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Google Book Search Settlement

By Jack M. Balkin

Google has reached a settlement with the authors and publishers who sued it for copyright infringement over Google's Book Search Project. If the 141 page settlement agreement (not including appendices) is approved by the court, Google will be able to make far greater portions of copyrighted books available on line, including selling access to the full text, and will share some 63% of its revenues from the Book Search Project with the copyright holders. Google is also paying the plaintiffs $125 million and paying their attorneys fees.

Under the proposed settlement agreement (which as of this writing I have just read quickly), copyright holders will have the right to opt-out of the Project for any given book, but the default rule will be that Google may display 20% of the text of copyrighted out of print books and may sell access to viewing the entire text online. Google will also continue to be able to display short snippets of copyrighted in print books and to display and make available for user download the full text off public domain books in response to user's search queries. Copyrighted and in print books will be made available for display (beyond the short snippets), online viewing, and download per agreement with each copyright holder. Under the settlement agreement, all public libraries in the United States will be offered a free online portal to Google's digitized collection and Google will offer institutional subscriptions to colleges and universities.

So in many ways the proposed settlement is a win-win-win-win (for Google, the copyright holders, the libraries, and the public). But there are some causes for concern as well. Perhaps most importantly, the settlement leaves undecided the issue of whether Google's scanning of the entire books and display of snippets is a fair use. Many observers, including me, believed that the courts would ultimately hold that it is a fair use, and thus set important precedent establishing that such "transformative uses" of copyrighted works -- uses that serve the shared goals of copyright and the First Amendment -- do not infringe copyright. Google's settlement for a $125 million payment and abandonment of its fair use defense, may well leave others in a far weaker position to enter the market for online book searches and digital archives and may make it more difficult to claim that such uses of books do not harm a potential licensing market, which claim carries considerable importance for successfully asserting fair use.

On the other hand, the proposed settlement provides that Google may not enjoy the benefit of changes in fair use doctrine (including, presumably, those that others might obtain by asserting fair use in litigation) with respect to its Book Search Project, and there are few companies that have the wherewithal to launch a book search service that would compete with Google's in any event. But the bottom line is that Google is left with a de facto monopoly over this "universal library" service and, as I have discussed in a recent article, potential competitors face a higher barrier to entry than if Google had fought and prevailed on fair use (or if Congress enacts a statutory license for such uses).

The proposed settlement also creates a collective licensing organization that will collect the proceeds from Google and distribute them to the rights holders. That may raise some competition issues of its own. ASCAP and BMI, the collective licensing organizations of public performance rights in musical works, operate under antitrust consent decrees.

Full post as published by Balkinization on October 28, 2008 (boomark / email).