Digital lending of scanned books remains legally unanchored in the United States: in Hachette v. Internet Archive, Judge John Koeltl ruled in March 2023 that controlled digital lending (CDL) of scanned books was not fair use, the Second Circuit affirmed in September 2024, and the parties settled in late 2024 on confidential terms that removed the affected books from the Internet Archive's lending program. As of mid-2026, no subsequent appellate ruling has changed that baseline — which makes this a status explainer, not a fresh-news alert.
MonBook Pro publishes information, not legal advice; library-lending questions belong with counsel or your library's own policy staff.
What was the case actually about?
Four publishers — Hachette, HarperCollins, Penguin Random House and Wiley — sued the Internet Archive in 2020 over its Open Library program, which scanned print books and lent digital copies under CDL rules: one digital copy per physical copy owned, for a limited loan period. The publishers argued this was straightforward copyright infringement; the Archive argued it was fair use. Per court documents in the case, the program at its peak included the emergency lending expansion of 2020, when the Archive lifted the one-to-one limits during pandemic library closures — the move that turned a quiet doctrinal experiment into a lawsuit.
What did the courts decide?
- March 2023: the district court granted judgment for the publishers, holding that CDL of scanned copies was not fair use — the first federal ruling on the theory.
- September 2024: the Second Circuit affirmed, rejecting the Archive's fair use defense on appeal and leaving CDL without appellate endorsement.
- Late 2024: the parties settled confidentially; per reporting on the settlement, the Archive agreed to remove the affected books from lending, and the publishers did not press for damages beyond the agreed terms.
What does this mean for controlled digital lending?
The doctrine survives in practice but without legal blessing. Libraries that own physical copies and lend them digitally under CDL norms continue to do so — the publishers' case targeted the Archive's scanned program, not every library's ebook circulation, and licensed platforms like OverDrive and its Libby app were never at issue because they lend under publisher licenses. What the rulings removed is the safety net: a library lending scanned copies without a license now does so knowing two courts have rejected the fair-use argument, and no U.S. appellate court has endorsed the one-to-one theory.
What does it mean for you as a reader?
Two practical effects. First, the Open Library's catalog is smaller and stays smaller — the settlement's removals are permanent unless renegotiated, so books you once borrowed there may only be available through your local library's licensed services. Second, library digital collections increasingly run on licensed terms set by publishers, which is why hold queues and lending limits on Libby feel the way they do: those are contract terms, not library policy. If you value robust digital lending, the lever is legislative — advocacy for CDL or ebook-licensing law — because the courtroom route is, for now, closed.
How does U.S. lending compare with Europe's approach?
The contrast is instructive. Several European markets regulate library e-book lending through collective licensing or statutory frameworks, where publishers are compensated per loan through collecting societies rather than relying on court-tested fair-use doctrines. That is one reason the FEP's 2025 statistics could report a record €24.9 billion European book market while digital library services kept expanding there: the rules of the game are written down. The U.S. route — license contracts between publishers and platforms — leaves libraries as negotiators rather than rightsholders by statute, which is why terms like price caps per copy and limited lending durations exist at all. For readers, the practical difference shows up in hold queues and catalog depth, not in headlines.
What changed in 2025 and 2026?
Nothing dramatic that could be verified as of July 2026: no new appellate CDL ruling, no announced renegotiation of the settlement, no federal statute. The steady developments are around the edges — publisher licensing terms for libraries, library consortiums rebalancing platforms, and continued advocacy work. When a real change comes, it will arrive through one of three doors: a new lawsuit testing narrower CDL facts, state ebook-licensing laws of the kind several states debated after 2020, or congressional action. Until one opens, the September 2024 ruling is the last word, and readers should treat any breathless update claiming otherwise with suspicion.
For more context, read What the European Book Market Report Says About Digital Reading.
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