The Audacity of the Google Book Search Settlement

Sorry, Kindle. The Google Book Search settlement will be, if approved, the most significant book industry development in the modern era.
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Sorry, Kindle. The Google Book Search settlement will be, if approved, the most significant book industry development in the modern era. Exploiting an opportunity made possible by lawsuits brought by a small number of plaintiffs on one narrow issue, Google has negotiated a settlement agreement designed to give it a compulsory license to all books in copyright throughout the world forever. This settlement will transform the future of the book industry and of public access to the cultural heritage of mankind embodied in books. How audacious is that?

Last October, Google announced that it had entered into an agreement to settle two lawsuits brought in 2005 charging it with copyright infringement for unauthorized scanning of books from major research libraries. Google scanned these books to index them and make snippets available in response to search queries.

One of the lawsuits was brought by three individual authors (whose average age incidentally is 85) and the Authors Guild on behalf of the class of everyone who own copyrights in books in the University of Michigan library, from which Google obtained many books for scanning. A second lawsuit, brought by five commercial mass-market publishers, including McGraw Hill, Pearson, and John Wiley & Sons, made the same charge, although not on behalf of a class of affected publishers.

Google initially fought these lawsuits by arguing that scanning, indexing, and snippet-providing was a fair use of the books because it promoted wider public access to them. Google was, moreover, willing to remove from the Book Search corpus books whose rights holders objected. Google also challenged whether Herbert Mitgang and the Authors Guild were fair representatives of the class of affected authors.

Many copyright professionals thought Google had good defenses on both issues. Google's attack on Mitgang and the Authors Guild as class representatives would likely have succeeded because most authors of books in the Michigan library are academic researchers likely to think, as I do, that scanning books to make indexes and snippets is fair use. There are approximately 100 times more academic researcher-authors than there are members of the Authors Guild.

So why did Google decide to settle instead of to fight? Inspired perhaps by Rahm Emanuel, who has observed "you never want a serious crisis go to waste," Google recognized that AAP and the Guild would be willing to settle their lawsuits by vastly expanding the plaintiff class to all persons with a U.S. copyright interest in one or more books. The settlement could then give Google a license to commercialize all books owned by the class.

Why would AAP and the Guild be willing to do this? It is largely because the agreement designates the Authors Guild as the representative of the author subclass and the Association of American Publishers (AAP) as the representative of the publisher subclass. This designation ensures that they will have vastly expanded responsibilities and powers to control the market for digital books for which they have been hankering for many years.

Under the settlement, the Authors Guild and AAP are tasked with creating a new collecting society, the Book Rights Registry, which is supposed to find class members, sign them up, and pay them from a revenue stream that Google intends to generate from its commercialization of these books.

Dan Clancy, the Engineering Director for the Google Book Search project, has estimated that there are somewhere between 80 and 100 million books in the world, although under half that many in the U.S. where Google has mostly been scanning books. No one really knows how many of these books are in-copyright, but it has got to be in the tens of millions.

You might think that authors and publishers of books from Germany, Japan, South Africa, and other countries could not possibly be affected by a settlement negotiated by these three entities under U.S. law. However, owing to international treaties, virtually every author and publisher of in-copyright books in the world is in the settlement class and eligible to receive revenues from the Google Book Search commercialization if they sign up with Google or the Registry.

Google will pay to the Registry 63 percent of the revenues it receives from its commercialization efforts of out-of-print books. After deducing its expenses, the Registry will pay royalties to those who have registered with it. Yet, the agreement also authorizes the Registry to pay out unclaimed funds from orphan and other unregistered works to registered owners, even though they are neither the authors nor the publishers of potentially millions of books.

(Owners of in-print books can opt in to Book Search commercializations, but Google won't display their books to the public unless they sign up for this. In-print rights holders can also sign up with Google as part of its partner program.)

Google will determine the in- or out-of-print status of all books based on a number of criteria, including whether they are available as new books through customary trade channels (e.g., bookstores).

Customary trade channels may be a useful criterion for mass-market publishers such as McGraw Hill, but this will disadvantage many foreign publishers or small and medium-size publishers of specialized books (such as handbooks of training materials, reports published by nonprofit groups, and monographs published by small scholarly or historical societies).

However, much larger questions call into question whether the settlement should be approved. One is whether the Authors Guild and AAP fairly represented the interests of all authors and publishers of in-copyright books during the negotiations that led up to the settlement agreement. A second is whether going forward, they and the newly created Registry to which they will give birth will fairly represent the interests of those on whose behalf the Registry will be receiving revenues from Google. As well-intentioned as they may be, the Authors Guild and AAP have negotiated an agreement that serves the interests of the core members of their organizational constituencies, not the thousands of times larger and more diverse class of authors and publishers of books from all over the world.

Consider this: The Authors Guild has about 8000 members. OCLC has estimated that there are 22 million authors of books published in the U.S. since 1923 (the year before which books can be presumed to be in the public domain). Jan Constantine, a lawyer for the Authors Guild, is optimistic that authors and publishers of out-of-print books will sign up with the Registry, but there are many reasons to question this.

For one thing, the proposed settlement agreement implicitly estimates that only about 750,000 copyright owners will sign up with the Registry, at least in the near term. Second, many books are "orphans," that is, books whose rights holders cannot be located by a reasonably diligent search. Third, many easily findable rights holders, particularly academic authors, would much rather make their works available on an open access basis than to sign up with the Registry. Fourth, signing up with the Registry will not be a simple matter, since the Registry won't just take your word for it that you are the rights holder. You are going to have to prove your ownership claim.

The non-representativeness of the class is one ground on which it is possible to object to the proposed Book Search settlement. Other reasons to object or express concerns will be explored in subsequent articles. Objections must be filed with the court by September 4, 2009. The hearing at which the judge will decide whether the settlement is "fair" is scheduled for October 7.

While some very positive things will happen in a post-settlement world, there are many reasons to be concerned about the downsides that may counterbalance the upsides.

Coming up next: Why is the Antitrust Division investigating the Google Book Search settlement?

Pamela Samuelson is a Professor of Law at the University of California, Berkeley. She can be reached at

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