Saturday, September 19, 2009

Justice Department Disapproves Google Book Settlement

On September 18, 2009, the U.S. Department Of Justice advised the Federal Court that it should not accept the Google Book Settlement in its current form. This almost certainly means Judge Chin will ask the parties to renegotiate the deal following his public hearing on the subject on October 7th.

Speaking on behalf of the United States Government, the Justice Department objects to the class action settlement in The Authors Guild Inc. et al. v. Google Inc. as proposed due to concerns of the United States regarding class action, copyright and antitrust law. The government proposes changes that may help address the concerns of United States. The Justice Department suggests the Settlement should:

1. Impose limitations on the most open-ended provisions for future licensing,
2. Eliminate potential conflicts among class members,
3. Provide additional protections for unknown rights holders,
4. Address the concerns of foreign authors and publishers,
5. Eliminate the joint-pricing mechanisms among publishers and authors, and
6. Provide some mechanism by which Google’s competitors can gain comparable access [to scanned content, depending on the settlement’s ultimate scope].

The full Justice Department announcement can be read here:
U.S. Justice Department Disapproves Google Book Search Settlement (PDF)

In my opinion ...

It's been recently reported that Google has been in 11th hour discussions with the Justice Department to offer concessions that would make the book deal acceptable. The existence of these discussions seems to be confirmed by this comment from Justice: "Given the parties’ express commitment to ongoing discussions to address concerns already raised and the possibility that such discussions could lead to a settlement agreement that could legally be approved by the Court ..."

Also of note, in the Congressional Hearing on September 9th, Google offered to forgo some profits and exclusivity in the deal by allowing others to access and publish books from its digital scans. This was widely reported in the media as a concession to publishers such as It is much more likely that this concession was part of Google's efforts to preemptively appease the Justice Department prior to their September 18th statement to the court.

Judge Chin's decision in October could be a setback for Google since a key element of the Settlement, which must be approved by the court, is to resolve alleged copyright infringement relating to Google's scanning and monetization of books that are still under copyright. Also, since the Settlement does not cover photographs in general, rejection of the current version could encourage a new class action law suit against Google relating to Google Image Search, which began monetizing image search with the addition of Adwords early in 2009.

Everyone agrees that enabling broad, digital access to books (over 10 million scanned thus far), including many that are out-of-print and otherwise inaccessible, would be a great service. What's really being decided is how the money will be divided and who will control this tremendously beneficial service that Google has initiated and paid to setup.

Another ramification ... rejection of the Settlement "as is" would indirectly emphasize the importance of evolving Orphan Works legislation. "Orphaned" books are a small subset of "Orphaned Works".

Randy Taylor
The Copyright Registry

Friday, September 18, 2009

Image Registry Role In Google Book-Orphan Works Argument

Some supporters of the Google Book Settlement are using the argument that the Settlement should be approved because no image registry exists and none will soon. Ironic, for sure, since our image registry AKA The Copyright Registry is live online with millions of images and is growing fast.

There have been over 400 opinions sent to Federal Judge Chin for his consideration in evaluating the Settlement. Many have been formal amicus curiae briefs ("friend of the court"). One in particular exemplifies this argument. It is from a trade association in the photo space that makes its primary argument that the Settlement should be approved because there is no image registry. Their brief says, "... no registry of photographs currently exists and none is even on the horizon." Their argument continues to say, "the precedential value of a book registry could serve as a powerful stimulus for the creation of a photograph registry and a step toward the resolution of the current photographic image orphan works issue."

While we completely agree that a free and open registry such as The Copyright Registry is the most logical solution to industry woes, I find it ironic that the best argument available to support the Orphan Works Act and the Google Book Settlement is that no such registry exists or is even on the horizon.

I felt it important that Judge Chin have complete and accurate information on which to base his decision. Accordingly, I wrote him about our registry. Here's the open letter to Judge Chin concerning image registries and Google Book Settlement.

Randy Taylor

Thursday, September 17, 2009

U.S. Copyright Office Speaks On Google Book Settlement

In what is likely the most significant factor since the Google Book Settlement was reached in October, 2008, Marybeth Peters, the Register of Copyrights of the U.S. Copyright Office, became the first government official with relevant knowledge, credibility and departmental interest to express serious concern about key aspects of the Settlement. Ms. Peters spoke on September 9, 2009 before the House of Representative's "Hearing on Competition and Commerce in Digital Books: The Proposed Google Book Settlement".

This is significant in so many ways. Most importantly, the U.S. Department Of Justice will submit its opinion on the possible anti-trust/monopoly implications of the Settlement on September 18th to Judge Chin, whose approval is required to finalize the Settlement. This DOJ statement will likely embody or reflect the position of other government agencies, including the informed opinion of the U.S. Copyright Office.

Additionally, published news reports indicate that Google has made some concessions and communicated directly with the Department of Justice in an effort to influence a positive decision for the Settlement, which will be reviewed by Judge Chin in a public hearing on October 7th, 2009.

Ms. Peters observations could be summarized by her statement: "We are greatly concerned by the parties’ end run around legislative process and prerogatives, and we submit that this Committee should be equally concerned."

In her prepared statement, Ms. Peters advised the committee, "… the so-called settlement would create mechanisms by which Google could continue to scan with impunity, well into the future, and to our great surprise, create yet additional commercial products without the prior consent of rights holders. For example, the settlement allows Google to reproduce, display and distribute the books of copyright owners without prior consent, provided Google and the plaintiffs deem the works to be "out-of-print" through a definition negotiated by them for purposes of the settlement documents. Although Google is a commercial entity, acting for a primary purpose of commercial gain, the settlement absolves Google of the need to search for the rights holders or obtain their prior consent and provides a complete release from liability. In contrast to the scanning and snippets originally at issue, none of these new acts could be reasonably alleged to be fair use."

Ms. Peters conveyed three primary concerns, summarized here with citations from her statement before the Congressional committee on the Judiciary:

1. Judicial Compulsory License - Allowing Google to continue to scan millions of books into the future, on a rolling schedule with no deadline, is tantamount to creating a private compulsory license through the judiciary (Courts) instead of via legislature (Congress). Ms. Peters said:

"As defined, the class would allow Google to continue to scan entire libraries, for commercial gain, into the indefinite future. The settlement would bind authors, publishers, their heirs and successors to these rules, even though Google has not yet scanned, and may never scan, their works."

"As a practical matter, this means that the settlement would create for Google a private structure that is very similar to a compulsory license, allowing it to continuously scan copyrighted books and 'inserts'."

"Compulsory licenses in the context of copyright law have traditionally been the domain of Congress. They are scrutinized very strictly because by their nature they impinge upon the exclusive rights of copyright holders."

"As a matter of copyright policy, courts should be reluctant to create or endorse settlements that come so close to encroaching on the legislative function. Congress generally adopts compulsory licenses only reluctantly in the face of a failure of the marketplace, after open and public deliberations that involve all affected stakeholders, and after ensuring that they are appropriately tailored. Here, no factors have been demonstrated that would justify creating a system akin to a compulsory license for Google – and only Google – to digitize books for an indefinite period of time."

2. The Sale of Copyrighted Books without Consent of Rights Holders - Certain provisions of the proposed settlement dramatically compromise the legal rights of authors, publishers and other persons who own out-of-print books. Ms. Peters said:

"The Copyright Office strongly objects to the treatment of out-of-print works under the proposed settlement. The question of whether a work is in-print (generally, in circulation commercially) or out-of-print (generally, no longer commercially available) is completely inconsequential as to whether the work is entitled to copyright protection under the law."

"... the out-of-print default rules would allow Google to operate under reverse principles of copyright law, and enjoy immunity from lawsuits, statutory damages, and actual damages."

"We do not believe that even Google has asserted that, in the absence of this class action settlement, it would be fair use to undertake the new activities that Google would enjoy risk-free as a result of the settlement. In essence, the proposed settlement would give Google a license to infringe first and ask questions later, under the imprimatur of the court."

"A class action settlement that permits new activities for years to come, and removes the judicial remedies of millions of authors and publishers that are otherwise afforded by the Copyright Act, seems to us to be an excessive exercise of judicial power."

"Apart from its interest in ensuring the proper application of law and policy, Congress should be particularly concerned about the settlement since it would interfere with the longstanding efforts of Congress and many other parties to address the issue of orphan works. The broad scope of the out-of-print provisions and the large class of copyright owners they would affect will dramatically impinge on the exclusive rights of authors, publishers, their heirs and successors. Such alteration should be undertaken by Congress if it is undertaken at all."

"Indeed, this Committee has already invested significant time in evaluating the orphan works problem and weighing possible solutions. That process is not over. The Google Book Settlement would frustrate the Committee’s efforts and make it exceedingly difficult for Congress to move forward. A much more productive path would be for Google to engage with this Committee and with other stakeholders to discuss whether and to what degree a diligent search for the rights holder should be a precondition of a user receiving the benefits of orphan works legislation, or whether a solution that is more like a compulsory license may make sense for those engaged in mass scanning."

"Until there is a legislative solution, it is our strong view that Google should conduct itself according to the same options available to other users of copyrighted works: secure permission; forego the use; use the work subject to risk of liability; or use the work in accordance with fair use or another limitation or exception."

3. International Concerns - The settlement, in its present form, presents a possibility that the United States will be subjected to diplomatic stress because foreign rights holders and foreign governments have raised concerns about the potential impact of the proposed settlement on their exclusive rights and national, digitization projects. Ms. Peters said:

"As a matter of policy, foreign rights holders should not be swept into a class action settlement unknowingly, and they should retain exclusive control of their U.S. markets."

"We know that some foreign governments have suggested that the settlement could implicate certain international obligations of the United States."

"Some foreign governments have raised questions about the compatibility of the proposed settlement with Article 5 of the Berne convention, which requires that copyright be made available to foreign authors on a no less favorable basis than to domestic authors, and that the ‘enjoyment and exercise of these rights shall not be subject to any formality’. For example, the Federal Republic of Germany has asserted that '[T]he proposed settlement is contrary to both the Berne Convention and WCT.'"

"For purposes of this hearing, we are not suggesting that international obligations of the United States are at issue or necessarily would be compromised. However, it is a cause for concern when foreign governments and other foreign stakeholders make these types of assertions."

"To summarize, it is our view that the proposed settlement inappropriately creates something similar to a compulsory license for works, unfairly alters the property interests of millions of rights holders of out-of-print works without any Congressional oversight, and has the capacity to create diplomatic stress for the United States."

There has been much press coverage in the U.S. and abroad in recent weeks relating the Google Book Settlement. Over 400 statements have been filed by interested parties with the Federal Court. The Congressional testimony of Ms. Peters and the anticipated statement of the Department Of Justice (to be announced tomorrow, as of this writing) are critical crossroads in a legal and political saga that began four years ago this week. Substantial opposition to the Settlement is solidifying. Judge Chin could very possibly ask the parties to the Settlement to renegotiate some key aspects. And, as noted in Opposition Growing Against Google Book Settlement, this ongoing process on The Google Book Settlement will also influence actions and results in Orphan Works legislation worldwide.

Click here for the complete statement by Marybeth Peters in the Hearing on Competition and Commerce in Digital Books: The Proposed Google Book Settlement

Randy Taylor

Thursday, September 3, 2009

Opposition Growing Against Google Book Settlement

On September 1st, Germany became the first foreign government to ask a U.S. court to block the Google Book Settlement, the deal done by Google Inc. with authors and publishers that allows Google to, retroactively and in the future, scan and profit from old books and publications that may be copyrighted, out-of-print or orphaned works.

(Part of the Google Book Settlement calls for Google to pay $34.5 million to establish a rights registry.)

In an amicus brief filed with the U.S. Federal Court in Manhattan, Berlin says the settlement would deprive German and other non-American authors of their copyright ownership rights while providing Google a de facto monopoly over Internet and digital dissemination of these text-based creative works. The brief says the Google Book Settlement would “irrevocably” weaken global copyright law.

The Germans are not alone. Opposition to the Google Book Settlement which was announced 10 months ago is growing. Equally important, its outcome will indirectly impact efforts to pass Orphan Works Legislation, which is waiting in the wings.

In a court filing the next day, September 2nd, The American Society of Media Photographers (ASMP) objected to photographer exclusion in the $125 million Google Book Settlement. They were joined by the Graphic Artists Guild (GAG), the Picture Archive Council of America (PACA), the North American Nature Photography Association (NANPA), and several prominent individual photographers. ASMP Executive Director Eugene Mopsik said, "ASMP believes that the proposed settlement has far-reaching consequences for the work product and livelihoods of creators of visual images. Through this filing, we hope to stop a settlement that would hurt our members and those of our sister organizations, and to participate in obtaining a fair and equitable solution."

Microsoft, Yahoo and Amazon are spearheading the Open Book Alliance, formed in August to rally opposition to the Google Book Settlement. The Internet Archive, American Society of Journalists and Authors, The New York Library Association, The Science Fiction and Fantasy Writers of America have also joined this opposition., which has its Kindle e-book reader, has filed a 41-page brief with U.S. District Judge Denny Chin (the judge who will approve or deny the Google Book Settlement sometime this Fall) that warns that Google will stifle competition and price gouge if the deal goes through.

The U.S. Justice Department is also taking a closer look at the Google Book Settlement because it could possibly violate U.S. laws that inhibit monopolies, predatory pricing or competition. The Justice Department will voice its opinions by September 18th.

And, the most intriguing tidbit (and perhaps the most revealing, speculatively speaking) is that Alexander Macgillivray, Google's former Deputy General Counsel for Products and Intellectual Property who was the key counsel who put together the Google Book Settlement, left Google in July and joined Twitter. Why would Google's lead attorney on the project jump ship shortly before the successful completion of what would surely be a huge career high point?

If the Google Book Settlement is not approved by Judge Chin, this will almost certainly result in Google increasing its efforts to get Orphan Works Act legislation passed in the U.S. Congress. While Google Book Settlement is of great concern to authors and publishers of text, it does not impact photography, in general. The significance of all this is that photographers, stock photo agencies and rights holders in the photographic community need to get their eye back on the ball and accelerate building defenses to the theft of images in general and to The Orphan Works Act in particular. Registration of images at The Copyright Registry, which now stands at about 2.9 million images registered, is one defense.

Orphan Works Legislation is most assuredly going to resurface, despite the claims of Orphan Works supporters who want creators to believe it is "dead". Now is the time to take action that will counter the effects of the Orphan Works Act when it passes. Don't wait for the flood to crest before beginning to fill sand bags. Besides, participants in The Copyright Registry gain the greatest value right now, today, while statutory damages are still in full effect. Every copy of your images can link back to you and your web site, including from the stolen, altered and uncredited copies that creators don't even know exist. (See how The Copyright Registry works.) This flurry of activity on the Google Book Settlement is a warning sign for the photo community to begin putting in place the defenses and monetization methods necessary to reclaim at least some of the value of all the stolen intellectual property online, which is increasing at an alarming rate.