Judge Rejects Google Settlement for Digital Library

Published April 11, 2011

A federal judge rejected a proposed $125 million settlement that would have led to the online availability of 15 million books from libraries throughout the United States. The judge’s ruling is considered a victory by antitrust and copyright advocates.

Google was sued by the Authors Guild and the Association of American Publishers in 2005 after the Internet company announced plans to digitize works housed in the nation’s libraries. The parties settled for $125 million in 2008, but continued concerns from authors, literary agents, and Google’s rivals over copyright and antitrust issues resulted in U.S. Circuit Judge Denny Chin rejecting the settlement in late March.

In the ruling filed March 23, 2011, Chin wrote: “While the digitization of books and the creation of a universal digital library would benefit many, the ASA [Amended Settlement Agreement] would simply go too far. It … would grant Google significant rights to exploit entire books without permission of the copyright owners. Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case.”

‘No Easy Answer Exists’
Books published before 1923 are public domain and therefore can be copied without violating copyright law. Books published after 1923 are copyrighted for the remainder of the authors’ lifetimes plus an additional 70 years. Chin noted his concern that Google’s copying of books with unknown copyright holders (called “orphan works”), would exclude other companies from also digitizing orphan works.  

Wendy McElroy, director of the Center for the Study of Innovative Freedom, a research facility supporting the reform of copyright and patent laws, expressed her concern over orphan works: “Is Google going to claim some sort of monopoly right in its digital reproductions so that anyone who tries to set up a mirror site would be hit with copyright infringement?” she asked. “From its past behavior, that’s what I would expect, and so a Google victory might well serve to establish yet another monopoly,” she said.

“Whether or not they are perfect contracts, many authors have entered into de facto contracts with publishers to assign exclusive rights to reproduce their work in all forms,” McElroy added. “Are those contracts—flawed as they may be—to be invalidated? I suppose the latter objection raises the question of how to transition from the present situation, in which almost no freedom exists, into a just situation. There will be cases where no easy or clean answer exists,” she said.

‘A De Facto Monopoly’
Sheldon Richman, editor of The Freeman, a magazine published by the Foundation for Economic Education, says Judge Chin had little choice in rejecting the settlement because of current antitrust and copyright laws. “Antitrust law is ill-conceived because it sees markets as static when they are really dynamic if left free,” Richman said. “Copyright law infringes people’s freedom to use their own physical property to reproduce texts. How absurd that Google’s worthwhile mission to bring readers long out-of-print books is slapped down by idiotic statutes.”

Jim Lakely, communications director and co-director of the Center on the Digital Economy at The Heartland Institute, which publishes Infotech & Telecom News, said the copyright concerns in Google’s plan to digitize 15 million books are “unprecedented” in giving Google a monopoly.

Orphan works presented a serious issue the settlement didn’t address adequately, Lakely said. “Even what appears to be the easiest question to answer is more complicated than it first appears: What to do with so-called orphan works—books and magazines that long ago went out of print and for which the copyright holder cannot be found.” he said.

Lakely explained: “This settlement protects only Google if one of those ‘orphans’ turns up and files a lawsuit for copyright infringement. Any other company that would want to get into the book-scanning business would be at great legal risk. That means no other company would probably attempt it, and Google ends up with a de facto monopoly.”

Laws, Not Lawsuits

Lakely and Tom Giovanetti, president of the Institute for Policy Innovation in Phoenix, Arizona, agree Congress should resolve the legal issues of orphan works. Giovanetti notes a cartel of private actors working through the courts does not weigh all interests in reaching a decision.

“I think it unfortunate that solving these tricky copyright questions started in the courts rather than with Congress,” said Lakely. “The settlement applies to nearly all publishers and authors on one side, and a single company on the other. All potential players in this market deserve equal protection under the law,” he said.

“It seems likely that Google, publishers, and the Authors Guild will come to some kind of compromise that allows ‘fair use’ access to books while still protecting copyrights, which is essential to well-functioning markets and the encouragement of creativity,” Lakely added. “They were close to a deal before this latest development, and the technology can be tweaked to protect copyright and get more information into more hands around the world.”

Bruce Edward Walker
([email protected]) is managing editor of Infotech & Telecom News.

Internet Info:

“Opinion: Authors Guild et. al. v. Google,” United States District Court, Southern District of New York, Circuit Judge Denny Chin,  March 23, 2011: http://www.heartland.org/infotech-news.org/article/29726/Opinion_Authors_Guild_et_al_v_Google.html