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March 19 – March 26, 2009 Edition Google Books Settlement Prompts Questions
About Effect on Readers, Libraries, Others
Reproduced with permission from Daily Report for Executives, 50 DER B-1 (Mar. 18, 2009).
Copyright 2009 by The Bureau of National Affairs, Inc. (800-372-1033)
Google Inc. and the American publishers and authors that sued it two years ago have come to an agreement on how to settle their case over Google’s scanning of entire libraries of books for full-text searches on the Internet. However, ambiguities remain regarding how the settlement will affect non-U.S. copyright holders, readers, libraries, researchers, and the future of books, in general. Many of these questions were raised at a March 13 seminar hosted by Columbia University’s law school, New York, where representatives of the settling parties, non-party publishers and authors, attorneys, and scholars offered their first-take analysis of the massive settlement deal.
Google’s intellectual property counsel, Alexander Macgillivray, said that in this case Google’s interest dovetails with the interests of casual readers as well as academic researchers.
Other participants in panel discussions wondered whether the settlement put too much power in the hands of Google and the registry body that the settlement parties plan to establish. Some expressed the wish that a public body, such as the Library of Congress, were in charge of maintaining and administering the massive program. In particular, observers looked askance at the unique position that Google holds as a result of the settlement. The absence of potential competitors worried many speakers.
Settlement of Dispute Over Scanning
The settlement’s origins are in the Google Print for Publishers program, which was initiated by Google in 2004 to enter into contracts with publishers to digitize their copyrighted works and make them available through Google’s Web site, where users could search their contents. Google then announced the Google Print for Libraries programlater renamed Google Book Searchin which Google contracted with a handful of large libraries to digitize the entire contents of their collectionsincluding works still under copyright protectionand make the resulting database searchable over the Internet. In 2005, several publishers and authors sued, initiating a class action against Google, alleging that the scanning constituted copyright infringement. A settlement was announced in October. Under the terms of the settlement, Google will pay $125 million to establish a centralized royalty collection organization and to compensate authors of scanned books. Each book stands to earn at least $60 for the scanning. Ongoing royalties will be paid for institutional subscriptions to Google Book Search, for paid online access to books through Google, for printouts made at participating libraries, and for other uses.
According to the agreement, the parties will also establish a Book Rights Registry under the control of authors and publishers to keep track of the use of registered works and for centralized collection of royalties.
The settlement proposal offers authors who do not accede to the agreement to opt out.
Will Authors Benefit?
Jan F. Constantine, general counsel for the Authors Guild, one of the settlement parties, hailed the settlement as an absolutely wonderful deal for authors. She said that she saw no downside for copyright holders or end users.
Eugene Linden, author of several books, including The Winds of Change: Climate, Weather, and the Destruction of Civilizations, said it was an irony that, by effectively allowing anyone to self-publish and distribute works for free, digitization will make it difficult for authors like him to make a living from their writings. According to Linden, past barriers to print publishing have allowed authors and publishers to charge sufficiently high prices for use of their works to produce enough of a royalty income for writers to live on. With a lack of barriers for entry to the publishing business in a digital environment, traditional print publishers and authors are forced to cut prices. As a result, writing-based businessessuch as journals, magazines, and newspapersdo not generate enough revenue to support their content providers.
There’s a huge gap between writers’ importance to society and remuneration, however, Linden said. Writers have produced some of the most disruptive events, such as Charles Darwin’s On the Origin of Species and Rachel Carson’s Silent Spring.
As an author, I’m happy that there’s now a facility to connect out- of-print books to those that want to find them, he said. However, the result is parasitic and cannibalistic, because of the diminishing rate of return to authors. Yes, the digital world has tremendous possibilties. On the other hand, writers are leaving by the thousands, because the digital world has put out of business their newspapers and magazines.
Marybeth Peters, the register of copyrights, led the list of questioners. Peters said that Google’s settlement with the Authors Guild relies on authors to come forward and claim their rights in order for them to benefit from the deal. She compared this system to federal registration of copyrighted works. Like copyright registration, the settlement agreement seeks to encourage those holding copyright interests to come forward and identify themselves. However, Peters said, even the Copyright Act, which also seeks to create significant incentives for copyright holders to come forward in the form of registration, has had very limited success. I can tell you that there are many, many works that are not registered. An awful lot of the works are going be in the public domain [or] treated as public domain works, she said. If the copyright registration infrastructure has such limited success, Peters said, she doubted that the parallel registration system being created by the settlement would be any more successful in prompting a significant proportion of copyright owners to come forward. Peters pointed to commentary that the settlement seemed to be a kind of legislation, stepping on congressional prerogatives. Internet archivist Brewster Kahle, for example, said that the settlement effectively creates a system going forward that creates a new Copyright Office, creates new copyright laws [and] all around a single monopoly for collective access to the books of humankind. The legislative process is what the Constitution had in mind with respect to setting copyright policy, Peters said. She warned that it remains to be seen how Congress will react to the parties’ settlement.
Peters stressed that many affected partiesforeign copyright holders, libraries, authors not included in the parties to the litigation, the publicwere not party to the negotiations.
I’m not opposed to the settlement in principle, she said. The question to me is the scope and the forward-looking aspects that didn’t really benefit from a broader public outlook, although many people will be bound by this.
Concerns Over Monopoly Power
Robert C. Darnton, director of the Harvard University library, labeled the Google database as the new library of Alexandria in digital form. However, he expressed concern that no one will be able to compete with Google. Even if another entity has the resources to enter into the same kind of project that Google has embarked upon, he said, the terms of the settlement agreement include a most favored-nation clause, which guarantees that the settlement parties cannot offer any other party a deal that is better than the one that Google’s getting. This puts Google in the position of a monopoly at a time when libraries are already facing the high costs of subscription databases. This is a situation in which Google can ratchet up prices in a manner that is going to ruin libraries. Darnton expressed a plea: Please, Google, find some mechanism that will preserve us from your abuse of monopolistic power.
Treatment of Orphan Works.’
James Grimmelmann, a professor at New York Law School, was among several who expressed concern about the settlement’s impact on orphan works, whose authors do not come forward to claim rights. Under the settlement, works whose authors are known or who come forward in order to claim their rights will fall under the protection of the registry. However, works whose authors remain unknown will be subject to the exclusive authority of Google.
This orphan works issue is absolutely central to the problems of the settlement, Grimmelmann said. Indeed, he said, these works should not be called orphans, but rather zombies: a shambling army under the sole control of Google.
Grimmelmann also warned about the concentration of power being created, noting antitrust and monopoly power concerns. In addition, he said that the settlement makes Google the single dominant cultural source with the power to shape culture by deciding what books will be included in its database, and how to rank them in search results.
Furthermore, he said that Google will have significant information about users as a result of their searches and their views of data through Google. This implicates privacy concerns. Indeed, the settlement requires Google to monitor reader activities and report them to the registry for royalty purposes.
Consumer rights are also implicated, Grimmelmann said. What recourse would a reader have if a particular book was badly scanned, he asked. He also said that the settlement constitutes a de facto change in fair use rights.
Grimmelmann suggested that the Federal Trade Commission might have to step in to ensure that Google does not abuse its market power. If this is a reasonable deal, it should be open to all, he said. If it’s not modified now, it’s going to shape the digital world in the near future and maybe the far future, Darnton said. A key defect in the settlement was the absence of public representation in the administration of the deal. The public needs to be protected against the potential of this servicewonderful as it isbeing priced out of their range.
There is a provision in the settlement agreement that would allow the registry to distribute to participating rights holders royalties collected for orphan works. In other words, members of the registry would be taking the royalties collected on behalf of authors who had not joined the registry.
Darnton objected to this claiming of orphan works royalties by the authors and publishers who did not hold copyright interest in the works being used. He said such funds should be used for the public benefit.
Carol A. Mandel, dean of libraries at New York University, was one of several who expressed the wish that Congress would take the settlement as an opportunity to finally enact legislation on orphan works. Before this morning, I was most concerned with the power of the registry, she said. After hearing much of the discussion, I can’t emphasize enough the importance of orphan works legislation. Google’s Macgillivray expressed support for congressional action on orphan works and he encouraged those interested in the issues to lobby for it.
Regarding the registry, Tracey L. Armstrong, head of the Copyright Clearance Center, which was established by copyright holders in 1977 to administer rights collectively, was curious as to why the CCC wasn’t chosen to administer rights under the settlement. The registry as it’s framed out in the settlement agreement is parallel with CCC in some ways, she said. One of the questions that came up was why isn’t CCC the registry? I really can’t answer that directly [because] I wasn’t at the table.
Victor S. Perlman of the American Society of Media Photographers also expressed disappointment that photographic works were not encompassed by the settlement.
There’s nothing inherent about visual materials that suggest that they should not have been included, Perlman said.
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