What is the legal basis for Internet Archive’s digital lending during normal times?

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One of the statements suggests you’ve acquired your books illegally. Is that true?
No. The books in the National Emergency Library have been acquired through purchase or donation, just like a traditional library. The Internet Archive preserves and digitizes the books it owns and makes those scans available for users to borrow online, normally one at a time. That borrowing threshold has been suspended through June 30, 2020, or the end of the US national emergency.

Is the Internet Archive a library?
Yes. The Internet Archive is a 501(c)(3) non-profit public charity and is recognized as a library by the government.

The concept and practice of controlled digital lending (CDL) has been around for about a decade. It is a lend-like-print system where the library loans out a digital version of a book it owns to one reader at a time, using the same technical protections that publishers use to prevent further redistribution. The legal doctrine underlying this system is fair use, as explained in the Position Statement on Controlled Digital Lending.

Does CDL violate federal law? What about appellate rulings?
No, and many copyright experts agree. CDL relies on a set of careful controls that are designed to mimic the traditional lending model of libraries. To quote from the White Paper on Controlled Digital Lending of Library Books:

“Our principal legal argument for controlled digital lending is that fair use— an “equitable rule of reason”—permits libraries to do online what they have always done with physical collections under the special database first sale doctrine: lend books. The first sale doctrine, codified in Section 109 of the Copyright Act, provides that anyone who legally acquires a copyrighted work from the copyright holder receives the right to sell, display, or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. This is how libraries loan books. Additionally, fair use ultimately asks, “whether the copyright law’s goal of promoting the Progress of Science and useful Arts would be better served by allowing the use than by preventing it.” In this case we believe it would be. Controlled digital lending as we conceive it is premised on the idea that libraries can embrace their traditional lending role to the digital environment.

The system we propose maintains the market balance long-recognized by the courts and Congress as between rightsholders and libraries, and makes it possible for libraries to fulfill their “vital function in society” by enabling the lending of books to benefit the general learning, research, and intellectual enrichment of readers by allowing them limited and controlled digital access to materials online.”