By Dani Kass

Law360 (June 1, 2020, 6:59 PM EDT ) Four major publishing houses on Monday accused the Internet Archive of engaging in "willful digital piracy on an industrial scale" with its Open Library, where users can borrow e-books made by scanning physical books.

Open Library aims to create a "web page for every book ever published" and step in for closed libraries during the COVID-19 pandemic, but Hachette Book Group Inc., HarperCollins Publishers LLC, John Wiley & Sons Inc. and Penguin Random House LLC told a New York federal court that it's doing so without respect for copyright law.

The organization illegally scans and uploads books without any licensing agreements or payment to authors and publishers, according to the complaint, with at least 1.3 million books already being distributed.

"Its goal of creating digital copies of books and providing them to whomever wants to download them reflects a profound misunderstanding of the costs of creating books, a profound lack of respect for the many contributors involved in the publication process, and a profound disregard of the boundaries and balance of core copyright principles," the publishers said.

"IA does not seek to 'free knowledge'; it seeks to destroy the carefully calibrated ecosystem that makes books possible in the first place — and to undermine the copyright law that stands in its way," the publishers said.

Internet Archive founder Brewster Kahle on Monday defended the organization's role as a library and said he hopes the case can be "resolved quickly."

"As a library, the Internet Archive acquires books and lends them, as libraries have always done," he said in an email. "This supports publishing and authors and readers. Publishers suing libraries for lending books, in this case, protected digitized versions, and while schools and libraries are closed, is not in anyone's interest."

In the complaint, the publishers said Open Library isn't a library, but an "unlicensed aggregator and pirate site." The organization uploads exact copies of copyright-protected books without having the right to do so and makes them free to the public, the complaint said.

"IA not only acts entirely outside any legal framework, it does so flagrantly and fraudulently," the publishers said.

The Internet Archive relies on a "fundamentally flawed" theory called controlled digital lending, under which the organization says it can lend a copy of a book as long as it has a physical version in its collection, according to the publishers.

Once the COVID-19 pandemic hit, the publishers say the Internet Archive removed those "already deficient" restrictions for its "National Emergency Library" to respond to the closing of in-person libraries.

"IA's blatant, willful infringement is all the more egregious for its timing, which comes at the very moment that many authors, publishers, and independent bookstores, not to mention libraries, are both struggling to survive amidst economic uncertainty and planning deliberatively for future, changing markets," the complaint states.

The publishers warn that Open Library puts the entire industry at stake, as "free is an insurmountable competitor."

Likewise, the complaint says the Internet Archive can't invoke the first sale doctrine under Section 109 of the Copyright Act, which lets the owner of a copy of a work distribute that specific copy.

"The lynchpin of IA's whole operation is that it scans a print book to create a digital file — a classic unauthorized reproduction of a work that puts the application of Section 109 clearly out of reach," the publishers said.

In a statement Monday, Association of American Publishers President and CEO Maria A. Pallante said "today's complaint illustrates that Internet Archive is conducting and promoting copyright infringement on a massive scale."

"In scanning and distributing literary works to which it has no legal or contractual rights, IA deliberately misappropriates the intellectual and financial investments of authors and publishers and brazenly ignores the copyright law that Congress enacted," Pallante said. 

In a statement supporting the Internet Archive, Public Knowledge legal director John Bergmayer said the suit was "disappointing."

"Controlled digital lending is plainly fair use under copyright law," Bergmayer said. "The National Emergency Library … is justified under the circumstances of the pandemic, when so many print books paid for by the public are inaccessible. At a time when so many people are relying on the internet and electronic resources for work, education, and research, a more collaborative approach between libraries, archives, and publishing companies would be welcome."

The publishers are represented by Elizabeth A. McNamara, Linda Steinman, John M. Browning and Meredith I. Santana of Davis Wright Tremaine LLP and Matthew J. Oppenheim and Scott A. Zebrak of Oppenheim + Zebrak LLP.

Counsel information for the Internet Archive wasn't immediately available.

The case is Hachette Book Group, Inc. et al. v. Internet Archive et al., case number 1:20-cv-04160, in the U.S. District Court for the Southern District of New York.

--Editing by Haylee Pearl.

For a reprint of this article, please contact reprints@law360.com.