I think most people here saw this coming. Unfortunately this isn't a question of whether the law is good, it's a question of whether IA broke the current laws we have. IA can and should lobby for copyright law to change. But breaking it before it has changed is risky and foolish, and does more harm than good.
Just to clarify, what are the consequences of their actions? It appears to be a clear case of copyright infringement. Therefore, I assume that the legal penalties listed on this website ( https://www.lib.purdue.edu/uco/infringement ) can be applied in this case: - The infringer paying the monetary damages and profits. - The law offering a range from $200 to $150,000 for each infringed work. - The infringer paying for…
Statutory damages are the most significant risk to IA's finances, both in this case but also wrt other potential plaintiffs who might be waiting in the wings. Exemption almost certainly figured into IA's risk assessment when designing and deploying their loan program. The argument for exemption is, naturally, stronger than for Fair Use.