> If that's the main argument of IA, they'll have a tough time in court.
As a non-profit library the plaintiffs effectively have to show that the Internet Archive acted in bad faith[1] in order to receive statutory damages. § 504 (c)(2) says,
> The court shall remit statutory damages in any case where an infringer believed and had reasonable grounds for believing that his or her use of the copyrighted work was a fair use under section 107, if the infringer was: (i) an employee or agent of a nonprofit educational institution, library, or archives acting within the scope of his or her employment who, or such institution, library, or archives itself, which infringed by reproducing the work in copies or phonorecords
Without full statutory damages I doubt IA would have to pay much of anything--at least, not so much that they become insolvent, unless the judge is mean-spirited--as it's unlikely the plaintiffs could show even a hint of significant economic loss. In fact, the inability to show economic loss in this case is likely to be critical to IA's Fair Use argument. In any event, I suspect it's this mandatory remittitur clause that gave the IA the courage to do what they did.
I agree the IA's interpretation of the law is unlikely to succeed given modern courts' sentiments regarding copyright. But is their legal argument so bad as to constitute bad faith? During a global pandemic? Where armies of educators will come out in defense of IA for the social benefit they provided given the exigent circumstances--a near complete, if not wholly complete, inability to gainfully access not only hard copies but electronic copies of these resources as well?
In light of the situation, it might even be possible that a trial court either approves of IA's theory or remits almost all damages, and the appellate courts refuse review, electing not to fall into the IA's or the publishing industry's trap of leveraging the pandemic to shape copyright law. In fact, rejecting IA's defense but using remittitur to reduce damages to a token amount is probably what a risk-averse trial judge might do, hoping that both IA and the publishers will accept a detente.
[1] I'm being a little lazy. I don't know of any precedent that equivocates the statute's language to the term of art, bad faith. But it seems close enough for loose talk.
EDIT: I forgot the wrinkle in that remittitur clause that I belatedly caught the first time I considered it a few weeks ago: it specifically refers to reproduction, not distribution or infringement generally. I dunno what the caselaw looks like, but that's an amateur oversight on my part, which I've apparently made twice. I guess I'm just eager to defend the IA.