Google Settlement Fairness Hearing, Part Two: DOJ Expresses Opposition; Parties Mount Vigorous Defense
"This turns copyright law on its head," says Justice Department lawyer
Norman Oder -- Library Journal, 02/18/2010
- Google: opt-in wouldn't have worked
- Authors Guild say objectors practice "extreme reductionism"
- Settlement affects about ten million works
- Judge: "There is a lot to think about"
While the first half of the hearing today on the Google Book Search Settlement allowed supporters and objectors just five minutes each to make their points, the second half gave the involved parties and the Department of Justice (DOJ) more time to make their cases.
Notably, the DOJ more clearly than before expressed strong opposition to the settlement as it stands. “This turns copyright law on its head,” said William Cavanaugh Jr. , Deputy Assistant Attorney General for Civil Matters, representing the DOJ.
That left the plaintiffs—the Authors Guild (AG) and the Association of American Publishers (AAP)—and defendant Google with the challenging task of countering the wave of opposition.
The lawyers for the parties offered a vigorous, confident defense, though they had to acknowledge a basic fact of what AAP attorney Bruce Keller called “a compromise”: the settlement, as a default, would open up in-copyright but out-of-print “orphan works” to full display while a search was made to identify and compensate authors.
U.S. District Judge Denny Chin, while not tipping his hand, had clearly assimilated the questions raised by the objectors and posed several to the parties. By contrast, he hardly interrupted Cavanaugh.
The extraordinary complexity of the case was illustrated by the multiple legal issues involved: copyright, antitrust, and the adequacy of class action law.
The DOJ's take
Cavanaugh, who had nearly 25 minutes to speak, at the outset acknowledged and applauded “the objectives of mass digitization,” but then expressed concern that this is not the appropriate vehicle to achieve such goals.
While settling claims for past infringement of copyright—the scanning of in-copyright books from libraries without the permission of authors and publishers—“grafted on to that settlement is a series of forward-looking commercial transactions.”
That does not remedy the alleged harm of infringement, he said, and it “produces benefits that Google could not achieve in the marketplace.”
What the case was about
He pointed out that the liability initially was limited to damages caused by Google’s scanning of books for indexing and snippet display. Had Google displayed full text of in-copyright works, it would have “had no colorable defense.”
He said that, in a class action case such as this, the parties have two options: litigate the claims presented or settle them.” The “forward-looking business plans” contemplated by the settlement may be a good idea, but they were outside the scope of the settlement.
And the further the settlement gets from the initial issues presented, “the adequacy of the representation”—the Authors Guild speaking for authors—“has to be called into question.”
The scope of settlement
A 1986 Supreme Court decision on discrimination known as Local Number 93, Int’l Assoc. of Firefighters v. City of Cleveland came in for much discussion in court. The plaintiffs had quoted Firefighters in saying that a court may “provide[] broader relief [in a class action that is resolved before trial] than the court could have awarded after a trial.”
Cavanaugh said the consent decree in Firefighters was different, since “the forward-looking conduct they reference is purely remedial in nature.”
Google would get complete immunity from future claims of infringement. By contrast, the three-part test in Firefighters, he said, requires that the resolution be in the pleadings, result from the underlying dispute, and be consistent with underlying law.
“The underlying law is copyright law,” he said. “This turns copyright law on its head.”
He acknowledged testimony earlier in the day about the social utility of copyright. However, he said, there’s a balance, and the right to control one’s work is an incentive to produce it.
He said the issue would be best left to Congress. “If there’s going to be a fundamental shift [in copyright law]. If we’re going to establish compulsory licensing, that should be left to Congress.”
He noted that the DOJ had suggested an opt-in approach for rightsholders, rather than the opt-out currently contemplated.
Wouldn’t that go beyond the underlying case, as well, asked Chin.
Cavanaugh acknowledged it would, but it would avoid having absent class members releasing their rights.
Contracts and antitrust
Cavanaugh also expressed doubt about Attachment A to the Settlement Agreement, which sets revenues for out-of-print books, among other things. “The more we think about it, it has real significance, he said. “You’re reformulating contractual rights.” He noted that, until the late 1980s, publishing contracts didn’t mention digital rights.
He acknowledged that the agreement was “enormously efficient” but said “this is essentially rewriting people’s contracts.”
“With respect to antitrust issues,” he said briefly, “our investigation is ongoing.” He added, “We continue to investigate the impact on many products, including the search product.”
The Authors Guild responds
AG attorney Michael Boni, noting he was from Philadelphia, said “I feel a little bit like Rocky being beaten about the head and face for 15 rounds” but added that, like Rocky, he expected to come back.
He charged the DOJ and others with “extreme reductionism” regarding the pleadings and the essence of the case. In 2004, he said, publishers and authors were “gravely concerned” about Google’s plan to scan books from libraries and the libraries’ use of the copies returned to them.
The argument, Chin said, is that, had Google engaged in wholesale display, it would have been way beyond fair use. “How do you respond?”
“We were concerned with what we didn’t know,” Boni said. “We had no idea how much they’d push the envelope.” He agreed that full display would have been considered a copyright infringement.
“Now, looking forward, isn’t that what’s contemplated?” asked Chin.
“What’s contemplated is the most fair, equitable, reasonable resolution,” Boni said. “To reduce the case to snippets is “simply wrong.”
Chin pointed out that the plaintiffs would be getting a “general release” of rights from absent participants.
That, Boni responded, is the paradigm of class actions.
Would it be against public policy, Chin asked, to release a defendant from future claims of discrimination?
“I don’t want to say yes or no,” said Boni, before contending the situations were substantially different.
What about opt-in?
If the settlement were opt-in, Chin suggested, channeling some of the objectors, “you’d eliminate a lot of objections.”
“You wouldn’t have a settlement,” Boni responded.
Chin said that’s because “Google wants the orphan books.”
“It’s a myth,” Boni said of the term. “It’s a phrase used as a political football.”
He said that close to 620,000 out of print books had been claimed, simply from the notice program, and that the Book Rights Registry contemplated by the settlement would “find a lot of the parents… and it’s going to benefit everybody.”
He added that inserts—contributions to books—could be “turned off” by their authors and pointed out that academic authors concerned about access can set the price at zero.
The Google defense
While Boni was energetic and slightly scattershot in his 18 minutes, Google attorney Daralyn Durie, speaking for 25 minutes, was methodically confident. She immediately responded to Chin’s example of discrimination.
“Discrimination is evil,” she said, contrasting it with the public policy goals behind the dissemination of copyright.
“What about copyright infringement?” asked Chin.
“Copyright infringement is evil to the extent” it harms rightsholders without compensation, she said.
She drilled down to the argument that the settlement, by creating a new product, brings new benefits. “There is nothing about the settlement which risks injuring the economic interest of absent rightsholders,” she said, noting there is no other channel for them to gain revenue for their works.
Durie said that the uncertainty and transaction costs involving in finding rightsholders and clearing rights made an op-in regime prohibitive. “The way we know is no one has done it.”
What, asked Chin, about the argument that such changes should be accomplished by Congress?
Congress has the power to do so, Durie allowed, but said plenty of issues that could be dealt with by Congress are also resolved by the courts.
“The opt-in regime is just the status quo,” she reiterated. “If it worked, someone would’ve done it.”
“This does not turn copyright law on its head,” she said, responding to the DOJ. “To say that is to say you cannot have a copyright class action.”
Fundamental issues
Chin asked if, had Google made entire scanned books available online and even sold them, would it have been a violation.
Durie said that making a copy available was a complex issue, because Google was going to give copies to libraries. She noted that one objector, University of California, Berkeley, law professor Pamela Samuelson, had expressed support for full display of books as fair use.
Durie contrasted this settlement with virtually all others, because the rightsholders retain the option to change their minds.
As for antitrust concerns, she said, the Sherman Act is concerned about the best interest of consumers, and the settlement would be better for both consumers and authors.
She said there was no present danger Google would monopolize the market for ebooks, because its current share is zero. (Critics would say that Google would monopolize the market for orphan works.)
Durie also clarified some numbers that had been bandied about. While Google may have identified more than 174 million unique works, there are about 42 million books in libraries, of which half are in foreign languages and 20% in the public domain. That leaves fewer than ten million works affected by the settlement, with five million of them out of print.
Who’s harmed?
Durie reiterated that competitors could also scan books and include them in search results. As for future concerns about antitrust issues, the Department of Justice or others could bring a case.
Privacy issues
Responding to concerns about privacy, Durie said that the book database would be available at public libraries for anonymous use. (She didn’t mention academic libraries, which would likely generate far more use.)
What about people looking from home, asked Chin.
“That may present an issue,” Durie acknowledged, citing the effort to balance security and privacy.
Last words from the AAP
AAP attorney Keller, speaking for less than ten minutes, batted cleanup of sorts.
He returned to the question about the issue before the court. “This case was never just about snippets,” he contended, saying that, once the scans were in Google’s hands, the plaintiffs wanted to condition future uses.
As for the question of turning copyright law on its head, Keller allowed that copyright holders usually have the right—like other property owners—to exclude others, but lots of property cases get settled.
As for the class action, he said it wasn’t perfect, but it was “fair and adequate and reasonable.”
Judge Chin got the final words: "I will reserve decision. There is a lot to think about."
