 56.1 statements
and are undisputed.

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user model that allows each eBook to be “checked out” by one patron at a time, ina similar fashion to traditional library lending of print books. Library patrons
access eBooks through distributors’ online platforms, like OverDrive’s Libby app.
Publishers require that libraries lend each eBook only to their own verified library
members, who are residents of the geographical areas served by the library.
The library eBook lending market is thriving. Checkouts of eBooks on
OverDrive by library patrons increased dramatically between 2010 and 2020. This
surge in lending translates to greater profits for Publishers, some of whom findlibrary eBook licenses occupying an increasing percentage of their overall eBook
revenues. With more than 93% of public libraries participating in eBook lending,Publishers and their authors have tapped in to a profitable, growing market.
The story is a bit more complicated for libraries. When libraries acquire
print books, they may circulate those books for as much time and as many borrows
as they desire, until the books wear down beyond usefulness. At first, Publishers
offered eBook licenses to libraries on a perpetual basis, allowing them to lend
eBooks in a similar manner to print books, though without the same concerns forwear and tear. Now, Hachette offers two-year licenses, Penguin offers two-year
and pay-per-use licenses, HarperCollins offers 26-borrows and pay-per-use
licenses, and Wiley offers perpetual licenses and licenses for a set number of days
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or uses. Although Hachette, Penguin, and HarperCollins still offer perpetual
licenses to academic libraries, they stopped offering perpetual licenses to public
libraries in 2019, 2018, and 2011, respectively. While some Publishers price theireBook licenses the same as print books, others price their licenses higher than thesuggested retail price of print books or even consumer eBooks. 2 For libraries, theresult is regular renegotiation of eBook licenses that often come at a steeper priceand for a shorter term than print copies of the same books.
Enter Internet Archive: a nonprofit whose stated mission “is to provide
universal access to all knowledge.” App’x 5778. Internet Archive (“IA”) “works
with libraries, museums, universities, and the public to preserve and offer free
online access to texts, audio, moving images, software, and other cultural
artifacts.” Id. at 5779. One of IA’s longest running projects is the “Wayback
Machine,” which archives public webpages that might otherwise be lost to history.
In 2011, IA launched the project at issue in this appeal: the “Free Digital Library.”
Appellant’s Br. at 5.

Wiley prices their library eBook licenses the same as their print books. HarperCollins prices
their licenses slightly higher than the suggested retail price of print books. Penguin prices theirlicenses higher than print books and consumer eBooks. The record is unclear regarding
Hachette’s library eBook licensing pricing as compared to its print and consumer eBook pricing.

2

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Starting in 2011, IA partnered with the Open Library of Richmond, anonprofit, and Better World Books (“BWB”), a for-profit used bookstore, to acquire
print books for digitizing and posting on IA’s website. The Open Library ofRichmond buys or accepts donations of print books―primarily from BWB―andsends those books to IA scanning centers, where operators scan each page using abook-digitization device. The Open Library of Richmond holds legal title to andmaintains physical possession of the print books, which are placed in shipping
containers and kept out of circulation after scanning.
Once IA scans a book, it posts the digital copy 3 on its website, where IA
account holders may access it in full, for free. IA does not charge a fee to open an
account or for any subsequent service, including digital book borrowing. Accountholders may check out up to ten digital books at a time for up to fourteen days
each, and may read those copies on IA’s BookReader web browser platform or
download an encrypted PDF or EPUB version of the digital book. IA represents
that it secures these downloadable versions with software that “allows only theauthorized patron to download and read the borrowed book . . . and prevents the

Publishers call these copies “eBooks” or “bootleg” eBooks. See, e.g., Appellees’ Br. at 39. IA,
meanwhile, refers to its scans as “digital cop[ies]” or “books.” See, e.g., Appellant’s Br. at 6. Forease of distinguishing between IA’s and Publishers’ respective services, and because theterminology is ultimately irrelevant to our holding, we refer to IA’s scans as “digital books” or“digital copies.”
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patron from copying or further distributing the book or from accessing it after theirloan has ended.” App’x 5788.
Other than a period in 2020, IA has maintained a one-to-one owned-toloaned ratio for its digital books: Prior to 2018, it allowed only as many concurrent“checkouts” of a digital book as it has physical copies in storage. IA refers to thispractice as “Controlled Digital Lending” or “CDL,” which it likens to traditional
library lending of print books.
In 2018, IA launched the “Open Libraries Project,” allowing libraries to“contribute” their noncirculating print books to the number of concurrent
checkouts available on IA’s website. Participating libraries send a catalog of theirnoncirculating books to IA, which then runs an “overlap analysis.” App’x 6095.
If the library’s catalog includes a book for which IA already has a digital copy, IA
increases the number of available concurrent checkouts by one. 4 Participating
libraries may, in turn, integrate links to IA’s digital books in their own catalogs.
IA asserts that the Open Libraries Project allows it to expand its lending capacity
while remaining within the confines of CDL. In other words, IA still maintains a

Even if a partner library owns multiple copies of a book, IA adds only one additional concurrent
checkout per library.

4

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one-to-one owned-to-loaned ratio, but the category of books “owned” nowincludes those books owned by participating libraries.
In 2020, in response to the COVID-19 pandemic, IA launched the “National
Emergency Library” (the “NEL”). Out of concern for a potential lack of access tobooks due to the closure of schools and libraries, IA lifted its one-to-one ownedto-loaned ratio, allowing its digital books to be checked out by up to 10,000 users
at a time, without regard to the corresponding number of physical books in storage
or in partner libraries’ possession―a practice IA acknowledges was a “deviat[ion]from controlled digital lending.” Appellant’s Br. at 9. The NEL ran from March24, 2020, to June 16, 2020, when IA reinstated its lending controls after this lawsuit
was filed.
IA markets its lending services to libraries as a free alternative to Publishers’
print books and eBook licenses. For example, in a presentation to libraries, IA’s
Director of Open Libraries noted that the Open Libraries Project “ensures[libraries] will not have to buy the same content over and over, simply because ofa change in format.” App’x 6099. Another presentation advertising the Open
Libraries Project bore the title: “Maximizing institutional investments in print
resources through controlled digital lending,” with the subtitle, “Or, You Don’t
Have to Buy it Again!” Id. at 6099. In another instance, a vendor acting on behalf13Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page14 of 64

of IA emailed libraries asking whether they “would like to participate [in the
Project] and get free ebooks.” Id. at 6100; see also Appellant’s Br. at 5 (referring to
its lending services as the “Free Digital Library”). As of December 2021, 62 partner
libraries participated in the Open Libraries Project.
IA hosts over 3.2 million digital copies of copyrighted books on its website.
Its 5.9 million users effectuate about 70,000 book “borrows” a day―approximately
25 million per year. Critically, IA and its users lack permission from copyrightholders to engage in any of these activities. They do not license these materials
from publishers, nor do they otherwise compensate authors in connection with thedigitization and distribution of their works.
On June 1, 2020, Publishers sued IA and five Doe defendants in the Southern
District of New York, alleging that IA infringed their copyrights in 127 books (the“Works” or the “Works in Suit”). The Works in Suit are published fiction andnonfiction books ranging from Sandra Cisneros’ The House on Mango Street (1984),
Sylvia Plath’s The Bell Jar (1963), and J.D. Salinger’s The Catcher in the Rye (1951), to
Les Carter’s Enough About You, Let’s Talk About Me: How to Recognize and Manage
the Narcissists in Your Life (2005), and Ian Woofenden’s Wind Power for Dummies(2009). The authors of the Works in Suit each assigned to one of the Publishers the
exclusive right to publish their works in print and eBook formats. All 127 Works
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are available as authorized eBooks that may be purchased by consumers or
licensed to libraries; and, at the time of the complaint, all 127 Works were available
as free digital copies on IA’s website.
IA answered the complaint, denying that its practices violate Publishers’
copyrights and asserting an affirmative defense of fair use under the CopyrightAct. 5 See 17 U.S.C. § 107. Following extensive discovery, the parties cross-moved
for summary judgment.
On March 24, 2023, the district court granted summary judgment to
Publishers, concluding that Publishers established the elements of copyright
infringement and that IA’s infringement was not excused by the defense of fairuse. Hachette Book Group, Inc. v. Internet Archive, 664 F. Supp. 3d 370, 378, 391(S.D.N.Y. 2023). In evaluating the four statutory fair use factors set forth in Section
107, the district court found that: (1) IA’s use of the Works in Suit is (a) nontransformative because IA reproduces the Works in full and its digital copies serve
the same purpose as the originals; and (b) commercial because, despite IA’snonprofit status, it exploits the Works by soliciting donations on its website andtaking a cut of the proceeds when users buy a physical book from BWB using alink embedded on IA’s website; (2) the Works are original fiction and nonfiction

5

IA asserted numerous other affirmative defenses not at issue in this appeal.

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books “close to the core of intended copyright protection”; (3) IA copies the books
wholesale; and (4) IA “brings to the marketplace a competing substitute” forlibrary eBook licenses, “usurping a market that properly belongs to the copyrightholder.” Id. at 380–91 (alterations adopted). As each factor favored Publishers, thedistrict court concluded that IA’s fair use defense failed as a matter of law. Id. at391. It further determined that the above analysis applied “even more forcefully
to the NEL.” Id.
The district court entered judgment on August 11, 2023, including apermanent injunction barring IA from, among other things, distributing or
reproducing Publishers’ copyrighted works, including but not limited to theWorks in Suit. The district court specifically limited its judgment to print books
that, like the 127 Works at issue in the suit, are also “available for electronic
licensing.” No. 1:20-cv-04160-JGK, Dkt. 216, at 3. IA timely appealed.
DISCUSSION“We review without deference the district court’s grant of summary
judgment when, as here, the parties filed cross-motions for summary judgment
and the district court granted one motion but denied the other.” Loomis v. ACE
American Insurance Company, 91 F.4th 565, 572 (2d Cir. 2024) (internal quotation
marks omitted). Summary judgment should be granted if “there is no genuine
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dispute as to any material fact and the movant is entitled to judgment as a matterof law.” Fed. R. Civ. P. 56(a). Although fair use “presents a mixed question of law
and fact, it may be resolved on summary judgment where, as here, the material
facts are not in dispute.” Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith,
11 F.4th 26, 36 (2d Cir. 2021) (“Warhol I”), aff’d, 598 U.S. 508 (2023).
The Constitution empowers Congress to enact copyright laws “[t]o promote
the Progress of Science and useful Arts.” U.S. Const. art. I, § 8, cl. 8. To that end,
the Copyright Act of 1976 grants the author of an original work “a bundle of
exclusive rights,” Harper & Row Publishers, Inc. v Nation Enterprises, 471 U.S. 539,
546 (1985), including the rights “to reproduce the copyrighted work,” “to prepare
derivative works,” to distribute copies of the work via sale, rental, lease, or
lending, and, in the case of literary works, “to display the copyrighted work
publicly,” 17 U.S.C. § 106. The Act defines derivative works “largely by example,
rather than explanation.” Authors Guild v. Google, Inc., 804 F.3d 202, 215 (2d Cir.
2015) (hereinafter “Google Books”). Those examples include “translation, musicalarrangement, dramatization, fictionalization, motion picture version, soundrecording, art reproduction, abridgment, condensation, or any other form in which
a work may be recast, transformed, or adapted.” 17 U.S.C. § 101. Copyright17

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infringement occurs when a person or entity “violates any of the exclusive rightsof the copyright owner.” 17 U.S.C. § 501(a).
The monopoly created by the Copyright Act “rewards the individual author
in order to benefit the public”; the idea being that authors and inventors will be
more motivated to produce new works if they know those works will be protected,
and the public will benefit from both restricted access to those works in the shortterm and unfettered access in the long term, once the period of exclusive control
expires. Harper & Row, 471 U.S. at 546. The Act therefore “reflects a balance ofcompeting claims upon the public interest: Creative work is to be encouraged andrewarded, but private motivation must ultimately serve the cause of promoting
broad public availability of literature, music, and the other arts.”

Twentieth

Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975).
This “balancing act” is reflected throughout the Copyright Act. Andy Warhol
Foundation for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508, 526 (2023) (“Warhol
II”). For instance, Section 109 codifies the first sale doctrine, which allows theowner of a physical copy of a work to “sell or otherwise dispose of” it without the
copyright owner’s permission. 17 U.S.C. § 109(a). Section 108 permits libraries
and archives to make a small number of copies of a protected work for certain
limited purposes, including preservation and replacement. 17 U.S.C. § 108.
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The Act also allows for certain “fair” uses of copyrighted works. Section 107
provides: “[n]otwithstanding the provisions of sections 106 and 106A, the fair useof a copyrighted work . . . for purposes such as criticism, comment, news reporting,teaching (including multiple copies for classroom use), scholarship, or research, is
not an infringement of copyright.” 17 U.S.C. § 107 (emphasis added). The statutesets out four non-exclusive factors for courts to consider in determining whether
a particular use is “fair”:(1) the purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes;(2) the nature of the copyrighted work;(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and(4) the effect of the use upon the potential market for or value of the
copyrighted work.
Id.

The fair use defense thus excuses what might otherwise be consideredinfringing behavior, allowing courts to “avoid rigid application” of the Copyright
Act when it would “stifle the very creativity” the Act is meant to promote. Stewart
v. Abend, 495 U.S. 207, 236 (1990). Given the diverse array of copyrightablematerial, fair use is a “flexible” concept, whose application varies depending on
the context. Google LLC v. Oracle America, Inc., 593 U.S. 1, 20 (2021); Harper & Row,
471 U.S. at 560 (“The factors enumerated in [Section 107] are not meant to be
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exclusive: Since the doctrine is an equitable rule of reason, no generally applicabledefinition is possible, and each case raising the question must be decided on its
own facts.” (internal quotation marks omitted and alteration adopted)).
On appeal, IA does not challenge the district court’s conclusion that
Publishers met their affirmative burden of establishing the elements of copyright
infringement. Rather, it argues as a defense to the infringement claim that its
lending practices constitute fair use under Section 107 of the Copyright Act.
Applying the fair use factors as set forth below, we conclude that the challenged
practices―IA’s lending of its “own” digital books that “are commercially available
for sale or license in any electronic text format,” the Open Libraries Project, andthe NEL―are not fair use. No. 1:20-cv-04160-JGK, Dkt. 216 at 2 (internal quotation
marks omitted). 6
I.

The purpose and character of the use

The first fair use factor is “the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educational
purposes.” 17 U.S.C. § 107(1). In assessing the first factor, courts consider two
sub-factors: (i) the extent to which the secondary use is transformative and (ii)Unless otherwise noted, the ensuing analysis applies to each of the challenged practices. We
address specific practices only where necessary to our assessment of the fair use factors.

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whether the secondary use is commercial in nature. Warhol I, 11 F.4th at 37.
Thoughweconsiderbothtransformativenessandcommerciality,transformativeness is the “central” question. Warhol II, 598 U.S. at 528; Warhol I,
11 F.4th at 37 (“[O]ur assessment of this first factor has focused chiefly on the
degree to which the use is ‘transformative.’”); Fox News Network, LLC v. TVEyes,
Inc., 883 F.3d 169, 176 (2d Cir. 2018) (describing transformativeness as the “primaryinquiry”).
A. Transformativeness
The first fair use factor focuses primarily on the extent to which thesecondary use is transformative; that is, whether the new work merely supplants
the original, “or instead adds something new, with a further purpose or different
character, altering the [original] with new expression, meaning, or message.”
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994). The use of a work toachieve “a purpose that is the same as, or highly similar to, that of the original” ismore likely to substitute or supplant the original work, and less likely to beconsidered transformative. Warhol II, 598 U.S. at 528.
Paradigmatic examples of transformative uses are those listed in thepreamble to Section 107: criticism, comment, news reporting, teaching,scholarship, and research. 17 U.S.C. § 107. But transformative uses are not limited
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to those examples.

Parodies of an original work are “routinely heldtransformative.” Warhol I, 11 F.4th at 37; Campbell, 510 U.S. at 583. Likewise, asecondary use may be transformative if it “improve[s] the efficiency of delivering[original] content,” see TVEyes, 883 F.3d at 177–78 (service that allowed users toview segments of TV programs responsive to their interests “at least somewhat
transformative” because it improved the efficiency of delivering content), or
expands the utility of the original, see Google Books, 804 F.3d at 214 (scanning books
to create a full-text searchable database was transformative because it expanded
the utility of the originals). Whether the use finds its approval in the preamble to
Section 107 or in our decisions, each of these examples contemplate the use of awork to “communicate[] something new and different from the original or
expand[] its utility, thus serving copyright’s overall objective of contributing to
public knowledge.” Google Books, 804 F.3d at 214.
However, “[n]ot every instance will be clear cut.” Warhol II, 598 U.S. at 528.
Whether a secondary use has a different purpose or character from the original “isa matter of degree.” Id. Though “[m]ost copying has some further purpose” and“[m]any secondary works add something new,” that alone “does not render suchuses fair.” Id. The word “transformative,” then, “cannot be taken too literally.”
Google Books, 804 F.3d at 214. While the right of copyright owners to prepare22Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page23 of 64

derivative works is “subject to” fair use, an “overbroad concept of transformative
use . . . that includes any further purpose, or any different character, would[improperly] narrow the copyright owner’s exclusive right to create derivative
works.” Warhol II, 598 U.S. at 529 (emphases added). To preserve that right, thedegree of transformation must “go beyond that required to qualify as a
derivative.” Id.
IA argues that its Free Digital Library is transformative because it uses
technology “to make lending more convenient and efficient” and “deliver[s] thework only to one already entitled to view it―the one person borrowing the bookat a time.” Appellant’s Br. at 30–32 (citing Sony Corp. of America v. Universal City
Studios, Inc., 464 U.S. 417, 488–50 (1984)); TVEyes, 883 F.3d at 178; Capitol Records,
LLC v. ReDigi Inc., 910 F.3d 649, 661 (2d Cir. 2018)). Additionally, IA asserts that
its Free Digital Library “enables uses not possible with print books and physicalborrowing,” such as allowing “authors writing online articles [to] link directly to”
a digital book in IA’s library. Id. at 32. Thus, IA concludes, each digital book“serves a new and different function from the original work and is not a substitutefor it.” Id. (quoting Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 96 (2d Cir. 2014)).
Publishers, meanwhile, argue that IA’s Free Digital library “does nothing‘more than repackage or republish’ the Works.” Appellees’ Br. at 26 (quoting
23

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HathiTrust, 755 F.3d at 96). They assert that IA does not copy the Works to provide
criticism, commentary, or information, but to serve the same purpose as theoriginals. Id. In Publishers’ view, to hold IA’s use transformative would “destroy
the value of [their] exclusive right to prepare derivative works,” including theright to publish their authors’ works as eBooks. Id. at 27. Nor does IA’s adherence
to CDL render its use transformative: “[W]ithout a different purpose from theoriginal,” Publishers argue, “IA’s ebooks are not transformative.” Id.
We conclude that IA’s use of the Works is not transformative. IA creates
digital copies of the Works and distributes those copies to its users in full, for free.
Its digital copies do not provide criticism, commentary, or information about theoriginals. Nor do they “add[] something new, with a further purpose or different
character, altering the [originals] with new expression, meaning or message.”
Campbell, 510 U.S. at 579. Instead, IA’s digital books serve the same exact purposeas the originals: making authors’ works available to read. IA’s Free Digital Libraryis meant to―and does―substitute for the original Works. Warhol II, 598 U.S. at
528 (“The use of an original work to achieve a purpose that is the same as, or highly
similar to, that of the original work is more likely to substitute for, or supplant, thework.” (cleaned up)). As we have said, “[w]hen all or a substantial portion of textthat contains protectable expression is included in another work, solely to convey
24

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the original text to the reader without adding any comment or criticism, the second
work may be said to have supplanted the original because a reader of the second
work has little reason to buy a copy of the original.” Ringgold v. Black Entm’t TV,
Inc., 126 F.3d 70, 79 (2d Cir. 1997). Though “[n]ot every instance will be clear cut,”this one is. Warhol II, 598 U.S. at 528.
True, there is some “change” involved in the conversion of print books todigital copies. See Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104, 108 n.2 (2d Cir.
1998) (“[A] change in format . . . is not technically a transformation.”). But thedegree of change does not “go beyond that required to qualify as derivative.”
Warhol II, 598 U.S. at 529.

Unlike transformative works, derivative works“ordinarily are those that re-present the protected aspects of the original work, i.e.,
its expressive content, converted into an altered form.” Google Books, 804 F.3d at
225. To be transformative, a use must do “something more than repackage orrepublish the original copyrighted work.” Authors Guild, Inc. v. HathiTrust, 755
F.3d 87, 96 (2d Cir. 2014); see also TVEyes, 883 F.3d at 177 (“[A] use of copyrighted
material that merely repackages or republishes the original is unlikely to bedeemed a fair use.” (internal quotation marks omitted)). Changing the medium ofa work is a derivative use rather than a transformative one. Warhol II, 598 U.S. at
529. In fact, we have characterized this exact use―“the recasting of a novel as an
25

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e-book”―as a “paradigmatic” example of a derivative work. Google Books, 804 F.3d
at 215. Digitizing physical copies of written work is not transformative, because
the act “merely transforms the material object embodying the intangible article thatis the copyrighted original work.” American Geophysical Union v. Texaco Inc., 60
F.3d 913, 923 (2d Cir. 1994).
To construe IA’s use of the Works as transformative would significantly
narrow―if not entirely eviscerate―copyright owners’ exclusive right to prepare(or not prepare) derivative works. See Warhol II, 598 U.S. at 528–29; 17 U.S.C. §106(2). The Supreme Court has cautioned against such an “overbroad concept oftransformative use.” Warhol II, 598 U.S. at 529. In Google Books, we identified a fairuse in Google’s “snippet view” search function, which allowed users to search thetext and view snippets of it online, 804 F.3d at 217–218, but we noted that had thePlaintiffs’ claim been “based on Google’s converting their books into a digitized
form and making that digitized version accessible to the public, their claim would[have been] strong,” id. at 225. As the district court noted here, that is “precisely
what the Publishers allege in this case.” Hachette, 664 F. Supp. 3d at 381.
IA’s arguments to the contrary are unpersuasive. IA argues that the formatchange alone is not what makes its use transformative. Rather, its use of the Worksis transformative because of “the sort of lending the scanning enables,” namely,26

Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page27 of 64(1) making lending more efficient, and (2) enabling other uses not possible withprint books and physical borrowing. Appellant’s Br. at 33. Neither of thesejustifications render IA’s use of the Works transformative because the underlying
purpose of making the Works available in a derivative format is still the same.
IA argues that its use of the Works is transformative because it “make[s]lending more convenient and efficient” and “uses technology to deliver the work
only to one already entitled to view it―the one person borrowing the book at atime.” Id. at 31–32. IA derives this argument from three cases: Sony, TVEyes, and
ReDigi. In Sony, the defendant manufactured and sold home video tape recordersthat allowed users to record TV programs broadcast at set times over the airwaves
so they could watch them later. 464 U.S. at 422–23. The Supreme Court, in adecision that predated our use of the word “transformative” as a term of art,
concluded that “time-shifting for private home use . . . [is] a noncommercial,nonprofit activity” that “merely enables a viewer to see such a work which [they]had [already] been invited to witness in its entirety free of charge.” Id. at 449. For
those reasons, the Court concluded that the first fair use factor favored thedefendant. Id.
We contextualized Sony within the modern fair use framework in TVEyes.
There, the defendant recorded vast quantities of live TV programs, compiled those27

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recordings into a text-searchable database in which they would be held for thirtytwo days before being deleted, and allowed its paying subscribers to search for
and watch up to ten-minute video clips of recordings that featured their terms ofinterest. 883 F.3d at 173–74. In assessing whether the use was transformative, we
reframed the Supreme Court’s discussion from Sony:
While Sony was decided before “transformative” became a term ofart, the apparent reasoning was that a secondary use may be a fair use
if it utilizes technology to achieve the transformative purpose of
improving the efficiency of delivering content without unreasonably
encroaching on the commercial entitlements of the rights holder.
Id. at 177. Expanding on that reasoning, although we ultimately rejected TVEyes’
fair use claim, we concluded that the use at issue was at least “somewhat
transformative” because it “enhanc[ed] efficiency” by enabling users to viewprogramming that discussed topics of interest to them “without having to monitor
thirty-two days of programming in order to catch each relevant discussion.” Id. at
177.
Later that same year, we addressed the fair use defense of a defendantwebsite that hosted an online platform for reselling digital music files. ReDigi, 910
F.3d at 652–54. We repeated our characterization of Sony from TVEyes, adding:
In Sony, the “apparent reasoning was that a secondary use may be afair use if it utilizes technology to achieve the transformative purposeof improving the efficiency of delivering content without
unreasonably encroaching on the commercial entitlements of the28

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rights holder” because the improved delivery was to one entitled to receive
the content.
Id. at 661 (quoting TVEyes, 883 F.3d at 177) (emphasis added). Still, we determinedthat the use in ReDigi was not transformative. Id. The website provided “neither
criticism, commentary, nor information about” the original music files, nor did it“deliver the content in more convenient and usable form to one who has acquired
an entitlement to receive the content.” Id. Instead, it effectively “provide[d] amarket for the resale of digital music files, which . . . compete[d] with sales of thesame recorded music by the rights holder.” Id. For that reason, the first fair use
factor favored the plaintiffs. Id.
The “efficiencies” identified in Sony and TVEyes are distinct from the
purported efficiencies offered by IA’s Free Digital Library. Sony was decided long
before modern technology made it possible for one to view virtually any content
at any time. Put in context, the “time-shifting” permitted by the defendant’s taperecorders in Sony was a unique efficiency not widely available at the time, andcertainly not offered by the plaintiff-television producer. 464 U.S. at 449. The
defendant in TVEyes likewise offered a uniquely efficient service: allowing users
to watch short clips of television programs featuring their selected search terms.
883 F.3d at 173–74.

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Here, by contrast, IA’s Free Digital Library offers few efficiencies beyond
those already offered by Publishers’ own eBooks. IA argues that its use is more
efficient because it “replace[s] the burdens of physical transportation with thebenefits of digital technology,” but this ignores the fact that IA’s digital books
compete directly with Publishers’ eBooks―works derivative of the original print
books. Appellant’s Br. at 32. Understood this way, IA’s Free Digital Library doesnot “improv[e] the efficiency of delivering content” without unreasonably
encroaching on the rights of the copyright holder; it offers the same efficiencies as
Publishers’ derivative works while greatly impinging on their exclusive right toprepare those works. TVEyes, 883 F.3d at 177; ReDigi, 910 F.3d at 661. In Sony,“timeshifting merely enable[d] a viewer to see such a work which [the viewer] had
been invited to witness in its entirety free of charge” by the broadcasters, Sony, 464
U.S. at 449, and therefore did not “unreasonably encroach[] on the commercial
entitlements of the rights holder,” TVEyes, 883 F.3d at 177 (characterizing Sony).
The Publishers in this case never “invited” readers to read their books for free froman unlicensed digital library. Sony, 464 U.S. at 449.
Nor does IA’s asserted adherence to CDL render its use transformative. IA
maintains that it delivers each Work “only to one already entitled to view[it]”―i.e., the one person who would be entitled to check out the physical copy of30

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each Work. Appellant’s Br. at 32. But this characterization confuses IA’s practices
with traditional library lending of print books. IA does not perform the traditional
functions of a library; it prepares derivatives of Publishers’ Works and delivers
those derivatives to its users in full. That Section 108 allows libraries to make asmall number of copies for preservation and replacement purposes does not meanthat IA can prepare and distribute derivative works en masse and assert that it issimply performing the traditional functions of a library. 17 U.S.C. § 108; see also,e.g., ReDigi, 910 F.3d at 658 (“We are not free to disregard the terms of the statutemerely because the entity performing an unauthorized reproduction makes efforts
to nullify its consequences by the counterbalancing destruction of the preexisting
phonorecords.”). Whether it delivers the copies on a one-to-one owned-to-loaned
basis or not, IA’s recasting of the Works as digital books is not transformative.
Google Books, 804 F.3d at 215.
IA also argues that its use is transformative “because it enables uses notpossible with print books and physical borrowing,” such as allowing “authors
writing online articles [to] link directly to [IA’s digital books].” Appellant’s Br. at
32. We rejected a similar argument in TVEyes. There, the defendant argued thatits provision of reproduced content identified through targeted search tools wastransformative “because it allow[ed] clients to conduct research and analysis of31

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television content by enabling them to view [video] clips responsive to theirresearch needs[,] [and] [r]esearch . . . [was] a purpose not shared by users of theoriginal content.” TVEyes, 883 F.3d at 178 n.4. Although we concluded that
TVEyes’ use was at least “somewhat transformative,” id. at 178, we rejected theresearch-based argument, explaining that simply because “a secondary use canfacilitate research does not itself support a finding that the secondary use istransformative,” id. at 178 n.4. To deem a use transformative on that basis would
extend the concept of transformativeness “beyond recognition.” Id. So too here.
That authors of online articles may embed links to IA’s Free Digital Library does
not render the Library a significantly transformative secondary use of the Works.
In sum, because IA’s Free Digital Library primarily supplants the original
Works without adding meaningfully new or different features that avoid unduly
impinging on Publishers’ rights to prepare derivative works, its use of the Works
is not transformative. TVEyes, 883 F.3d at 177 (“Although transformative use is
not absolutely necessary for a finding of fair use, transformative works lie at theheart of the fair use doctrine, and a use of copyrighted material that merely
repackages or republishes the original is unlikely to be deemed a fair use.”(cleaned up)).

32

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B. Commerciality
We next consider “whether [the] use is of a commercial nature or is fornonprofit educational purposes.” 17 U.S.C. § 107(1). The commercial nature of asecondary use generally weighs against a finding of fair use, especially where thesecondary use is only “modest[ly] transformative.” TVEyes, 883 F.3d at 178.
However, we assess commerciality “with caution” since “nearly all of theillustrative uses listed in the preamble to Section 107 are generally conducted forprofit in this country.” Warhol I, 11 F.4th at 44 (cleaned up). “The crux of the
profit/nonprofit distinction,” then, “is not whether the sole motive of the use ismonetary gain[,] but whether the user stands to profit from exploitation of the
copyrighted material without paying the customary price.” Harper & Row, 471 U.S.
at 562.
Importantly, commerciality is only one part of the first factor inquiry andthe broader fair use analysis. See, e.g., Sony, 464 U.S. at 448–49 (noting that thecommercial or nonprofit character of a work is “not conclusive” but rather a factor
to be “weighed [alongside the others] in any fair use decision”). Accordingly, “themere fact that a use is educational and not for profit does not insulate it from afinding of infringement, any more than the commercial character of a use bars afinding of fairness.” Campbell, 510 U.S. at 584; see also Google Books, 804 F.3d at 219
33

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n.20 (“[T]here is . . . no reason to presume categorically that a nonprofit educational
purpose should qualify as a fair use.”).
Here, the district court concluded that IA’s use of the Works is commercial
for two principal reasons.

Hachette, 664 F. Supp. 3d at 383–84.

Though it

acknowledged IA’s nonprofit status, it determined that IA still “exploits the Worksin Suit without paying the customary price” by (1) soliciting donations on its
website and (2) taking a cut of the proceeds when users buy a physical book from
BWB using a link embedded on IA’s website. Id. at 383–84. The district court
found “largely irrelevant” the fact that IA distributes its digital books for free,instead emphasizing that “[w]hat matters is whether IA profited from copying theWorks.” Id. at 384.
IA objects to the district court’s “expansive” understanding ofcommerciality, asserting that it “receives no profit or other private benefit” fromits use of the Works. Appellant’s Br. at 21, 23. Publishers argue that IA’s use iscommercial in nature because IA reaps some economic advantages from its
partnership with BWB and obtains “other non-monetary calculable benefits” fromits use of the Works, including advancing its mission of ensuring universal accessto all knowledge. Appellees’ Br. at 39. However, Publishers “do not contend thata non-profit . . . is commercial merely because it solicits donations.” Id. at 38 n.12.
34

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We conclude, contrary to the district court, that IA’s use of the Works is notcommercial in nature. It is undisputed that IA is a nonprofit entity and that it
distributes its digital books for free. Of course, IA must solicit some funds to keep
the lights on: its website includes a link to “Donate” to IA, and it has previously
received grant funding to support its various activities. App’x 6091. But unlike
the defendant in TVEyes, who charged users a fee to use its text-searchable
database, IA does not profit directly from its Free Digital Library. 883 F.3d at 175.
It offers this service free of charge. See American Society for Testing and Materials v.
Public.Resource.Org, Inc., 896 F.3d 437, 449 (D.C. Cir. 2018) (“ASTM I”) (concludingthat use was not commercial where there was no evidence that nonprofit
organization profited from its dissemination of reproduced industry standards
that had been incorporated into law).
We therefore disagree with the district court that IA’s partnership with BWB
renders its use commercial. When users read a digital book on IA’s web browser
platform, a “Purchase at Better World Books” button appears at the top of theirscreens. This button links to BWB’s website, where users may buy a used print
copy of the book they were just reading, or any other book in BWB’s library. BWB
compensates IA whenever someone buys a book via the “Purchase at Better World
Books” link; although the exact profits IA earns from this arrangement is disputed.
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Any link between the funds IA receives from its partnership with BWB and
its use of the Works is too attenuated for us to characterize the use as commercial
on that basis. See Swatch Group Management Services Ltd. v. Bloomberg L.P., 756 F.3d
73, 83 (2d Cir. 2014). In Swatch, Bloomberg posted a recording of a Swatch
conference call on its website for access by its paying subscribers. Id. at 78–79.
Although the recording―like other Bloomberg content―could be accessed only
by paying subscribers, we concluded that “the link between the defendant’scommercial gain and its copying [was] attenuated such that it would be
misleading to characterize the use as commercial exploitation.” Id. at 83 (cleanedup). Unlike in TVEyes, where the defendant charged a fee in direct connection
with its use of the works, Bloomberg’s subscription fee covered a broad range ofservices, including access to the recording. Compare id., with TVEyes, 883 F.3d at
175. Because “it would strain credulity to suggest that providing access to [therecording] more than trivially affected the [overall] value of [Bloomberg’s]
service[s],” we assigned the commercial nature of Bloomberg’s use “little weight.”
Swatch, 756 F.3d at 83.
IA does not charge a fee for any of its services, let alone the Free Digital
Library. While IA may incidentally profit from its use of the Works when accountholders check out a digital book via the BookReader platform, click on the36

Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page37 of 64“Purchase at Better World Books” link, and purchase a book from BWB, the link
between this commercial gain and IA’s use of the Works to create the Free Digital
Library is “attenuated[,] such that it would be misleading to characterize the use
as commercial exploitation.” Id. (internal quotation marks omitted). Although IA
exploits the Works in Suit without paying the customary price, it does not profit
directly from that exploitation. See Harper & Row, 471 U.S. at 562.
We likewise reject the proposition that IA’s solicitation of donations renders
its use of the Works commercial. IA does not solicit donations specifically inconnection with its digital book lending services―nearly every page on IA’s
website contains a link to “Donate” to IA.

App’x 6091.

Thus, as with its

partnership with BWB, any link between the funds IA receives from donations andits use of the Works is too attenuated to render the use commercial. Swatch, 756
F.3d at 83. To hold otherwise would greatly restrain the ability of nonprofits toseek donations while making fair use of copyrighted works. See ASTM I, 896 F.3d
at 449 (rejecting the argument that because free distribution of copyrighted
industry standards enhanced a nonprofit organization’s fundraising appeal, theuse was commercial).
Finally, to the extent Publishers argue that IA’s use is commercial because it
derives “other non-monetary calculable benefits” from the Free Digital Library,37

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we disagree. Appellees’ Br. at 39. It is true that the “profit/non-profit distinction
is context specific, not dollar dominated,” such that the “absence of a dollars andcents profit” will not necessarily exclude a finding of commerciality. Weissmann
v. Freeman, 868 F.2d 1313, 1324 (2d Cir. 1989). Indeed, in Weissmann we refused toweigh the first fair use factor against the plaintiff where the defendant
appropriated her unpublished research article and presented it as his own. Id. at1316. Despite the apparent lack of economic profit, the defendant “stood to gain
recognition among his peers in the profession . . . without paying the usual pricethat accompanies scientific research and writing, that is to say, by the sweat of hisbrow.” Id. at 1324. In this context, however, IA does not stand to gain the direct
reputational benefits that accompany presenting another’s work as one’s own.
Rather, it obtains only those nonmonetary benefits that attend most other
legitimate, secondary uses, including advancing its mission and bolstering its
reputation. Characterizing these general benefits as commercial profits would
render commercial the activities of virtually any nonprofit organization thatbolsters its reputation through its own nonprofit activities.
IA does not profit directly from its exploitation of the Works in Suit. For
that reason, its use of the Works is non-commercial in nature. But the nonprofit
character of IA’s use is not conclusive, Sony, 464 U.S. at 448, and38

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transformativeness remains the “central” focus of the first factor, Warhol II, 598
U.S. at 542. Thus, because IA’s use of the Works is not transformative, the first fairuse factor favors Publishers. See TVEyes, 883 F.3d at 177–78.
II.

The nature of the copyrighted works

The second fair use factor is “the nature of the copyrighted work.” 17 U.S.C.
§ 107(2). In assessing the second factor, courts consider (i) whether the work is
expressive or creative, with “greater leeway being allowed to a claim of fair use
where the work is factual or informational”; and (ii) “whether the work is
published or unpublished, with the scope of fair use involving unpublished works
being considerably narrower.” Blanch v. Koons, 467 F.3d 244, 256 (2d Cir. 2006).
This factor recognizes that “some works are closer to the core of intended
copyright protection than others.” Campbell, 510 U.S. at 586. However, it “rarely
play[s] a significant role in the determination of a fair use dispute.” Google Books,
804 F.3d at 220; see also HathiTrust, 755 F.3d at 98 (“The second fair-use factor . . . is
not dispositive.”).
IA argues that this factor weighs neutrally because the Works, thoughpublished, include both fiction and nonfiction books.

Although we havepreviously stated that the second factor tends to favor fair use when the copied
works are factual, rather than fictional, that general statement is an39

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oversimplification of the Works in this case. While the Works in Suit include both
fiction and nonfiction books, even the nonfiction books contain original expression“close[] to the core of intended copyright protection.” Campbell, 510 U.S. at 586.
The Copyright Act “does not protect facts or ideas set forth in a work, [but] it does
protect that author’s manner of expressing those facts and ideas.” Google Books,
804 F.3d at 220 (emphasis added). Wind Power for Dummies may contain factual
information regarding the mechanics of wind power, but the author’s compilationof those facts into a book suitable for the average “dummy” is an original
expression that the Copyright Act protects.
The nonfiction Works here are therefore unlike the copyrighted materials in
Swatch, one of the few cases in which the second fair use factor bore somesignificance. There, as noted above, Bloomberg obtained a sound recording andtranscript of a private conference call between Swatch executives and a group of
securities analysts and posted both online for access by its paying subscribers.
Swatch, 756 F.3d at 78–79. Swatch sued Bloomberg, obtaining a copyright to cover
the statements made by Swatch executives during the meeting. Id. at 79. In
concluding that the second factor favored fair use, we remarked on the “thinness”
of Swatch’s copyright: the copyrighted statements were of a “manifestly factual40

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character,” intended to “convey financial information about the company,” not toshowcase any original expression. Id. at 89.
Here, while the nonfiction Works undoubtedly convey factual informationand ideas, they also represent the authors’ original expressions of those facts andideas—and those “subjective descriptions and portraits” reflect “the author’s
individualized expression.” Harper & Rowe, 471 U.S. at 563. Thus, because theWorks in Suit are “of the type that the copyright laws value and seek to protect,”the second fair use factor favors Publishers. HathiTrust, 755 F.3d at 98.
III.

The amount and substantiality of the use

The third fair use factor is “the amount and substantiality of the portion
used in relation to the copyrighted work as a whole.”

17 U.S.C. § 107(3).

Generally, a finding of fair use is more likely when “small amounts, or lessimportant passages [of the work] are copied than when the copying is extensive,or encompasses the most important parts of the original.” Google Books, 804 F.3d
at 221. The third and fourth factors are interrelated, as the greater the amount andsubstantiality of the use, “the greater the likelihood that the secondary work mightserve as an effectively competing substitute for the original.” Id.
Still, there is no bright line rule separating permissible from impermissible
copying. Warhol I, 11 F.4th at 46. Sometimes it is necessary to copy the entirety of41

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a work in order to achieve a legitimate, transformative secondary purpose. See,e.g., Google Books, 804 F.3d at 221–22 (copying entirety of books necessary to createtransformative search function and snippet view); HathiTrust, 755 F.3d at 98–99(copying entirety of books necessary to create transformative search function).
Other times, “taking even a small percentage of the original work [is] unfair use.”
Rogers v. Koons, 960 F.2d 301, 311 (2d Cir. 1992). The relevant consideration, then,is not the amount of copyrighted material used by the copier, but “the amount of
copyrighted material made available to the public.” TVEyes, 883 F.3d at 179.
Here, it is undisputed that IA copies the Works in their entirety anddistributes those copies to the public in full. Still, IA argues that the third factor
weighs neutrally because “copying the entire work is necessary for Controlled
Digital Lending.” Appellant’s Br. at 43 (cleaned up). As IA itself recognizes, thisargument hinges entirely on its assumption that its use of the Works istransformative. 7 But IA does not scan the Works in their entirety to achieve a

IA faults the district court for improperly “collaps[ing] the first and third factors.” Appellant’s
Br. at 44. But IA itself acknowledges―on the same page of its brief―the interrelatedness of thefirst and third factors in this case. See id. (“[T]he district court’s transformativeness analysis waswrong (and failed to consider other justifications for copying). Its third-factor analysis thus iswrong for the same reasons.”). The Supreme Court has explained that the “enquiry” with respect
742

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transformative secondary purpose; it scans the Works in their entirety to substituteIA’s digital books for Publishers’ print books and eBooks.
IA’s use is therefore unlike the copying that took place in HathiTrust and
Google Books. In those cases, the defendants scanned copyrighted books to create,
among other things, searchable databases that allowed users to view snippets oftext pertaining to their search terms, or to learn on which pages and with whatfrequency their search terms appeared in any given book. HathiTrust, 755 F.3d at
91; Google Books, 804 F.3d at 208–10. Though the defendants copied the books intheir entirety, doing so was necessary to achieve a transformative, secondary
purpose―the searchable databases. HathiTrust, 755 F.3d at 98–99; Google Books,
804 F.3d at 221–23. And critically, while the defendants “ma[de] an unauthorized
digital copy of the entire book, [they did] not reveal that digital copy to the public.”
Google Books, 804 F.3d at 221 (second emphasis added).

to the third factor “will harken back to the first of the statutory factors, for . . . the extent of thecopying varies with the purpose and character of the use.” Campbell, 510 U.S. at 586-87; see also
A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 642 (2d Cir. 2009) (faulting the plaintiffs for“fail[ing] to recognize the overlap that exists between the [first and third] fair use factors”). Thus
here, even if features of IA’s offerings were transformative insofar as they facilitate research byallowing the insertion of links, IA’s use would not be “tailored to further its transformative
purpose.” Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 613 (2d Cir. 2006). IA allows
the entirety of the Works to be available to millions of users, the vast majority of whom are notusing the digital copies to insert links into articles.

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Here, IA makes unauthorized digital copies of the Works and reveals thosecopies to the public in their entirety. The “amount and substantiality” of thecopying is not necessary to achieve a transformative secondary purpose, but
serves to substitute Publishers’ books. 17 U.S.C. § 107(3). For that reason, the third
fair use factor favors Publishers. See ReDigi, 910 F.3d at 662 (third factor favored
plaintiffs where the defendant made available “identical copies of the whole ofPlaintiffs’ copyrighted sound recordings.”); TVEyes, 883 F.3d at 179 (third factor
favored plaintiff where the defendant made available “virtually the entirety of the[plaintiff’s] programming that TVEyes users want[ed] to see and hear.”).
IV.

The effect of the use on the potential market for or value of theworks

The fourth and final fair use factor is “the effect of the use upon the potential
market for or value of the copyrighted work.” 17 U.S.C. § 107(4). This factor“focuses on whether the copy brings to the marketplace a competing substitute forthe original, or its derivative, so as to deprive the rights holder of significant
revenues because of the likelihood that potential purchasers may opt to acquire
the copy [rather than] the original.” Google Books, 804 F.3d at 223. Analysis of thisfactor “requires us to balance the benefit the public will derive if the use ispermitted” against “the personal gain the copyright owner will receive if the use

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is denied.” Warhol I, 11 F.4th at 48. The fourth factor is “undoubtedly the single
most important element of fair use.” Harper & Row, 471 U.S. at 566.
In assessing the fourth factor, we consider “not only the market harm causedby the particular actions of the alleged infringer, but also the market harm thatwould result from unrestricted and widespread conduct of the same sort.”
TVEyes, 883 F.3d at 179 (cleaned up); Campbell, 510 U.S. at 590. We ask not“whether the second work would damage the market for the first (by, for example,
devaluing it through parody or criticism), but whether it usurps the market for the
first by offering a competing substitute.” Warhol I, 11 F.4th at 48. This inquiry
encompasses both the market for the original work and the market for any
derivative works the rightsholder might develop. Campbell, 510 U.S. at 590. The
first and fourth factors are closely related, as the more copying is done to achievea purpose that is the same as or substantially similar to the original, the more likely
it is that the copy will serve as a “satisfactory substitute for the original.” Google
Books, 804 F.3d at 223. Ultimately, the “burden of proving that the secondary use
does not compete in the relevant market is . . . borne by the party asserting thedefense.” Warhol I, 11 F.4th at 49.
Before discussing the parties’ arguments, we must identify the relevantmarket in which IA’s Free Digital Library allegedly competes. Publishers focus on
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harm to their markets for eBooks, including consumer eBooks and licensed
eBooks. IA, meanwhile, argues that we should consider harm (or lack of harm) to
Publishers’ eBook and print book markets.
In this case, the relevant market for purposes of analyzing the fourth fair use
factor is the market for the Works in general, without regard to format. The
Copyright Act protects authors’ works in whatever format they are produced. See
generally 17 U.S.C. § 106 (granting copyright owners the exclusive right toreproduce their works in numerous formats). Even if we consider the print
editions to be the “original” forms of the Works in this case―and we recognizethat the concept of a singular “original” form may be difficult to grasp in the digitalage―the Act recognizes that presentation of the same content in a different
medium is a derivative work subject to the same legal protections as the purported
original. 17 U.S.C. § 106(2). Here, Publishers obtained from authors the exclusive
right to publish their Works in numerous formats, including print and eBooks, and
it is this exclusive right that IA is alleged to have violated via its Free Digital
Library. For that reason, the relevant harm―or lack thereof―is to Publishers’
markets for the Works in any format.

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A. IA does not disprove market harm
IA argues that its Free Digital Library causes no harm to Publishers’ markets
for the Works because IA’s lending “offers a distinct service” from Publishers’
eBooks, not a substitute; and “all available evidence shows that IA’s lending
caused no harm at all” to Publishers’ markets for the Works. Appellant’s Br. at 45.
We address each point in turn.
IA’s first argument is a simple one: because its Free Digital Library is atransformative use of the Works, it cannot serve as a substitute for the originals.
This argument, like numerous other arguments raised by IA in this appeal, ispremised on its assumption that its use of the Works is transformative. But there
is nothing transformative about IA’s use of the Works or its adherence to CDL―itsdigital copies serve the same purpose as the originals. And the more copying isdone to achieve a purpose that is the same as the original, the more likely it is thatthe copy will compete in the market as a “satisfactory substitute for the original.”
Google Books, 804 F.3d at 223.
Google Books and HathiTrust underscore this point. In HathiTrust, the fourthfactor supported a finding of fair use because the ability to search the text of a bookto determine whether it includes select words did not “serve as a substitute for thebooks [themselves].” 755 F.3d at 100. Likewise, in Google Books, the ability to view47

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small fragments of books pertaining to particular search terms did not “provide asignificant substitute for the purchase of the [actual] book[s].” 804 F.3d at 224–25.
Critical to our conclusions in those cases was the interrelatedness of the first andfourth factors: because the copying was “done to achieve a purpose that differ[ed]from the purpose of the original[s],” it was unlikely that the secondary uses would“serve as a satisfactory substitute for the original[s].” Id. at 223.
Here, not only is IA’s Free Digital Library likely to serve as a substitute forthe originals, the undisputed evidence suggests it is intended to achieve that exact
result. IA copies the Works in full and makes those copies available to the publicin their entirety. It does not do this to achieve a transformative secondary purpose,but to supplant the originals. IA itself advertises its digital books as a freealternative to Publishers’ print and eBooks. See, e.g., App’x 6099 (“[T]he Open
Libraries Project ensures [libraries] will not have to buy the same content over andover, simply because of a change in format.” (internal quotation marks omitted));id. at 6100 (marketing the Free Digital Library as a way for libraries to “get free
ebooks”); id. at 6099 (“You Don’t Have to Buy it Again!”). IA offers effectively thesame product as Publishers―full copies of the Works―but at no cost to consumers
or libraries. At least in this context, it is difficult to compete with free. IA’s nontransformative use of the Works is a strong indicator that its digital books “usurp[]
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the market for the [originals] by offering a competing substitute.” Warhol I, 11
F.4th at 48 (emphasis omitted).
Still, even where a secondary use serves the same purpose as the originals,
the defendant may present evidence of a lack of market harm to support theirdefense of fair use. IA presents data that purportedly show a lack of harm to
Publishers’ print and eBook markets, and faults Publishers for failing to provide
empirical data of their own.
IA’s expert, Dr. Rasmus Jørgensen, examined OverDrive checkouts of theWorks before, during, and after the National Emergency Library (IA’s COVID-era
program pursuant to which it lifted its one-to-one owned-to-loaned ratio, allowing
each digital book to be checked out by up to 10,000 users at a time without regard
to the corresponding number of physical books in storage or in partner libraries’
possession) to assess potential harm to Publishers’ eBook licensing market. If IA’slending were indeed a substitute for Publishers’ library eBook licenses, hetheorized, then the shutdown of the NEL and reinstitution of IA’s lending controls
should correspond to an increase in demand for the Works on OverDrive (thecommercial service used by many libraries who license eBooks). But Dr. Jørgensen
found the opposite: OverDrive checkouts of the Works decreased following the
shutdown of the NEL in June 2020. From this, IA concludes that its lending “has49Case 23-1260, Document 306-1, 09/04/2024, 3633246, Page50 of 64

no effect on demand for borrowing on OverDrive” and, therefore, there is “noreason to imagine, much less assume, that digital lending affects Publishers’ ebook
license revenue at all.” Appellant’s Br. at 51.
Dr. Jørgensen used the same methodology to analyze the effect of IA’slending on Hachette’s 8 monthly print and eBook sales of the Works. Once again,
he theorized that if IA’s lending were a substitute for Hachette’s consumer print
and eBooks, then the closure of the NEL should correspond to an increase in
Hachette’s sales of the Works in those mediums. But it did not: at the same timeIA reinstituted its lending controls in June 2020, Hachette’s print and eBook sales
decreased by 21% and 29%, respectively.
IA also submits the expert report of Dr. Imke Reimers, who examined theeffect of IA’s lending on Amazon sales rankings for print copies of the Works. Dr.
Reimers analyzed whether Amazon sales rankings changed when IA (1) first
added the Work to its Free Digital Library, (2) launched the NEL, or (3) removed
the Work from its Free Digital Library in response to this lawsuit. She found “nostatistically significant evidence” that either inclusion in IA’s library or increased

In discovery, while Hachette produced monthly sales data for 2020, the remaining Publishers
provided only annual sales data. As the NEL ran for a matter of months in 2020, Dr. Jørgensen
concluded it was impossible to assess the effect of the NEL on HarperCollins, Penguin, andWiley’s print and eBook sales.
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lending through the NEL harmed print sales rankings on Amazon, and thatremoval of the Works from IA’s Free Digital Library actually correlated with adecrease in sales rankings of the Works on Amazon. App’x 4934. From this and
Dr. Jørgensen’s report, IA concludes that its Free Digital Library has no effect on
Publishers’ markets for print and eBooks.
This evidence does not satisfy IA’s “burden of proving that the secondaryuse does not compete in the relevant market[s].” Warhol I, 11 F.4th at 49. Dr.
Jørgensen’s report shows, at best, a weak correlation between the closure of the
NEL and a decline in Publishers’ checkouts and sales. As Publishers’ expert Dr.
Jeffrey Prince points out, Dr. Jørgensen “does not even have a[n] [empirical]
model,” let alone a model that accounts for the effect of various other causal factors
on Publishers’ sales. App’x 5476. Instead, Dr. Jørgensen simply analyzes “twopoints in time during a period where major macroeconomic events were
occurring,” id. at 5382, and “say[s] any difference that you see is because of the
takedown of the NEL,” id. at 5530.
But “[j]ust because one event follows another doesn’t mean it was causedby the prior event.” Id. at 5383. There were a broad range of factors at play in June
2020 for which Dr. Jørgensen’s report fails to account, including the “COVIDrelated surge in ebook sales” which “slowed down by summer 2020” as public
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spaces began to reopen. Id. at 5469. Dr. Jørgensen’s own graph reveals thatcheckouts spiked for OverDrive and IA between March 2020 and June 2020,
followed by a steady decline for both as checkouts reverted to pre-pandemic
levels. Id. at 4850. In short, Dr. Jørgensen’s report does not indicate, let alone
prove, the effect of IA’s Free Digital Library on Publishers’ markets for the Works.
Dr. Reimers’ report suffers from deeper infirmities. First, her report is oflimited relevance as it analyzes Amazon sales rankings for print editions of theWorks in Suit, not print revenues, eBook Amazon sales rankings, or eBook
revenues. As Dr. Prince explains, Amazon sales rankings are not necessarily aproxy for revenues, and the sales rankings of print books tell us nothing about the
impact of IA’s lending practices on sales and checkouts of eBooks. Id. at 5397–98.
Moreover, the Amazon algorithm that determines the rankings is “vague” andreportedly “susceptible to manipulation.” Id. at 5474. This makes it difficult todiscern whether and to what extent those rankings correspond to sales revenues.
For that reason, the conclusions drawn by IA from Dr. Reimers’ report regarding
the impact of their lending services on Publishers’ sales are ill supported.
Although they do not provide empirical data of their own, Publishers assertthat they (1) have suffered market harm due to lost eBook licensing fees and (2)will suffer market harm in the future if IA’s practices were to become widespread.
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IA argues that Publishers cannot rely on the “common-sense inference” of market
harm without data to back that up, citing American Society for Testing & Materials
v. Public.Resource.Org, Inc., 82 F.4th 1262 (D.C. Cir. 2023) (“ASTM II”). Appellant’s
Br. at 55–56.
We agree with Publishers’ assessment of market harm. “It is indisputable
that, as a general matter, a copyright holder is entitled to demand a royalty forlicensing others to use its copyrighted work, and that the impact on potential
licensing revenues is a proper subject for consideration in assessing the fourthfactor.” Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 614 (2d Cir.
2006). While “only an impact on potential licensing revenues for traditional,
reasonable, or likely to be developed markets should be legally cognizable” whenevaluating market harm, here, Publishers’ library eBook licensing market is bothreasonable and developed. TVEyes, 883 F.3d at 180 (cleaned up). And it isundisputed that IA appropriated the Works “without payment of [the] customary53

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licensing fee.” 9 Ringgold, 126 F.3d at 81. IA has thus “usurped a market thatproperly belongs to the copyright holder.” 10 TVEyes, 883 F.3d at 180 (cleaned up).
We are likewise convinced that “unrestricted and widespread conduct of
the sort engaged in by [IA] would result in a substantially adverse impact on thepotential market for [the Works in Suit].” Campbell, 510 U.S. at 590 (cleaned up).
IA’s Free Digital Library serves as a satisfactory substitute for the original Works.
Were we to approve IA’s use of the Works, there would be little reason for
consumers or libraries to pay Publishers for content they could access for free on
IA’s website. See Warhol I, 11 F.4th at 50. Though Publishers have not provided
empirical data to support this observation, we routinely rely on such logicalinferences where appropriate in assessing the fourth fair use factor. See, e.g., Google
Books, 804 F.3d at 223–25 (relying on logical inferences rather than empirical datato conclude that the secondary use did not serve as a competing substitute for theoriginals); ReDigi, 910 F.3d at 662–63 (relying on logical inferences rather thanempirical data to conclude that the secondary use served as a competing substitute

It is “of no moment” that IA approached Publishers to purchase their eBooks on a perpetual
basis and was rebuffed; “the failure to strike a deal satisfactory to both parties does not give [IA]the right to copy [Publishers’] copyrighted material without payment.” TVEyes, 883 F.3d at 180.
9This is true even though Publishers’ revenues have increased in recent years. That Publishers
are both profitable and have lost potential licensing fees as a result of IA’s infringement are notmutually exclusive; both can be, and here are, true at the same time.

10

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for the originals); Warhol I, 11 F.4th at 50 (relying on “self-evident” harm thatwould result if the defendant’s use were to become widespread). Thus, weconclude it is “self-evident” that if IA’s use were to become widespread, it would
adversely affect Publishers’ markets for the Works in Suit. Warhol I, 11 F.4th at 50.
ASTM II does not convince us otherwise. That D.C. Circuit case involved
various private organizations that promulgate, copyright, and sell copies ofstandards establishing best practices for their respective industries, which areoften incorporated by reference into federal agency rules and state and local
regulations.

ASTM II, 82 F.4th at 1265.

Three of those standard-settingorganizations sued nonprofit Public.Resource.Org (“PR”), alleging that it
infringed their copyrights in numerous standards that had been incorporated into
government regulations by posting those standards on its website for users toaccess for free. Id. at 1266. The district court determined that PR’s use of thestandards was a fair use, and the organizations appealed. Id. at 1265.
The D.C. Circuit affirmed, concluding that the first three fair use factors
strongly favored PR. Id. at 1267. With regard to market harm, the organizations
pressed the “common-sense” argument that, if users can download an identical
copy of a standard for free, few will pay to buy the standard. Id. at 1271. The court
rejected this argument for two reasons. First, PR published only versions of the55

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regulations that had been incorporated into government regulations. Id. Because
the organizations regularly update their standards, and government agencies are
slow to incorporate those new standards, if builders, engineers, or otherconsumers wanted the most up-to-date version of a regulation, they would haveto purchase the organization’s copy. Id. Thus, there was reason to doubt the“common-sense inference” that PR’s activities would usurp the market for theorganizations’ standards. Id.
Second, the organizations did not provide any empirical evidence of market
harm, while PR introduced data indicating a lack of such harm. Id. The Court
explained:
Public Resource has been posting incorporated standards for fifteen
years. Yet the plaintiffs have been unable to produce any economic
analysis showing that Public Resource's activity has harmed any
relevant market for their standards. To the contrary, ASTM’s sales
have increased over that time; NFPA’s sales have decreased in recent
years but are cyclical with publications; and ASHRAE has not pointed
to any evidence of its harm.
The plaintiffs’ primary evidence of harm is an expert report opiningthat Public Resource’s activities could put the plaintiffs’ revenues atrisk. Yet although the report qualitatively describes harms theplaintiffs could suffer, it makes no serious attempt to quantify past or
future harms. Like the district court, we find it telling that theplaintiffs do not provide any quantifiable evidence, and instead rely
on conclusory assertions and speculation long after Public Resource
first began posting the standards.

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Id. (cleaned up). The Court thereafter concluded that the “fourth fair-use factor
does not significantly tip the balance one way or the other.” Id. at 1272.
IA urges us to adopt the same analysis of market harm. It argues that
Publishers’ lack of data is similarly “telling,” and that we, like the D.C. Circuit,should reject their common-sense claim that if users can download an identical
copy of a Work for free, few will pay to buy or lease Publishers’ editions.
Appellant’s Br. at 56.
To the extent IA faults Publishers’ lack of empirical data, it forgets theburden of proof. Recall the broader context: Publishers have already establisheda prima facie case of copyright infringement. The only issue in this appeal iswhether IA’s Free Digital Library constitutes a fair use of the Works. “Fair use isan affirmative defense; as such, the ultimate burden of proving that the secondaryuse does not compete in the relevant market is appropriately borne by the party
asserting the defense: the secondary user.” Warhol I, 11 F.4th at 49. While therightsholder may bear some initial burden of identifying relevant markets, “wehave never held that the rightsholder bears the burden of showing actual market
harm.” Id. Publishers need not present empirical data of their own in connection
with IA’s asserted affirmative defense.

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Additionally, the nature of the works at issue in ASTM II was of a manifestly
different character than the Works at issue here. The organizations in ASTM II
updated their standards frequently, such that their production of new copyrighted
standards typically outpaced governments’ incorporation of those standards intolaw. ASTM II, 82 F.4th at 1271. Given that PR posted only standards that had been
incorporated into law, its use did not usurp the organizations’ market for the most
up-to-date version of the standards. Id. The interrelatedness of the first and fourthfactors was apparently critical to the D.C. Circuit’s conclusion: because PR’s copies
did not replace the originals―i.e., the most up-to-date versions of thestandards―it was unlikely that those copies would bring to the marketplace acompeting substitute for the originals. Id. at 1271, 1268 (“[PR] publishes only what
the law is, not what industry groups may regard as current best practices.”). This
lack of usurpation made the organizations’ failure to quantify past or future harms“telling.” 11 Id.

To the extent the D.C. Circuit faulted the plaintiff-organizations for failing to produce empiricalevidence of market harm, we don’t understand that court to have shifted the burden of
persuasion on the fair use defense. In any event, the law is clear in this Circuit that the burden of
producing persuasive evidence of the absence of market harms falls to the infringer that invokes
a fair use defense. Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith, 11 F.4th 26, 49 (2d Cir.
2021) (“[W]e have never held that the rightsholder bears the burden of showing actual market
harm. Nor would we so hold. Fair use is an affirmative defense; as such, the ultimate burden ofproving that the secondary use does not compete in the relevant market is appropriately borneby the party asserting the defense: the secondary user.”), aff’d, 598 U.S. 508 (2023).
11

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Here, by contrast, IA’s use of the Works, which remain unchanged throughtime, is not transformative. Because IA’s Free Digital Library functions as areplacement for the originals, it is reasonable and logical to conclude not only that
IA’s digital books currently function as a competing substitute for Publishers’
licensed editions of the Works, but also that, if IA’s practices were to become“unrestricted and widespread,” TVEyes, 883 F.3d at 179, it would decimate
Publishers’ markets for the Works in Suit across formats.
B. Any public benefits of IA’s Free Digital Library do not outweigh the harm
to Publishers’ markets
Although IA cannot disprove market harm, we still “balance the benefit the
public will derive if the use is permitted [against] the personal gain the copyrightowner will receive if the use is denied.” Warhol I, 11 F.4th at 48. IA argues that its
Free Digital Library provides “significant public benefits,” including expanding
access to free literary materials. Appellant’s Br. at 59. It asserts that prohibiting
its CDL practices would cause harm “to those who have difficulty accessing
physical libraries and to researchers and authors who use controlled digital
lending in creating new works.” Id.
We conclude that both Publishers and the public will benefit if IA’s use isdenied.

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To be sure, expanding access to knowledge would, in a general sense,
benefit the public. But “[a]ny copyright infringer may claim to benefit the public
by increasing public access to the copyrighted work.” Harper & Row, 471 U.S. at
569. That does not alone render the infringement lawful. Indeed, the Copyright
Act and its empowering constitutional authority reflect a considered judgmentthat “the Progress of Science and useful Arts” is best promoted by laws that protect
authors’ original works and permit authors to set the terms of engagement, at least
for a limited time. See Sony, 464 U.S. at 429. Doing so benefits the public “byproviding rewards for authorship.”Google Books, 804 F.3d at 212.

This

monopolistic power is a feature, not a bug, of the Copyright Act.
Within the framework of the Copyright Act, IA’s argument regarding the
public interest is shortsighted. True, libraries and consumers may reap someshort-term benefits from access to free digital books, but what are the long-term
consequences? If authors and creators knew that their original works could becopied and disseminated for free, there would be little motivation to produce newworks. And a dearth of creative activity would undoubtedly negatively impact
the public. It is this reality that the Copyright Act seeks to avoid.
While IA claims that prohibiting its practices would harm consumers andresearchers, allowing its practices would―and does―harm authors. With each60

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digital book IA disseminates, it deprives Publishers and authors of the revenues
due to them as compensation for their unique creations. Sandra Cisneros, anauthor who submitted a declaration in support of Publishers’ summary judgment
motion, captured the effect of IA’s infringement:
I worked hard to earn the financial security that I now have and whichenables me to earn a living from my pen without fear of poverty.
And, as my agent reminds me, the royalty revenues I receive from thesales of books I have written are precious and must be closely
guarded because this is ultimately going to generate the money that
supports me in old age. . . .
When I went on the Internet Archive’s website and saw that scans of
my books were being distributed to anybody who wanted them forfree―without my permission or any payment―I was appalled. I
found the experience so viscerally upsetting that I could not stay on
the website for long. It was like I had gone to a pawn shop and seen
my stolen possessions on sale.
App’x 249–50. Though IA and its amici may lament the consolidation of editorial
power and criticize Publishers for being motivated by profits, behind Publishers
stand authors who are entitled to compensation for the reproduction of theirworks and whose “private motivation . . . ultimately serve[s] the cause ofpromoting broad public availability of literature, music, and the other arts.”
Warhol II, 598 U.S. at 526 (quoting Twentieth Century Music Corp., 422 U.S. at 156).
IA’s Free Digital Library undermines that motivation.

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In sum, IA has not met its “burden of proving that the secondary use does
not compete in the relevant market[s].” Warhol I, 11 F.4th at 49. Its empiricalevidence does not disprove market harm, and Publishers convincingly claim bothpresent and future market harm. Any short-term public benefits of IA’s Free
Digital Library are outweighed not only by harm to Publishers and authors but
also by the long-term detriments society may suffer if IA’s infringing use wereallowed to continue. For these reasons, the fourth fair use factor favors Publishers.
V.

Weighing the factors together

While fair use “presents a mixed question of law and fact, it may be resolved
on summary judgment where, as here, the material facts are not in dispute.”
Warhol I, 11 F.4th at 36. Having considered the four factors, we find that eachfavors Publishers. Even if certain tools associated with IA’s reproductions offersome minor functional benefits not associated with the original works (such as
linkability), because IA offers these functionalities by reproducing and making
publicly available the copyrighted works in their entirety, those benefits are
overwhelmingly outweighed by the other fair use considerations. See TVEyes, 883
F.3d at 174 (concluding that even though TVEyes’ re-distribution of Fox’s
audiovisual content had some transformative character, “because that redistribution makes available virtually all of Fox’s copyrighted audiovisual62

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content―including all of the Fox content that TVEyes’s clients wish to see andhear―and because it deprives Fox of revenue that properly belongs to the
copyright holder, TVEyes has failed to show that the product it offers to its clientscan be justified as a fair use.”).
Accordingly, IA’s defense of fair use fails as a matter of law. 12
CONCLUSION
The parties in this case represent potentially serious interests. On the one
hand, eBook licensing fees may impose a burden on libraries and reduce access tocreative work. On the other hand, authors have a right to be compensated inconnection with the copying and distribution of their original creations. Congressbalanced these “competing claims upon the public interest” in the Copyright Act.
Twentieth Century Music Corp., 422 U.S. at 156. We must uphold that balance here.
IA asks this Court to bless the large scale copying and distribution of
copyrighted books without permission from or payment to the Publishers or
authors. Such a holding would allow for widescale copying that deprives creators

IA makes a final argument that, even if its Open Libraries project did not qualify as a fair use,
we should restrict the injunction to the Open Libraries project and allow IA to continue CDL forbooks that IA itself owns. Appellant’s Br. at 62. In support of that argument, IA argues that the
fourth factor analysis would be more favorable if CDL were limited to IA’s own books. Id. In
our view, the fair use analysis would not be substantially different if limited to IA’s CDL of thebooks it owns, and the fourth factor still would count against fair use. So we decline IA’s
invitation to narrow the scope of our holding or of the district court’s injunction.
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of compensation and diminishes the incentive to produce new works. This may
be what IA and its amici prefer, but it is not an approach that the Copyright Act
permits.
For these reasons, we AFFIRM.

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