Internet Archive Lawsuit News: Hachette and UMG Rulings

The Internet Archive lawsuits — one brought by four major book publishers, the other by the largest record labels — have both ended against the nonprofit, producing a permanent injunction on digital book lending, a confidential settlement over vintage sound recordings, and the removal of more than 500,000 titles from the Archive’s lending collection. Neither case reached the Supreme Court. The rulings have narrowed what libraries can legally do with scanned copies of copyrighted works, and they have reshaped the Archive’s operations without shutting it down.

Hachette v. Internet Archive: The Book Publishers’ Case

On June 1, 2020, Hachette Book Group, HarperCollins, Penguin Random House, and John Wiley & Sons sued the Internet Archive in the Southern District of New York. The suit was coordinated by the Association of American Publishers and cited 127 specific copyrighted works, though the Archive’s scanned collection was estimated at more than 3.6 million titles.¹²

At issue was a practice the Archive called “controlled digital lending.” Under CDL, the Archive scanned physical books it owned and lent the digital copies on a one-to-one basis: one patron at a time per physical copy in storage. The dispute came to a head with the “National Emergency Library,” launched in March 2020 as the pandemic closed physical libraries. That program suspended the one-copy-at-a-time rule and made 1.4 million books available for simultaneous borrowing by unlimited users.³ The Archive shut it down after three months, once the lawsuit was filed.⁴

How the Courts Ruled

On March 24, 2023, U.S. District Judge John G. Koeltl granted summary judgment to the publishers, finding that all four fair use factors weighed against the Archive.² The Archive appealed. On September 4, 2024, a three-judge panel of the Second Circuit unanimously affirmed.⁵

The appellate court rejected the argument that converting a print book to a digital file was “transformative.” Changing the format, the court found, adds no new expression or meaning and produces a substitute that competes directly with publishers’ ebook markets. The panel distinguished the Archive’s practice from an earlier case involving Google, which had displayed only small “snippets” of scanned books rather than distributing full copies.¹ The court also held that the Archive’s nonprofit status did not excuse the practice, finding that the organization used its library to attract members, solicit donations, and bolster its standing.⁵

The Archive let the December 3, 2024, deadline to petition the U.S. Supreme Court pass without filing.⁶

The Injunction and Settlement Terms

Before the appeal was decided, the parties negotiated a consent judgment in August 2023 that included a permanent injunction. Its terms bar the Internet Archive from reproducing or distributing copyrighted books that are commercially available in electronic format. The injunction carves out several activities that remain permitted:

Digitization for preservation purposes
Lending of out-of-print books
Providing accessible formats for people with print disabilities
Displaying short excerpts consistent with fair use⁷

Through a separate agreement with the Association of American Publishers, the Archive agreed to apply the same takedown procedures to the full catalogs of all AAP member publishers, not just the four plaintiffs.⁸ The Archive also made an undisclosed monetary payment described as substantially covering the publishers’ legal fees and costs since 2020.²

What Was Removed From the Collection

By late 2024 the Internet Archive had removed more than 500,000 books from its lending program, and the organization warned that many more would follow.⁹ Patrons reported that the removed titles spanned academic texts in subjects like bioanthropology and ancient history, out-of-print books no longer commercially available, textbooks on endangered indigenous languages, and older editions of classic works. Citations and links that scholars and Wikipedia editors had built pointing to those books went dead.¹⁰

UMG v. Internet Archive: The Record Labels’ Case

The second lawsuit was filed in August 2023 by Universal Music Group, Sony Music Entertainment, Capitol Records, and other labels in federal court in San Francisco. The complaint targeted the Archive’s “Great 78 Project,” an initiative to digitize and stream more than 400,000 fragile shellac records from the early twentieth century, including recordings by Frank Sinatra, Ella Fitzgerald, and Billie Holiday. The labels called the project an “illegal record store” hiding behind the language of preservation and research, and they named audio preservationist George Blood, who worked on the digitization, as a co-defendant.¹¹

An amended complaint in 2024 expanded the recordings at issue from 2,749 to 4,142. The labels sought $150,000 per recording, the statutory maximum for copyright infringement, putting potential damages above $621 million.¹² Founder Brewster Kahle said in a 2025 interview that a judgment of that size would end the organization: “If the Internet Archive has to pay hundreds of millions of dollars, the Internet Archive is gone.”¹³

On September 15, 2025, the parties filed a joint notice of settlement before Judge Maxine Chesney. The terms are confidential. Both sides said they would have no further public comment, and a formal stipulation of dismissal was expected within 45 days. The settlement resolved all claims against both the Internet Archive and George Blood.¹⁴ Neither the financial amount nor any specific changes to the Great 78 collection were disclosed, though users noted that hundreds of thousands of files had been removed from a related audio collection on the site around that time.¹⁵

What the Rulings Mean for Digital Lending

The Hachette decision has effectively closed the door on controlled digital lending as a legal theory, at least within the Second Circuit. The court’s central holding — that owning a physical book does not entitle the owner to scan and distribute it digitally — reaches well beyond the Internet Archive itself. Library advocates had hoped CDL could give libraries a way to offer digital access to their physical collections without paying the licensing fees publishers charge for ebooks, which can run $75 to $150 or more per title.¹⁶

Advocacy has since shifted toward legislation. Several states have pursued or considered laws that would require publishers to offer ebook licenses to public libraries on reasonable terms, and a “Model Law” has been drafted for that purpose. Legal scholars have noted that state efforts face a serious obstacle: federal copyright preemption.¹⁷ Some have called for amendments to federal copyright law that would create a compulsory licensing framework or a new library exception for digital materials, potentially modeled on the European Union’s rental right.¹⁸

Amicus briefs in Hachette drew a wide slate of participants. Supporting the Internet Archive were the American Library Association, the Wikimedia Foundation, Creative Commons, HathiTrust, Project Gutenberg, and numerous copyright scholars. Supporting the publishers were the Authors Guild, the Copyright Alliance, and international rights holders’ organizations.¹ The Authors Guild, which had campaigned against the Archive’s lending program since 2017, called the final outcome “a resounding legal refutation” of what it described as attempts to undermine intellectual property protections in the digital age.¹⁹

Where the Internet Archive Stands Now

Kahle has been direct about the organization’s condition. “We’re still here. We’re not dead yet,” he told American Libraries Magazine in June 2025. After the Second Circuit ruling he said: “It was never the Internet Archive’s intention to get into a lawsuit over lending digitized books — we respect the outcome.”¹³

The finances tell a matching story. In 2023 the nonprofit reported a net loss of nearly $9 million, with expenses of $32.7 million exceeding revenue of $23.7 million, and net assets dipping into negative territory. By 2024 the picture had improved: revenue of $26.8 million against $23.5 million in expenses produced a $3.3 million surplus.²⁰ Individual donations supplied roughly 68 percent of 2024 revenue, about $18.3 million. The Kahle-Austin Foundation, connected to the founder, has been the single largest donor, contributing $13.5 million between 2003 and 2024. Other supporters include the Mellon Foundation, the Alfred P. Sloan Foundation, the Knight Foundation, Craig Newmark Philanthropies, and the National Science Foundation.²¹

On the lending side, the Archive is putting more resources into purchasing ebooks outright from publishers willing to sell them, so that libraries can own and lend those copies without licensing restrictions. Kahle has described the goal as building “a system that works for more players than just big corporations that make a habit of suing libraries.”¹³

1
Electronic Frontier Foundation. Hachette v. Internet Archive
2
Publishers Weekly. Internet Archive Copyright Case Ends Without Supreme Court Review
3
Authors Guild. Internet Archive’s Uncontrolled Digital Lending
4
MDPI. Controlled Digital Lending and Copyright Law
5
Justia. Hachette Book Group v. Internet Archive, No. 23-1260
6
Authors Guild. AG Applauds Final Court Decision Affirming Internet Archive Book Scanning as Copyright Infringement
7
Internet Archive Blog. What the Hachette v. Internet Archive Decision Means for Our Library
8
Association of American Publishers. Publishers and Internet Archive Submit Negotiated Judgment
9
Internet Archive Blog. Lending of Digitized Books
10
Internet Archive Blog. Patrons Speak Out: The Impact of Losing Access to More Than 500,000 Books
11
Rolling Stone. Internet Archive Major Label Music Lawsuit
12
Rolling Stone. Internet Archive Labels Settle Great 78 Copyright Lawsuit
13
American Libraries Magazine. Newsmaker: Brewster Kahle
14
Ars Technica. Internet Archive’s Big Battle With Music Publishers Ends in Settlement
15
Internet Archive Blog. An Update on the Great 78s Lawsuit
16
Colorado State University SOURCE. Internet Archive Court Case
17
Yale Journal of Law and Technology. Copyright, Ebooks, and the Future of Digital Lending
18
UNLV Scholars. Copyright, eBooks, and the Future of Digital Lending
19
Authors Guild. AG Celebrates Resounding Win in Internet Archive Infringement Lawsuit
20
ProPublica Nonprofit Explorer. Internet Archive Nonprofit Filing
21
Inside Philanthropy. Who’s Funding the Wayback Machine