Google Book Settlement Enters New Phase

On Friday the 13th (11/13/09), a revision to the Google Book Settlement (GBS) was filed in Federal Court, bringing Google a step closer to achieving its vision of indexing and providing the literary history of the world to the world. The GBS Revision seems designed primarily to appease the U.S. Justice Department, which has expressed anti-trust concerns, as well as objections by foreign countries, such as France and Germany, which have raised international political pressure relating to copyright laws and treaties because of GBS.

The GBS Revision removes many foreign publications from the class action, drops a “most favored nation” provision that provided Google with at least as good a deal as any competitor in the future, assigns a Fiduciary to watch over rights, and changes how monies received for “orphaned works” will be used.

The revised settlement agreement is subject to the judgment of Federal Judge Chin. The U.S. Justice Department will likely give a second opinion early in 2010. And while many people support the goal of making books available that were previously unavailable, the process is clearly ongoing with many players on the stage.

Here is a layman’s perspective on a few of the highlights of the GBS Revision, mostly taken from Google’s summary of the revision:

The Book Rights Registry (BBR) will add an independent, court-appointed Fiduciary to control unclaimed funds for “orphan works”, including books and inserts. The Fiduciary will be responsible for representing the interests of rightsholders. This seems intended to address what the U.S. Justice Department saw as a conflict of interest in which the BBR searches for the owners of orphaned works, but if they don’t find the owners, gets to keep the money (to offset operating expenses) or pay it to other rights holders of unrelated works. In the GBS Revision, after 10 years (up from 5 yrs), unclaimed monies will go to literacy-based charities, government entities (ie, state attorney generals) or “fully participating” libraries. The Fiduciary can spend up to 25% of that money trying to find the owner of each unclaimed creative work covered by the settlement.

Foreign countries, such as France and Germany, and publishers in those countries have voiced loud objections to GBS. This prompted the European Union to consider legislation to counter the effects of the Google Book Settlement. The GBS Revision drops most authored works from countries that do not “share a common legal heritage and similar book industry practices”. Books by authors from the United Kingdom, Canada and Australia remain in the deal, as well as any books registered with the U.S. Copyright Office.

Any book retailer (ie, Amazon, Barnes & Noble, local bookstores, etc.) will be able to sell online access to consumers of unclaimed and out-of-print books covered by the settlement. For book sales by Google, a “black box” algorithm will set pricing based on dynamic industry comparisons. Rightsholders will still receive 63% of the revenue while retailers will keep the majority of the remaining 37%.

The “Most Favored Nation” clause is removed that made the Book Rights Registry offer the same terms to Google before licensing unclaimed works to other parties.

And, additional revenue models (for which BBR can license works) is now limited to Print-On-Demand, File Downloads and Consumer Subscriptions.

Photography continues to be excluded from this class action in most instances.

While Google has taken definitive steps to make the Settlement more acceptable, it remains to be seen if Judge Chin will favor the GBS Revisions or the arguments of those who continue to oppose GBS, such as the potential competitors that created the Open Book Alliance, who described the GBS Revision as a “sleight of hand, surgical nip and tuck”.

There is a recorded press conference-style call that included Richard Sarnoff, Chairman of the American Association of Publishers, Paul Aiken, the Executive Director of the Authors Guild, and Daniel Clancy, who it the Engineering Director for Google Books. You can register to hear/replay the discussion by calling (888) 203-1112 or (719) 457-0820 and entering the code “3915040”.

And, Google has issued three documents on the proposed Revision to the Google Book Settlement (GBS) as follows:

Revised GBS Agreement

Summary Of GBS Revision

FAQ’s About GBS Revision

Some Other Resources About The Google Book Settlement Revision:

New York Time’s summary of the GBS Revision

The Laboratorium, organized by lawyer James Grimmelman, has detailed legal analysis of the GBS Revisions that supplements his extensive coverage of GBS to date