Fair use and the case against the commercialization of nonprofits: The Wikimedia Foundation’s amicus brief in Hachette v. Internet Archive

Update (27 September, 2024): After the Internet Archive’s (IA) appeal, the Second Circuit Court of Appeals affirmed, in September 2024, the District Court’s original ruling in this case. The Second Circuit Court held the unfortunate decision that IA’s Controlled Digital Lending (CDL) of copyrighted works, without authorization from authors or publishers, is not protected by fair use. However, the Second Circuit Court did find that the solicitation of donations does not amount to commercial use, which was the main focus of the Wikimedia Foundation’s amicus brief. This reinforces that the processes by which nonprofits engage in fundraising activities, especially those that rely on user-generated content (UGC) like the Foundation, continue to be considered fair use. Nonetheless, by considering CDL as infringing, this ruling diminishes the protections that the fair use exception was intended to cover.

The Wikimedia Foundation, in collaboration with Creative Commons and Project Gutenberg, filed a “friend-of-the-court” brief supporting the Internet Archive in the Hachette v. Internet Archive case. The lawsuit involves major publishers accusing the Internet Archive of copyright infringement through its Open Library service. Legal issues arose in 2020 when lending restrictions were removed during the COVID-19 pandemic, leading to a District Court ruling against the Internet Archive in March 2023. The Court found fault with the nonprofit’s fair use defense, emphasizing concerns about soliciting donations. In response, the Wikimedia Foundation’s brief argues that the Court’s interpretation of fair use could wrongly classify nonprofit secondary uses as commercial, impacting all nonprofit organizations’ ability to utilize copyrighted material.

Internet Archive building in San Francisco. Image by Svobodat, CC BY-SA 3.0, via Wikimedia Commons.

The Wikimedia Foundation submitted an amicus brief in support of the Internet Archive in the Hachette v. Internet Archive lawsuit. In this case, the Internet Archive is being sued by four major book publishers who claim that the Internet Archive’s Open Library service encourages copyright infringement. We argued that the Court’s definition of “commercial use” of copyrighted works unfairly restricts nonprofit activities. 

The Internet Archive was created with the objective of building a digital library for the public and to be able to access internet sites and cultural artifacts. It has been able to do so by scanning donated and purchased books, storing the physical copies, and then lending the virtual ones in a process called Controlled Digital Lending (CDL). To prevent abuse, the Internet Archive would use virtual locks to prevent the content from being shared more than once. They believed that this would allow content to be lent through the fair use exception, while still respecting copyright-holders ownership of the works. In response to the COVID-19 pandemic, the organization decided to remove the lending restrictions it had on 1.4 million digitized books and created a National Emergency Library.

In March 2023, the District Court ruled against the Internet Archive’s Emergency Library and found that even if the nonprofit would lend the books for free, the fact that the organization solicited donations was a significant enough factor to find that the copyrighted works were being exploited in a way which harmed the owners of copyrighted material. Ultimately, the Court considered the use made by the National Emergency Library to be of a commercial nature: 

IA exploits the Works in Suit without paying the customary price. IA uses its Website to attract new members, solicit donations, and bolster its standing in the library community. […] IA receives these benefits as a direct result of offering the Publishers’ books in ebook form without obtaining a license. Although it does not make a monetary profit, IA still gains “an advantage or benefit from its distribution and use of” the Works in Suit “without having to account to the copyright holder[s],” the Publishers.

In September 2023, the Internet Archive appealed the decision. This led the Wikimedia Foundation, along with Creative Commons and Project Gutenberg, to submit an amicus brief in support. Our argument focused on the concern that the Court’s interpretation of fair use would unfairly classify any nonprofit’s use of copyrighted material to be commercial. The Wikimedia Foundation argued that it is problematic to associate additional users, donations, and reputation with “commercial” gains when, in actuality, they served the organization’s nonprofit purposes. The fair use exemption is important, as it allows some type of content to be freely posted on the Internet Archive’s website. Nonprofits with websites like the Wikimedia Foundation, Project Gutenberg, and Creative Commons use fundraising strategies and rely on donations to pay for infrastructure, employees, and other activities that help further each nonprofit’s mission.

We felt that the Court’s decision would threaten both the processes of nonprofit fundraising and the methods by which nonprofits, especially those which produce online educational resources, provide their services. Monetization should not be expanded to cover donations, as they are unrelated to the particular use of copyrighted material. We believed the Internet Archive did not have a commercial advantage with its Open Library service. Instead, it was serving the public in a time of greater need.

The content hosted by a nonprofit is generally set by what type of content can bring the greatest amount of benefit to the public at large. The Court’s decision, that a website-wide banner requesting donations was of a “commercial nature”, would subject nonprofit organizations to greater risks. As Wikipedia and other similar projects rely on user-generated content, this decision would create uncertainty for volunteer contributors, since rights holders may be emboldened to challenge the content posted by users. Ultimately, the Wikimedia Foundation believes that normal nonprofit activities like website-wide donation banners should not be seen as “commercial” under copyright laws. 

If you are interested in the topic and want to learn more about the case, you can read our joint amicus brief, the District Court’s ruling against the Internet Archive or about the Internet Archive and their mission.

We would like to thank the University of Southern California Gould School of Law Intellectual Property and Technology Law Clinic certified law students Zachary Hardy and Anna Higgins for their valuable contributions to this brief; our co-signers, Creative Commons and Project Gutenberg; the Wikimedia Foundation’s legal staff James Buatti, Shaun Spalding, Stan Adams and Jacob Rogers, and former legal fellows Elliot Ping and Veronica Dibos.