Category: Copyright

End of the Line for Controlled Digital Lending Theory

controlled digital lending

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.

The Second Circuit Court of Appeals yesterday affirmed that Internet Archive’s digital book lending model controlled digital lending (CDL) is not permitted by copyright law, including under the fair use exception. The outcome is a big deal and, at the same time, is not really big news. Copyright watchers grounded in what the law is (rather than what they wish it to be) were likely relieved but not surprised that the appeals court upheld a judgment, which the lower court originally issued just four days after oral arguments.

The lawsuit Hachette et al. v. Internet Archive was triggered by IA’s so-called National Emergency Library (NEL), an alleged response to the COVID shutdown whereby it arbitrarily made over one million digital books available without any kind of restriction. Because IA had no basis on which to claim it was responding to an “emergency” need, I maintain the NEL itself was a stunt designed to provoke litigation and take Brewster Kahle and friends’ copyright theories out for a ride. And as of yesterday, that ride is probably over.

Specifically, IA and a small group of academics hoped to prove that controlled digital lending is permitted by fair use. CDL is based on the theory that a library is permitted to make its own digital copy of a physical book in its collection and to loan either the digital or the physical copy to one reader at a time—and to then apply the scheme for as many physical copies as the library owns. Further, IA expanded the concept to create its Open Library by “partnering” with various libraries around the country to effectively count the physical copies on all those shelves and increase the number of readers to which the digital copies would be loaned.

The Second Circuit affirmed not only that the Open Library model is not permitted but that the CDL practice is not a fair use—even if it were limited to the physical books in IA’s possession. With the one distinction that the circuit court reversed the lower court’s finding that IA’s purpose is “commercial” under fair use factor one, IA lost resoundingly on all four fair use factors.

In short, CDL is not transformative under factor one because its purpose is no different than the legal eBook lending models offered by publishers. This finding informs factor four. Because the purpose of the use is not transformative, the CDL scheme amounts to a market substitute and is, therefore, a potential market harm. Factors two (nature of the works used) and three (amount of the works copied) barely warrant discussion. The books in suit are expressive in nature, which favors the plaintiff; and IA does not dispute that it copied and made whole books available. Copying whole works may be permissible, but only possibly if the use is transformative.

Since before this suit began, IA has claimed to be a champion for all libraries, even going so far as to assert that CDL is simply doing what all libraries do—i.e., to “buy books and loan books.” But that rhetoric, conveniently facile for the media, obfuscated the more complex truth that IA, its colleagues, and supporting amici were pushing a theory with no foundation in law. CDL is a self-indulgent thought experiment for a handful of academics and activists with no skin in the game of creating literary works. And IA’s claim to be acting like any other library was simply untrue.

To those who believe the law should be different to facilitate IA’s alleged social benefit, I have considered the intent of CDL (and the alleged burden of eBook licensing) and find no evidence to support the claim that CDL fulfils an unmet need. In fact, as stated in past posts, Kahle’s dream of digitizing everything and making it all freely available is not only harmful to future authorship but is a threat to local libraries. Further, it bears repeating that the publishers in this case represent thousands of authors, while IA represents the interests of no authors.

I get why even creators are often persuaded by Internet Archive’s claims. After all, creators tend to love libraries and are instinctively wary of corporations, including publishers. But to put this in contemporary context, IA’s mass digitization and “lending” scheme, which would harm future authorship, is hardly much better than AI’s mass digitization and “training” scheme, which would also harm future authorship. (See what I did with the letters there?) Mass copying and distribution of protected works should always be viewed skeptically because the purpose is rarely transformative and non-threatening to creators. As the court states in yesterday’s judgment:

Within the framework of the Copyright Act, IA’s argument regarding the public interest is shortsighted. True, libraries and consumers may reap some short-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 be copied and disseminated for free, there would be little motivation to produce new works. And a dearth of creative activity would undoubtedly negatively impact the public. It is this reality that the Copyright Act seeks to avoid.

Thinking About an Old Copyright Case and Generative AI

old copyright case

The first copyright case decided at the U.S. Supreme Court was Wheaton v. Peters in 1834. There were six justices at the time, including the oft-quoted Joseph Story, and in a 4-2 decision, the Court made what I believe was a textual and, therefore, doctrinal error. The allegedly infringed works at issue were published reports of the Court, and there was neither disagreement nor error in finding that the opinions of the Court themselves were not a subject of protection. Instead, the important question—a philosophical debate inherited from England’s 18th century copyright battles—was whether Article I of the Constitution empowered Congress to create rights or to protect rights that naturally existed at common law.

In finding the former, the Court erred in my view because its opinion turned on misinterpreting the word securing from the intellectual property clause in Article I, which states that Congress is empowered, “To promote the progress of science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” The Court held that securing was a word of “origination,” establishing the doctrinal principle that copyright rights are “creatures of statute.”

The precedent in Wheaton has often been highlighted by anti-copyright scholars because it limits the notion that copyright rights are in any sense natural rights. This, in turn, supports the skeptical (I would say cynical) view that copyright is a devil’s bargain with authors, begrudgingly granting a temporary “monopoly” in exchange for production and distribution of their works. But aside from the fact that the Court of 1834 stated that the longstanding question remained “by no means free from doubt,” its textual interpretation of the word securing was simply unfounded.

As I discuss briefly in my book, there are at least two strong arguments against the Court’s finding that secure was a word of origination, and the first of these is the preamble to the Constitution. When the Framers wrote “to secure the blessings of liberty,” they can only have meant that the aim of the Constitution is to protect, ensure, or maintain that liberty which had so forcefully been articulated in ink and blood as a natural right of all people. The Framers did not mean that the Constitution creates the “blessings of liberty.”

The second argument is the dictionary. Noah Webster, who happens to be both the father of American English and the father of American copyright, was widely respected as a man of letters; as an effective voice for the natural rights of authors; and as the primary force behind the copyright law revision of 1831. Nevertheless, in defining the word securing in the Wheaton case, the Court somehow failed to harmonize its interpretation with any of seven entries in the 1828 edition of Webster’s dictionary. There, all definitions of secure express variations on the idea of “protection,” and none suggests that the word means “creation.”

Why does Wheaton matter today?

By misreading the meaning of secure, the Wheaton Court overstated a utilitarian view of copyright and understated the natural, common law (i.e., human) view of copyright. Granted, this tension dates back a few centuries, if one wishes to look that far, but it isn’t necessary to wander into the tall grass of pre-American history. There is ample rationale since 1790 to hold as self-evident that what the author creates is naturally her property, but this principle can only apply to human creators.

As mentioned, copyright skeptics, many who are either funded by or ideologically aligned with Big Tech, will overstate the precedent that copyright is a “creature of statute” because they like to propose that what Congress giveth, Congress can taketh away. For instance, Wheaton animated the “copyright is broken” campaign, which insists that technological progress in the digital age demands weakening protections on creative works to foster “innovation.”

This argument has taken various forms over the years, including justifying mass piracy; proposing that Congress should roll back the duration of protection; arguing the unconstitutionality of digital rights management; advocating extreme interpretations of fair use; and inventing legal theories like “controlled digital lending” for eBooks. These efforts have largely failed while Big Tech’s credibility has also diminished over the past decade. And indeed, despite the doctrinal weight of Wheaton, the legislative, judicial, and cultural record on copyright is replete with natural rights principles.

Still, although Big Tech does not enjoy the benefit of the doubt it did circa 2012, the commotion over generative artificial intelligence (GAI) reprises the familiar theme that copyright rights allegedly stand in the way of “progress.” In fact, one of the leading astroturf organizations promoting that view calls itself the Chamber of Progress, but the consideration about GAI in the creative community and beyond should respond that “progress” which proposes to displace or diminish human value is not progress.

As new technologies emerge and enter such central aspects of our existence, it must be done responsibly and with respect for the irreplaceable artists, performers, and creatives who have shaped our history and will chart the next chapters of human experience. – Human Artistry Campaign –

Big Tech surrogates like the Chamber of Progress will repeat the assertion that GAI “democratizes” creativity, which takes a lot of chutzpah coming from an industry that has done so much widespread damage to democracy. By now, it should be obvious that when tech companies claim to “democratize” anything, this smokescreen is disguising the fact that what they are usually doing is undermining the value of individual agency—from control of one’s likeness to copyright rights to political views. In other words, democratization has been bad for democracy.

The Wheaton Court of 1834 could not have imagined that the subject of common law copyright would be relevant 190 years later in context to a technology that can generate creative works without creative people. But human artistry is not strictly about art per se. It reprises the philosophical question as to what it means to be human, and if that answer begins with thought and knowledge, then we must recognize how democracies have been hammered by epistemic crisis since the explosion of social media.

Now that GAI is accelerating and expanding the power of misinformation, the human who encounters the AI generated lie must decide whether to believe what he sees, let alone to amplify the post. This is not merely a question of critical thinking, but an existential test that guys like Peter Thiel hope we fail. As many tech critics have repeated over the last 10-15 years, the design of these technologies—and indeed the stated intent of many of its designers—is that we become its tools rather than the other way around. And GAI has the potential to fulfill that agenda by more thoroughly blurring the line between reality and illusion.

The EFF Campaign Against DMCA Section 1201 Perishes in the DC Circuit

section 1201

The First Amendment protects the right to read books but not the right to break into a bookstore for the purpose of reading—not even if the goal is to quote a passage from a book in a manner that would be fair use under copyright law. The hypothetical, lawful use of the book’s contents to produce protected expression does not make the law prohibiting trespassing into the store a violation of the speech right. Most reasonable people can understand this distinction, but for about 18 years, the Electronic Frontier Foundation (EFF) has tried to prove that common sense is wrong.

Ever since literary works, sound recordings, audiovisual works, etc. went digital, the concept of “digital locks” used to protect lawful access to these materials has vexed the EFF, which launched a campaign and lawsuit in 2016 to prove that the law against breaking said locks is unconstitutional. Filing suit on behalf of researcher Matthew Green and product developer Andrew Huang, the EFF has argued that Section 1201 of the Digital Millennium Copyright Act (DMCA) violates the speech right because circumvention of technical protection measures (TPM) may sometimes be done to achieve forms of protected expression that would be defensible under the fair use exception.

TPMs generally consist of code used to enforce lawful access to digitally distributed works like eBooks or streaming services, and §1201 prohibits circumventing TPM and/or trafficking in devices primarily designed for circumvention. By law, the Librarian of Congress (really the Copyright Office) conducts a triennial rulemaking proceeding to consider applications for, and grant exemptions to, §1201 for purposes such as research and certain educational or journalistic uses of the encrypted works. You can read posts here and here for background on the EFF’s case, but the bottom line is that the appellate court last week soundly rejected the claim that 1201’s “legitimate sweep” functions as a “speech licensing” law.

Among the court’s determinations, it held that the government’s interest in preventing “digital trespass” properly restricts a wide range of conduct that has no expressive purpose; the First Amendment does not guarantee unfettered access to expressive works; the plaintiffs in name make no showing that their protected expression is being chilled; and the various hypothetical examples presented by the EFF are answered by legal forms of access to works that do not require circumvention of TPM. More than a few of the court’s responses demonstrate why the EFF has tried inaptly to portray an anti-trespass law as a speech law. For example…

A trespass law undoubtedly affects some expressive conduct, as when political protestors trespass to stage a demonstration where it might have maximal impact. Similarly, the DMCA’s anticircumvention provision might preclude a student from circumventing technological measures to cut a high-quality clip of a copyrighted feature film to use in his class presentation. But trespassing is not “necessarily associated with speech,” because laws prohibiting trespass also “apply to strollers, loiterers, drug dealers, roller skaters, bird watchers, soccer players, and others not engaged in constitutionally protected conduct.”

As the court explains, §1201 likewise applies to a range of parties with an interest in circumvention for both lawful and unlawful purposes, but expression is not the basis on which the law operates. Going back to the bookstore, it is simply illegal to break in at all, regardless of whether the intent is to read, cite a book, or ransack the place. The fact that the vandal will face charges not attributable to the reader has no bearing on the trespass violation they both committed.

I also want to highlight the court’s response to the allegation that the §1201 rulemaking process is itself an unconstitutional prior restraint on speech as indicative of EFF’s chronic misstatements about fair use. The court writes, “An irony of appellants’ challenge to the DMCA is that the triennial rulemaking exemption scheme—which identifies in advance and immunizes categories of likely fair uses—may be less chilling of the fair uses to which it applies than the after-the-fact operation of the fair use defense itself.”

In other words, arguing a fair use defense requires litigation and uncertainty in contrast to a rule by the Librarian that a given use has been granted an exemption. The Library has granted a broad range of exemptions to §1201, and as this opinion notes, an exemption granted to a single petitioner (e.g., a documentary filmmaker or teacher) applies to all parties in that class with the same interest in circumventing TPM.

Finally, the court concludes that the rulemaking proceeding is not above judicial review—that a petitioner who believes the Library has made a content- or viewpoint-based decision may still bring a First Amendment complaint to the courts on that basis, but this does not alter the finding that the law itself withstands constitutional scrutiny. Never say never, I guess, but I predict this alleged controversy is now a settled matter—that EFF has wrung all the value it can from this campaign and will need to find a new anti-copyright windmill on which to break its lances.