1. Communications Law & Policy Symposium February 2, 2010 Lisa A. Dolak Syracuse University College of Law

2. Google Books: Project History  December 2004: Google announced plans to scan and include in search database the full text of books in research libraries  Two parts:  Partner Program (rights-holder authorized scanning, etc.)  Library Project

3. Google Books: Project History  Library Project  Materials scanned from research libraries  Search query yields:  Public domain materials: full text  With rightsholder’s permission: few pages  Without rightsholder’s permission: “snippets” (max of three)  Reference works: only bibliographic info  Copyright issues: (1) scanning and (2) display

4. Google Books: Project History  August 2005: Google announced “opt-out” option and temporary moratorium (until November 1, 2005) on scanning  Other digitization projects (Microsoft and Yahoo (Open Content Alliance) were opt-in only

5. Google Books: The Litigation  September 20, 2005: Authors Guild class action (SDNY) (damages and injunctive relief)  October 19, 2005: Five publishers (McGraw- Hill, Pearson, Penguin, Simon & Schuster, and John Wiley & Sons) (SDNY) (injunctive relief)  No request for preliminary injunction; no suit against the libraries.  Cases consolidated

6. Google Books: The Litigation  Plaintiffs could have opted out (of the Library Project) or opted in (to the Partner Project)  Key objection: putting opt-out burden on rights-holders “turn[s] copyright law on its ear”

7. Google Books: The Litigation  Key legal issue: Google’s fair use defense  17 U.S.C. § 107: Fair use factors include: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

8. Google Books: The Litigation  Legal landscape:  Two 9 th Circuit cases:  Kelly v. Arriba Soft (2003)  Defendant’s “spiders” copied images; stored and displayed thumbnails; thumbnails linked to original website  Held: fair use  Commercial purposes, but transformative use (“different function than [plaintiff’s] use – improving access to information on the internet vs. artistic expression)  Creative works, but published  Whole was copied, but necessary  No harm to plaintiff’s ability to sell full-size images (low-res thumbnails can’t profitably be enlarged)

9. Google Books: The Litigation  Legal landscape:  Perfect 10 v. Amazon.com (2007)  Plaintiff published erotic photos in magazine and on website; claimed that other websites copied and displayed its photos without permission  Google’s search engine scanned and displayed thumbnails of the infringing images and links to those websites  Held: fair use  Commercial benefit (ad revenues), but use was “highly transformative”: “a search engine may be more transformative than a parody, because a search engine provides an entirely new use for the original work, while a parody typically has the same entertainment purpose as the original work.”  Importance of “new circumstances... especially during a period of rapid technological change”

10. Google Books: The Litigation  Pro-Google legal arguments:  Case like Arriba and Perfect 10:  Commercial purposes, but not selling the scanned books  Tranformative use: creating full-text searchable database available to everyone  Without permission, only displayed snippets (didn’t supplant originals; in fact displayed less than what displayed in Arriba and Perfect 10)  Only involved published works  Had to scan entire works to function

11. Google Books: The Litigation  Pro-plaintiff legal arguments:  Arriba and Perfect 10 distinguishable  copying there involved digital images; owners had given “implied license”  Library Project interfered with ability to license books to search engines  Arriba and Perfect 10 were wrongly decided

12. Google Books: The Litigation  Other arguments:  Pro-Google:  Tremendous social benefits: provides searchable access to information otherwise not easily accessible; potentially increases demand for books  No reasonable alternatives:  Transaction costs of negotiating with individual rightsholders (plus question of who, as between author and publisher, has digitization rights)  Orphan works problem: rightsholders unknown for an estimated 1.5 – 6 million books  Authors Guild represented only 10,000 authors, limited point-of-view (but judgment will bind “[a]ll persons who... have a [U.S.] Copyright Interest in one or more Books or Inserts”, unless they opted out)

13. Google Books: The Litigation  Other arguments:  Pro-plaintiffs arguments:  Opt-out system created dangerous precedent  Lack of control over Google’s practices  Security of Google’s database  One private party’s control over access to knowledge (via propriety search algorithm)

14. Google Books: The Settlement  October 28, 2008: Settlement announced  Basic proposed terms:  Google will pay license fees to the “Book Rights Registry”  Adopts default rules for three categories of works:  Public domain (20%): continued full-text display  In copyright, in print (10%): only bibliographic information and front pages/index  In copyright, out-of-print (70%): up to 20% of book’s text (but complicated rules depending on type of book)  Rightsholders can manage Google’s use on a per book basis  Consumer purchases authorized for out-of-print and “opted-in” in-print  Institutional subscriptions to view full text available

15. Google Books: The Settlement  Book Rights Registry  Google will pay  $34.5M to establish and maintain BRR  At least $45M to compensate rightsholders whose books Google scanned without permission as of May 5, 2009 (rightsholders who “claim” such books by March 31, 2011 will receive “Cash Payments” of at least $60 per book)  63% of revenues earned in the Google Book Search  To share in those revenues, rightsholders must “claim” their books  If don’t opt out, all claims against Google (for its uses) and the libraries (for providing the copies) are waived

16. Google Books: The Issues  Criticisms:  Opt-out nature  Class action nature:  End-around the legislature  Orphan works  Compulsory licensing  Extent to which named plaintiffs adequately represented the class (disparate author interests)  Concerns about quality of some scans (copies of scanner’s thumb, crooked pages, etc.)  User privacy

17. Google Books: The Issues  Criticisms, cont’d:  Concentration of control in hands of single, private party  Class action facilitates clearance of index rights for 24 million in-copyright books  Only Google gets these rights as a result of this settlement (most rights-holders likely won’t file claims with Registry)  Concerns include worries that Google will extend control over search, e-book distribution markets  BUT: Google’s rights are non-exclusive

18. Google Books: The Settlement  Class action settlement – must be approved by the court  Rightsholders (including non-U.S. owners) originally had until September 4, 2009 to  opt out, or  file comments with the court  Court received hundreds of comments and dozens of amicus briefs

19. Google Books: The Settlement  Parties filed amended settlement agreement with court on November 13, 2009  Main difference is that most foreign works are excluded from the content covered by the settlement (to be included, works not published in the U.S. must have been “published by January 5, 2009 and either were registered with the U.S. Copyright Office by that date or their place of publication was in Canada, the United Kingdom (‘UK'), or Australia”)

20. Google Books: The Settlement  Another significant change (from “Attachment N”):  “The Amended Settlement makes the following changes to the Original Settlement: (a) after Unclaimed Funds are held for five years, the Registry, in collaboration with organizations in Canada, the UK and Australia, and in consultation with the fiduciary, may use up to 25% of the funds for the sole purpose of locating Rightsholders; and (b) remaining Unclaimed Funds will be held for the Rightsholders for at least 10 years, after which the Registry, subject to fiduciary approval as to timing, may apply to the Court for permission to distribute Unclaimed Funds to literacy-based charities in the United States, Canada, the UK and Australia, upon notice to Rightsholders, the attorneys general of all states in the United States, and Fully Participating and Cooperating Libraries.”

21. Google Books: The Settlement  Court preliminarily approved amended settlement on November 19, 2009  Rightsholders had until January 28, 2010 to opt out  Final settlement approval hearing held on February 18 (is amended settlement “fair, reasonable, and adequate”?):  5 hour hearing  Judge Chin reserved ruling