Authors Guild, Inc. v. HathiTrust

Second Circuit rules that doctrine of “fair use” allows consortium of university libraries to create full-text searchable database of copyrighted works and to provide those works in formats accessible to people with disabilities.

Beginning in 2004, several research universities agreed to allow Google to electronically scan the books in their collections; the universities later announced plans to create a repository for the digital copies and founded an organization called HathiTrust to set up and operate the HathiTrust Digital Library (HDL). The Second Circuit addressed whether the doctrine of fair use protected HDL’s use of copyrighted material against claims of infringement asserted by several authors and authors’ associations.

HathiTrust permits three uses of the copyrighted works in the HDL repository. First, HathiTrust allows the general public to search for particular terms across all digital copies in the repository. Unless the copyright holder authorizes broader use, the search results show only the page numbers on which the search term is found within the work and the number of times the term appears on each page. Second, the HDL allows member libraries to provide access to the full text of copyrighted works to patrons with certified print disabilities (generally, people with visual impairments, other physical disabilities, or learning disabilities that prevent them from reading printed text). Third, by preserving the copyrighted books in digital form, the HDL permits members to create a replacement copy of the work if the member already owned an original copy; the member’s original copy is lost, destroyed, or stolen; and a replacement copy is unobtainable at a “fair” price elsewhere.

The district court granted the defendants’ motions for summary judgment on the basis of fair use, giving considerable weight to what it found to be the “transformative” nature of the HDL’s uses of the works.

On appeal, the Second Circuit considered whether each of these uses is protected within the meaning of copyright law, specifically Section 107 of the Copyright Act, which sets out the four elements that must be assessed in a fair-use analysis:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

As to full-text search and the purpose and character of its use of copyrighted works, the appeals court viewed the creation of a full-text searchable database as a “quintessentially transformative use” because it created new uses for the books and did not merely replicate or repackage the books. Regarding the second and third fair-use factors, although the authors contended that the copying is excessive because the HDL creates and maintains copies of the works at four different locations, the court found that these copies are reasonably necessary in order to facilitate the HDL’s legitimate, transformative uses. For instance, the HDL had to copy the entirety of each copyrighted work in other to make each work text-searchable.

As to the fourth factor, market effect, the court found that the full-text search function does not serve as a substitute for the books that are being searched. It was irrelevant, the court said, that the defendants might be willing to purchase licenses in order to engage in this transformative use (if the use were deemed unfair). Lost licensing revenue matters only when the use serves as a substitute for the original, and the full-text-search use does not.

Accordingly, the court held that the balance of relevant factors favored the defendants and that the doctrine of fair use allows the defendants to digitize copyrighted works for the purpose of permitting full-text searches.

Next, the court concluded that the doctrine of fair use allows the libraries to provide full digital access to copyrighted works to their print-disabled patrons. While this access is not transformative (because each work is merely being repackaged), the court nonetheless found it to be a proper use because Congress has consistently “reaffirmed its commitment to ameliorating the hardships faced by the blind and the print disabled.” The second factor weighed against fair use, because each work being copied was protected. As to the third factor, the court found that the entirety of each work had to be copied in several formats and stored in several locations in order to enable print-disabled patrons to access the works. The fourth factor, market effect, weighed in favor of fair use because the market for books accessible to print-disabled patrons is “so insignificant” that publishers often forgo royalties in order to facilitate access by the print disabled.

Accordingly, the court held that the balance of relevant factors favored the defendants and that the doctrine of fair use allows the defendants to copy protected works for the purpose of making those works accessible to print-disabled patrons.

Finally, the appellate court vacated the district court’s ruling as to the book replacement program, concluding that claims were speculative and not ripe for adjudication.