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Tuesday, October 28, 2008

Google Book Search Settlement

Neil Netanel

EDITED ON OCTOBER 29: Google has reached a settlement with the authors and publishers who sued it for copyright infringement over Google's Book Search Project. If the 141 page settlement agreement (not including appendices) is approved by the court, Google will be able to make far greater portions of copyrighted books available on line, including selling access to the full text, and will share some 63% of its revenues from the Book Search Project with the copyright holders. Google is also paying $125 million plus attorneys fees. At least $45 million of Google's payment will go to holders of copyrights in the books that Google has scanned without permission. Google's payment will also fund the establishment of a book registry and collective licensing organization to enable payments to copyright holders for future uses.

Under the proposed settlement agreement (which as of this writing I have just read quickly), copyright holders will have the right to opt-out of the Project for any given book, but the default rule will be that Google may display 20% of the text of copyrighted out of print books and may sell access to viewing the entire text online. Google will also continue to be able to display and make available for user download the full text off public domain books in response to user's search queries. However, Google will no longer display short snippets of copyrighted books that remain in print without first obtaining copyright holder permission. Portions larger than short snippents of such books will also be made available for display, online viewing, and download per agreement with each copyright holder. (The settlement agreement actually uses the term "commercially available" rather than "in print," suggesting that books that are made available solely online, such as through Amazon.com's Kindle Books service, will be deemed to be "in print" for purposes of the settlement.) Under the settlement agreement, all public libraries in the United States will be offered a free online portal to Google's digitized collection and Google will offer institutional subscriptions to colleges and universities.

So in many ways the proposed settlement is a win-win-win-win (for Google, the copyright holders, the libraries, and the public). But there are some causes for concern as well. Perhaps most importantly, the settlement leaves undecided the issue of whether Google's scanning of the entire books and display of snippets is a fair use. Many observers, including me, believed that the courts would ultimately hold that it is a fair use, and thus set important precedent establishing that such "transformative uses" of copyrighted works -- uses that serve the shared goals of copyright and the First Amendment -- do not infringe copyright. Google's settlement for a $125 million payment and abandonment of its fair use defense (as well as its agreement to stop displaying short snippets of copyrighted in print books without obtaining copyright holder permission), may well leave others in a far weaker position to enter the market for online book searches and digital archives and may make it more difficult to claim that such uses of books do not harm a potential licensing market, which claim carries considerable importance for successfully asserting fair use. The proposed settlement also provides that Google may not enjoy the benefit of developments in fair use doctrine that bear on its Book Search Project, so Google has no incentive to support other book archive and search services' fair use claims.


Of course, there are few companies that have the wherewithal to launch a book search service that would compete with Google's in any event. But the bottom line is that Google is left with a de facto monopoly over this "universal library" service and, as I have discussed in a recent article, potential competitors face a higher barrier to entry than if Google had fought and prevailed on fair use (or if Congress enacts a statutory license for such uses).

The proposed settlement also creates a collective licensing organization that will collect the proceeds from Google and distribute them to the rights holders. That may raise some competition issues of its own. ASCAP and BMI, the collective licensing organizations of public performance rights in musical works, operate under antitrust consent decrees.

Comments:

Neil,

Thanks for reporting on this one. I'm of the opinion that it is only a matter of time before any digitized use is considered fair, if only on enforceability-cum-judicial-economy grounds. Sooner rather than later, if I had my way.

Am I correct that you would hav been happier with a vindication of the fair use defense?
 

Thanks for your comment, Robert. I would have been happier with a successful fair use defense plus effective orphan works legislation. The successful fair use defense would have only allowed Google to display very short snippets of copyrighted books, not to make available the full text of out print books, as orphan works legislation could make possible. I'm skeptical that any digitized use will be deemed fair, and as I wrote in my main post, I think the Google settlement could make it more difficult for digital archives of books to qualify for fair use.
 

When I say I expect all digitized uses to eventually be deemed fair, I'm talking very long term. But in the end, yes, I think judicial economy and enforceability will require such a finding. Not to mention that such a holding would actually be more in keeping with the patent and copyright clause per se. In the Gutenberg era there may have been call to grant these monopolies, but when reproduction and distribution become effectively limitless, well, as I've said elsewhere, when supply approaches infinity one reasonably expects price to approach the nadir. In the Gutenberg era, with attendant limits on replication and distribution, there were limits on supply. No longer. And that doesn't even factor in the burgeoning wealth of content creators of the current era.

Along similar lines, you might enjoy this post in the wake of the 2005 Grokster decision and Brian Martin's Againt Intellectual Property.
From "Disagreeing With My Betters":

"Where the public, and justice, and the Constitution, would best be served by a radical curtailment of copyright and patent durations and an equally radical strengthening of fair use doctrines, what we can expect, so long as there's so very much money to be made under the current outdated systems, is more of same."

Peace,

rl
 

Sigh - My worries, when I heard about the settlement, were exactly those articulated in your post--it's not very comforting to have them confirmed by someone with expertise in these matters.

It really depressed the hell out of me. Nobody had a better chance than Google of fighting and winning this thing--especially with Patry as their copyright counsel. Now, it's that much harder for anyone else. Sigh!
 

Preface: I am not a lawyer (IANAL) and only occasionally post rant response comments on this site.

***

"So in many ways the proposed settlement is a win-win-win-win (for Google, the copyright holders, the libraries, and the public)."

I'm not so certain that this is a "win" for the public. It depends on the future actions of Google and how it "serves" the public and the public interest. As we've so clearly seen recently, the interests of a mega-corporation and the public rarely coincide, and if they should happen to, can diverge at any point. (To segue, I think it would be more accurate to refer to the interests of the executives and directors of mega-corporations as compared to the rest of the world.)

And it's those interests, Google's and the public's, that have likely diverged markedly due to this settlement. As you've noted, Google now has a "de facto monopoly over this "universal library" service." That monopoly represents an asset that Google fought for, paid dearly for, and hopes to make a large profit from. Any events or interests that would in any way potentially diminish those expected profits would be viewed by Google as adversarial. That includes the interests of the public. If a law were to be passed requiring licensing of copyright, Google could easily lose its advantage in the online book reading and viewing market and so would likely devote great effort and resources to fight any such future law.

In other words, this settlement makes Google a likely ally of the publishing industry, not the public or the public's interests, if that was ever the case.

As I've noted, IANAL, and certainly not a high tier professor of law, but I was thinking about the MP3.com case, where MP3.com had made available (copyrighted by others) music for online listening. MP3.com was sued by the publishers and lost their case, to the "tune" of hundreds of millions of dollars - with no resulting market advantages whatsoever. From my unlearned view the main differences between the MP3.com case and this Google case is that MP3.com made available full songs rather than partial "samples" - (a possible "fair use") as Google has done in most cases with books. The other difference though is that MP3.com required prospective online listeners to provide proof that they had the original CDs containing the songs they wanted access to. Google makes no such requirement of book viewers. MP3.com basically tried to provide a world wide listening ability to music members of the public had paid for. At the time it was suggested that the error of MP3.com's ways was in that it, MP3.com, did the copying to the net of the music (which MP3.com also bought) rather than the individuals that had bought the CDs to be listened to. Again, supposedly, if MP3.com had made online space available for members to upload their own digital copies of their music, then the service would have been acceptable.

Obviously that's not true anymore and probably wasn't at the time but was simply suggested as a possible basis to find against MP3.com. At this point it's become clear that the rights of purchasers of copyrighted material or licenses thereof have very very little rights other than those specifically granted by the publishers. That apparently includes copying digital material onto other devices for backup or any reason, including overcoming the obsolescence of devices used for listening or viewing. We've seen something of that with "services" that provide music for download that are ended by publishers or their vendors, effectively making the music purchased no more than bits in the digital bit bucket. Taken to its extreme, copy "protecting" of works extended into the future will likely prevent in some or many cases those works ever becoming part of the public domain - the supposed tradeoff basis for copyright protection in the U.S. constitution.

Google is now an ally with these publishers. They've got their agreement. Any agreements that might be made with others would be a threat to expected profits and any laws that might provide greater rights to the public would be even more of a threat.

The publishers just got a very powerful and wealthy ally and the public lost one, or at least any pretext that it ever had one.

P.S. Thanks for your insights and concerns.
 

If you read the whole settlement agreement, you notice that it's pretty limited-- hardly an "iTunes for books" as people say.

First there is no downloading allowed, and no remote access except at big institutions. Public libraries get one terminal-- that's it-- and limited printing, for a FEE!

Even people who buy the books can't download them-- and can only print them in a limited fashion.

Google also says they will set up a registry for publc domain books, but they haven't yet, and are currently violating their agreements with the host libraries by not making all PD scans available.

All in all-- it's weak weak weak. No great research tool, as it has been hyped.
 

i don't see how you can possibly
say this is a "win" for the public,
not without knowing the _cost_
that will be charged for "access",
as well as the nature of the "access".

over and above their abandonment
of a robust defense of "fair use",
google capitulated in every way to
desires of the publishing industry,
and left the public holding the bag.

google gives 'em an income-stream
from "property" they'd abandoned,
and also gives 'em an infrastructure
to impose a rental model on books
-- one that the publishers could
_not_ have created on their own,
as evidenced by the music biz --
that means the public has to pay for
books that we can't even download.

not only that, but the prices for this
"rental" of books are quite obscene!
have you studied their fee schedule?

the market for e-books hasn't even
begun to form, let alone shake out,
yet already the publishers want to
freeze into place the parameters?
and google is going to assist them?
and raise the entry barrier as well?

no, no, a thousand times no!

this is no "win" for the public, and
it's no "win" for the future either...

you really need to go back to your
desk and study all this some more.

these books represent our culture!
we will not let someone seize them
and hold them for ransom. no sir!

-bowerbird
 

Good points-- it would be understandable to have display only for subscription accounts, but for actual consumers to be put into a rental-only position when they BUY the book is unacceptable.

I still think that the days of free downloads for public domain works will soon end. Google is not going to keep that up for long. It's all gonna be rental as you say.
 

I think the Google settlement could make it more difficult for digital archives of books to qualify for fair use.
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