What to expect on Monday (Google Book)

posted by Matthew Sag

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.

  November 8, 2009 at 5:18 am  Tags: copyright, fair use, Google, Google Book Settlement  Posted in: Uncategorized   Print This Post   3 Comments

Fear of a Google Planet

posted by Matthew Sag

Should we fear Google? This question, unthinkable ten, maybe even five, years ago, seems to dominate internet policy discussion today. AT&T is afraid of Google Voice. Apple might be afraid of the Google Phone. Microsoft is afraid that Google Apps will make its Office suit redundant. These fears are justified, but they are also good. In most cases Googlephobia is a condition suffered by competitors. Google will probably kill off some competitors, but it will force many more to continue to innovate and provide better products to the consumer at lower prices. So, yes, some people should fear Google. But should we the public?

“Fear is often preceded by astonishment, and is so far akin to it, that both lead to the senses of sight and hearing being instantly aroused. In both cases the eyes and mouth are widely opened, and the eyebrows raised.” Charles Darwin, The Expression of the Emotions in Man and Animals.

In its pre-settlement incarnation, the Google Book Search (GBS) project was merely an astonishing attempt to build a comprehensive search engine to allow full text searching inside millions of books. The GBS envisaged in the Settlement (before the DOJ sent the parties back to the drawing-board) was much more ambitious. Not satisfied with digitization, indexing and limited display of books consistent with copyright law’s fair use doctrine, Google, the Authors Guild and a handful of publishers struck a deal which allowed for the commoditization of digital books as direct substitutes for paper copies. Subject to an opt-out and a few other exclusions, the Settlement swept in almost all books subject to U.S. copyrights and established an entirely new institutional framework for clearing digital book rights.

My personal view is that justified astonishment at the GBS Settlement has, in too many cases, given way to unjustified fear. Google is still far from being the new Microsoft as the Department of Justice’s Christine Varney has asserted. It certainly does not act like it. Google’s track record of openness and innovation are heartening and there is very little evidence so far that they plan on abandoning their “don’t be evil” corporate culture.

Googlephobia appears to be the foundation of some pretty wild assertions in the context of the Google Book dispute in particular. Google conceives that it is set to liberate out-of-print books from their dusty dungeons on the relatively inaccessible shelves of the worlds great libraries. Critics of the deal (and the initial more modest GBS) see plans for monopolization of hitherto non-existent markets, the destruction of libraries, universities and even the book itself.

The Google Book Settlement was not perfect, but my own fear is that Googlephobia and the intervention of the Department of Justice have left us worse off than we would have otherwise been. The Google skeptics are right about a number of the Settlement’s shortcomings, but now that the parties renegotiating the deal we had all better hope that GBS version 3 is better, fairer, and more accessible — not just smaller and less ambitious.

It might be naive to simply trust in Google, but the fear Google now inspires seems equally misplaced.

  November 3, 2009 at 1:09 pm  Tags: copyright, fair use, Google, Google Book Settlement  Posted in: Uncategorized   Print This Post   2 Comments

Academic Books, Non-Academic Books, BitTorrent, and Google’s Brand Power

posted by Deven Desai

D is for Digital is over now. I urge anyone interested in the Google Book Deal (aka the Google Book Search) to check out the schedule page and the webcast links (the stream links are at the top of the Friday and Saturday schedules respectively). James Grimmelmann put together a conference that aired out pro and con views rather well. In fact, I’d say although many were questioning the deal, I learned a good amount about the views of those in favor of the deal. I was not convinced that the deal is good and should go forward, but I appreciated hearing more about how the deal evolved and defenders’ views.

I highly recommend the keynote lunch with Pam Samuelson and Paul Courant. That panel warmed up the group. Some really good questions about transparency of the process, responsibility, and more came up. Pam’s key point that if one builds a pubic good this big, public trust responsibilities go with it was dead on for me. I highly recommend watching the video for all that was said.

The next panel C is for Culture was excellent. James asked a question that has been on my mind and we had kicked around at WIP IP last week. Is Google Book Search irrelevant?

Here is why that is good question. First, the day so far emphasized that the majority of the books in question are academic books. As Pam explained and Paul Duguid echoed, if scholars’ books are at stake, scholars should be involved. Paul made clear that scholarly standards should guide the project.

Now, consider that many books are becoming available on BitTorrent. In addition, one panelist, Dan Reetz has a fascinating project. His DIYscanner project is a wild moment in grassroots digital activism. The story of how he chose to build his low-cost, open source DIY scanner (we’re talking maybe $300-$400 total) so that one could scan personal (and other books) at the rate of a few seconds per page and without destroying the book merits another post. (for now here is a link to the plans to build your own scanner) In addition, Reetz noted that majority of new books are leaked prepublication. As a general matter, a key claim is that users will pay for a book but copy the book so that they can search and take many books with them. The importance of these changes is that crowd-sourced and other approaches to digitizing text is on the move. One can see this shift as indicating market failure or that ereader functionality will be more and more the case.

As scanners, ereaders, and companies like Stanza offer better ways to access, search, mark, and read, the walled or controlled version of the text experience that the Google Book Deal offers seems odd. I doubt, however, that it will be irrelevant. Google’s brand, the ease of searching (even with its errors so far), and the ability to trust Google over BitTorrent or other sources will likely make it relevant to many. Nonetheless, the growth in alternative sources would suggest that Google will need to choose between a web search that captures all useful book offerings or a Google Book Search that only gives Google Book results. As the last panel on antitrust explored, Google is already dominant in search. It arguably killed a little company called MapQuest. Once Google offered its maps and its maps became the default listing when one entered address information into the search, MapQuest was done. That seems awfully close to the MS bundling issues of the last decade. When it comes to books, Google’s lead and dominance will give it massive power and leverage over how we all access knowledge. Nonetheless, it may be that grassroots, crowd-sourced movements will permit an end around for the control the publishers want through this deal. To be clear an end-around is insufficient protection against the lock-in problems the Google Book Deal poses, but it may help push Google to reach a deal that is less run by publisher interests.

  October 12, 2009 at 7:40 am  Tags: Antitrust, DIY scanner, Goog, Google, Google Book Settlement  Posted in: Google & Search Engines, Intellectual Property, Technology, Web 2.0   Print This Post   One Comment

Google = ICANN?

posted by Deven Desai

One way to think about the Google Book Deal is that Google will end up as the super-gateway to books. It will in effect be the ICANN central authority of online books. So when Amazon and others have objected to Google’s claim that it will let everyone play in its sandbox, they are smart. No company should want to be a reseller (registrar in domain name terms). Insofar as one is competing with Google, who may also sell books, having to go through Google, the competitor, is undesirable to say the least. As the D is for Digital conference highlights, the way non-U.S. interests are not well-covered and represented is a problem. Insofar as the class action process is hijacking these international and domestic interests, the deal could be understood as an instance of arrogant law making with problems analogous to what one finds in Internet governance matters.

  October 9, 2009 at 6:51 am  Tags: Google, Google Book Settlement, ICANN  Posted in: Google & Search Engines, Intellectual Property   Print This Post   One Comment

Danger Will Robinson: Google Book Deal Is at DEFCON 2

posted by Deven Desai

The Google Book Deal is suspended. Time to cheer, correct? No. As Pam Samuelson noted in the New York Times, that probably is too little time to resolve the issues at hand. In fact I think right now is when the GBD is at quite a dangerous stage.

First neither party represents the public. One cannot expect them to represent the public, and one ought not trust they will do the right thing for the public. To be clear, I am not making a moral judgment here. I expect, as we all should, that each party will seek to maximize its position. Understanding why I refuse to call this situation a settlement helps understand this point. As many know, this action encompasses far more than the claims at issue in the suit. Many think that Google was on strong grounds for its fair use clam and its original use. The Publishers (aka the Registry seeming to be working for authors) saw the chance to get ahead of the digital curve. Unlike music and film, they realized they could look good and capture publishing’s future. They offered Google a deal that Google did not need. Or did it? Although Google is a data vacuum and does well with the ad-based business model, the search giant has been searching for a new revenue stream. Online ads can’t be the only source of revenue from any viewpoint. That is a precarious position. Indeed, the online ad market just took a big dip. The Deal presents Google with the chance to make money from something other than ads.

With this perspective one sees that expecting or trusting either party to look out for the public’s interest is foolish. My guess is that the public choice literature could yield some useful ways to think about the problem too, but I have not thought that through as yet.

Second, Google and the Publishers now have a wave of information from all quarters that they can use to their benefit. Here is the strategy that I expect to see. Assess the most severe and some of the less severe criticisms. Incorporate some of them in changes. Keep the deal as is for the most part (Note that is precisely what the Registry said will be the case “the core agreement is going to stay the same.”). Then when the time to approve, deny, or move the Deal to another form comes, one claims “We acted in good faith. We can’t keep everyone happy. Without this deal no one wins. Can’t we get along, move forward, and sort the details later? That is a more reasonable way to proceed.”

More importantly, those who have kept paying attention to the problem may start to lose focus or fade out. People may become tired or say is this thing still going on?

And that is why I say Danger Will Robinson. The Google Book Deal is at Defcon 2.

  October 8, 2009 at 2:59 pm  Tags: Google, Google Book Settlement, Registry  Posted in: Cyberlaw, Google & Search Engines, Intellectual Property, Media Law, Politics, Technology   Print This Post   No Comments

Copyright Irony, Of Royalty Boards and Google Book Deals

posted by Deven Desai

Earlier this week Live365 filed a law suit arguing that the Copyright Royalty Board is unconstitutional. Today is the deadline for authors to opt-out of the class in the Google Book Settlement. The idea that this Settlement ought to approved is more than suspect. Others have noted the myriad issues the settlement raises. As Pam Samuelson has put it “Exploiting an opportunity made possible by lawsuits brought by a small number of plaintiffs on one narrow issue, Google has negotiated a settlement agreement designed to give it a compulsory license to all books in copyright throughout the world forever. This settlement will transform the future of the book industry and of public access to the cultural heritage of mankind embodied in books. How audacious is that?” The nature of the class, whether class action (which I usually see as better suited to resolving tort rather than property claims) is the correct approach, the way in which this class purports to operate, and the anti-trust issues alone should make it clear that this deal, although possibly offering benefits, should be slowed down and put under further scrutiny.

It is ironic that one one hand Live365 has been able to raise a Constitutional challenge to a copyright royalty issue, and on the other hand what is surely a turning point in copyright history and the question of how society governs access-to-knowledge is subject to a private deal between private parties who have little concern for society’s claim to access and use the works in question. To be clear, I am not arguing that it is improper to figure out a possible payment system. Samuelson’s work on mapping the public domain is clear about reasons we may need and want to have certain groups build, maintain, and charge money for information repositories. The questions that concern me are what will that system look like? Will it allow innovation and competition in the provision of the similar services or will it hinder such efforts? Is this service a natural monopoly? Will the incumbents after the deal is done be able to extract rent? What about the different uses that are conflated here (e.g., higher educational uses, research uses, social networking uses, and more)? What about the spillovers that could come from a more open system such as empirical research on the data in the works and computer science work on the way language operates?

I have begun a close read of the 140 page contract and its appendices. I urge all of you to take a look at the contract. It reminds a little too much of entertainment deals I have read in practice. Some clauses are opaque; some bizarre. All protect one party and ignore others. In a Hollywood or other publishing arena that may be O.K. When talking about the modern Library of Alexandria, it is not.

To whet your appetite about why one should not accept the deal at face value look at this statement of objectives:

The economic terms for Institutional Subscriptions of Books will be governed by two objectives: (1) the realization of revenue at market rates for each Book and license on behalf of Rightsholders and (2) the realization of broad access to the Books by the public, including institutions of higher education. Plaintiffs and Google view these two objectives as compatible, and agree that these objectives will help assure both long-term revenue to the Rightsholders and accessibility of the Books to the public.

My initial comments are at the Public Index in Section IV. But in brief, the assumption that the objective of market rates and the realization of broad public access are compatible is on the surface semi-plausible but facile. The following sub-clauses make it clear that broad public access is not the animating force on the deal. Intense control over access and the ability to price discriminate (including a ban on k-12 access unless the Registry (publishers) agree) are the goals. Again if others read the sections and can show where I err, I am all ears.

As a general matter, if anyone can share why class action was wise and/or a good fit here, please share your insights.

Last, I suggest that this deal is so important that Congress has to be involved. As private re-writing of the Copyright Act is not the correct way to proceed. It will likely take away the chance for copyright to roar into the twenty-first century with a winning solution for authors, publishers, and society at large and instead will repeat history with the system being captured and benefiting only a narrow class of stakeholders.

  September 4, 2009 at 11:33 am  Tags: class action, copyright, Google Book Settlement  Posted in: Constitutional Law, Google & Search Engines, Intellectual Property, Technology, Web 2.0   Print This Post   2 Comments