World Intellectual Property Organization

Google and Book Publishers Settle

July 2009

The Google Print court case has been the subject of much discussion and controversy. Stakeholders have been waiting with anticipation for the court’s decision, but instead the case has settled out of court. Professor Andrés Guadamuz González, E-Commerce Law, University of Edinburgh, and Co-Director of the SCRIPT, Centre for Studies in IP and Technology Law, highlights some of the legal implications and technical details of the settlement. While Professor Wilson Rafael Ríos Ruiz, IP Law and Information and Communication Technologies (ICTs) Specialist, Universidad de Los Andes, outlines some concerns right holders have expressed about it.

Legal and Technical Implications

By Andrés Guadamuz González

Content industries face monumental challenges in the digital domain. Traditional methods of distribution have become obsolete, replaced by digital delivery of copyright content – the route of an apparent conflict between content owners and the new intermediaries: search engines, streaming services, content aggregators and value-added providers. The copyright industry has had to seriously reconsider the role of these emergent services and to explore licensing models that do not easily fit in existing revenue models. The new generation of consumers has also grown suspicious of traditional distribution channels, and expects – be it warranted or not – to find almost any sort of content online at a competitive price.

This conflict has been more evident in the case of GoogleTM. Because of its size, global reach and deep pockets, Google has become the lightning rod for criticism by content owners, and the subject of litigation.

Google Print goes to court

In 2004 Google announced a service called Google Print (later renamed Google Book Search). Google entered into an agreement with several libraries in the U.S. and the U.K. such that it would digitize out-of-print books and make them available to anyone searching for that title. The books were to be offered either in their entirety, or in “preview” mode, meaning that only some pages would be accessible. Google’s goal was to digitize 15 million books within a decade, a goal that seemed well underway by October 2008 when there were 7 million volumes in its database.

Needless to say, some authors responded negatively to Google’s plans and, in 2005, two separate lawsuits were brought against the search engine giant by the Association of American Publishers and the Authors Guild. Both complaints were similar in scope, and alleged that Google was engaging in copyright infringement by digitally reproducing the plaintiff’s works for commercial gain, and then publicly distributing and displaying copies of those works. Google argued their actions fell under the fair use doctrine. Given the importance of the legal issues at stake, the litigation was met with considerable interest from scholars, practitioners, publishers and anyone interested in digital copyright matters. However, formal legal resolution was cut short when in October 2008 the parties announced they had reached an agreement, and the dispute was settled out of court.

The out-of-court agreement

The agreement is surprisingly detailed and far-reaching – the definitions section alone spans 18 pages. Under the terms of the agreement, Google will pay US$125 million to the claimants, which will be distributed according to several schemes created by the settlement. Google must create a portal website where authors can opt-out of the settlement agreement, the deadline for opting out being September 2009.

Authors can also apply for a cash payment scheme that will compensate those whose works were digitized before the opt-out deadline; the deadline for making a claim is January 2010. Google has deposited US$45 million in a Settlement Fund to cover payments under the scheme.

Google will help to create and administer an Institutional Subscription Database that will sell access to books. Google will also fund a Book Rights Registry that will act as a collective rights agency, collecting and distributing earnings from the Google Book Search scheme; it has already paid US$34.5 million into the Registry, and will pay a net 63 percent of all future earnings from the Google Book Search project, minus operating expenses. The Registry will be administered by authors, right holders and publishers.

In exchange for those concessions, Google has been authorized to sell subscriptions to the Institutional Subscription Database, sell individual books, place advertisements on Google Book Search pages and make other commercial uses of the digitized works. Once the opt-out deadline has passed, Google has also been granted permission to display snippets and previews of authorized participating books as well as other non-protected bibliographical information, such as abstracts and reviews.

Interestingly, all libraries participating in the Google Search Project, namely the libraries where the digitized books originated, will be allowed to keep digital copies of the works for their institutional repositories and digital archives. Google has a non-exclusive right to make digital copies of out-of-print works from any source.

The settlement enumerates several business strategies for monetizing digital copies, particularly through the Institutional Subscription Database, through direct sales via the search results page or by including links to sites where potential customers may purchase print copies or electronic books. The agreement allows for limited non-commercial use by participating libraries. Interestingly, the settlement also identifies several future business models, including print-on-demand services, customized publishing (e.g., printing collections of several books), PDF downloads, individualized subscription models and aggregate services, such as the creation of compilations.

U.S. but worldwide

There are two important legal and technical aspects to the settlement that bear closer scrutiny. First, the agreement affects only works published in the U.S., or that have a U.S. “copyright interest.” While the agreement is sketchy in this regard, the Authors Guild portal further expands on this by including books published in countries outside of the U.S. that have copyright relationships with the U.S., such as signatory states of the Berne Convention. This makes the seemingly national nature of the agreement remarkable for its international reach, as it potentially affects authors and publishers around the world.

Second, although the agreement can concern international publishers, the benefits primarily touch the U.S. For example, Google can only sell books, subscriptions and digitized copies to customers within the U.S., which opens up the question of technical filtering by Internet Protocol address. The agreement is silent in this regard as well as on enforcing jurisdictional filtering. Similarly, all digitized copies that form part of the settlement must be stored in the U.S., and there is a technical annex outlining security measures to be implemented by institutions acting as digital repositories.

Validity

At the time of writing, questions were being raised as to the validity of the agreement in light of American antitrust law, and the settlement has not yet been ratified by the court.1 This could prove to be a significant stumbling block in implementing the settlement. Because of Google’s dominant position in the search engine market, there is a concern the agreement could stifle competition in the electronic books market, because its wording gives Google an advantage were U.S. copyright law to be amended in order to allow the use of orphan works.

A blueprint for content industries

Nonetheless, regardless of how one feels about Google’s market dominance, and pending a final outcome of the regulatory investigation, the Google Books settlement could be seen as a blueprint for other content industries. Like it or not, Google is the leading search engine by far, and content owners would be well advised to take this into consideration when thinking about their digital strategies. Content providers should carefully consider their options before deciding to make back catalogues available through aggregator services like Google.

It is not a matter of “if,” but “when” and “how.” The Google Book Search settlement will undoubtedly set in motion new revenue streams for out-of-print works, serving perhaps as living evidence of Chris Anderson’s Long Tail.2 Aside from the many challenges, digital markets could open up new markets for works that no longer occupy shelf space in traditional retail outlets. Challenges need not be seen as negative.  

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Settlement Agreement: Concerns of Copyright Holders - A perspective from Colombia

By Wilson Rafael Ríos Ruiz

It is alarming that many Colombian authors and right holders, as well as those in other parts of the world, were not aware their works were being digitized – let alone that a settlement agreement is being proposed by Google. However, Colombian authors and right holders who believe their works are concerned, will be able to register to participate in the settlement agreement and receive compensation, regardless of whether their works are registered in the U.S. or Colombia, thanks to automatic protection principles and national treatment principles on copyright established in the Berne Convention.

Alternatively, they will be able to file an objection or opt out of the settlement agreement. It will also be possible to request that a work not be digitized or, if it already has been, to request its withdrawal from the Google project database. The deadlines mentioned in the article above are the same for non-U.S. right holders.

However, it is worth taking a closer look at the main bone of contention in the Google Print court case, which is whether conversion from print to electronic format (space shifting) is permissible, or if it actually constitutes infringement.

From print to electronic format

From a copyright point of view, it is clear that the different forms in which a work is made available are independent of each other, and authorizing one form does not expressly include other forms. Therefore, authorizing use of a print version does not, in itself, mean the authorization extends to an electronic version.

An important element in the Google case relates to the independence and autonomy of different forms of use of works. This is a principle covered in the Law on Copyright of Colombia and the Andean Community Decision 351 of 1993, which provides that “the different forms of use of the work shall be independent of each other; authorization by the author of one form of use shall not extend to other forms.”

The point concerning the transfer or conversion of printed or written texts from traditional hard copies to electronic, optical or similar copies is also clear in the rulings handed down in the following court cases: [U.S.] Tasini v The New York Times; [Canada] Robertson v Thomson Corp.; [U.S.] Random House v Rosetta; [U.S.] Greenberg v National Geographic. Each respective court ruled that the authorization given by an author, columnist, photographer or content creator to use their work in printed form does not imply broader authorization to use the work in electronic form, and ordered that additional payment be made for each separate use.

In September 2006, Google was also hit hard by a Belgian Court of First Instance judge who ordered content removed from Google News – articles, photographs and images taken from the newspapers Le Soir and Grenz Echo.

Further right holder concerns

The settlement agreement has been at the heart of much questioning by Colombian authors and right holders as it seeks to “legalize” an illegal situation instigated by Google itself: Google used content without previously and expressly obtaining authorization from the authors or right holders of the works. Furthermore, the compensation offered by Google does not cover damages caused by their actions, but rather tries – it is worth repeating – to legalize a situation which is, in itself, illegal. In other words, the proposed settlement agreement cannot be backdated, so tries instead to wipe the slate clean without taking into account actual events.

Another cause for reflection in the agreement relates to what is known as “orphan works”, works whose authors or right holders are unknown and impossible to identify or locate. According to Google, the settlement agreement has been widely disclosed and distributed, so that any works whose authors or right holders remain unidentified fall into the category of orphan works. It is this author’s opinion that this is an attempt to obtain a blanket license without expending much effort, without violating copyright and without paying compensation to would-be right holders. Therefore, according to the terms of the agreement, if authors cannot be found, Google will be able to use such works without restriction.

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1. Elizabeth Williamson, Jeffrey Trachtenberg and Jessica Vascellaro, “Probe of Google Book Deal Heats Up” The Wall Street Journal (9 June 2009)
2. Chris Anderson, The Long Tail: The Revolution Changing Small Markets into Big Business, New York: Hyperion (2006).

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