Ranjan Narula and Shipra Alisha Philip of RNA, Technology and IP Attorneys analyse how a US ruling could affect digital libraries, e-book licensing, and public access to knowledge in India

The recent ruling by the United States Court of Appeals for the Second Circuit in the case of Hachette Book Group, Inc. v Internet Archive (the IA Case) has raised significant issues regarding copyright, fair use, and access to information.

The Internet Archive (IA), a non-profit organisation, digitises print books and provides them for free through its Free Digital Library. In 2020, four major book publishers sued IA, alleging copyright infringement of their books. The court ruled that IA's use of the books is not fair use and harmed the market for the publishers' e-books and print books, outweighing the short-term public benefits of IA's Free Digital Library. This decision was further upheld by the appellate court on September 4 2024.

This article explores:

The first sale doctrine allows the owner of a legally purchased copy of a work to resell, lend, or distribute that copy without further permission from the copyright holder. This doctrine is crucial for libraries, as it enables them to lend books and other materials to the public. The first sale doctrine ensures that once a copyright holder sells a copy of their work, they no longer have control over the distribution of that copy. This principle supports the free flow of information and access to knowledge.

While the first sale doctrine applies straightforwardly to physical copies of works, its application to digital works is more complex. Digital works are copied in nearly every computing or networking transaction, raising questions about the extent to which the doctrine can be applied.

In the IA Case, the US court held that libraries making a small number of copies for preservation and replacement purposes does not mean that the IA can distribute these copies en masse, while asserting it is simply performing the traditional functions of a library. This ruling highlights the challenges of applying the first sale doctrine to digital works.

The court in IA's case rejected its justification towards its use being transformative because it makes lending more convenient and efficient, and uses technology to deliver the work only to one person borrowing the book at a time. Rather, the court ruled that scanning complete books for free without altering its content or meaning (whether on a one-to-one, owned-to-loaned basis or not) is derivative in nature as they serve the exact purpose as the originals; i.e., making the books available digitally, encroaching on publishers' rights.

In India, the first sale doctrine flows from Section 14(a)(ii) of the Copyright Act, 1957, which grants exclusive rights to copyright owners to "issue copies of the work to the public not being copies already in circulation". However, challenges arise when applying this principle in the digital realm. Since India does not have established legal precedents on digital exhaustion for e-lending, the phrase "copies already in circulation" needs broader interpretation. Furthermore, digital works are copied in nearly every computing or networking transaction, requiring a balance between the rights of copyright owners and libraries in digital redistribution.

Section 52(1)(n) of the Copyright Act, 1957 permits non-commercial public libraries to reproduce works for preservation if the library already possesses their physical copies. However, it does not clarify the reasonability of distribution/communication of such copies.

The transformative fair use defence is not explicitly available under the Indian copyright law. However, Indian courts have occasionally touched upon transformative uses in their interpretations of fair dealing, particularly in the context of education and research. For instance, in Syndicate of The Press of the University of Cambridge v B.D. Bhandari and Anr. (2009), the court recognised use of a work for the purposes of making a guidebook as transformative and substantially different from the purpose for which the original work was made and constituted fair use.

This case has gained significant attention, which could influence copyright policies and practices worldwide, including in India.