The lawsuit wasn’t coming because they were in a strong grey area with one physical copy per digital. By offering unlimited copies they directly invited a lawsuit.
And then their legal defense had absolutely no competency behind it. They didn’t come with any legal principles, they basically just said “we shouldn’t be punished because we’re nice”, and then they tried the same style of argument during appeal, basically throwing money away on legal expenses. All the while they were campaigning for donations - the people that supported them were paying the lawyers, not for the IA’s regular activities.