Books, Google / Search Engines

The Google Books Settlement

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Earlier this week, we attended an interesting debate about the Google Books settlement. It featured Professor Richard Epstein of the University of Chicago Law School, who argued against the settlement, and Jonathan Jacobson of Wilson Sonsini, who defended it.
The debate, held at the Cornell Club and sponsored by the Federalist Society, was moderated by Professor Scott Hemphill of Columbia Law School. ATL readers may remember the hunky Hemphill as one-half of July’s Couple of the Month.
Read more, after the jump.


Hemphill began the proceedings with a brief overview of the topic. Several years ago, Google started scanning millions of books from the collections of major libraries. In 2005, the company was sued by a group of authors and publishers for copyright infringement. The suit, a class action, is in the process of being settled. From the settlement administration website:

[A] class action lawsuit [was] brought by authors and publishers, claiming that Google has violated their copyrights and those of other Rightsholders of Books and Inserts, by scanning their Books, creating an electronic database and displaying short excerpts without the permission of the copyright holders. Google denies the claims.

The lawsuit is entitled The Authors Guild, Inc., et al. v. Google Inc., Case No. 05 CV 8136 (S.D.N.Y.). The Court preliminarily approved the Original Settlement in November 2008…. On November 19, 2009, the Court preliminarily approved the Amended Settlement Agreement.

The settlement has generated opposition, according to Hemphill. The objections fall into two major camps: antitrust and privacy. On the antitrust front: Is the settlement (a) good for consumers and (b) fair to competitors of Google? On the privacy front: What kind of privacy protections will be given to people who use the Google Books service?
John Jacobson of Wilson Sonsini, which represents Google, took the floor to defend the agreement. After praising Google for its effort to create a modern Library of Alexandria, he made a number of points:

  • Many of the books being scanned as part of the Google Books project are in the public domain; there is absolutely no copyright issue as to these works.
  • For in-copyright books that are part of the Google partner program, excerpts are provided, and users are offered several easy ways to purchase the books — this is good for authors.
  • For books that are part of the Google partner program, the revenue split between Google and the authors is quite generous to the authors (better than the standard Amazon.com deal).
  • Rightsholders can come forward to remove their books from the Book RIghts Registry, the clearinghouse for this program, at any time.
  • Consumers are better off under the settlement because Google Books makes available out-of-print books that would otherwise be lost.
  • An algorithm developed by Google will come up with default prices for books sold through Google Books, but it’s not price fixing because, notwithstanding the algorithm, each individual rightsholder can set the price for his or her own work.
  • The scope of the settlement is limited. For example, it does not cover books published after January 2009 (i.e., it does not cover most of today’s bestselling books).

Professor Richard Epstein then spoke out against the settlement:

  • Even setting aside the antitrust issues, the settlement is problematic on class action grounds. It’s an overaggressive use of the class action mechanism, purporting to offer broader relief than what could have been obtained in response to this lawsuit.
  • There are conflicts of interest here between authors and publishers that aren’t fairly hashed out in the settlement; certain subgroups are not adequately represented by the parties to the class action. How should author-publisher disputes be dealt with in this framework?
  • Why not do it the other way around — have a settlement that enjoins Google’s conduct, then let Google set up a website authors can use to sign up to have their works included in Googe Books?
  • For so-called “orphaned” works, i.e., in-copyright but out-of-print works whose authors can’t be located, perhaps Google should create a list of them, let them be sold through Google Books (after a certain notice period elapses), but keep track of the monies generated through such sales, so the proceeds can be turned over to the rightsholder if that person emerges later.
  • Google Books should employ an “opt in” rather than an “opt out” regime. Thanks to the web, which dramatically lowers transaction costs, an “opt in” regime would be so easy to implement. Why can’t Google just use that instead?

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The discussion then became more freewheeling. The panelists responded to each other, addressed additional issues raised by Hemphill, and also took questions from the audience.
Jacobson’s basic response to Epstein was that an “opt in” regime, which might be nice and all, is not legally mandated. The Sherman Act prohibits contracts in restraint of trade — not contracts less in restraint of trade than some other imaginable contracts. On the class action issue, Jacobson argued that this is an efficient use of the class action device, allowing many complex claims to be resolved in one fell swoop.
Epstein’s rejoinder: this settlement might be trying to resolve too much, too quickly. Remember the proposed asbestos mega-settlement that got struck down by the Supreme Court? The Google Books settlement might get struck down too, if it’s overly aggressive.
Additional discussion of the event appears in this nice write-up by Andrew Nusca of ZDNet.com, which highlights one of the more dramatic aspects of the evening:

Several times during the debate, which grew heated at times, a woman from the audience interjected and railed against Google and the settlement. After Jacobson rhetorically asked why copyright owners wouldn’t come forward to claim and monetize their lost works, the woman replied, “because copyright does not require owners to come forward.”

Who was this passionate woman — who, truth be told, seemed to tick off other audience members with her running commentary and frequent interjections?
We met her during the cocktail hour before the debate. Her name is Lynn Chu, and although she’s a lawyer — she got her J.D. at the University of Chicago, and she’s a member of the New York Bar — her main claim to fame is as a super-successful literary agent. Check out her client list, heavy on conservatives and legal luminaries — e.g., David Brooks, Richard Epstein (Chu’s former professor), Irving Kristol, Ken Starr, Clarence Thomas (ka-ching), John Yoo, and many others.
Chu has written extensively — and critically — about the Google book settlement. You can read a piece she wrote for the Wall Street Journal over here.
The Google Books Settlement [Federalist Society for Law and Public Policy Studies]
Google Books search settlement: monopoly or public service? [ZDnet.com]
Google’s Book Settlement Is a Ripoff for Authors [Wall Street Journal]
Google Books Settlement Agreement [informational page]
Google Book Settlement [settlement administration site]

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