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Late on Friday, a federal court in New York received a new version of the Google Book Search settlement. As with the old version, the new one was drafted jointly by Google and its erstwhile litigation opponents: the publishers and authors who sued Google for scanning their books without permission.
Substantively, the new settlement bears a great resemblance to the old one. There's a large number of changes (which are conveniently marked up in a downloadable file available from the settlement site here), but while they chip away at some of the rough edges of the earlier proposed settlement, the core of our antitrust concerns seems to remain.
That main concern is that Google should not be the sole entity able to license the display of orphan and unclaimed works.
Nothing in the new settlement agreement seems to change that dynamic. Google and the plaintiffs have previously stated that they do not believe that the Book Rights Registry—a settlement-created entity that is supposed to represent the interests of authors—would be able to grant other entities the same ability to legally display orphan and unclaimed works, and there's no attempt in the settlement to
General. The Registry will be organized on a basis that allows the Registry, among other things, to (i) represent the interests of Rightsholders in connection with this Amended Settlement Agreement, (ii respond in a timely manner to requests by Google, Fully Participating Libraries and Cooperating Libraries, and (iii) to the extent permitted by law, license Rightsholders’ U.S. copyrights to third parties (in the case of unclaimed Books and Inserts, the Unclaimed Works Fiduciary may license to third parties the Copyright Interests of Rightsholders of unclaimed Books and Inserts to the extent permitted by law).
That mention of licensing to third parties would be encouraging, only it also appeared in the original settlement, in slightly different form:
Organizational Structure. The Registry will be organized on a basis that allows the Registry, among other things, to (i) represent the interests of Rightsholders in connection with this Settlement Agreement, (ii) respond in a timely manner to requests by Google, Fully Participating Libraries and Cooperating Libraries, and (iii) to the extent permitted by law, license Rightsholders’ U.S. copyrights to third parties.
Note that loophole-enabling phrase, "to the extent permitted by law." That allows this clause to look like it's endorsing third-party licensing even if the drafters of the agreement don't want it to happen.
The reason for this is that, as a class action settlement, the agreement is basically a contract between Google and all of the owners of copyright in books published before January 5, 2009. The plaintiffs agree not to sue the defendant for doing a number of different things, and in exchange, the defendant gives them money, agrees to behave in certain ways, etc. Here, all of the authors who are members of the class would be prohibited from suing Google for displaying unclaimed books, so long as it got the permission of the Unclaimed Works Fiduciary, a to-be-created independent arm of the Book Rights Registry.
But if the UWF decided to license to someone who isn't Google—someone who isn't a part of this whole legal case that binds the class together—it's unlikely that the settlement agreement can legally prevent an author from suing that third party, despite any assurances the settlement might make. That's the reason Google and the rightsholders didn't think the settlement could explicitly allow for third-party licensing before. And given that the language is basically the same now, it's likely still not going to happen.
And that inability for the authors to license as a group to other parties means that Google would stand as the only purveyor of unclaimed and orphan books to the public. Sure, other outlets might be able to embed a sort of Google Book reader into their web pages and act as resellers of the Google database, but that doesn't create actual competition, especially if it's Google-controlled information and software at the back end. All that the reseller would be doing is providing different window dressing and customer support. In the end, it's still just Google alone in that market, and that's something that is a real cause for concern.