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24 Mar 2011

Judge Chin shoves the Google settlement toward sanity Copyright Law

The Google book settlement has been grinding through the courts since the Authors' Guild and Association of American Publishers (AAP) sued them in a class action in 2005, and they came to a tentative settlement in 2008. Yesterday Judge Denny Chin once again rejected the proposed settlement, with a strong hint about how to fix it. Fortunately for the American public, Judge Chin is an excellent judge with a deep understanding of the issues, and his opinion makes it clear what all the problems with the proposed settlement are.

The original complaint from the Guild and the AAP was that Google Books had been scanning their books without permission, and publishing "snippets" of them on their web site. Google's defense was that their actions were covered by fair use. Personally, I think that Google would have had a good chance of prevailing on the merits, but we'll never know because they soon started negotiating a settlement. But the settlement morphed from just settling the issues about the books whose copyrights are owned by Guild and AAP members to all books in copyright anywhere, in particularly including orphan works whose copyrights have not yet expired, but whose copyright owners (typically heirs of deceased authors, or publishers who've gone out of business) can't be located. Orphan works are a famous sore spot in copyright law, since they're basically a black hole. Even if someone were willing to pay for the right to use one, there's nobody to pay, the penalties for using one without permission can be huge, and showing that you tried and failed to find the copyright owner is not a defense.

The Google settlement, like all class settlements, works by opt-out, that is, if you're a class member, i.e., a copyright owner, it covers you unless you specifically object. With this in mind, the settlement came up with some standard prices to be paid for copies of every work that Google scanned, with the money paid to owners if they're known, and held in escrow if not. If a hitherto unknown owner shows up, he or she can collect the escrowed money, and can forbid future use, but is stuck with whatever Google collected for whatever they've already sold. There is a whole lot of extra complication about foreign authors, and authors of "inserts" (sections of books with separate copyrights), and whose job it is to represent what rights holders. For more detail, read the summary in Judge Chin's opinion.

In some ways, this settlement would be a great thing, since it unlocks all of the orphan works. Unfortunately, it creates a de-facto monopoly for Google, since the only way for someone else to get into the business would be to get sued and have a similar settlement approved, which everyone agrees will never happen. Judge Chin noted that over 6,000 class members went to the effort to opt out of the settlement because they didn't like the terms, an enormous and probably unprecedented number. Other important objections include those from France, Germany, Japan, and other countries who argue that the settlement violates the Berne copyright treaty and other international law, from a group of academic authors who say that they have no interest in Google charging anything for their works, since academics want maximum distribution, not maximum royalties, and some heirs of authors who argue that it is their clear right under the law not to license works if they don't want to.

Many people argue, and Chin appears to agree, that these problems (other than the monopoly one) are all problems that should be addressed by legislation, not by a gigantic one-off settlement. Class actions are to settle claims about actions the defendant has already done, not ones they want to do in the future.

In the last page of the opinion, he says that if they change the settlement from opt-out to opt-in, he'll probably approve it. This has a lot of legal advantages, since it now no longer attempts to bind the authors of orphan works, foreign authors, or anyone else who doesn't want to play. The Guild would rather it be opt-out, since the bigger the pie, the bigger their administrative cut, but by definition they don't represent authors of orphan works since the only way to be a Guild member is to pay your dues every year. Ditto the AAP. Hence opt-in clearly addresses all of the Guild's and AAP's legitimate concerns. Google doesn't get to sell all the orphan works, but they do get to sell everything by copyright owners who give them permission, which already seems to be a substantial business.

Opt-in doesn't solve the orphan work problem, but that's Congress' job. There have been bills in Congress to deal with the problem in the last several Congresses, so something's likely to happen reasonably soon.

The Guild, AAP, and Google have three options now: appeal the decision to the Second Circuit, give up the settlement and resume the lawsuit, or take the hint and make it opt-in. The first two seem unlikely, since an appeal of such a well reasoned opinion is unlikely to get a different result, and pursuing the case would expose everyone to vast expense and uncertainty. So they'll probably grumble, and come back with an opt-in settlement, which will be good for the public interest, and not bad for the Guild and AAP members.

Update: Some other commenters have suggested that Google wouldn't accept opt-in, since that shrinks their online bookstore down to a fraction of what it would be with opt-out. It's true, it does, but I don't see Google having much leverage here. If the Guild and AAP accept opt-in, or amend the complaint so the plaintiff class is just their members, and Google says no, what's Google's argument? The plaintiffs are offering to release all their claims, and Google says no because they don't get a release of other stuff? The judge will not be impressed. For the orphan works, the worst would be that Google is back where they were in 2005, asserting fair use to scan and show snippets of orphan works. They were OK with that then, if they have any sense they'll be OK with it now.

Claimer: I am a member of the Authors Guild, but they never asked me if I wanted them to sue on my behalf.

  posted at: 09:57 :: permanent link to this entry :: 0 comments
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