Tagged: copyright

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Google Books and Author’s Rights

I agree with James Grimmelmann that the Google Books decision is a bit anticlimactic (although the appeal has the potential to add suspense by bringing the case back from the dead). After last October’s decision in Authors Guild v. Hathitrust, the only question really was whether Judge Chin would distinguish HathiTrust on the grounds that the defendants there were nonprofit institutions of higher education, while the defendant here was a commercial entity. To be sure, Judge Chin was not bound by Judge Baer’s analysis that HathiTrust’s use was transformative and did not in any way harm the market for the works at issue,  but these holdings were so consistent with precedent in the Second and Ninth Circuit that it was hard to imagine that Judge Chin would disagree with them. That left the commercial/non-commercial distinction, which has become far less significant in recent years in cases involving transformative uses.

Both judges’ recognition of the enormous social utility of creating a searchable index of books, and the absence of harm to authors caused by such an index (to the contrary, the index benefits authors by making their works more discoverable), highlights the mystery at the heart of these cases: What is the Authors Guild fighting for? Why did it not settle last year, when the publishers dropped their suit against Google? Why did it continue to pursue its litigation against HathiTrust after HathiTrust abandoned its orphan works project?

For some Authors Guild members, it might be about the money. They may believe that there is a pot of gold at the end of the Google rainbow. If the Internet could make instant millionaires (if not billionaires) out of all these kids who express themselves through Internet acronyms, emoticons, and 140 character tweets, then surely authors who spend years writing finely crafted books deserve a share of that fortune.

For others, it seems to be a matter of principle. But exactly what principle? Apparently, that no one should use their works without their permission. While they may agree with fair use in the abstract, they oppose it as applied to their works. The fact that the use is socially beneficial and does not harm them economically is irrelevant. I would amend James’s “three c” formulation with a fourth c: creators should have complete control over copies.

The Authors Guild’s belief in complete control is based more on the Continental “author’s rights” (droit d’auteur) tradition than on the Anglo-American utilitarian tradition. In the author’s rights approach, copyright springs not from statutes but from natural law. The relationship between the author and his work is intimate and indivisible. By contrast, in the Anglo-American system, copyright is not a response to natural law, but rather is a matter of legislative choice directed at incentivizing the creation of works for the benefit of society.  The Anglo-American utilitarian approach in theory provides only as much protection as is necessary to encourage creative activity, while the author’s rights approach provides more robust protections of both economic rights and moral rights such as the right of attribution and integrity.  Historically, the difference between the two approaches translated into longer copyright terms and narrower exceptions in author’s rights jurisdictions.

However, in response to lobbying by rights-holders, Congress has enacted certain features of author’s rights systems — for example, the ever-increasing copyright term. The first U.S. copyright act provided a term of 14 years, renewable for another 14 years, for a total of 28 years. Now, the copyright term matches the European Union’s term of life of the author plus 70 years.

Efforts are underway to import other author’s rights features. The U.S. Copyright Office just released a report recommending that Congress consider adoption of a resale royalty (droit de suite) for visual artists. Under this framework, a visual artist would receive a percentage of the amount paid for a work each time it was resold by a third party.  A resale royalty is in effect a tax on the sale of copyright products and is directly contrary to the long-established first sale doctrine.

The complete control over copyrighted works sought by the Authors Guild and reflected by proposals such a resale royalty are inconsistent with the public interest purpose of our copyright system. Fortunately, Judge Chin, and Judge Baer before him, recognized that the objective of copyright is not to enrich rights-holders, but “to advance the progress of the arts and sciences.”

 

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Is this really a copyright problem?

Modeling costs and revenues

In the comments to my last post, the skeptical Matt Lister asked a great question…

Say we agree there’s very little being translated into languages like Zulu and we agree that’s a problem. Is the problem that copyright makes it too expensive? Or is the real problem that translation or publication is inherently too expensive, given the limited size of these audiences and low ability to pay?

A theoretical model and some examples

It’s clear that the potential profits from Zulu translations aren’t sufficient to cover the costs. But those costs fall into lots of different categories: copyright licensing fees, the translator’s labor, distribution costs… etc. Would merely eliminating the copyright barrier be enough to tip the equation?

Let’s build a theoretical model first and then my research can look for data points…

P = potential income from book sales
C = costs of copyright compliance (including fees to the copyright owner, transaction costs of negotiating the license, and lawyer’s fees to handle copyright compliance and disputes)
T = costs of performing the translation (translator’s labor)
D = distribution costs (printing costs, shipping costs, overhead, leaving a profit margin for retailers, etc.)

For translated works to be produced, we would need to see that potential sales outweigh the copyright, translation, and distribution costs.

P > C + T + D

We can think about this equation as applying generally to works in a particular language market. Or more accurately, we can think about it applying to any specific work. If potential sales appear to be greater than costs, then the market should produce the work. So, let’s look at some specific works that the market is producing in Zulu right now…

Read More

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How do you say “copyright” in Zulu?

Woman reading Zulu newspaper

South African woman reading a newspaper in Zulu

Are the costs and benefits of copyright protection roughly the same in English and in Zulu? Or is copyright law’s impact radically different from one language to another?

Copyright protection gives authors the exclusive right to market their works. This has the benefit of channeling profits back to authors, enhancing the financial incentives to create new works. But it also has the cost of limiting competition, inflating prices for consumers, and restricting public access to existing works.

Copyright scholars have extensively debated these costs and benefits. But we have not yet done much thinking about how the cost-benefit calculus might play out for different languages.

That project lies at the heart of my current work-in-progress, which advocates targeted copyright reforms to promote publishing in lesser-spoken languages.

From an economic perspective, the publishing market is fundamentally different from one language to another. English books can be marketed to an enormous and wealthy global audience. The audience for Zulu works, however, is 1% as large and has significantly less disposable income.

Scholars continue to debate the relative effectiveness of financial versus nonfinancial incentives for authorship. But there is no doubt that the incentives are powerfully present for English-language works. That does not appear to be true for works in Zulu.

According to recent data, 77% of books sold within South Africa are in English, though only one in ten South Africans speaks English at home. The vast majority of South Africans speak African languages such as Zulu. Yet books in all African languages combined account for only 11% of the South African publishing market. Of African language book sales, 89% are textbooks, subsidized by government purchasing.

The copyright system that has so effectively incentivized the production and distribution of works in English has not produced equivalent benefits in Zulu. The costs of copyright protection – including higher prices and barriers to translation – are also particularly burdensome for the Zulu-speaking community.

In theory, the costs of copyright protection may outweigh the benefits in many linguistic communities characterized by small size and low wealth. I’m working now on some case studies to see whether facts on the ground support that prediction.

If so, my suggestion is not to change copyright law generally, but to adjust the rules for certain languages. There are thousands of different linguistic communities in the world, each as unique as the various expressive works that copyright law protects. A one-size-fits-all regime is unlikely to be ideal.

Reforms to strike the right balance could be implemented at the level of national policy making. By treating different languages differently, countries may be able to improve publishing in languages such as Zulu without prejudicing the interests of authors and publishers in the dominant markets.

In a series of posts during my month as a Co-Op guest blogger, I’ll explore how we might structure such reforms and other issues raised by this project.

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Better Stories, Better Laws, Better Culture

I first happened across Julie Cohen’s work around two years ago, when I started researching privacy concerns related to Amazon.com’s e-reading device, Kindle.  Law professor Jessica Littman and free software doyen Richard Stallman had both talked about a “right to read,” but never was this concept placed on so sure a legal footing as it was in Cohen’s essay from 1996, “A Right to Read Anonymously.”  Her piece helped me to understand the illiberal tendencies of Kindle and other leading commercial e-readers, which are (and I’m pleased more people are coming to understand this) data gatherers as much as they are appliances for delivering and consuming texts of various kinds.

Truth be told, while my engagement with Cohen’s “Right to Read Anonymously” essay proved productive for this particular project, it also provoked a broader philosophical crisis in my work.  The move into rights discourse was a major departure — a ticket, if you will, into the world of liberal political and legal theory.  Many there welcomed me with open arms, despite the awkwardness with which I shouldered an unfamiliar brand of baggage trademarked under the name, “Possessive Individualism.”  One good soul did manage to ask about the implications of my venturing forth into a notion of selfhood vested in the concept of private property.  I couldn’t muster much of an answer beyond suggesting, sheepishly, that it was something I needed to work through.

It’s difficult and even problematic to divine back-story based on a single text.  Still, having read Cohen’s latest, Configuring the Networked Self, I suspect that she may have undergone a crisis not unlike my own.  The sixteen years spanning “A Right to Read Anonymously” and Configuring the Networked Self are enormous.  I mean that less in terms of the time frame (during which Cohen was highly productive, let’s be clear) than in terms of the refinement in the thinking.  Between 1996 and 2012 you see the emergence of a confident, postliberal thinker.  This is someone who, confronted with the complexities of everyday life in highly technologized societies, now sees possessive individualism for what it is: a reductive management strategy, one whose conception of society seems more appropriate to describing life on a preschool playground than it does to forms of interaction mediated by the likes of Facebook, Google, Twitter, Apple, and Amazon.

In this Configuring the Networked Self is an extraordinary work of synthesis, drawing together a diverse array of fields and literatures: legal studies in its many guises, especially its critical variants; science and technology studies; human and computer interaction; phenomenology; post-structuralist philosophy; anthropology; American studies; and surely more.  More to the point it’s an unusually generous example of scholarly work, given Cohen’s ability to see in and draw out of this material its very best contributions.

I’m tempted to characterize the book as a work of cultural studies given the central role the categories culture and everyday life play in the text, although I’m not sure Cohen would have chosen that identification herself.  I say this not only because of the book’s serious challenges to liberalism, but also because of the sophisticated way in which Cohen situates the cultural realm.

This is more than just a way of saying she takes culture seriously.  Many legal scholars have taken culture seriously, especially those interested in questions of privacy and intellectual property, which are two of Cohen’s foremost concerns.  What sets Configuring the Networked Self apart from the vast majority of culturally inflected legal scholarship is her unwillingness to take for granted the definition — you might even say, “being” — of the category, culture.  Consider this passage, for example, where she discusses Lawrence Lessig’s pathbreaking book Code and Other Laws of Cyberspace:

The four-part Code framework…cannot take us where we need to go.  An account of regulation emerging from the Newtonian interaction of code, law, market, and norms [i.e., culture] is far too simple regarding both instrumentalities and effects.  The architectures of control now coalescing around issues of copyright and security signal systemic realignments in the ordering of vast sectors of activity both inside and outside markets, in response to asserted needs that are both economic and societal.  (chap. 7, p. 24)

What Cohen is asking us to do here is to see culture not as a domain distinct from the legal, or the technological, or the economic, which is to say, something to be acted upon (regulated) by one or more of these adjacent spheres.  This liberal-instrumental (“Netwonian”) view may have been appropriate in an earlier historical moment, but not today.  Instead, she is urging us to see how these categories are increasingly embedded in one another and how, then, the boundaries separating the one from the other have grown increasingly diffuse and therefore difficult to manage.

The implications of this view are compelling, especially where law and culture are concerned.  The psychologist Abraham Maslow once said, “it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”  In the old, liberal view, one wielded the law in precisely this way — as a blunt instrument.  Cohen, for her part, still appreciates how the law’s “resolute pragmatism” offers an antidote to despair (chap. 1, p. 20), but her analysis of the “ordinary routines and rhythms of everyday practice” in an around networked culture leads her to a subtler conclusion (chap. 1, p. 21).  She writes: “practice does not need to wait for an official version of culture to lead the way….We need stories that remind people how meaning emerges from the uncontrolled and unexpected — stories that highlight the importance of cultural play and of spaces and contexts within which play occurs” (chap. 10, p. 1).

It’s not enough, then, to regulate with a delicate hand and then “punt to culture,” as one attorney memorably put it an anthropological study of the free software movement.  Instead, Cohen seems to be suggesting that we treat legal discourse itself as a form of storytelling, one akin to poetry, prose, or any number of other types of everyday cultural practice.  Important though they may be, law and jurisprudence are but one means for narrating a society, or for arriving at its self-understandings and range of acceptable behaviors.

Indeed, we’re only as good as the stories we tell ourselves.  This much Jaron Lanier, one of the participants in this week’s symposium, suggested in his recent book, You Are Not a Gadget.  There he showed how the metaphorics of desktops and filing, generative though they may be, have nonetheless limited the imaginativeness of computer interface design.  We deserve computers that are both functionally richer and experientially more robust, he insists, and to achieve that we need to start telling more sophisticated stories about the relationship of digital technologies and the human body.  Lousy stories, in short, make for lousy technologies.

Cohen arrives at an analogous conclusion.  Liberalism, generative though it may be, has nonetheless limited our ability to conceive of the relationships among law, culture, technology, and markets.  They are all in one another and of one another.  And until we can figure out how to narrate that complexity, we’ll be at a loss to know how to live ethically, or at the very least mindfully, in an a densely interconnected and information rich world.  Lousy stories make for lousy laws and ultimately, then, for lousy understandings of culture.

The purposes of Configuring the Networked Self are many, no doubt.  For those of us working in the twilight zone of law, culture, and technology, it is a touchstone for how to navigate postliberal life with greater grasp — intellectually, experientially, and argumentatively.  It is, in other words, an important first chapter in a better story about ordinary life in a high-tech world.

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Vanderbilt Law Review En Banc Golan Roundtable

Vanderbilt Law Review En Banc is pleased to present our current Roundtable on Golan v. Holder, which is to be argued at the Supreme Court on October 5, 2011. In Golan, the Court will consider whether Congress may constitutionally confer copyright on works that have fallen into the public domain. Congress created a new class of “restored” works in 1996 in order to fulfill its obligations under the Berne Convention, an international copyright treaty. Professor Tyler T. Ochoa introduces the case, discusses the history of the Berne Convention, and analyzes how the Court’s decision will affect the idea of the public domain. Professor Daniel Gervais takes a closer look at the Berne Convention. He argues that Berne is a flexible document and that Congress provided greater protection to restored works than is actually required by the treaty. Dale Nelson, Senior Intellectual Property Counsel at Warner Bros., questions whether restoration has had as significant an effect on the public domain as its detractors believe. She argues that the benefits of restoring foreign works to copyright greatly outweigh the burdens to users. Professor David Olson looks at Golan’s constitutional questions from a perspective not emphasized in the parties’ briefs. He argues that, because restoration is in violation of the Progress Clause, the Government can assert no legitimate interest to support its claim that restoration does not unconstitutionally restrict the Petitioners’ First Amendment speech rights. Finally, Professor Elizabeth Townsend Gard takes a detailed look at the mechanics of the statute enacting copyright restoration. In her view, the statute does not achieve the Government’s stated interests and transgresses the traditional contours of copyright. She provides several recommendations for statutory amendments that would make determination of public domain status a more manageable exercise.


Tyler T. Ochoa, Is the Copyright Public Domain Irrevocable? An Introduction to Golan v. Holder, 64 Vand. L. Rev. En Banc 123 (2011).

Daniel Gervais, Golan v. Holder: A Look at the Constraints Imposed by the Berne Convention, 64 Vand. L. Rev. En Banc 147 (2011).

Dale Nelson, Golan Restoration: Small Burden, Big Gains, 64 Vand. L. Rev. En Banc 165 (2011).

David S. Olson, A Legitimate Interest in Promoting the Progress of Science: Constitutional Constraints on Copyright Laws, 64 Vand. L. Rev. En Banc 185 (2011).

Elizabeth Townsend Gard, In the Trenches with § 104A: An Evaluation of the Parties’ Arguments in Golan v. Holder as It Heads to the Supreme Court, 64 Vand. L. Rev. En Banc 199 (2011).

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On the Colloquy: The Credit Crisis, Refusal-to-Deal, Procreation & the Constitution, and Open Records vs. Death-Related Privacy Rights

NW-Colloquy-Logo.jpg

This summer started off with a three part series from Professor Olufunmilayo B. Arewa looking at the credit crisis and possible changes that would focus on averting future market failures, rather than continuing to create regulations that only address past ones.  Part I of Prof. Arewa’s looks at the failure of risk management within the financial industry.  Part II analyzes the regulatory failures that contributed to the credit crisis as well as potential reforms.  Part III concludes by addressing recent legislation and whether it will actually help solve these very real problems.

Next, Professors Alan Devlin and Michael Jacobs take on an issue at the “heart of a highly divisive, international debate over the proper application of antitrust laws” – what should be done when a dominant firm refuses to share its intellectual property, even at monopoly prices.

Professor Carter Dillard then discussed the circumstances in which it may be morally permissible, and possibly even legally permissible, for a state to intervene and prohibit procreation.

Rounding out the summer was Professor Clay Calvert’s article looking at journalists’ use of open record laws and death-related privacy rights.  Calvert questions whether journalists have a responsibility beyond simply reporting dying words and graphic images.  He concludes that, at the very least, journalists should listen to the impact their reporting has on surviving family members.

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An Alternative Story about the Success of Digital Music

Many consider digital music a success. But, looking back at the history of an older music technology – the CD – should make us pause. The CD was invented in 1982 and made its market debut the same year with Billy Joel’s album 52nd Street. It was adopted quickly and in 1987 surpassed the sales of vinyl records. Digital music, on the hand, suffered a different fate

Digital music technology was invented in the early 1980s.  Several advances enhanced its marketability. The latest steps occurred in 1998 when Napster added the distribution advantage through file sharing and a fully functional MP3 player allowing portability was released. But, surprisingly, a decade later, the latest available music sales statistics show that in 2008 CD sales still compromised 77.8% of music sales, while digital music sales comprised only 12.8%.

This delayed adoption of digital music is perplexing given the overwhelming advantages of digital music over CDs. One factor that doubtless affected the sales of digital music is downloading from file sharing networks. But, I would like to offer another explanation. I believe that copyright enforcement particularly through technological measures — use of digital rights management systems (DRM) – played a role in delaying the adoption of digital music.  DRM limit interoperability between digital music devices and music tracks. For example, Apple, the owner of the leading digital music device iPod, refused to license its Fairplay DRM system to competitors. The result was that music purchased from iTunes and protected by Fairplay could only be played on iPods and other Apple devices. Surveys showed that DRM’s effect on interoperability frustrated consumers digital music experience and that consumers were more likely to purchase digital music if DRMs will be removed.

This story about the delayed adoption of digital music is not commonly told. But, it is an important story to tell for two reasons. First, those objecting to copyright enforcement argue that lawsuits against file sharing systems, such as Napster or Grokster, inhibit innovation in dissemination technologies.  But, they fail to address the policy argument of the dissemination failure of digital music technology itself.

Secondly, and even more importantly, by focusing on the adoption failure the parties to the digital music copyright disputes could find common ground. Both could benefit from accelerated adoption of digital music. Clearly, individuals who do not use digital music fail to benefit from the immediacy of downloading, the ability to choose individual songs and general convenience of digital music. But, the music industry could also benefit from a rise in the sales of digital music. Digital music allows direct selling resulting in savings on storage and mobilization of physical products.  It does not involve physical copies so music providers do not end up with redundant copies of CDs. Music providers can also benefit from the flexibility of providing consumers with the option to buy specific songs — this lets them cater to a broader range of tastes and expand their sales. And finally. digital music allows instant delivery – again allowing expansion of sales through profiting from impulse buys.

There are good reasons then to consider the delayed adoption of digital music. For a more complete description of this alternative story, see here.

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If Cows Could Read

In my forthcoming article, Copyright and Copy-Reliant Technology, I investigate the significance of transaction costs in the context of technologies that copy expressive works for nonexpressive ends. These “copy-reliant technologies”, such as Internet search engines and plagiarism detection software do not read, understand, or enjoy copyrighted works, nor do they deliver these works directly to the public. They do, however, necessarily copy them in order to process them as grist for the mill, raw materials that feed various algorithms and indices.

Copy-reliant technologies usually, but not invariably, incorporate some kind of technologically enabled opt-out mechanism to maintain their preferred default rule of open access. For example, every major Internet search engine relies on the Robots Exclusion Protocol to prevent their automated agents from indexing certain content and to remove previously indexed material from their databases as required.  A robots.txt file at the root level of a website in the form of: User–Agent:* Disallow: / will banish all compliant search engine robots from a website.

The Robots Exclusion Protocol is pretty easy to implement and it is highly customizable. The interesting question for copyright law is “does the provision of an opt-out make any difference?”

In the Article, I argue that it opt-outs are significant in the context of a fair use analysis. The doctrinal analysis is in the paper, but the basic point is that when transaction costs are otherwise high, opt-out mechanisms can play a critical role in preserving a default rule of open access while still allowing individuals to have their preferences respected.

The notion that the rights of the property owner can be protected under permissive default rules coupled with an opt-out is hardly new.  Robert Ellickson famously describes the “fencing out” rule whereby cattle were allowed to roam freely on the property of others unless that property was fenced.  Landowners still maintained their property rights, subject to the burden of fencing out neighbors’ cattle.  Presumably, if cows could read, a sign not unlike the Robots Exclusion Protocol would have been sufficient.

8

Ozymandias Lessons for Copyright

BM,_AES_Egyptian_Sulpture_~_Colossal_bust_of_Ramesses_II,_the_'Younger_Memnon'_(1250_BC)_(Room_4)2Ann Bartow’s post about Paul Zukofsky, son of Louis and Celia Zukofsky, and his attempt to exert extreme control over his parents’ work reveals that heirs are problem for copyright. Mr. Zukofsky asserts some untenable points about his power over the material and the need for academics to seek his approval. The full letter is on his site. Here are some choice quotes:

Despite what you may have been told, you may not use LZ’s words as you see fit, as if you owned them, while you hide behind the rubric of “fair use”. “Fair use” is a very-broadly defined doctrine, of which I take a very narrow interpretation, and I expect my views to be respected. We can therefore either more or less amicably work out the fees that I demand; you can remove all quotation; or we can turn the matter over to lawyers, this last solution being the worst of the three, but one which I will use if I need to enforce my rights. …

Next, other than for the following, I am not trying to censor you. I hardly give a damn what is said about my father (I am far more protective of my mother) as long as the name is spelled properly, and the fees are paid. My interest is almost purely economic. That being said, I do not approve of delving into the personal lives of my parents. If you wish to spend your time worrying if LZ did or did not shtupp alligators, that is your problem, but I will not approve quotation. That is not scholarship. That is gossip, and beneath contempt. …

Finally, when all else fails, and you remain hell-bent on quoting LZ, but you really, really REALLY do not want to deal with me, or you have been stupidly advised to try to circumvent me — remind yourself again and again, and yet once more, what Lyndon Baines Johnson’s said about J. Edgar Hoover i.e.: “I’d rather have him inside the tent pissing out, than outside pissing in”.

Although these statements may seem like ravings, Mr. Zukofsky is not alone in having these perspectives. As some know, the Joyce, T.S. Elliot, J.R.R. Tolkien, J.M. Barrie, Sylvia Plath, Samuel Beckett, and Bertolt Brecht estates have expressed similar views. What strikes me here is that although Louis and Celia Zukofsky are important figures in American poetry, I would bet that many are unaware of who they are. Their son’s perspective of wanting extreme control, little discussion, and rent extraction indicates his interest in, well, his interests. Those do not seem to include aiding people who wish to keep the artists in question alive as part of our culture. All of which makes me think Mr. Zukofsky might take a lesson from another poet, Percy Bysshe Shelley, for I think that not even the pedestal may remain for his parents if he maintains this posture.

OZYMANDIAS

I met a traveller from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shatter’d visage lies, whose frown
And wrinkled lip, and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamp’d on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
“My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!”
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.

IMAGE: WikiCommons. Thought to have inspired the poem.
License: GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation

Description: The British Museum, Room 4 – Colossal bust of Ramesses II, the ‘Younger Memnon’ From the Ramesseum, Thebes, Egypt 19th Dynasty, about 1250 BC. One of the largest pieces of Egyptian sculpture in the British Museum. Weighing 7.25 tons, this fragment of his statue was cut from a single block of two-coloured granite. He is shown wearing the nemes head-dress surmounted by a cobra diadem.

Author: Mujtaba Chohan E-mail: m.chohan@gmail.com Source: British Museum Visit

3

What to expect on Monday (Google Book)

The now defunct version of the Google Book Class Action Settlement is a complicated document consisting of 141 pages, 160 definitions, 17 separate articles and 116 separate clauses, not including the substantial provisions contained within the 15 attachments where several important features of the deal were buried.

The initial draft of the agreement dates back to October 28, 2008, when Google announced that it had reached a settlement of the highly publicized class-action lawsuit brought by the Authors Guild and another equally important lawsuit brought by the American Association of Publishers.

Opposition from various quarters caused the parties to reconsider the details of the settlement and a new version is due on Monday November 9, 2009. In my recent article I compared the settlement to the most likely outcome of the litigation the settlement resolves. In this post I speculate about the contents of the revised agreement.

The essential features of the old settlement agreement were:

  • Money. Google made some pretty significant financial concessions, including one-time payments of over $100 million dollars and a revenue sharing agreement.
  • Digitization, Indexing & Search. In return for these concessions Google received the right to continue to operate its book search engine, substantially in its current form which is arguably consistent with copyright law’s fair use doctrine.
  • Commodification. The settlement also gave Google the ability to explore new revenue possibilities in cooperation with authors and publishers. The highlights consisted of extensive book previews, consumer e-book purchases, institutional subscriptions to the entire Google Book database and various other “New Revenue Opportunities”.
  • New institutional arrangements. Beyond the mechanics of the agreement itself, the key elements of the new Google Book universe were to be the “Book Rights Registry” and the “Author-Publisher Procedures”. Although the Registry received more attention from critics of the settlement, the Author-Publisher Procedures appeared to be the key vulnerability from a class-action fairness perspective. These procedures determine who controls the exploitation of a work within the Google Book universe and who benefits from that exploitation. In many cases the Author-Publisher Procedures act like a standard form publishing contract that supersedes deals negotiated before the importance of digital rights was widely realized.
  • Orphan works exploitation. The treatment of orphan works pervades all aspects of the current Settlement agreement. The agreement increased public access to orphan works by presumptively including almost all works in most commercially significant uses. Orphan works could be digitized, indexed, made available for partial-previews, sold as consumer purchases and incorporated into institutional subscriptions. As well as benefiting Google, revenues attributable to these uses will flow in part to the Registry, and to registered authors and publishers.
  • Orphan works monopoly. In its current form the Settlement only solves the orphan works problem for Google.

    What should we expect on Monday?

    The most desirable change from an antitrust perspective would be to allow Google’s competitors to exploit orphan works on the same terms as Google. The problem with this solution is that it further strains the boundaries of class action law and looks more and more like private legislation. This should not, in my view, be enough to derail the deal if the parties can show that all of the relevant sub-class interests were adequately represented.

    The Author-Publisher Procedures enhance the coordinating function of the Settlement by streamlining the incorporation of existing author-publisher contractual terms into the framework of the Google Book universe. However, where an existing author-publisher contract gives both parties some control over electronic exploitation, or simply fails to make any provision for electronic rights, the Author-Publisher Procedures effectively overwrite those contracts. These new terms do not appear to systematically disadvantage either authors or publishers, but they strike me as a one size fits all solution that could be substantially improved upon.

    Finally, I expect the revenue sharing aspects of the deal to become more complicated.