(Warning: Long post!)
What was the need for a Google Books settlement?
Google Books is a service several of us as students, academicians and practitioners are more than familiar with and has proved to be invaluable where hard copied of books are either damaged, out of print or just too expensive to be procured. The service from Google searches the full text of books that Google has scanned, converted to text using OCR and stored in its digital database and makes them available to users in snippets.
The Google Books Settlement (hereinafter ‘GBS’) is an attempt by Google to counter the claims of copyright infringement that were levelled against it from as early as 2005, with Google relying on a fair use defence that many argued was excessive and inapplicable to a situation wherein Google was copying full texts of books and saving them in its own digital databases. Leaving aside the issue of an implied license to copy, possibly favouring Google in such a case, the larger issue that courts seemed concerned with prior to the settlement being reached, was the sheer quantity of text that Google copied on to its servers, notwithstanding the fact that it was making only searchable summaries online to users in the case of copyrighted works. In view of the claims brought against it over the years, Google entered into a settlement agreement with the Authors Guild and the publishing industry on October 28, 2008.
What were the terms of the proposed Google Books settlement?
The fundamental terms of the settlement were as follows: (for a more detailed explanation of the terms, you can visit the official website created by Google over here)
- The rights granted to Google are non-exclusive in nature. This implies that the authors and publishers are free to enter into such agreements with other parties as well. So for example if Apple were to start its own digital library a few years from now, the GBS does not preclude its formation.
- Google is allowed to continue to digitise books and inserts, sell subscriptions, online access to individual books and advertising on certain pages as well as display previews, snippets and bibliographic information of the books digitised.
- Google will pay rights holders 63% of all revenues Google receives from the commercial uses of the digitised books.
- Google will pay $34.5 million to establish and maintain a Book Rights Registry, containing contact information and for collection and distribution of revenue to rightsholders.
- Importantly, rightsholders were given the right to determine whether and to what extent Google may use their copyrighted writings.
- The settlement also provided for the creation of an independent Unclaimed Works Fiduciary to represent interests with respect to, and assume responsibility for certain decisions pertaining to unclaimed works. This particular term is relevant in the context of ‘orphan works’, an issue that was raised in the court proceedings and a major ground of objection.
- Rightsholders of Books also had the option of removal or exclusion. This is important in the context of determining whether the opt-out system provided for was reasonable of not.
What were the principal grounds of objection?
The principal objections can be classified under the following broad headings:
- Class action suit concerns
For the sake of convenience, I am going to club together the concerns that broadly relate to class representation. Firstly, there were objections raised as to the adequacy of notice of the original as well as amended proposed settlement, to members of the class. Secondly, there were also objections to the adequacy of representation and on the applicability and objections under Rule 23 of the Federal Rules of Civil Procedure, under which class action suits are governed.
2. Copyright concerns
There were two main grounds of objection in copyright law. The first revolves around the fact that the settlement covers issues that should be properly considered, deliberated upon and decided by Congress and not through private agreement between the parties, as it raises important issues in the realm of copyright law. Since the settlement was subject to the court’s scrutiny, any affirmation of the same by the judiciary would encroach on the constitutional and legislative authority of the Congress to regulate such matters. The other objection is linked to the question of orphan works (where the owners of the work cannot be contacted) and the settlement licensing such works to be a violation of the Copyright Act.
3. Antitrust concerns
The antitrust concern is one that is perceivable without any strict grounding in the law itself. The fact that Google would have a monopoly over digital books, and without question, orphan books, is a certainly a cause for concern. The antitrust objections appear to be more holistic with an emphasis on the potential dominance of Google in the overall online search market, and not restricted to Google Books search.
4. Privacy concerns
The privacy concerns were raised by several civil society organisations in relation to the vast amounts of information that Google would be able to amass by merely tracking user habits. Thus, Google would have access to information right from the books viewed by a particular user, to the precise page number as well as the amount of time spent on each page.
5. International law concerns
Although the GBS is restricted to U.S works and works registered in the U.S., the opt-out system envisaged under the settlement caused some to raise the objection on the ground that it would violate international law by requiring foreign rights-holders to determine the applicability of the GBS.
What was the basis for the ruling on the objections raised?
1. Class action matters:
While this aspect of the court’s ruling is not necessarily relevant to a discussion on IP, I’d like to briefly set out the court’s decision on this issue. Firstly, it held that the members of the class received adequate notice of the proposed settlement. It explained how several individual notices were sent aside from the fact that a website was created solely for this purpose. Judge Chin however agreed that it was possible that the interest of all members of the class were not adequately represented and may even have been at odds with each other. The entire issue has been explained in great detail here.
2. Copyright concerns:
One of the primary issues was whether judicial affirmation of the settlement was an encroachment on the legislature’s prerogative to address copyright issues, such as those covered in the proposed settlement. The U.S. Supreme Court has declared that such judicial intervention is only appropriate when copyright issues are presented as a result of technological developments.
One of the primary copyright concerns was the creation of an opt-out system wherein authors covered by the settlement would have to notify Google of their desire to have their works excluded. Such a system was vehemently objected to on the ground that it deviated substantially from the intent and purpose of U.S copyright law which allowed a rightsholder to ‘sit back, do nothing and enjoy his property rights untrammelled by others exploiting his works without permission.‘ I feel there is a degree of merit in this contention since such a system would certainly expropriate rights of individuals involuntarily, by means of a system unrecognised by statutory copyright law. This is evidently even more unreasonable to a class member who is unaware that the settlement covers works owned by him or her, and upon failure to expressly notify Google that he wishes the work to be excluded/removed, has the work digitised against his will. The judgement itself cites the concerns of several independent authors who advance a similar argument, stressing on the creation of a system which places the burden on the rightsholder to exclude himself from the scheme, which is incongruous with current copyright law.
3. Antitrust concerns:
The antitrust concerns stem primarily from the fact that Google would have a monopoly over unclaimed or orphan works, as well as entrench its dominant position in the online search market. It would have the ability to deny future competitors the right to search orphan books, as well as enter into agreements with third parties to display snippets of books it has scanned for a fee. Judge Chin noted the above and stressed that the mandatory requirement for authors of works to object to digitisation, would certainly grant Google a monopoly over works where the authors were untraceable, raising serious anti-trust concerns.
4. Privacy concerns:
While Judge Chin did note that ‘the privacy concerns are real’, he noted that such concerns by themselves are insufficient to reject the proposed settlement. This indicates to me that if Google were to make another attempt at a settlement, it should focus more on the copyright and antitrust concerns, while maintaining reasonable safeguards on the disclosure of reader information. Judge Chin suggests ‘additional privacy protections‘, without getting into specifics, so it appears that Google need only focus on non-disclosure of reader information and concretisation of its undertakings in this regard.
5. International law concerns
Such concerns were mainly advanced by owners of foreign works, which were registered in the U.S to ensure coverage of American law, and fall within the ambit of the proposed settlement, by virtue of this fact. Of particular importance is the objection raised by Indian authors and publishers, who state that the settlement “continues to provide Google with sweeping rights to exploit works of Indian authors/publishers under copyright protection without their express permission/consent, a violation of international and Indian copyright laws,” which also finds mention in the decision of the District Court. They contend that the settlement would violate the Berne Convention and the TRIPS agreement. Interestingly, Judge Chin in his decision states that “in any event, I need not decide whether the ASA would violate international law. In light of all the circumstances, it is significant that foreign authors, publishers, and, indeed, nations would raise the issue.” The other issues raised by foreign rightholders were acknowledged by Judge Chin, including the difficulty in determining whether the settlement applied to them and the issue of orphan works being a global one.
Thus, based on the above reasoning, Judge Chin held the proposed settlement to be “(sic) unfair, inadequate and unreasonable” and dismissed the motion for final approval of the settlement.
What happens now?
In his concluding paragraph, Judge Chin hints that by transforming the system into an opt-in regime instead of an opt-out one, the difficulties expressed above may be avoided. Secondly, by declaring that the motion is denied ‘without prejudice’, Judge Chin has left the door open for a renegotiation of the settlement terms.
Thus the case could proceed to trial, the parties could appeal, or a renegotiated settlement could be submitted, while accounting for the concerns raised by Judge Chin. While the Authors Guild and publishers might prefer the latter option, Google has in the past, categorically stated that the creation of an opt-in system is not a viable option. While Google continues to stress that the issue of orphan works is being made out to be bigger than it actually is (since it claims the number of works where authors cannot be located are relatively few) it continues to be a niggling concern – one that Google must address in one form or another. Some have suggested that Google could push for a legislation that satisfactorily addresses the orphan works issue, providing sufficient room to manoeuvre itself through the settlement terms and realise its original objectives. Others have argued that Google has a very strong fair use case and hence settling for an opt-in system is not its best option. Either way, we can expect a whole lot of lobbying, aggressive campaigning and hurried negotiations.
Whatever be the case, the entire Google Books case has highlighted several issues in an increasingly important field and we will track the developments as and when they come in.
