Amended Google Settlement Submitted to Court

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Seeking to address concerns raised by the Justice Department, on Friday, November 13, the parties in the Google Settlement, which include the Authors Guild, the Association of American Publishers (AAP), and Google, submitted an Amended Settlement Agreement to the U.S. District Court for the Southern District of New York. Among the changes, the new agreement is now limited to works registered with the U.S. Copyright Office or published in the United Kingdom, Australia, and Canada.

In a "Settlement Modification Overview" posted on Google's Public Policy Blog, the company noted that over the last several months, the parties to the agreement had been carefully reviewing the submissions filed with the Court, including that of the Department of Justice, and they had made changes to the settlement to address many of these concerns, while preserving the core benefits of the agreement.

The Authors Guild noted that the amended settlement includes authors and publishers of works published in Australia, Canada, and the U.K., because they "have contributed the largest number of English-language works to American libraries" and have similar copyright laws and book industry practices. Each country will be given an author and a publisher seat on the Book Rights Registry, a nonprofit entity with authors and publishers equally represented on its Board of Directors that will be responsible for overseeing the resolution of claims and the distribution of payments under the settlement.

Another key change in the agreement is the establishment of an independent fiduciary, or trustee, approved by the court that will be solely responsible for decisions regarding unclaimed works. The New York Times noted that "the trustee, with Congressional approval, can grant licenses to other companies who also want to sell these books, and will oversee the pool of unclaimed funds that they generate. If the money goes unclaimed for 10 years, according to the revised settlement, it will go to philanthropy and to an effort to locate rights holders."

Among other changes to the settlement:

  • Any book retailer will be able to sell consumers online access to the out-of-print books covered by the settlement, including unclaimed books. Rights holders will still receive 63 percent of the revenue, while retailers will keep the majority of the remaining 37 percent.
  • Additional access models to which Google and the Books Rights Registry might agree to in the future have been reduced and are now limited to: print-on-demand, file download, and consumer subscription. The amended agreement also enables the Registry to increase the number of terminals at a public library building, and it clarifies that rights holders can choose to make their books available for free or allow re-use under Creative Commons or other licenses.
  • The amended agreement clarifies how Google's algorithm will work to price books competitively. The algorithm used to establish consumer purchase prices will simulate the prices in a competitive market, and prices for books will be established independently of each other. The agreement also stipulates that the Registry cannot share pricing information with anyone but the book's rights holder.

Under the original agreement, which was announced by the Authors Guild, AAP, and Google in October 2008, Google agreed to pay a minimum of $45 million into a Settlement Fund for copyright holders whose books it had digitized on or before May 5, 2009, and $34.5 million to establish the Book Rights Registry. Google also agreed to pay the plaintiffs' legal fees and other administrative costs.

Last week, Authors Guild Executive Director Paul Aiken said he believes the new settlement addresses the issues raised by the Justice Department.

However, the Open Book Alliance (OBA), one of the groups that had raised concerns about the original settlement, is not satisfied with the revised agreement. OBA Co-Chair Peter Brantley said, "None of the proposed changes appears to address the fundamental flaws illuminated by the Department of Justice and other critics that impact public interest." These, he said, include the establishment of a monopoly over digital content access and distribution and a usurping of Congress's role in setting copyright policy.

The parties to the settlement are now waiting for Judge Denny Chin of the U.S. District Court for the Southern District of New York to set a date for a "fairness hearing," where both sides will be able to present arguments for or against the settlement.