What the Google Settlement Means for Publishers and Authors

February 2009
by Jonathan Kirsch

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Jonathan KirschJonathan Kirsch, a publishing attorney based in Los Angeles, is general counsel of the Independent Book Publishers Association and a recipient of its Benjamin Franklin Award for excellence in publishing.


A new age in book publishing began in 2004 when Google, Inc., announced an ambitious plan to create an online database containing a vast number of published books in word-searchable digital format. Google would scan printed books, convert them, and create a vast database of digitized content. Users would be able to access the database, enter words and phrases as search terms, and then retrieve selections from each digitized book in which the search terms appeared. Essentially, readers and researchers around the world would have millions of books at their fingertips without having to buy them or even pull them off a library shelf.

Under the Google Print for Publishers program, Google entered into contracts with various publishers that permitted Google to digitize their titles and add them to the searchable online database. Users were permitted to view only a limited portion of each book and were offered the opportunity to purchase the book by linking to online booksellers. At this early stage, the Google program was not greatly different from Amazon’s Search Inside the Book feature, since both Amazon and Google acquired the right to digitize and display books under contract with copyright owners.

Under the Google Print for Libraries program, however, Google vastly expanded its reach by contracting with libraries (rather than with copyright owners) for the right to digitize entire collections. The New York Public Library and the Bodleian Library at Oxford University limited their participation to books in the public domain, but other libraries—including the libraries at Harvard University, Stanford University, and the University of Michigan—agreed to make all titles available for digitization and display by Google in its searchable database.

By 2008, seven million titles were available through the Google digitization program, now renamed Google Book Search, and some 20,000 publishers had reportedly signed up to participate. From the outset, however, many authors and publishers regarded the Google Print for Libraries program as copyright infringement on a cosmic scale.

Fair Use or Willful Infringement?

Google defended the library version of its program under the Fair Use Doctrine of the U.S. Copyright Act, which permits certain limited use of copyrighted works without the permission of the rights holder. To reduce a complex argument to simple terms, Google argued that digitizing entire books ought to be permissible under the Fair Use Doctrine because the end user was permitted to see only “snippets” of a book after performing an online search. If users wanted to see the whole book, they had to buy a copy.

The Authors Guild and the Association of American Publishers disagreed. By making digital copies of books in their entirety without seeking the permission of the rights holders, they argued, Google was engaging in willful copyright infringement even if the end users of the Google Book Search feature were permitted to view only “snippets” and were required to purchase a copy of the book to see its entire contents.

Two lawsuits—one on behalf of authors and one on behalf of publishers—were filed against Google in 2005. The two lawsuits were combined in the U.S. District Court for the Southern District of New York, and various stakeholders around the world watched the progress of the case closely. Content owners, as a general rule, insisted that Google ought to be required to seek permission before digitizing works that remained under copyright. Content users and activists for copyright reform saw the Google case as an opportunity to rewrite the law of copyright for the digital age.

On one point alone, however, everyone seemed to agree—the case was so hotly contested and so important in its long-term implications for the international law of copyright that it would ultimately be decided only on appeal to the U.S. Supreme Court.

The Google Settlement

The battle lines changed the day before Halloween in 2008, when it was announced that a settlement had been agreed upon in principle by all the parties. The preliminary settlement was approved by the District Court in November 2008, and formal notice was to be sent out to class members—that is, authors, publishers, and other rights holders whose interests were at stake in the class-action litigation—in the first week of 2009. At this writing, a hearing on the final settlement was set for June 2009.

At 300-plus pages, the proposed settlement agreement is itself the size of a good long book, and the complex mechanism for enforcing the terms of settlement has many moving parts.

The principal features of the proposed settlement, and its advantages and disadvantages, are summarized and discussed below. But the devil is in the details, and only a close scrutiny of the settlement agreement will enable authors and publishers to make an informed decision (see “See for Yourself” and “Special Caution to Publishers”).

Principal Features

Rights holders control the use of their works by Google. As a general rule, authors, publishers, and other owners of rights in copyrighted works will enjoy the right to decide whether and how their works will be made available through Google Book Search. For example, rights holders can include some books and exclude others, permit some uses of their books and prevent other uses, and remove books that have already been digitized from Google Book Search with a timely request. These concessions by Google represent an important victory for rights holders because Google is essentially waiving its fair-use argument and deferring to the rights-holders’ rights.

Google will share revenue with rights holders. Future revenue from Google Book Search will be split between Google, which keeps 37percent, and rights holders, who will receive a share of the other 67 percent, to be allocated among them according to a specified formula. Revenue will be generated by the sale of institutional subscriptions to the Google Book Search database, the sale of online access to various individual books, and advertising revenues, among other sources of income. (Some uses of the database by Google, however, generate revenue for Google that is not subject to sharing with rights holders.)

Rights will be administered by the newly created Book Rights Registry. The single greatest innovation is the creation of the so-called Book Rights Registry, an independent, not-for-profit entity that will be charged with collecting revenue from Google and distributing it to rights holders. Google will pay an initial $34,500,000 lump sum toward the creation and operation of the Book Rights Registry. Thereafter, the Registry will collect the 67 percent of revenues on behalf of rights holders, deduct an administrative fee that is estimated to be between 10 and 20 percent, and disburse the rest of the money. The Registry’s board of directors will consist of an equal number of authors and publishers. Once established, the Registry will serve as a representative of rights holders and a clearinghouse for rights-management issues.

Google will pay for past use of copyrighted works. Google will pay a total of $45 million for past use it made of copyrighted works without permission. The payment will be divided among rights holders whose works Google digitized without permission through May 5, 2009. The minimum payment will be $60 per book, and lesser amounts will be paid for prefaces, introductions, and other text elements.

Out-of-print books will be made available unless the rights holder objects. One much-touted benefit of the settlement is that Google Book Search will make out-of-print books that are still under copyright available to the public, and the sale of digital copies of these books by Google will create new income for rights holders. As a general rule, Google will have the right to display and sell copies of out-of-print books—and to charge for these products and services—unless the rights holder specifically excludes a book from such uses.

Objecting to and Opting Out of the Settlement

Strictly speaking, the settlement (if and when approved by the court, which appears to be likely) will be binding on anyone who owns a “U.S. copyright interest” in a book or certain other writings as of January 5, 2009, including authors and publishers and their heirs, licensees, and assignees. Although a searchable database of all books covered by the settlement will be made available, it will not be comprehensive, and some rights holders may be affected by the settlement without knowing that they are.

As I write, the settlement agreement is still subject to final court approval; the deadline for making objections to the proposed terms of settlement is set for May 5, 2009, and formal hearings are scheduled for June 11, 2009. Class members—that is, authors, publishers, and other rights holders whose interests are at stake in the Google case—are entitled to object to or comment on specific terms of the proposed settlement, and it’s possible that the settlement itself may change after such objections are presented and discussed.

Whether or not a member of the class objects to the settlement, however, it will be binding on all class members if and when approved by the court. At that time, class members will no longer have the right to sue Google for any of the legal claims that are being released in the settlement agreement, and they will be obliged to honor the rights of Google under the settlement agreement. Of course, they will also be entitled to the rights and benefits of the settlement agreement, including the payments that Google will be obliged to make.

The only exception applies to class members who formally opt out of the settlement according to the schedule and procedures set by the court. At this writing, the deadline for opting out of the settlement is May 5, 2009. The settlement agreement will not apply to class members who have opted out.

Rights holders who opt out of the settlement will not be entitled to receive any of the rights and benefits that will be available under the settlement agreement, and they will be entitled to file lawsuits of their own against Google or try to negotiate a separate settlement of their own with Google. Of course, they will have to hire their own attorneys to do so.

A Solution for a Digital World

For most authors and publishers, the Google settlement offers a reasonable and effective solution to the problem of publishing in the digital era. No fundamental principles of copyright law have been changed or eliminated, and rights holders will be compensated—if only modestly—for most uses of their work. Above all, they are entitled to remove their work from the Google Book Search program if they elect do so. And the Book Rights Registry bestows an important new benefit on rights holders that simply did not exist prior to the settlement. For these reasons, very few authors or publishers are likely to exercise their right to opt out of the Google settlement.

As with any settlement of a hotly disputed lawsuit, however, some stakeholders are not entirely happy with the outcome. Fair-use activists are disappointed that Google did not stay in court and fight for a new and expanded definition of the Fair Use Doctrine. Some authors and publishers feel that Google is acquiring too many rights for too little money. And some critics of the settlement are simply unsettled at the prospect of a single corporation controlling a resource as vast and powerful as the Google Book Search database.

But the rights holders who opt out of the settlement will be faced with a serious practical problem. The Google case was litigated on behalf of authors and publishers by lawyers who will be paid by Google as part of the settlement, and those lawyers represented a huge class of rights holders whose sheer size posed a serious threat to Google. By contrast, only a tiny number of authors and publishers are expected to opt out of the settlement, and they will have to bear their own legal expenses in carrying on the fight against Google. For any rights holder contemplating whether to opt out of the settlement, the costs and risks of going it alone against Google may outweigh the potential upside of a victory in court or a more advantageous settlement, neither of which seems like a good prospect once the vast majority of authors and publishers have settled with Google.

Of course, even the authors and publishers who decide not to opt out of the settlement can still opt out of Google Book Search. After all, they can take the payment that is being offered for past use of their books, and they can still demand that Google remove their books from the Google database, if that’s what they truly want to do.

But the real question that a rights holder must ask and answer is whether anything is gained by erasing one’s work from cyberspace. After all, the Internet in general and Google Book Search in particular offer authors and publishers far greater accessibility and visibility than they ever enjoyed during the print-only era of publishing. Authors or publishers who opt out of the Google settlement may find that they have also opted out of the brave new world of publishing in which we find ourselves today.

See for Yourself

The Google settlement is far too complex to be accurately and completely described in a brief article, and I urge you to consult the settlement documents in their entirety.

For example, full participation in the settlement may depend on timely copyright registration, completion and submission of claim forms, and various technical definitions that govern whether or not a work or a rights holder is included within the settlement.

A good place to start is the 38-page summary of the proposed settlement agreement as it appears in a draft of the official court notice to class members.

The definition of rights holder under the Google settlement is subtle and complex, and it is important to bear in mind that it generally refers to electronic rights in a copyrighted work.

Thus, for example, if a publisher acquired only the right to publish in the form of a printed book and the author reserved the electronic rights in the same book, then the author is probably the rights holder for purposes of the Google settlement.

Publishers need to consult their contracts (and possibly their lawyers) to determine whether they enjoy the right to opt out of the settlement or the right to receive benefits under the settlement.

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