Google takes it on the Chin

The bigger they are, the harder they fall:
but might there still be a settlement?

In a decision which has attracted much satisfaction, considerable attention and little surprise (at least among many authors, copyright enthusiasts, cynics and Google-bashers on the European side of the Atlantic), Federal Judge Denny Chin rejected the class action settlement which Google had painstakingly reached with a coalition of authors and publishers.  The proposed settlement, the judge felt, would grant Google significant rights to exploit entire books, without permission of the copyright owners,giving the world's most omnipresent corporation a significant advantage over competitors -- rewarding it for engaging in wholesale copying of copyright works without permission [Yes, says Merpel, but isn't that exactly what it was supposed to do?].

The 2009 settlement proposal would have left Google free to create a registry of books [but isn't it doing that anyway?], so long as it paid a paltry US$125 million to those people whose copyright-protected books had been scanned and to locate the authors of scanned books who had not come forward. Google would also have enjoyed what has been described as "immunity from copyright laws, allowing the company to distribute millions of books on the Internet in exchange for sharing the revenue it would generate" (Bloomberg).  The IPKat was horrified, at a conference in December 2009, to hear publishers' representatives urging that the $125 million offer -- about the price of three top-class footballers -- should be accepted since (i) it was "the only offer on the table", (ii) there wasn't anyone else around who was going to offer a better deal and (iii) in the current sorry state of the book publishing industry any subsequent offer was likely to be lower, not higher.

One of the things which the IPKat found most unpalatable about the settlement was that it required authors to opt out if they didn't like it, rather than getting them to opt in if they did. Judge Chin seems to think so too, so now it's Google which is considering its options.  Hillary Ware (a managing counsel for Google) is reported as saying: "Like many others, we believe this agreement has the potential to open-up access to millions of books that are currently hard to find in the U.S. today".  It does, but so too does the abolition of copyright.  And there are lots of other things that are hard to find in the U.S. today -- a decent cup of truly hot coffee being one of them -- but we don't go around saying that people's personal property rights should be trampled on or subject to opt-outs in order to make it easier for people who have no entitlement to them to gain access to them.

The IPKat is fairly confident that this is not the last we've heard of the settlement.  He bets that it will get through eventually --but on a very different basis.  His position has always been that the copyright issues are less of a problem than those of absence of competition, and it is those which will shape the global outcome.

Sources and further reading:
The Authors' Guild et al v Google Inc, 05 Civ. 8136 (DC), 48 pages
The proposed settlement agreement here, 323 pages
Google Book Settlement website here
"GBS Update: the Settlement Is Dead; Long Live the Settlement Negotiations!", Scrivener's Error
"Federal Judge Rejects Google Books Settlement, But Leaves Door Open to Revision", ACS Blog
Giovanna Occhipinti Trigona, "Google book search choices", Journal of Intellectual Property Law & Practice (2011) 6(4): 262-273 (abstract here)
"Defeated Book Settlement 'a Victory for Copyright', The Bookseller.

From “Dr Googleberg” to the “Google Book Settlement” - Some news from Germany

Some of the IPKat’s readers may have followed the recent intriguing political scandal surrounding former German defence minister and Germany's political superstar Karl Theodor zu Guttenberg (depicted below on the cover of a new biography about his life), who last Tuesday resigned from office following allegations that he had plagiarized large parts of his “summa cum laude” PhD thesis in Law.

Naughtily dubbed “Dr Googleberg” or “Baron cut and paste” by some parts of the German media, zu Guttenberg decided not to use his Phd title after the initial accusations of plagiarism broke, then wrote to his university (Bayreuth) and asked to “return” his PhD, with the university subsequently deciding to take his doctorate away for good. Further investigations at Bayreuth University are still pending.

The whole story has some interesting legal implications as plagiarising a thesis could qualify as “carrying an academic title without authorization” (section 132 German Criminal Code -unlikely to apply since the PhD was bestowed legally initially) as well as ”criminal disloyalty” (section 266 German Criminal Code “Untreue”) since zu Guttenberg allegedly ordered essays from the scientific services of the Bundestag and used them in his thesis without properly referencing this third party work and due to the fact that he should have only used the services for his work as a member of parliament, not for his personal use. Perhaps most importantly, plagiarizing other’s works without referencing them properly could be copyright infringement under section 109 German Copy Right Act (using someone else’s works non-commercially without authorization).

On the right - the thesis in question

For the copyright infringement provisions to apply the law requires that one of the authors of infringed texts filed a complaint with the relevant authorities (provided that the texts that been copied in the thesis were itself “creations” that fell within the ambit of the copyright act), unless there was a heightened damage to the “legal good copyright” so that there could potentially be a public interest in prosecuting this matter. (See here for a discussion of the criminal law implications (in German)).

It appears that none of the allegedly copied authors has so far filed an official complaint with the prosecution authorities and it is now up to the prosecution authorities in Hof, Bavaria to investigate further after zu Guttenberg resigned from all his official posts and as such is no longer covered by the immunity laws. The university of Bayreuth is also conducting further (internal) investigations as does an interesting internet project called "GuttenPlag Wiki", which appears to have established that more than half of the thesis has been copied.

This Kat was in Germany when the story broke initially and was intrigued by the very high approval ratings zu Guttenberg boasted before and after his resignation. It does hence not come as too much of a surprise that - in typical German fashion - the first third party trade mark application for the trade mark “Guttenberg” in classes 9, 14 and 25 [update: the exact goods covered are not yet published on the official register] has been filed at the German Patent and Trade Mark Office.

Merpel now wonders whether Karl Theodor zu Guttenberg may find a new career as the new Paul (see above right and IPKat posts here and here) Knut, Heidi)?

From Dr Googleberg to the ongoing “Google Book Settlement” class action which also affects German authors and right holders. On its website, the German Collection Society “VG Wort” now informs us that it has again written to Judge Denny Chin of the New York District Court in relation to the “Google Book Settlement” case (The Author’s Guild et al v Google, Inc., case no 1: 05-cv-08136 (DC)).

In its letter to the court of 14 February 2011 (which can be retrieved via VG Wort’s website by clicking here (in English)) the German Collection Society requests an extension of the court deadlines for claiming a cash payment by 31 March 2011 and for claiming the complete removal of works by 5 April 2011. The extension of time should be granted in an interim ruling. VG Wort argues that since it was at present uncertain whether a settlement would be approved by the court, “(VG Wort) cannot be expected to incur the heavy administrative costs which would be involved” (...) “in determining the current status of German books under the existing terms of the settlement.” Furthermore, VG Wort also stresses that it was at present still unclear which German works would be covered by the potential settlement. VG Wort had already submitted an amicus-curia brief to the court ahead of the fairness hearing of 18 February 2010 (see Amerikat's report here) in which it had criticised that it was difficult and almost impossible to determine which authors and publishers were affected by the settlement.

Certainly not the last chapter in this matter.

$125m in the kitty, but who will get the cream?

On Monday Google announced during a European Commission hearing in Brussels that it will exclude from the US Google Book Settlement all European books that are still commercially available [Note only those that are “commercially available”. Could we have a definition please, Google?]. This means that European books will no longer be available to American consumers through Google Book Search unless the author/publisher has expressly agreed to be included. Although they say this is a “step in the right direct”, European authors and publishers, as well as national governments, still expressed serious concern regarding the Google Book Settlement.

As reported by the IPKat (here, here and here), the Google Book Settlement made in November 2008 was a result of a class action lawsuit brought by the Association of American Publishers, the Authors Guild, and other select authors and publishers who had alleged that Google’s scanning of their books infringed their respective copyrights. If approved by federal court in a fairness hearing scheduled in October, the Settlement would enable Google to scan copyright, out-of-print and orphaned works in the US for online inclusion in exchange for $125 million payment to a Books Right Registry from which authors and publishers would then be compensated. The online functionality of the Google Book Search, in conjunction with the approved Settlement, would enable Google to use the content for a multitude of permitted acts such as sales, advertising and third-party licensing. 37% of revenue earned from these uses would go to Google. In the US, Google had previously given authors until 5 May 2009 to “opt-in” or “opt-out” of the settlement terms. Failure to do so would have the effect of “opting in” an author/publisher to the settlement – in effect a compulsory licensing system. This and the issue of Google acting as a de facto exclusive licensor of “orphan works” generated waves of concern throughout the U.S., resulting in the Justice Department commencing a formal inquiry into the Settlement’s antitrust implications this past summer.

European concern also continues to mount. France has begun the process of filing formal objections to the case in New York, while Germany has already submitted its opposition to the settlement citing contravention of national German copyright laws and the European initiatives to create non-commercial digital libraries (more on this below). As reported by Bloomberg, Nicolas Georges, the director responsible for books and libraries at the French Ministry of Culture stated at the hearing:

“The settlement isn’t in line with intellectual property rights, secondly, the settlement raises serious issues in antitrust law and thirdly the settlement poses an evident risk to cultural diversity ... The right of Google to digitize orphan works in American libraries, but coming from around the world, gives them an unequal licensing right for exploitation in the future, a monopoly.”

But what is Europe to do? Due to the territorial nature of copyright law a pan-European settlement or licensing deal would be near impossible to achieve – a problem which in fact had already been addressed last year by the ¡2010: Digital Libraries Initiative’s High Level Expert Group (HLEG) and Copyright Subgroup’s Joint Report which addressed the problem of digitization of orphan works. The Digital Libraries Initiative 2005 launch was followed by a Recommendation adopted by the European Commission in August 2006 in which it called upon Member States to create mechanisms to facilitate use of orphan works and promote the availability of a known orphan works directory. The European Council then invited Member States to have mechanisms in place by 2008 to facilitate the digitization and online access to orphan works. Google, unsurprisingly, beat Europe to the punch.

Information Society Commissioner Viviane Reding and Internal Market Commissioner Charlie McCreevy issued a joint statement yesterday in relation to the Google Books hearing which stated:

“"It goes without saying that digitisation of copyrighted works must fully respect copyright rules and fairly reward authors, who could be the biggest winners from better access to a Europe-wide online audience. However, we also need to take a hard look at the copyright system we have today in Europe. Is the present framework still fit for the digital age? Will the current set of rules give consumers across Europe access to digitised books? Will it guarantee fair remuneration for authors? Will it ensure a level playing field for digitisation across Europe, or is there still too much fragmentation following national borders? What could be the contribution of Europeana, Europe's digital library, when it comes to working on a European response to digitisation efforts in other continents? [This Kat is worried: Europe’s previous recommendations and Joint Reports were derived from the premise of promoting the public sector and ‘cultural and public good’. These are arguably not appropriate frameworks in which to reassess the legal implications of orphan works in the commercial sector.]

Is Europe's copyright framework modern enough when it comes to digitising orphan works and out-of print works? [Well, no! Europe’s recommendations in regard to orphan works have been emphatically lacking. Their addition really has been only to codify the common-sense approach of a ‘due diligence’ search. Can anyone point to a European legal definition of an “orphan work”?]

These books represent the vast majority of European libraries' collections (around 90%). In our view, these books must be recovered and given a new lease of life".

The European Commission will be discussing the above questions with stakeholders, the European Parliament and the Council in the coming weeks with the stated aim of presenting proposals for “the modernization of Europe’s still far too fragmented copyright system…with the focus on finding an online family for orphan and out-of-print works” to the new Commission.
It seems to this IPKat that Europe has a proverbial ‘gun to their head’ in the guise of the Google Book Settlement. Because of this, this IPKat is concerned that any proposed legislation or solutions now put forward will not adequately address the legal and practical ramifications of orphan works and similar issues.

Deadlines to file amicus curae briefs have now passed. The US Government has until 18 September 2009 to file their written submissions to the court. The hearing is scheduled for 7 October 2009. This IPKat, in her guise as AmeriKat, will be in Manhattan during the hearings and hopes to be either in Judge Denny Chin’s courtroom or in the proximity thereof.

Google Book War: now peace breaks out

The IPKat thanks his trusty friend Kristof Neefs (Laga, Belgium) for drawing his attention to a press release today from Google, headed "Authors, Publishers, and Google Reach Landmark Settlement: Copyright Accord Would Make Millions More Books Available Online". The press release reads, in relevant part:

"The Authors Guild, the Association of American Publishers (AAP), and Google today announced a groundbreaking settlement agreement on behalf of a broad class of authors and publishers worldwide that would expand online access to millions of in-copyright books and other written materials in the U.S. from the collections of a number of major U.S. libraries participating in Google Book Search. The agreement, reached after two years of negotiations, would resolve a class-action lawsuit brought by book authors and the Authors Guild, as well as a separate lawsuit filed by five large publishers as representatives of the AAP’s membership. The class action [the IPKat wonders, should this read 'agreement'?] is subject to approval by the U.S. District Court for the Southern District of New York.

The agreement promises to benefit readers and researchers, and enhance the ability of authors and publishers to distribute their content in digital form, by significantly expanding online access to works through Google Book Search, an ambitious effort to make millions of books searchable via the Web. The agreement acknowledges the rights and interests of copyright owners, provides an efficient means for them to control how their intellectual property is accessed online and enables them to receive compensation for online access to their works [The Kat thought this was impossible. If the Guild, the AAP and Google can manage this, perhaps they'd like to tackle global warming, the credit crisis and Madonna's divorce settlement too].

If approved by the court, the agreement would provide:

More Access to Out-of-Print Books – Generating greater exposure for millions of in-copyright works, including hard-to-find out-of-print books, by enabling readers in the U.S. to search these works and preview them online [more access to hyphens too, it appears ...];

Additional Ways to Purchase Copyrighted Books – Building off publishers’ and authors’ current efforts and further expanding the electronic market for copyrighted books in the U.S., by offering users the ability to purchase online access to many in-copyright books [any prizes for predicting the impact of this on Amazon's business?];

Institutional Subscriptions to Millions of Books Online – Offering a means for U.S. colleges, universities and other organizations to obtain subscriptions for online access to collections from some of the world’s most renowned libraries [what about non-US institutions, distance learning institutions etc?];

Free Access From U.S. Libraries – Providing free, full-text, online viewing of millions of out-of-print books at designated computers in U.S. public and university libraries; and

Compensation to Authors and Publishers and Control Over Access to Their Works – Distributing payments earned from online access provided by Google and, prospectively, from similar programs that may be established by other providers [this looks like a sop to those worried about lack competition], or through a newly created independent, not-for-profit Book Rights Registry that will also locate rightsholders, collect and maintain accurate rightsholder information, and provide a way for rightsholders to request inclusion in or exclusion from the project.

Under the agreement, Google will make payments totaling $125 million [until a few short weeks ago, the IPKat used to think this was a lot of money ...]. The money will be used to establish the Book Rights Registry, to resolve existing claims by authors and publishers and to cover legal fees. The settlement agreement resolves Authors Guild v Google, a class-action suit filed on September 20, 2005 by the Authors Guild and certain authors, and a suit filed on October 19, 2005 by five major publisher-members of the Association of American Publishers: ... . These lawsuits challenged Google’s plan to digitize, search and show snippets of in-copyright books and to share digital copies with libraries without the explicit permission of the copyright owner.

Holders worldwide of U.S. copyrights can register their works with the Book Rights Registry and receive compensation from institutional subscriptions, book sales, ad revenues [do the Kats pick up the scent of AdSense?] and other possible revenue models, as well as a cash payment if their works have already been digitized.

Libraries at the Universities of California, Michigan, Wisconsin, and Stanford have provided input into the settlement and expect to participate in the project, including by making their collections available. Along with a number of other U.S. libraries that currently work with Google, their significant efforts to preserve, maintain and provide access to books have played a critical role in achieving this agreement and, through their anticipated participation, they are furthering such efforts while making books even more accessible to students, researchers and readers in the U.S. It is expected that additional libraries in the U.S. will participate in this project in the future.

Google Book Search users in the United States will be able to enjoy and purchase the products and services offered under the project. Outside the United States, the users’ experience with Google Book Search will be unchanged, unless the offering of such products and services is authorized by the rightsholder of a book.

...

For more information about this agreement, including information about whether you may be a class member, please visit http://books.google.com/booksrightsholders [when time permits, this may be fun]. Class members include authors (the Author Sub-Class) and publishers (the Publisher Sub-Class), and their heirs and successors, of books and other written works protected by U.S. copyright law.

A teleconference for the media will be held today, Tuesday, October 28, 2008, at 10:30 a.m. Eastern. To participate, reporters in the U.S. should dial 877-340-7913, and reporters internationally should dial 719-325-4845. Please tell the operator you would like to join the “Authors, Publishers and Google” call".

The IPKat says, this seems wonderful -- never has so much reading material been made available to so many readers so swiftly and with so little effort on their own part. Merpel says, some words are missing from this press release. They include orphan, Berne, indemnity, liability, infringe, moral right and damages ...



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