In a decision Friday, Judge Koeltl ruled that the Internet Archive ("IA"), the nonprofit entity behind the popular "Wayback Machine," committed copyright infringement through its program of scanning and lending digital copies of copyrighted books to the public. IA advanced a type of "fair use" defense that it called "controlled digital lending," arguing that an entity that owns a physical copy of a book can digitize it and then lend out the digital copy, as long as it only loans out a single digital copy for each physical copy owned.
Judge Koeltl rejected IA's fair use argument, finding "nothing transformative about IA's copying and unauthorized lending."
At bottom, IA's fair use defense rests on the notion that lawfully acquiring a copyrighted print book entitles the recipient to make an unauthorized copy and distribute it in place of the print book, so long as it does not simultaneously lend the print book. But no case or legal principle supports that notion. Every authority points the other direction.
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