The case that decided how a digital library may lend began with a decision made in a fortnight of panic. On 24 March 2020, with schools and libraries closed, the Internet Archive launched what it called the National Emergency Library: it lifted the waiting lists on its scanned books and let any number of readers borrow the same title at once. On 1 June 2020, four publishers — Hachette Book Group, Penguin Random House, HarperCollins and Wiley — sued. On 16 June the Archive shut the emergency programme down. It did not save the case.
What was actually on trial was older and less dramatic than the emergency: controlled digital lending, the practice of buying a physical book, scanning it, and lending the scan to one reader at a time while the paper copy sits unread on a shelf. Libraries had argued for years that this is what a library does, in a format the twenty-first century can use. Publishers argued it is copying, and that a library’s right to lend the copy it bought does not include the right to manufacture a new one.
On 24 March 2023 Judge John G. Koeltl ruled for the publishers, finding that the fair use defence failed on all four statutory factors. On 11 August 2023 the parties submitted a negotiated judgment: a permanent injunction, a confidential monetary payment, and one exception that matters — the restriction covers the plaintiffs’ titles for which a commercial ebook exists. On 4 September 2024 the Second Circuit affirmed. In December 2024 the Archive said it would not challenge further.
More than 500,000 books left full lending as a result.
What the ruling settled
It settled that scanning a book you own and lending the file is not, by itself, protected by fair use in the United States. Judge Koeltl’s reasoning gave the publishers everything on the first factor — the use was not transformative, because the scan does the same job as the original — and the fourth, the effect on the market, because a licensed ebook market plainly exists.
The consequence is narrow in law and wide in practice. A library may still buy an ebook licence. What it may not do is convert its own paper collection into a digital one and lend from that. And the licence, unlike the book on the shelf, is not property. It is a term: a number of loans, or a number of years, after which the library pays again or the title disappears.
That is the substance of the argument that continued after the case ended. Librarians did not lose a piracy case. They lost the ability to own the thing they lend.
What it left open
The exception written into the judgment is the interesting part. The injunction applies to the plaintiffs’ books that are commercially available as ebooks. Work that no publisher has digitised, and does not intend to, sits outside it.
That covers a great deal of the twentieth century: out-of-print fiction, regional publishing, academic monographs with an audience of four hundred people, the entire mid-list of the 1970s and 1980s. For those books there is no licensed ebook to buy, no market to harm, and frequently no rightsholder anyone can locate. The judgment did not say that lending them is lawful. It said the publishers’ injunction does not reach them, which is a different and much smaller statement.
Nothing in the ruling touches the Archive’s other work — the web crawl, the film and audio collections, the public-domain library. Project Gutenberg, which distributes only public-domain texts, was never in the frame at all.
Why this belongs in the same story as piracy
Because they are the two ends of one failure.
The shadow libraries answer a demand that legal channels do not meet, and they answer it badly: without permission, without payment to authors, and increasingly by selling bulk access to companies training commercial systems. The Internet Archive tried to answer part of the same demand lawfully, at scale, with the books it had bought — and the law said no.
The result is that the reader who cannot afford a book, or whose library cannot afford the licence, has fewer legitimate options in 2026 than they had in 2019, while the illegitimate ones have become more industrialised. That is not an argument that the publishers were wrong. Their case was decided on the law and it was decided clearly. It is an argument that winning it did not solve the problem underneath, and that nobody has been asked to.
Maria A. Pallante, president and chief executive of the Association of American Publishers, put the industry’s position plainly when the negotiated judgment was announced: infringement, she said, “serves only the infringer, not the public”, and copyright law exists to incentivise new works and lawful access to them. Both halves of that sentence are defensible. The second half is also a commitment, and it is the one still outstanding: lawful access, at a price a public library can carry, for the books people actually want to read.
Until that exists, every enforcement victory will be followed by the same discovery — that the demand did not go anywhere, and that it is now somewhere harder to see.
