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Google’s Settlement With Publishers Does Not Resolve All Library Project Issues
Posted On October 11, 2012
After more than 7 years of litigation, Google and The Association of American Publishers (AAP) reached a settlement over Google’s ongoing Library Project to scan books from public and academic libraries and make the content available over Google. The settlement permits the project to continue, but it gives U.S. publishers the power to choose whether to make their books available through Google or to have them removed. However, the settlement does not resolve the claims made by The Authors Guild and individual authors that the project violates their copyrights. Those claims remain tied up in litigation, notwithstanding previous efforts at reaching a settlement.

The lawsuit began in 2005 after Google entered into several agreements with public and academic libraries to digitize the books in their collections and then make “snippets” of the books available on Google. If a user search identified content from a scanned book among their Google results, the user would see a small portion of the book, or a snippet, to provide the context for the search result. Depending on the title, the user could then be directed toward a bookseller or a library to obtain the book.

In response to the project, The Authors Guild, several individual authors, and the AAP sued Google, claiming that the project infringed on their copyrights. Google’s defense largely was oriented around its claim that the publication of snippets was covered by copyright’s Fair Use doctrine.

Proposals for settling the lawsuits were reached in 2008 and again in 2010. Both of the settlement proposals would have allowed Google to continue to develop and maintain both its database of the books and a registry for collecting copyright information and disseminating royalty payments. Google would be permitted to market the database on both a per-use and a subscription basis, in return for the payment of royalties. However, both times the proposal settlements fell victim to objections about the scope of the settlement, legal objections to taking copyright choice away from individual copyright owners, and concerns that Google would develop a monopoly over the digitization of books.

The new settlement avoids the problems of the earlier settlement proposals by focusing only on works clearly owned by the publishers and allowing them to have a choice in whether their content is made available through Google. Although some details of the settlement—including any financial arrangements between Google and the publishers—have not been released, Google did agree to “acknowledge the rights and interests of copyright-holders,” and the publishers will have the power to make several choices about the use of their digitized works.

Among those choices is a threshold decision as to whether the books are to be included as part of the Google Books database. If so, the settlement would allow up to 20% of the book to be browsed by users. In addition, the publishers may also permit Google to sell full-text electronic versions of the books through Google Play for use on e-readers, presumably also paying a royalty to the publishers. Finally, Google agreed to provide to the publishers a digital copy of the work with broad republication rights, which could allow the publishers to make separate agreements with other ebook vendors such as Amazon and Barnes & Noble.

These final points are particularly important in an era where ebooks are an increasing part of the publishing landscape. Publishers are now in a position to generate ebook revenue from out-of-physical-print books through both Google and any other vendor that they would like to work with. Essentially, Google did the work of scanning the books and creating the databases, and the publishers get the benefit.

The looming question, however, is whether and how this settlement could affect the continuing litigation that remains with Google, The Authors Guild, and individual authors. Because the recently announced settlement is limited to Google and the AAP, it does not require the approval of the court, nor does it apply to The Authors Guild and the individual authors.

The authors’ side of the ongoing litigation is far more complex, making it a challenging question as to whether a settlement along the lines of the publishers’ model is possible. Two of the biggest challenges are that The Authors Guild and the named individual authors are pursuing the lawsuit as a class action, where they represent the interests of thousands of individual authors and copyright owners. In addition, the authors are seeking damages for every book that Google has scanned, a damage claim that could run into the hundreds of millions of dollars.

Recent developments in the authors’ case suggest that the parties remain far apart. Earlier this year, Google filed motions to dismiss the lawsuit or, alternatively, to have the case rejected as a class action. Having the case rejected as a class action lawsuit would have been a big win for Google as it would have required each individual author to file separate lawsuits. While some suits would certainly have been filed, they would have not nearly reached the level of potential cost for Google from a class action.

The judge denied both of Google’s motions, allowing the suit to proceed as a class action lawsuit. However, the court agreed to put the suit on hold while Google appeals the class action decision, a process that could take several months.

The dynamic between Google and the authors is also very different from that of Google and the publishers. Google had already entered into deals with various publishers to make their works available through Google Play and the Google Books database, so the settlement was not that much of a stretch for either Google or the publishers association. Also, the climate for ebooks has become much more robust since 2005, opening up new opportunities for both Google and the publishers.

More critically, the economic relationship between Google and thousands of individual authors makes a similar deal less likely. The court has already rejected an “opt-out-based” settlement, wherein Google would use the scan unless the author specifically objected, because of the number of potential authors involved. An “opt-in” arrangement would require far more work and would likely result in far less return for Google’s investment. Complicating a settlement further, many of the books that have been scanned are so-called orphan works, books still protected by copyright. But due to the passage of time, the copyright owner—whether original author, heir, or now defunct publisher—can no longer be identified. In rejecting the earlier settlement, the court made it clear that the rights of those unknown owners needed to be protected.

A settlement of the authors’ suit is not impossible. The Wall Street Journal quoted one of The Authors Guild lawyers as saying that the publisher settlement made him “cautiously optimistic” that a settlement could be reached. Another commentator speaking in The New York Times suggested that the publishers settled because the lawsuit was no longer “worth pursuing,” which could help Google “slightly.” I would be hard-pressed to see a settlement before the appeals court decides whether the case can proceed as a class action. If Google wins its appeal, the lawsuit as currently configured would be dramatically different and would likely be much smaller. However, if Google loses and the case proceeds as a class action, it is looking at potentially billions of dollars in copyright infringement damages, which changes the economic dynamic considerably. The motivations of both parties to reach a settlement would likely change considerably as well.

George H. Pike is the director of the Pritzker Legal Research Center and a senior lecturer at the Northwestern University School of Law. Previously, Pike was director of the Law Library at the University of Pittsburgh School of Law, and held professional positions at the Lewis and Clark Law School and at the University of Idaho School of Law, and was a practicing attorney in Idaho Falls, Idaho. Pike received his B.A. from the College of Idaho, his law degree from the University of Idaho, and his M.L.S. from the University of Washington. He is a member of the American and Idaho State Bar Associations, the American Association of Law Libraries, and the American Intellectual Property Lawyers Association.

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