The Internet Archive has lost its appeal in a fight to lend out scanned ebooks without the approval of publishers. In a decision on Wednesday, the Second Circuit Court of Appeals ruled that permitting the Internet Archive’s digital library would “allow for widescale copying that deprives creators of compensation and diminishes the incentive to produce new works.”

The decision is another blow to the nonprofit in the Hachette v. Internet Archive case. In 2020, four major publishers — Hachette, Penguin Random House, Wiley, and HarperCollins — sued the Internet Archive over claims its digital library constitutes “willful digital piracy on an industrial scale.”

The Internet Archive has long offered a system called the Open Library, where users can “check out” digital scans of physical books. The library was based on a principle called controlled digital lending, where each loan corresponds to a physically purchased book held in a library — avoiding, in theory, a piracy claim. It’s a fundamentally different system from programs like OverDrive, where publishers sell limited-time licenses to ebooks on their own terms.

However, the Internet Archive expanded its library project during the covid-19 pandemic. It launched the National Emergency Library, allowing an unlimited number of people to access the same copies of ebooks. That’s when the publishers banded together to file the lawsuit, targeting both online libraries.

The Second Circuit Court’s decision acknowledges the benefits and drawbacks of the Internet Archive’s digital library in its decision. But it ultimately sides with publishers:

On the one hand, eBook licensing fees may impose a burden on libraries and reduce access to creative work. On the other hand, authors have a right to be compensated in connection with the copying and distribution of their original creations. Congress balanced these “competing claims upon the public interest” in the Copyright Act. We must uphold that balance here.

Last year, a federal judge ruled that the Internet Archive doesn’t have the right to scan and lend out books in the same way a library would. The Internet Archive later appealed that decision.

“We are disappointed in today’s opinion about the Internet Archive’s digital lending of books that are available electronically elsewhere,” Chris Freeland, the director of library services at the Internet Archive, writes in a post on the site. “We are reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books.” Freeland also points to a petition you can sign to restore access to the 500,000 books publishers restricted access to.