Google and Association of American Publishers Reach Settlement Agreement Over Book-digitizing Lawsuit
After seven years of litigation, the Association of American Publishers announced on October 4th, 2012, that they had reached a settlement agreement that will provide access to publishers’ in-copyright books and journals digitized by Google for its Google Library Project. The AAP and the Authors’ Guild had filed a class action lawsuit against Google in 2005 for copyright infringement, and the settlement agreement reached by all parties in 2009 was invalidated by the Court in 2011. The lawsuit is finally over for the publishers: the settlement agreement states that Google “acknowledges the rights and interests of copyright-holders” and that U.S. publishers can “choose to make available or choose to remove their books and journal digitized by Google for its Library Project.”
Google began digitalizing books in 2002. In 2004, it announced that it had reached an agreement with several major research libraries allowing Google to digitally copy books and other writings in the library collections. This agreement enabled Google to launch Book Search, which allows users to search its database of digital books. The idea was that users could view snippets of copyrighted books and then download and view full copies of books. After Google failed to obtain copyright permission from rightholders to scan their books, on September 20, 2005 the Authors guild filed a class action lawsuit against Google in the Southern District of New York, arguing that Google’s Library Project involved massive copyright infringement since it created digital copies of copyrighted works. Following this complaint, Google temporarily suspended scanning the copyrighted books in order to allow copyright owners to submit lists of books they wished to exclude from the collection. The Association of American Publishers followed the Authors Guild, and also filed a lawsuit for copyright infringement against Google, seeking injunctive relief. In response to this second lawsuit, Google argued that they were not infringing on any copyright on the basis that the doctrine of fair use applied, since they were only showing “snippets for books where they did not have permission from a rightsholders.”
Negotiations to settle the lawsuit began in the spring of 2006. In October 2008, the parties to the lawsuit proposed a settlement agreement (which was revised in November 2009), according to which Google was to pay $125 million: $45 million would go to rightsholders whose copyrights had allegedly been infringed; $15.5 million to the publishers’ legal fees; $30 million to the authors’ lawyers; and $34.5 million to create a Book Rights Registry, a form of copyright collective to collect revenues from Google and dispense them to the rightsholders. In February 2009, a Google Book Search settlement website was created where rightsholders could claim their books for the purposes of the settlement. Rightsholders whose books had been digitalized by Google and who have claimed their books were to receive a one-time payment of $60 per book, or $5 to $15 for partial works, plus 63% of all revenues associated with their works. After claiming a book, a rightsholder also had the ability to alter the default display settings.
However, this settlement was rejected on March 22, 2011 by supervising Judge Denny Chin after a fairness hearing, and after hundreds of objections to the deal were made by Google rivals, academic experts, literary agents and even foreign governments. Judge Chin’s primary reasons for rejecting the settlement were that “it would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case.” (For more information on the decision, see infodocket.com).
The settlement agreement was also criticized by many, for a variety of reasons. According to Siva Vaidhyanathan, Associate Professor of Media Studies and Law at the University of Virginia, the settlement of the case left the fair use dispute unresolved, which poses a potential threat to the meaning and force of this doctrine. The fair use claims in this case were arguably so excessive that the judges felt compelled to issue limitations on the invocation of the fair use right. Additionally, in December 2009 science fiction and fantasy author Ursula K. LeGuin announced her resignation from the Author’s Guild because of this settlement. She claimed in her open letter of resignation that the leadership of the Guild had “sold us (its members) down the river, and that the settlement threatened “the whole concept of copyright”.
An anti-trust argument was also made against the settlement. Since the settlement agreement covered the previously digitalized books and provided a revenue model for future digitalization, it gave Google control over the digitizing of virtually all books covered by copyright in the United States. In addition, the settlement raised a high risk of censorship from Google. As a result of the settlement, Google would be able to create a “content management system” and would have the power to remove inappropriate books – similar to Google’s ability to remove inappropriate movies from YouTube. Some feared that this would lead to censorship, and that public interest concerns justified protecting the digitized versions of the books from being buried behind Google’s ranking system.
Another concern was raised by privacy advocates. Whereas traditional libraries provide privacy assurance to visitors, Google would keep a record of books accessed through a Books Search, which would enable it to “become a one-stop shop for government surveillance into the reading habits of millions of Americans.”
After seven years of litigation and a failed settlement agreement, Google finally reached a settlement agreement with the Association of American Publishers on behalf of five named plaintiffs (McGraw-Hill Companies, Pearson Education, the Penguin Group, John Wiley & Sons, and Simon & Schuster.)
This settlement basically provides that Google and the AAP agree to disagree. It allows publishers to choose whether to allow Google to digitalize copyrighted books that are out-of-print, and if the authorization is granted Google will provide the publisher with a digital copy for their own use (see APP’s Press release on the settlement agreement). Once a book is digitized, Google will allow people to read 20 percent of it online, purchase the entire book from the Google Play store, and then Google will share revenue from these purchases with the publishers. Google has been offering publishers the opportunity to sell digital books for years, but under the settlement, publishers get the benefit of Google digitizing out-of-prints books that they might not otherwise have turned into e-books. According to Tom Survey, the Director of strategic partnership at Google, “what’s really exciting about the settlement is the fact that Google will be getting access to books that have long been out of print, that are in copyright. It’s good for users who weren’t able to buy them before, and for publishers.” Tom Allen, chief executive of the Association of American Publishers added: “We are very pleased because the settlement acknowledges the rights and interests of copyright holders and publishers, and whether they’re going to make their rights available.” However, the question of “orphan works”—those that are still under copyright but whose owner or author cannot be located—was not addressed in the settlement. This is a big win for Google: If a work is actually an orphan, then no copyright owner can come forward to have it removed, and therefore according to the terms of the settlement Google gets to keep the work in its database.
Publishers have not asked for monetary damages from Google, but additional financial terms of the agreement have not been disclosed by the parties and further terms of the agreement are confidential. No public settlement document will be released, since the agreement is a private settlement between Google and APP, and therefore not subject to court approval, unlike the 2008 Settlement Agreement between Google, APP, and the Author’s guild.
Despite this progress, this settlement did not resolve the much bigger issue of the litigation between Google and the Author’s Guild: Whether Google is infringing copyright by digitizing books, and only constitutes a small step forward for Google’s plan to digitize every book and make them readable and searchable online by giving publishers the right to keep their books out of Google’s reach. While Google remains tied up in court against the Author’s Guild, which used to be a partner of the publisher against Google, the settlement with the publishers is likely to have an impact on the outcome of the case. According to James Grimelmann, a professor at New York Law School who has closely followed the case, the settlement with the publishers could help Google in the litigation. Grimelmann stated, “maybe the fact that the publishers don’t think this is a lawsuit worth pursuing will help Google slightly.”
The Author’s Guild does not seem to see the settlement as a betrayal on the part of the Publishers. Paul Aiken, the executive director of the Author’s Guild, stated that “The publishers’ private settlement, whatever its terms, does not resolve the author’s copyright infringement claim against Google. Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights, and our class-action lawsuit on behalf of U.S. authors continues.” Meanwhile, Michael J. Boni, a lawyer for the Author’s Guild, said that he was “cautiously optimistic” about the prospects to make progress in the rest of the case now that the publishers have settled: “We are delighted that Google and the publishers forged an agreement. We see that as a sign of Google’s willingness (to be open) to the concept of settlement. And we hope we can get to the bargaining table as soon as we can.”
To be fair, the settlement will not bring much change to the pre-existing partnership between Google and publishers. However, it has symbolic significance, as it is the newest signpost for defining copyright in the Internet age. When the publishers first sued Google seven years ago, digital books were not as common as they are now, and represented a legitimate source of concern for publishers. This newest settlement is the latest evidence of the shift from print to e-books as well as of Google’s efforts to compete with e-book rivals like Amazon.com. According to James Grimelmann, “They had this lawsuit hanging around for years, and basically the publishers have all moved on. They are selling digitally know. That’s the future. This just memorializes the transition.”