Google settlements as a genre: an holistic approach and the hippo in the bath tub

"Online Distribution of Copyright Works: Judge Chin Rejects Google Books Settlement" is the title of an article just published in the CPI Antitrust Chronicle, 2 June 2011 (CPI stands for 'Competition Policy International,' by the way).  The authors, Isabel Davies (Consultant,Boyes Turner) and Holly Strube (a solicitor with the same firm), examine the rejected Amended Settlement Agreement which Google and its counterparts reached and conclude that

"The time has come to look afresh at copyright issues in particular, and IP issues in general, and agree on a structure to deal with these challenges on a holistic basis, perhaps by moving forward with multinational supplementary agreements. 

It is not suggested that multinational co-operation will be easily achieved but, in our view, this process must begin without delay. Certainly Google has served notice that it continues its interest in developing its business in this area and doesn’t intend to cease its activities ..."

I agree that a holistic approach is needed and feel that it should be able to encompass not merely the copyright and competition/antitrust issues but also, to the extent appropriate, the knock-on effect on hard copy and electronic publishing, the retail book sector, the information-supplying industries and -- perhaps most importantly in the long term -- the advertising sector.

To put it in terms of a metaphor, we should ask not just whether the hippopotamus will fit into the bath tub but what precisely happens to the water it displaces: whether the hippo fits or not is an entirely different issue from whether there's room in the tub for anyone else once the hippo's in it, whether there's any water left after the hippo gets out, who gets soaked or where the surplus water runs off to -- but all these effects need to be accounted for.  If the hippo's application to occupy the bath tub is judged solely by the criterion of whether it fits, these other issues remain troublesomely unaddressed.

Google Book: Commission tests the water ...

Via Stephanie Bodoni (Bloomberg) comes breaking news that the European Commission has intensified its review of Google Book, to analyze how it might affect authors' and publishers' copyrights. The European Commission's operation is described at this stage as "a fact-finding mission, not an investigation".

The Commission wants precise details on the exact scope of the US$125 million settlement, as well as how many European works and publications are potentially affected.

Too big to infringe?

My old friend Rob Kunstadt (R. Kunstadt PC) has just sent me this free link to his highly topical article on the proposed Google book settlement, published in this week's National Law Journal. Google is a veritable Colossus these days and it looks set to guard the gates to global literature. In his distinctively punchy prose, Rob's conclusion pulls no punches:

"The settlement would reward Google's massive unauthorized online reproduction of copyrighted works, by making Google a "shadow copyright office" with a revenue percentage—unlike the real Copyright Office, which collects a flat fee.

Google took from the authors first—and belatedly now seeks to legitimize its misconduct by this settlement. Instead, Google should be punished hard, to deter such schemes. Otherwise, Google will succeed where Napster failed. Respect for IP law—as well as the rule of law in general—will decline. ...

Google's conduct fits the definition of a public nuisance, and may be enjoined as such. It imposes a small harm on a large number of authors. The harm, copying only a portion of each work, is calculated so as not to make it worthwhile for an author to incur the expense of suing for injunctive relief. Google, despite its cute slogan "Don't be evil," is like a large paper mill releasing noxious gas over a wide area, sufficiently diluted that you smell it but faintly. Like those banks that are now "too big to fail," is Google really "too big to infringe"?"

However good or bad Google's conduct may seem, and however one views the legal and moral issues, the fact remains that once Google's ambitious project succeeds -- as surely it will -- there is no room for a competitor and is unlikely to be one. This raises fascinating policy issues for competition regulators as well as for the copyright-driven commercial and educational sectors. Should Google be (i) scrupulously regulated by one or more public bodies, (ii) nationalised (a popular Socialist option in Europe in the past and a current option for all shades of political philosophy regarding banks), (iii) broken up into a bunch of Baby Googles or (iv) left to its own devices? We shall soon find out.

Google Four more months to opt in ... or out

Writing in CNET News, Daniel Terdiman relates that Judge Denny Chin (US District Court for the Southern District of New York) has granted authors worldwide four more months in which to decide whether to participate in a settlement involving Google's online Book Search service. If it were not for this ruling, authors would have had only till 5 May to decide whether to join the settlement or opt out. The deadline is now said to be 4 September 2009, with the final fairness hearing taking place in New York on 7 October.

The proposed settlement of the action filed by the Authors Guild and the American Association of Publishers in 2005 hinges on Google's ability to include content from books online. A particularly contentious issue is that of "orphan" works which are still under copyright, but the authors or copyright owners of which cannot be traced.

Background note: This dispute (more properly The Authors Guild Inc et al v Google Inc, Case No 05 CV 8136) reached a provisional settlement last autumn (or should that be "fall"?) under which Google is to obtain broad rights to monetise the books it has scanned into its BookSearch system for a down payment of $125 million and an ongoing 63% of revenue: see here), with over a quarter of the up-front payment going towards setting up the Book Registry, a clearing house (or quasi-collecting society) for authors and publishers to claim rights and receive payments.

Text by John Enser and Jeremy Phillips