The Google Book Search Settlement: An Overview

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In 2004, Google announced that it had entered into agreements with the New York Public Library and the libraries of Harvard, Stanford, the University of Michigan, and the University of Oxford to digitize books in their collections to form a searchable electronic database that would allow users to see snippets or a few lines from the scanned books. The company described the new initiative as "an expansion of the Google Print program, which assists publishers in making books and other offline information searchable online."

However, the announcement elicited strong reactions from groups representing authors and publishers, who objected to Google's plans to digitize not just books in the public domain but also titles still under copyright. In September 2005, the Authors Guild filed a class action suit claiming that Google was "engaging in massive copyright infringement." In October 2005, the Association of American Publishers (AAP) announced a separate lawsuit against Google. AAP noted that the suit "was filed only after lengthy discussions broke down between AAP and Google's top management." The suit, filed on behalf of five AAP publisher members -- the McGraw-Hill Companies, Pearson Education, Penguin Group (USA), Simon & Schuster, and John Wiley & Sons -- sought a "declaration by the court that Google commits infringement when it scans entire books covered by copyright and a court order preventing it from doing so without permission of the copyright owner."

Google countered that its actions were permitted under the U.S. copyright law's doctrine of "fair use." Rather than have the courts determine whether Google's actions fell under "fair use," in October 2008, the groups announced a negotiated settlement agreement, subject to approval by the U.S. District Court for the Southern District of New York.

The settlement applies to U.S. copyright holders of books published on or before January 5, 2009. Out-of-print books are automatically included in the settlement unless an author or publisher requests that specific books be removed. In-print books can be included in the settlement at the approval of the author or publisher.

Google agreed to pay a minimum of $45 million into a Settlement Fund for copyright holders whose books were digitized on or before May 5, 2009, and $34.5 million to establish a Book Rights Registry, a nonprofit entity with authors and publishers equally represented on its Board of Directors, to oversee the resolution of claims and the distribution of payments. Google also agreed to pay the plaintiffs' legal fees and other administrative costs.

Under the terms of the agreement, Google will allow users to see excerpts from books at no charge, and it will sell both access to individual books and institutional subscriptions to the database. Rightsholders will receive 63 percent of all revenue from sales, advertising placed on any page dedicated to the book, and other commercial uses. (Full details of the agreement are available on the Google Settlement site.)

Calling it a landmark settlement, AAP and the Authors Guild issued a statement noting that, if approved by the court, the agreement would provide:

  • More Access to Out-of-Print Books -- Generating greater exposure for millions of in-copyright works, including hard-to-find out-of-print books, by enabling readers in the U.S. to search these works and preview them online;
  • Additional Ways to Purchase Copyrighted Books -- Building off publishers' and authors' efforts and further expanding the electronic market for copyrighted books in the U.S., by offering users the ability to purchase online access to many in-copyright books;
  • Institutional Subscriptions to Millions of Books Online -- Offering a means for U.S. colleges, universities, and other organizations to obtain subscriptions for online access to collections from some of the world's most renowned libraries;
  • Free Access From U.S. Libraries -- Providing free, full-text, online viewing of millions of out-of-print books at designated computers in U.S. public and university libraries; and
  • Compensation to Authors and Publishers and Control Over Access to Their Works -- Distributing payments earned from online access provided by Google and, prospectively, from similar programs that may be established by other providers, through a newly created independent, not-for-profit Book Rights Registry that will also locate rightsholders, collect and maintain accurate rightsholder information, and provide a way for rightsholders to request inclusion in or exclusion from the project.

In October 2008, AAP Chairman Richard Sarnoff said, "The agreement creates an innovative framework for the use of copyrighted material in a rapidly digitizing world, enables broader access to a huge trove of previously hard-to-find books, and establishes an attractive commercial model which offers both control and choice to rightsholders."

By this spring, however, concerns about the settlement were being voiced by diverse groups and individuals, ranging from Microsoft to library associations, from law professors and authors to Consumer Watchdog, a public interest group in Southern California. "The dilemma for many of the critics," observed the New York Times, "is that virtually all agree that the settlement does a lot of good, and [those voicing concerns] don't necessarily want it struck down." On May 4, the Times reported that the American Library Association, the Association of College and Research Libraries, and the Association of Research Libraries "asked a federal judge to exercise 'vigorous oversight'" over the class-action settlement. Although the groups do not oppose the settlement, the Times noted that in a court filing they asked the court "to provide continuing oversight of it, to ensure that the prices Google charges for subscriptions to its digital library aren't artificially high because of a lack of competition." They also asked the judge overseeing the settlement to "ensure that the privacy of readers of books made available online by Google is protected."

In April, a group of authors and heirs of authors asked the court to delay the deadline for rightsholders to decide whether or not to participate in the settlement, then set at May 5, for four months to give them more time to determine whether to participate in the agreement. In response, the deadline to opt out of the settlement was moved to September 4, 2009.

Brewster Kahle, co-founder of the Internet Archive, a nonprofit organization that has made a large body of public domain books available online, gave voice to some of the concerns of those opposed to the settlement in a May op-ed in the Washington Post. Kahle wrote that the settlement "provides a new and unsettling form of media consolidation" and would "also create a class that includes millions of people who will never come forward. For the majority of books -- considered 'orphan' works -- no one will claim ownership.... Google would get an explicit, perpetual license to scan and sell access to these in-copyright but out-of-print orphans, which make up an estimated 50 to 70 percent of books published after 1923. No other provider of digital books would enjoy the same legal protection."

On June 24, in an open letter to members, Authors Guild President Roy Blount, Jr. responded to concerns that the settlement would give Google a monopoly on orphan books. "Some dissenters are so alarmed at this prospect that they'd rather have the settlement fail," wrote Blount. "In that case, these 'orphan books' would remain in limbo for everyone. And so would all the other out-of-print books that the settlement would make available, and marketable, online."

Of the orphan book, he observed, "No one can get it, except at the library or in a used book store. So Google is essentially being accused of cornering the market on the unmarketable." In addition, the number of "orphans" will diminish every year, Blount said, "as the new Book Rights Registry is obliged to locate authors."

And on June 25 in an open letter, AAP President and CEO Tom Allen wrote to counter what he termed the "heated rhetoric from opponents," much of which he characterized as "hyperbolic and misleading." In the letter, Allen reiterated that "the settlement offers enormous benefits and represents our best hope of remaining competitive and vibrant in the digital environment."

This month the Justice Department, which began an inquiry into the potential antitrust implications of the settlement in April, sent a civil investigative demand (a formal request for information) to Google, a move the Wall Street Journal said "was the strongest sign yet that the Justice Department may seek to block or force a renegotiation of the settlement." Despite the Justice Department's recent actions, Google's chief legal counsel told WSJ that the company still expects the settlement will be approved.

In May 2009, AAP's Allen told BTW that finalizing approval of the Google settlement was an important priority. "The delay is not really a surprise given the complexity of the settlement," Allen said. "The more authors and other rightsholders understand it, the more comfortable they will be with the settlement. People can look at it and say, I don't like one point here or there, but Google has the capacity to make an extraordinary number of books available to the public.... There were bound to be objections, there were bound to be concerns, but this is a good, solid agreement between the three parties. I think it works."

Even as the Justice Department looks into the settlement, Google continues to roll out new features, as reported this week by Publishers Weekly, and the company continues to assert claims the settlement is anticompetitive are unfounded. Last week Michael Healy, executive director of the Book Industry Study Group (BISG), who is expected to become the first executive director of the Book Rights Registry, said in an interview with Christopher Kenneally of the Copyright Clearance Center: "The critical thing, I think, about this settlement, and particularly about the Book Rights Registry is that it introduces into the environment a new organization, which is really determined to give an unprecedented degree of control for authors, publishers, and other rightsholders, on how their copyrights are exploited and distributed in this new digital world."

The Final Fairness Hearing on the settlement is scheduled for October 7, 2009. --Rosemary Hawkins