News & Trends: Countdown to the Google Book Search Settlement Review
The preliminary settlement agreement between the Association of American Publishers, the Authors Guild and Google regarding Google’s Book Search project and its alleged copyright violation has been heralded by the parties involved as a victory. Other publishers and industry analysts also have voiced optimism over the settlement’s impact on the industry. But as the date of the final settlement review (the Fairness Hearing) approaches (June 11), many still are investigating the agreement’s details. Others have voiced concern and suggest the settlement demands some significant changes. And time is of the essence. Because this is a class-action suit filed on behalf of authors and publishers, virtually anyone who owns copyright interest in a book is included in this settlement, unless they opt out by the May 5 deadline. That is also the deadline for anyone to submit objections to or comments on the settlement. Those who do not opt out of the settlement will be “bound by the court’s rulings” and will relinquish their rights to sue Google regarding this matter in the future.
The Settlement at a Glance
According to the settlement administration Web site Google has created, the agreement enables Google to “scan and maintain an electronic database of in-copyright books.” Google also can “sell access to individual books and institutional subscriptions to the database, place advertisements on any page dedicated to a book and make other commercial use of books.” Authors and publishers can opt out (request that their books be removed from Google’s database).
“The settlement [also] makes a distinction between out-of-print books and in-print books,” says Tad Crawford, publisher of Allworth Press, who is also an attorney and advocate for artists’ rights. “In-print books are not in the licensing program unless the rights holder does something. Out-of-print books are in the licensing program unless the rights holder does something. That was the key distinction that led to the settlement.”
The settlement also created the Book Rights Registry, through which “Google will pay rights holders 63 percent of all revenues from these [above] uses.” Google has to pay $34.5 million to establish the registry and cover notice and settlement administration costs. It also will pay “at least $45 million for cash payments to rights holders of books and inserts that Google scans prior to the deadline for opting out of the settlement.”
Most do not question the benefit of enabling millions of book titles to be searchable on the Web. This type of consumer access can only be positive.
At the heart of many criticisms are legal principles: fair use and antitrust issues. Giving Google permission to copy, use and profit from copyrighted material without prior permission from the rights holders opens the door for others to do the same. On the flip side, awarding a financial settlement to authors and publishers opens the door for publishers and authors to sue other search engines.
The antitrust concerns arise from the fact that this class-action suit binds authors and publishers into a “collective license.” According to James Grimmelmann, associate professor at New York Law School, where he is affiliated with the Institute for Information Law and Policy, this is essentially price-fixing.
“The settlement is by and large a good thing, since it will help people … get access to [books] on fair terms that compensate authors. But there are worrisome gaps in it,” says Grimmelmann. “It creates a powerful new registry that will have huge negotiating power to set the terms of the next generation of publishing and impose them on authors and publishers. And the structure of the settlement itself gives Google an initial lock on some very lucrative markets that will be hard for anyone else to dislodge.”
His suggestion? Modifications to the agreement before it is finalized. “The settlement needs some serious pro-competitive changes to make sure that there’ll be fair competition in the book-search and online-access markets,” he says.
A first step, which Grimmelmann writes about on his blog (Laboratorium.net), would be to modify the agreement to “offer any search engine the ability to participate on the same terms as Google, with no prejudice to their ability to negotiate better terms if they can.”
Grimmelmann notes that the settlement “also needs protections for intellectual freedom: privacy, fair use rights under copyright law, and readers’ ability to access books without censors intervening to yank the books from the system.”
What do most publishers think of the settlement? Book Business contacted a number of publishing houses of various sizes to find out where they stand on this critical issue that will help shape the future of digital content distribution. Overall, most are still undecided on where they stand, and others feel that regardless, there’s opportunity here of which to take advantage. Here’s what they had to say:
“Scholastic considers the settlement agreement a positive development and an opportunity, but it is an extremely complex settlement that raises a lot of questions, and we still have work to do to fully understand its implications and how Scholastic will proceed in response to the settlement.”
—Ellie Berger, president of trade publishing, Scholastic
“Overall, I am supportive, though cautious, about the possibilities for abuse. The e-book market is finally starting to take off. Google is only one of many players, and they are addressing a segment of the market (orphaned works) that desperately needs attention.
“Here’s a key thought: The iPod would never have taken off if consumers weren’t able to make MP3 copies of their own music. For e-book devices to take off, we need some equivalent body of content to jump-start the market. So far, Google is the only player (beyond nonprofits like the Internet Archive and Project Gutenberg) who are taking this critical step to jump-start the market.”
—Tim O’Reilly, founder and CEO, O’Reilly Media Inc.
“We are still analyzing the proposed settlement and have asked for more information from Google. We have not yet formed a companywide opinion on the matter.”
—Sophie Cottrell, VP, communications director, Hachette Book Group
“Now that we have a settlement, publishers ought to figure out how to make the most of this, because this is a powerful technology, and people will be drawn to it, and that ought to present opportunities for enterprising publishers.”
—John Morse, president and publisher, Merriam-Webster Inc.
“… The issue here is protection of copyright for publishers and authors, and that concerns all publishers. The jury will be out for quite some time as to whether Google is a monopoly that is trying to gain access to the world’s knowledge for corporate gain or a savior of the world’s knowledge that [otherwise] would be lost due to deterioration without digitization. The fact is, Google was scanning copyrighted works without permission or compensation, and now they can no longer do so.”
—Terry Nathan, executive director, Independent Book Publishers Association
“Random House is very supportive of the settlement. We believe it is a great step forward for all parties in the shared opportunity to bring our authors’ content to an ever-greater number of potential book buyers.”
—Stuart Applebaum, executive vice president, communications, Random House
“The proposed settlement should help authors and publishers. With respect to books that are in print, authors and publishers can choose whether to allow the books to be part of the [Google Books Library Project]. This is an important protection and far better than requiring rights holders [of in-print books] to ‘opt out’ or be considered to have consented to participate. Also, those who participate will receive remuneration and the benefit of having limited portions of their books come up in response to key words used in Google searches. This is similar to the existing search program that many publishers have taken part in and should help potential purchasers find relevant books to buy.”
—Tad Crawford, publisher, Allworth Press
“We are studying the settlement now—it is a very long and complex document— and discussing our position. We haven’t made a decision yet about whether or not we will sign on to the settlement. We do have an agreement with Google as one of their ‘publishing partners’ and expect to continue, and possibly extend, our work with them under that agreement.”
—Lynne Withey, director, University of California Press