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Intellectual Property Law

: IPKat

Letter from AmeriKat I - Google Book Fairness Hearing

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

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Over the past month the AmeriKat has suffered through a toxic cocktail of work, revision and weekend exams. Now that the latest tranche of LPC exams are over until May, the AmeriKat spent this past week slowly returning to the land of the living. While she was suffering through this chaotic month, one of her good friends was halfway across the world enjoying three weeks of bombacious adventure and travel throughout Mexico (left). She was admittedly jealous of his adventure, but knowing his inevitable return to our rainy island coincided with his professional entry into the legal world of Magic Circle firms her green-eye of jealously was less severe. When she finally saw him this week, fresh from the Mexican sun, she thought she would be talking him down from the ledge of impending law firm doom. Instead, to him, the end of his travel only signalled a new and exciting beginning.

Cries of "It's not fair!" drown the final fairness hearing

Google may be also dreaming of a new, fresh beginning for themselves after enduring the past month. These past few weeks have witnessed, amongst others, the Google Book Settlement fairness hearing, a patent lawsuit, a class action privacy suit and three of their directors receiving suspended sentences in Italy. The AmeriKat, although critical of Google in the area of copyright law, is strangely beginning to feel slightly sorry for them. February also saw the European Commission commencing a preliminary anti-trust investigation into Google following three complaints made against them. Google stated that one of these complaints was from their rival, Microsoft.

Microsoft was also one of the numerous amicus curiae in opposition of the Google Book Settlement, who's final fairness hearing took place two weeks ago before Judge Denny Chin (see here for the transcript). Opponents to the settlement outnumbered those in support 3 to 1. The AmeriKat's baited breath was, unfortunately but not unexpectedly, stifled when Judge Denny Chin (right) told the packed courtroom that he was not going to rule on the settlement during at the end of the hearing or, indeed, any time in the very immediate future.

"To end the suspense, I'm not going to rule today. There's just too much to digest. And however I come out, I want an opinion that explains my reasoning."

With 28 parties appearing at the hearing, Judge Chin ran a tight courtroom schedule to which any soccer mom would have been proud. Judge Chin gave the parties five minutes to speak, including Microsoft and Amazon.com. Tom Rubin, Microsoft's chief intellectual property lawyer, argued that if the settlement was approved other companies would be penalized and put at a competitive disadvantage for following copyright law. Unlike Google, other companies had asked permission from authors and publishers prior to scanning works in similar projects. He stated

"Google by comparison took a short cut by copying anything and everything regardless of copyright status. They're like a trucking company that instructs its drivers to go 90 miles an hour. It's not surprsing that competing companies that obey the speed limit can't keep up."

As reported by the AmeriKat here, the DoJ's filing attempted to strike a balance between recognizing the benefit of the Google Book project with that of the serious copyright and competition concerns the Amended Settlement Agreement (ASA) presents. According to reports of the hearing, the DoJ's oral submissions, given by William Cavanaugh, were much more critical. The majority of the DoJ's submissions relied on the ASA being outside the scope of Rule 23. The DoJ cited the cases of Amchem and Firefighters in support of this contention and stated that the ASA went beyond the original pleadings, did not spring from the original dispute and is not consistent with underlying copyright law. The ASA, the DoJ contended, was a forward-looking commercial model and not a settlement that only went so far as was necessary to remedy the underlying dispute. Therefore, the DoJ submitted, the ASA was a misuse of Rule 23.

"These forward looking business transactions are not designed to remedy the alleged harm created by those, and it produces benefits to Google that Google could not achieve in the marketplace because of the existence of orphan works.. . The class representatives here, your Honor, have a relatively narrow focus and duty: To litigate the claims presented or settle the claims presented. Millions of authors and publishers around the world did not hire these class representatives to serve as their literary agents for purposes of their broad digital rights."

At the end of the hearing, Google's lawyers told Judge Chin that the settlement was not perfect but that it was fair. According to this report from CNET, Google made it clear that they were interested in obtaining the rights to use and profit from orphan works (see these AmeriKat articles here and here for more information). Google indicated that the money received from the orphan works would enable their digital library to be a feasible business. The AmeriKat is unsure why the illegal use of orphan works by Google is somehow remedied by the fact that such use would enable a feasible business model. Again, the AmeriKat is exasperated by this issue of orphan works and the Google Book Settlement. Their use is illegal, and absent any legislative measures or intervention by the US or EU, companies like Google will attempt to use them for profit which not only violates copyright law but will cause inevitable anti-competitive complaints being brought, like those by the DoJ and Microsoft.

In the AmeriKat's opinion, the court should not enable class action settlements to be used as a vehicle for a party's circumvention of national and international copyright law. The AmeriKat hopes that Judge Chin will take this opportunity to formally address the numerous problems with the ASA and reject the settlement in its current form. Until then, however, the "jury" is still out on this one and we will have to await Judge Denny Chin's verdict.
For a great summary of the oral arguments presented at the hearing see this link here.

Full post as published by IPKat on February 27, 2010 (boomark / email).