Google Books II - Printing Press’ Couture for Digital Technology?

The fundamental problem is that a printing press vintage law is being pushed and prodded in an attempt to dress internet technologies. Copyright law was conceptualized in 1709 for the express purpose of tackling the then technological advance - printing press invention and not the technological possibilities opened up by digital advances.

This pivotal flaw is exposed when the parties appear to be talking past each other on whether the Settlement is legal as per Copyright law (or is ultra vires for illegally attempting to exceed permissions granted by law via a private contractual arrangement.)

Google argues that it is within legal parameters as it will not be making available whole books for user access but ‘snippets.’ On this basis, Google refutes the infringement allegation taking cover from permitted ‘fair use.’ Google argued that merely showing snippets could hardly be construed as copying and distributing whole books (and reducing book sales.)

Whereas the DoJ’s chooses an altogether different tack; argues the main infringement issue here is not one of degree/snippets and fair use but rather is that the settlement attempts to reverse copyright law. The core principle of the Copyright Act is that copyright owners generally control whether and how to exploit their works during the term of copyright. (DoJ filing, Feb 4, 2010, (DoJ filing, henceforth) p.2 ) Thus, the copyright default rule of prior permission from owner will be rendered in reverse by the Settlement mechanism, which establishes the opposite formula "assumed in unless expressly ‘opted-out’ in time."

Simply put, the Settlement will ensure the consent of the rights-holder (author or publisher, as the case may be) is a given, unless the rights-holder chooses to "opt out" of licensing his works to Google explicitly.

The DoJ argues that the ‘Opt-Out’ is an insufficient safeguard: The Amended Settlement Agreement (ASA) "provisions that afford class members an on-going ability to decline to participate in these various business opportunities reduce, but do not eliminate, the conflict between the ASA’s broad grant of rights to Google and the Copyright Act’s default rule barring use of copyrighted works without the copyright holder’s permission. Rightsholders that have not already opted out by the January 29, 2010 deadline are bound by the terms of the ASA. See Nov. 19, 2009 Order at 5.

Thereafter, to stop Google from utilizing their works in any of its business ventures, rightsholders must list their works with the Registry and direct which revenue models should be extinguished on a work-by-work basis. After March 9, 2010, rightsholders cannot have a previously-scanned book deleted from the research corpus. ASA 1.126, 3.5 (a) (iii). Consequently, rightsholders that have not already opted out will have released Google for any copyright infringement liability arising out of Google’s use up to the time each rightsholders registers and instructs Google to discontinue use. ASA 10.2(a),(b). Those rightsholders also are subject to the ASA’s provisions that provide Google with certain protections, including mandatory ADR to resolve disputes over its use of a copyrighted work. ASA 9.1(a)." (DoJ filing, p.14)

Fair Procedure Fulcrum
A critical justice issue that is required to be decided (even before permitting ripening into a fulsome scrutiny on merits) is whether the procedures are fair and adequately represent parties.

a. Since this suit will determine the rights outcome for absent class members (un-impleaded publishers and authors), whether such absent members have been adequately represented even if their particular facts are very different from the present suit?

b. While courts do have flexibility to approve enforceable settlements, this flexibility must not be used to usurp the legislative function, or to permit parties to use the courts as mere recorders of private contractual arrangements. (See p.5-6 of DoJ Filing)

Anti-trust Concerns
The DoJ fears the settlement will grant rights that ‘in turn, confer significant and possibly anticompetitive advantages on a single entity – Google. Under the ASA as proposed, Google would remain the only competitor in the digital marketplace with the rights to distribute and otherwise exploit a vast array of works in multiple formats.’

a. The settlement will enable Google, and no other entity, to compete in a marketplace that the parties seek to create. There is no way Google’s competitors would be able to obtain comparable rights independently. (See p.21 of DoJ Filing) For eg: Amazon, its chief rival has only managed to obtain 3 million titles since 2002 whereas allowing Google to straight away supply tens of millions of books en masse by a settlement prompted by a class action suit for copyright infringement would evidently hardly be worthy of legal blessings!

b. The Settlement would thus be arguably providing Google with unrivalled market power in upstream book market without any countervailing competition. (For lack of checks and other competitors argument, see p. 22 of DoJ Filing) Especially since other distributors cannot benefit from the accord (only Google would be allowed to scan and digitize the books), and Google’s competitors will face an infringement suit if they did so, the Settlement would provide Google with an even greater blanket of security as to its exclusivity. (See Attachment A to the ASA, and p.21-22, DoJ Filing)

c. The settlement will further entrench Google in online search business, where it already holds a dominant market share. Given Google’s position in search markets, the unrestricted use of digitized text will further strengthen its dominant position. According to Action on Authors' Rights group, "the Settlement would permit a single corporation to gain an anti-competitive chokehold on the emerging digital market".

d. The proposed Settlement also restricts price competition among authors and publishers, adding to antitrust concerns. The horizontal agreements among authors and publishers may be subject to antitrust scrutiny, several grounds of which remain unaddressed in the ASA as per the DoJ. (See p. 16-20 of DoJ Filing).

Problematic Nucleus
This Settlement issue exemplifies the critical problem of essaying to utilize a legislation intended to deal with Gutenberg’s invention for the digital world. The Copyright laws created to tackle printing press and still the primary law in effect will not permit such exploitation of work without prior permission of rightsholders. However, rights clearance may be practically impossible since even if they can be located, it may be unclear whether authors or publishers won the digital licensing rights. ‘This is especially likely where publication predated, and contracts did not anticipate, the digital era. Finally, there are no major licensing systems in place by which good faith users can efficient secure permission from and render payment to rightsholders.’ (See p.3 of DoJ Filing,)

This issue can no longer be put off as it will determine whether the public will get the full benefit of digital technologies for future creativity and innovation. The above realities impede large scale digitization projects, thereby denying the public the full corpus of 20th century books. This remains the ultimate prize; a worthy goal to ensure that we cleave past arguments on both sides (as Google and Amazon etc. on each side seek to further their corporate advantages through the suit, a perfectly legal goal, it must be emphasized) and focus on a solution that will enable public access to the whole innovation and creative work of the past – simultaneously, ensuring past creators are not brushed aside by individual corporate interest in the name of the greater common good.

This case of course brings to the fore that Printing Press Couture hardly maketh for prêt-a-porter for digital technologies.

- Aarthi S. Anand and VJ

Google Books I - To Settle or Not To: That is the Question

Today is a critical day for Google, seemingly controversy’s favorite online child these days - from China to EU to Buzz’s privacy violation; most importantly, Google will be defending its Book Settlement case, and participating in the Fairness Hearing today. This suit begun in 2005 will have far reaching consequences for Google and tremendous impact on all of us since it is about content control; directly impact the Indian publishing industry as well.

What is ‘Google Books’?
Google Books is an ambitious initiative intended to scan, digitize and create a repository of all published books and make them available online. This project will provide the public benefit of digital access to all works published so far; Google in turn will gain an indomitable advantage in the book search market and its algorithms will have a huge first mover advantage over enormous content.

Google announced partnerships with key public and University libraries, from Stanford to Oxford for its goal of making over 15 million books available under this initiative.

Google Books – with over seven million books scanned so far – was hailed for facilitating phenomenal reader access (especially, to rare and out-of-publication or orphaned books, where authors’ heirs are no longer traceable etc.) (For Pro-views, click here)

Copyright & Term
A vast number of these books were however not legally permitted to be copied, distributed etc. protected as they were by copyright. Copyright is the set of exclusive rights granted to the author or creator of an original work, including the right to copy, distribute and adapt the work and copyright lasts for a certain time period after which the work is said to enter the public domain.

Copyright term varies depending upon country of first publication, and generally extends for a period after the author’s life. In other words, author’s lifetime + 60 years in India for instance. (See Sec.22 of the Copyright Act (PDF version). For other countries, click here.)

Publishers’ Suits
Thus, world over, Publishers & Author Guilds were up in arms against Google Books arguing that it infringed their copyright and straight away reduced their profits. Simply put, if free of charge portions were available, could be searched, read and used, how many would pay publishers to purchase books?

The Author’s Guild and several Publishers filed class action and civil suits for failure to respect copyrights and to properly compensate authors and publishers. (Authors Guild v Google: HTML version, PDF version and McGraw Hill v. Google, SD. N.Y. Case No. 05-CV-8881-JES. PDF version. Google’s responses are also available at Litigation History)

In the Settlement Ring: Round 1
The parties began negotiating toward a settlement, and initially, in 2008 proposed (a) establishment of a non-profit body for managing the revenues that Google would pay into it (generated from ad revenues from the registry) and (b) to only include in-print books after obtaining permission from publishers and authors.

For books already digitized, Google would provide for $ 60 compensation per principal work etc., which would be paid out of the initial $ 45 million fund that Google would set up (under the non-profit body.) (See Art II, 2.1(B) of Settlement Agreement proposed. The PDF versions of summary and full proposal are available online)

The Settlement Agreement proposed would become binding, enforceable only by court order, prior to which objections from interested parties etc. would be heard. During this phase, the US Dept of Justice (DOJ) provided several objections to the settlement including those received from several other national governments and affected foreign publishers.

Non-US Publishers’ Objection – Round 2
Several countries, especially France, Germany etc. objected to being extraneously subject to the settlement agreement entered into by US publishers/author guilds and Google. In Nov’08, the Settlement proposed was amended to exclude works published in all other countries save UK, Canada and Australia (whose publishers were impleaded and were represented in the suit.) (The summary of revisions is available online)

Feb 2010 Update - DoJ Objections
While appreciating the foreign work exclusion, the DoJ indicated that the revisions remained inadequate and objected that the Settlement proposed violates (a) copyright laws, (b) antitrust laws, and (c) is an incorrect usage of class action suits.

The DoJ’s argument may be summed up as:
The Settlement “is an attempt to use the class action mechanism to implement forward looking business arrangements that go far beyond the dispute before the Court in this litigation.” (DoJ Filing, Feb 4, 2010, p 2) But however, if the Court does conclude that Class Representatives may grant such wide ranging rights for forward looking business arrangements of the entire class, the court should consider additional safeguards. (See DoJ Filing, Feb 4, 2010, p23-25))

- VJ and Aarthi S Anand