The Google Book Settlement: A Guide Through the Maze…

Tony HoravaNov. 28, 2012

ISI 5161A ‘Information and the Law’

Outline

• Basic landscape of the original settlement & aftermath• Chronology• Reactions• Overview of major issues, such as:

– Copyright and anti-trust challenges– Intellectual freedom– Privacy concerns – Pricing (‘Institutional Database Subscription’) The Fairness Hearing and recent legal developments

Google’s mission:

“To organize the world's information and make it universally accessible and useful.”

Chronology/Key dates• Dec. 14, 2004

Google announces Google Print (later renamed Google Book Search) and begins scanning book collections from the initial group of library partners: Harvard, the University of Michigan, the New York Public Library, Oxford and Stanford.

• September-October 2005.The Authors Guild (AG) and the Association of American Publishers (AAP) file two separate lawsuits against Google for copyright infringement.

• October 28, 2008Two lawsuits settled between the three parties, AG, AAP and Google. In addition to other terms, Google will make payments totalling $125 million (U.S.) and establish a Book Rights Registry (BRR) to help publishers and authors control how their copyrighted works are accessed.

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Chronology/Key dates (cont`d)

• September 4, 2009Google must make cash payment for all books they have digitized without permission before this date, including books which they expect to digitize shortly after.

• November 9, 2009Revised settlement (the Amended Settlement Agreement) filed allows out of print books from only four English speaking countries to be scanned, restricts the way that Google can make money from scanning and digitizing out-of-print books, and requires a registry to seek out copyright holders who do not come forward.

• March 22, 2011 ‘Fairness hearing’ decision by the court (this is required for class action settlements in the US)

• October 4, 2012Google and publishers reach agreement on digitization

Original Settlement - basics

Class-action settlement: covers online access in the US for books only. It includes titles that are:

– published before January 5 2009– “Could” cover books published after above date

Google pays $125 million– $34.5 million to establish Book Rights Registry– $45 million to rights holders for books scanned prior to May 2009

($60 per title) – for past and future uses– $45.5 million for legal fees

Split of future revenues:– 63% to copyright holders– 37% to Google

Class-action: what is it?

• An association acting on behalf of its members.• A judge needs to certify the action.• Three conditions need to be met:

– There must be evidence that the members could sue in their own right if they wished;

– The subject matter is relevant to the association’s purpose;

– The claim does not require the participation of individual members

Settlement basics (cont’d)

Copyright scope:– ‘In print’ in-copyright books are automatically excluded: this

means that rights holders need to opt-in to display uses – – ‘Out of print’ in-copyright books (orphan works) are automatically

included : this means that rights holders need to opt-out of display uses –

– In print = commercially available in US, Canada, Australia, and UK

Revenue streams:– Individuals: sale of perpetual access per title via Google server– Institutions: sale of annual access to Institutional Subscription

Database

The project so far

• 21 Library Partners• Google-funded digitization• In-copyright and out-of-copyright material

– Google and selected library partner servers only• 15 million books to date:

– 3 million public domain (20%)– 11.25 million in copyright, out of print (75%)– 0.75 million in copyright, in print (5%)

• Eventual aim: (?) books

Types of Use covered by the Settlement

‘Display’ Uses• Access Uses: viewing and annotating the entire book, and printing and

copying/pasting portions of the book, subject to certain page number limitations.

• Preview Uses: user to view up to 20% of a book (but no more than 5 adjacent pages) before making a purchase decision. For books of fiction, Google will block the last 5% of the book. Rights holders may change the preview availability.

• Snippet Displays: display three/four lines of text in response to a user’s search.

• Display of Bibliographic Pages: display book’s title page, copyright page, TOC and index.

Types of Use (cont’d)

• ‘Non-display uses’, i.e. that don`t involve display of content to the public:– full-text indexing– geographic indexing– algorithmic listings of key terms– internal research and development at Google (how are they using

this data??)

The pace of Google’s digitization

• “Prior to our partnership with Google Inc., we digitized between 5,000 and 10,000 works each year, a rate that put us ahead of other digitizing libraries and well behind the books, which were already decomposing before we could get to them. At that rate, we estimated that it would take us approximately 900 years to preserve our 2002 collection digitally. Our partnership with Google, which the settlement will preserve, will enable us to preserve approximately eight million works in less than a decade.” – Paul Courant, University Librarian, University of Michigan, Sept. 4, 2009

Claimed21%

Orphans79%

How many orphans?*

3.5 million out of print books scanned prior to May 2009

$45 M (rights claims)

÷ $60 per book______________ = 750,000 claimed books,

and 2.75 million orphans Out-of-print titles

But $45 million is the minimum payment, so numbers may vary.

One possible calculationOne possible calculation

What Has the Reaction Been?

Positive: – Will lead to a broad dissemination of an enormous corpus

representing a large portion of our cultural heritage (‘breathing life into old works’ – Dept of Justice submission)

– Bypasses the lack of ‘Orphan works’ legislation in US Congress. NB- orphan works are those for which the rights holder is unknown or un-locatable.

Negative:– A de facto monopoly & copyright concerns – Pricing issues– Intellectual freedom & Equity of access– Privacy issues– Long-term security of data– About 6,800 opt-outs by authors

”The Google Book Settlement – Who is Filing and What Are They Saying?”, Brandon Butler, Association of Research Libraries

Selected Supporters and Objectors

• Supporters– Canadian Urban Library Council– Computer and Communications Industry Association– American Association of People with Disabilities– National Federation for the Blind– Stanford University Libraries– Sony

• Objectors– Amazon– Electronic Privacy Information Center (EPIC)– French Publishers’ Association– Microsoft– Open Book Alliance– The Internet Archive– The United States of America

Book Rights Registry

Non-profit independent collecting agency representing plaintiff interests to:– Manage rights database: copyright status, contact

information, rights information– Negotiates terms and prices of online book uses on

behalf of rights holders– Distribute share of revenue to rights holders, based

on formula in agreement– The Registry does not have to be made public.

Pricing and market impacts

• Only Google can license ‘orphan works’ (in the absence of legislation)

• Opting out for orphan works would be very problematic – owners aren’t known or locatable. Creates a huge locked-in pool of books.

• Concentration of book legacy in Google’s hands would have huge influence on market pricing for out-of-print books.

• Rights holder can set price, or the Registry would use a pricing algorithm based on similar books to determine price.

The Research Corpus

Represents all Google books except in-copyright works whose rights holders have removed their works

Hosted at Google, up to two other mirror sites‘Non-consumptive’ research:

– linguistic analysis, automated translation, book relationships, index/search techniques

• If qualified users want to search the Research Corpus for ‘non consumptive’ research, e.g. textual or linguistic analysis, their research agenda needs to be approved by the host institution

• “Research Agenda” means a document that describes a research project in sufficient detail to demonstrate that it will be Non-Consumptive Research”

• Host institution is responsible. What will the criteria be? • This will certainly conflict with academic freedom…fundamental

values will be at play

Copyright and monopoly challenges

Raises public policy issues regarding the delicate balance between public and private good; how does it reflect upon the nature of copyright in a digital world?

The interests of one group (known rights holders) are pitted against another (absent rights holders or orphans) in relation to revenue sharing and pricing.

Can a class-action settlement provide equity for economic rights and address the public good? Does the Authors Guild represent the academic authors whose works are the majority in the database?

Class action settlement is supplanting copyright legislation as the lever for reproducing and disseminating in-copyright books to our collective cultural heritage

A commercial model– what if Google’s business completely changes in twenty years?

Copyright and competition challenges (2)

The board of the Book Rights Registry will have no librarian or reader representation… this is very problematic for a balanced approach to copyright, access, and pricing.

Will have a damper effect on Open Access and Creative Commons licensing – an ‘institutional bias’ (Samuelson) against it. How will this affect the long-term plans of the Open Content Alliance, for example

Other providers can be offered license terms better than Google’s – but Google has enormous lead advantage

Any other company risked being sued if they follow the same approach as Google

Reaction of the US Copyright Office

“In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress. The settlement is not merely a compromise of existing claims, or an agreement to compensate past copying and snippet display. Rather, it could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come. We are greatly concerned by the parties’ end run around legislative process and prerogatives, and we submit that this Committee should be equally concerned. “– Marybeth Peters, US Register of Copyrights, Sept 10, 2009

Institutional Subscription Licensing models• Libraries that contribute books for scanning:

– ‘Fully participating’ libraries• Give in-copyright books; get digital copies,

must meet security requirements– ‘Cooperating’ libraries

• Give in-copyright books; get no digital copies

• Libraries that do not contribute books for scanning:– May subscribe to ISD (either whole or discipline based) – Pricing model set by Google and Book Registry

• Benefits of partnering: – Ability to challenge institutional pricing model – Some subscription discounts– Information about inclusion / exclusion of books

Pricing concerns for the Institutional Subscription Database

Pricing to be determined by: the pricing of similar products & services; the scope of books available; the quality of the scan; and features offered via the subscription

The settlement refers to two broad goals: 1)Market realization of revenues for rights holders, and 2) Broad access by the public including institutions of higher education …to be based on “comparable products and services”. But which ones?

Could lead to a widening of the digital divide between wealthier and poorer libraries.

Tension between these two objectives is one of the key problems with the settlement

Pricing (cont`d)

“How the price of those subscriptions will be set remains unclear. GBS 2.0 has some language explaining the way its pricing algorithm will work, but it contains no effective mechanism to prevent price gouging, no provision for an antitrust consent decree that would empower a public authority to monitor prices, and no way to protect the public from excessive pricing should Google be taken over in the future by rapacious speculators.”

- Robert Darnton, “Google and the New Digital Future” New York Review of Books, Dec. 17, 2009

Institutional Subscription Database (cont’d)

• Momentum driving supply & demand :

• “…it is possible that faculty and students at institutions of higher education will come to view the institutional subscription as an indispensable only because research libraries have invested significant resources in preserving out of print books.. They might insist that their institution’s library purchase such a subscription. The institution’s administration might also insist that the library purchase an institutional subscription so that the institution can remain competitive with other institutions of higher education in terms of the recruitment and retention of faculty and students.” ALA-ACRL-ARL Brief

• This can exacerbate inequalities among libraries, based on budget realities.

Intellectual Freedom & censorship

Google can exclude a book for editorial reasons: on what basis? Pressure from governments or powerful interest groups could have an important impact, e.g. Google saving itself from embarrassment or bad PR by suppressing a controversial book

The Settlement requires Google to provide public access and the ISD for only 85% of the in-copyright, not commercially available books (potentially 2.25M books)

The Settlement doesn’t include pictorial works, eg photographs and illustrations will be blacked out.

Works within works might be excluded, depending on rights holder exercising a separate copyright, eg an essay, a poem, a chart or a table

Privacy concerns

Google has an unprecedented opportunity to monitor and track user reading habits, eg when a user prints out pages from a book in the ISD, there will be a visible watermark displaying encrypted session information “which could be used to identify the authorized user that printed the material or the access point from which the material was printed” (art 4.1)

“For purchases of online e-book access or access via institutional subscriptions, Google will have the technical ability to track every page that one views, even recording how long is spent on a page.” (Alan Inouye, ALA)

For which purposes will Google collect data?

What are the safeguards against misuse of data?

Google’s response re privacy concerns

• “..because the settlement agreement has not yet been approved by the court, and the services authorized by the agreement have not been built or even designed yet, it's not possible to draft a final privacy policy that covers details of the settlement's anticipated services and features. Our privacy policies are usually based on detailed review of a final product -- and on weeks, months or years of careful work engineering the product itself to protect privacy.” – Jane Horvath, Global Privacy Counsel, Google

• “The Bureau [of Consumer Protection] asks Google to commit to a continuing dialogue regarding consumer privacy policies for Google products and services…I believe such a commitment would require Google to adhere to the concept of privacy by design,..” – Commissioner Paula Jones Harbour

The Center for Democracy and Technology has addressed this issue in their original submission :

• “Although Google does voluntarily provide some notice, we believe that it should be required to clearly and prominently disclose the following:

• (a) What information Google collects in connection with the New Services, including information that can be used to identify individual readers;

• (b) What information Google collects about individuals’ use of the New Services;• (c) The purpose for which this information is collected;• (d) How long each type of data is retained;• (e) What technical mechanisms Google uses to track readers on the site;• (f) How readers can exercise choice about having their data collected and used

in connection with the New Services; and• (g) How reader data is safeguarded against theft or misappropriation.”

– Also noteworthy is the fact that Google has not offered to allow institutions subscribing to the ISD to manage the authentication process, even though these institutions have the expertise and resources to do so.

Amended Settlement Agreement (Nov. 9, 2009): key changes

• Restricted to works published in four countries before Jan. 5, 2009: U.S., Canada, Australia, and Great Britain; or the books were registered with the Copyright Office before January 5, 2009.– This would cut the size of the database approximately in half

• Book Rights Registry (BRR) is given the authority to increase the number of free public access terminals in a public library branch

• Rights holders to authorize Google to modify or remove the default restrictions such as the number of pages that can be cut and paste or printed out with one command.

• Google is not permitted to digitize books from microform• Google will not provide the BRR with personally identifiable user

information “other than as required by law or valid legal process.”

Amended Settlement Agreement: key changes (cont’d)

• Board of Directors of the BRR will have at least one representative of the Author Sub-Class and one representative of the Publisher Sub-Class from each of the following countries: the US, the UK, Australia, and Canada.

• The settlement provides that “..A certified user may be permitted to access Books in the LDC in the form of electronic text used in conjunction with screen enlargement, voice output, or refreshable Braille displays (section 7 (2) (ii) (1)”

• “People with vision loss will be able to search for books through the Google Books interface and purchase, borrow, or read at a public library any of the books that are available to the general public in accessible formats. As a result, vast numbers of books will be opened up for many people for the first time ever.” – American Association of People with Disabilities, July 27, 2009

Amended Settlement Agreement: key changes (cont’d)

• Revenue from unclaimed works to be managed by an ‘Unclaimed Works Fiduciary’

• The unclaimed funds will not be used for the BRR’s operating expenses and will not be distributed to rights holders who filed claims.

• Rather, the BRR, in collaboration with rights holder organizations in Canada, Australia, and the U.K., and in consultation with the Unclaimed Works Fiduciary, can spend up to 25% of the unclaimed funds held for five years on searching for absent rights holders.

• After holding the remaining 75% for another five years, the BRR, with the approval of the Unclaimed Works Fiduciary, may petition the Court for approval to distribute the unclaimed funds to literacy based charities.

• BRR will facilitate rights holders’ requests that their works be made available through alternative licenses for consumer purchase, such as through a Creative Commons license (purchase price set to zero)

Amended Settlement Agreement: key changes (cont’d)

• The original settlement included a “Most Favored Nation” clause that required the BRR to extend to Google the same terms it negotiated with any other entity – this has been removed.

• The ASA permits only the following three additional revenue models to be developed in the future: print on demand, file download (e.g. PDF) , and consumer subscription. (original settlement was open-ended regarding future revenue models)

• Authors and publishers who actively manage their books get payment for uses made (and can control what uses are permitted)

Integration issues

• Google has opened Book Search via APIs: libraries can embed book images, previews, and links to Book Search within discovery layers and catalogues

• OCLC is taking steps to integrate Google Books into the WorldCat database - URLs for Google Books have been added to WorldCat records

• In April 2010, OCLC announced that they will derive new MARC records to represent this digital collection. WorldCat Local will be used to provide a public interface for the HathiTrust content

• Can we leverage the SFX link resolver to obtain maximum benefit from enriched content in Book Search?

• Libraries can work closer with Google and OCLC to make it very easy to move from search results to purchased content (eg ‘Find in a Library’ link)

Integration (cont’d)

• Book Search offers a very limited form of collaboration (eg shared annotation among small & predefined groups) but:

– Doesn’t permit enhancements of texts;– Doesn’t permit the layering of new services upon texts;– Doesn’t permit use of texts in digital mash-ups.– Compare this with dynamic developments in ebook interfaces

for searching, sharing, storing, and managing ebook content– Book Search won’t allow downloading of in-copyright books to

mobile devices. – How will Google propose to integrate Book Search into the

researcher’s workflow?

The Competition….

• The sheer size and scope of Book Search will invite comparisons with established commercial products, such as EEBO, ECCO, and the backlists of major publishers like Oxford or Taylor & Francis.

• How would the pricing for the Institutional Database Subscription (IDS) affect pricing models in the academic marketplace?

• How would the ebook aggregators (eg. ebrary, EBL) be affected? Google has very deep pockets for R&D

• Turf wars - Google is providing public domain titles in ePub format to the Sony ebook reader and announced that “it would let anyone resell the millions of out-of-print books it has scanned from the nation’s libraries.”

• What was Amazon’s response?– “an Amazon executive immediately rejected the idea of becoming

Google’s affiliate”• Comparison of DRM systems would be important for assessing access to

material.

Google Books Settlement Conference, UC Berkeley, Aug. 28, 2009• Google Books is rife with metadata problems – wrong

publication dates, wrong subject headings, wrong authors, etc.

• “Will GBS be an adequate resource for scholarly needs… now and in the future? Depends on:– Quality of imaging– Reliability and robustness of search tools– Quality and reliability of metadata – e.g., date, edition history, author, subject

classification”Geoff Nunberg, School of Information, U California

“In our panel discussion, Dan Clancy [Google Chief Engineer] suggested that it should fall on users to take some of the responsibility for fixing these errors, presumably via some kind of independent cataloguing effort. But there are hundreds of thousands of errors to pick up on here, not to mention an even larger number of files with simply poor metadata or virtually no metadata at all. Beyond clearing up the obvious errors, the larger question is whether Google's engineers should be trusted to make all the decisions about metadata design and implementation for what will probably wind up being the universal library for a long time to come, with no contractual obligation, and only limited commercial incentives, to get it right. - Geff Nunberg, “Google Books: A Metadata Train Wreck”, Aug 29, 2009. http://languagelog.ldc.upenn.edu/nll/?p=1701

A Google ooops…

And another…

Canadian perspectives

• A group of Canadian authors led by David Bolt have argued that the ASA would violate US treaty obligations to protect Canadian copyright holders; would undermine moral rights under Canadian copyright law; poses serious threats to reader privacy; and creates a monopolistic model that undermines the interests of Canadian authors.

• The Association of Canadian Publishers, on the other hand, argues that the ASA is in the interests of its members since there is flexibility and transparency in allowing authors to opt out of the agreement.

• The Canadian Publishers Council praises the ASA for the flexible approach to management of its members intellectual works and the ability to control copyright interests. It also lauds the settlement for providing it with representation in the Book Rights Registry; for monitoring use of Canadian works outside of Canada, and for protecting the economic interests of its members.  

Canadian perspectives (cont’d)

• The Canadian Association of University Teachers argues that the Authors Guild does not represent Canadian academic authors, many of whom receive funding from the state to carry out research and are employed by public (rather than private) institutions. Also:

• “..the proposed settlement, among other things, contravenes international copyright law and international trade agreements, interferes with the moral rights of Canadian authors, fails to reflect the open communication values of academic authors and undermines privacy.”

Questions to think about

How do we partner with Google to take advantage of this dizzying opportunity for ‘’ breathing new commercial life into millions of long forgotten, commercially unavailable works”

Can library & educational values be respected, and what would this require?

Can a modified settlement allow Google, publishers, and authors to find compromise between private and public interests? Will it lead to ‘copyright peace’? (Department of Justice filing)

How does it impact or challenge the ways in which students, researchers and others access culture, and enhance, collaborate, and produce new cultural works for education and scholarship?

If the settlement went ahead, what does it mean for the publishing industry, authors, and access to books in general?

How could the settlement affect Canadian libraries?

Commercialization of knowledge...

• “The settlement would facilitate a remarkable change in the relationship among books, readers, publishers, authors, libraries, and Google. Access to so many great works would be greater than anyone imagined just ten years ago. But American libraries would be commercialized, essentially hosting Google vending machines on their premises.”

- Siva Vaidhyanthan, The Googlization of Everything, p. 154

Judge Denny Chin’s decision on March 22, 2011 (Fairness Hearing)

What did he rule and why?

The ASA (Amended Settlement Agreement) was rejected...

• “The question presented is whether the ASA is fair, adequate, and reasonable. I conclude that it is not.”

• “While the digitization of books and the creation of auniversal digital library would benefit many, the ASA would

simply go too far. It would permit this class action – which was brought against defendant Google Inc. to challenge its scanning of books and display of "snippets" for on-line searching -- to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners. “

A few key points in the ruling

• “Not only are the objections great in number, some of the concerns are significant. Further, an extremely high number of class members -- some 6800 – opted out.”

• “The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties.”

• “The ASA would grant Google the right to sell full access to copyrighted works that it otherwise would have no right to exploit.”

Seven types of objections discussed

• Notice to class members• Representation of the class• Future releases of class member rights• Copyright law & public policy• Antitrust concerns• Privacy concerns• International law

A few key points in the ruling (cont’d)

“...many of the concerns raised in the objections would be ameliorated if the ASA were converted from anopt-out settlement to an opt-in settlement.... I urge the parties to consider revising the ASA accordingly.”

What happened next? Several options were possible:

• An appeal of the ruling;• Revise the settlement and ask for another ruling;• Abandon the settlement and go back to litigation;• Publishers and authors drop the lawsuit;

Recent developments

– Dec. 12, 2011: Authors’ plaintiffs file motion for class certification to sue Google as a group

– Dec. 22, 2011: Google files motion to dismiss the above motion, ie to dismiss the class certification and hence the case....

– Google’s ‘divide and conquer strategy’– May 31, 2012: Judge Denny Chin grants class

certification and denies Google’s motion to dismiss– A hearing is scheduled to go ahead, but the case has

been suspended pending Google’s appeal.

“Class action is the superior method for resolving thislitigation. It is, without question, more efficient andeffective than requiring thousands of authors to sueindividually. Requiring this case to be litigated on anindividual basis would risk disparate results in nearly identical suits and exponentially increase the cost of litigation.”

- Judge Denny Chin, Opinion Granting Class Certificationhttp://thepublicindex.org/docs/cases/authorsguild/2012-05-31-opinion.pdf

How does this project and its endless litigation impact the perceptions of copyright law and libraries’ involvement with Google?

The Authors Guild sued HathiTrust for illegally making available 7M ‘orphan works’ digitized by Google: http://www.authorsguild.org/advocacy/articles/authors-3.html

What did the judge decide?

• “I cannot imagine a definition of fair use that would not encompass the transformative uses made by [HDL] and would require that I terminate this invaluable contribution to the progress of science and cultivation of the arts that at the same time effectuates the ideals espoused by the [Americans with Disabilities Act]."

- Judge Harold Baer, Oct. 10, 2012

A major victory for the proponents of ‘Fair Use’...

“The creation of a search index is a transformative use under the first fair use factor: "The use to which the works in the HDL are put is transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material.“

“The use of digital copies to facilitate access for the print disabled is also transformative. Because print-disabled persons are not a significant potential market for publishers, providing them with access is not the intended use of the original work.”

- Judge Harold Baer, Oct. 10, 2012

Google and publishers reach settlement

• Oct. 4: a deal is announced (doesn’t need court approval)

• AAP (Association of American Publishers) can determine whether or not to include their in-copyright publications in Google’s Research Corpus: victory for the publishers

• Those deciding not to remove their works will have the option to receive a digital copy for their use.

• The other details of the agreement are confidential• This agreement doesn’t affect the lawsuit of the

Authors’ Guild

Conclusion

• A healthy balance between the public good, legislation and private interests in regards to copyright and access to knowledge is essential

• How will this case affect information policy more broadly, eg competition, privacy, and international trade issues?

• How will this project shape the perceptions of the role of libraries in the digital era?

• What does this case tell us about the differing interests and values of authors, publishers, libraries, and Google?

• This case has enormous implications for the future of libraries to provide broad & free access to our cultural heritage, and the role of authors, publishers, and Google in controlling access to knowledge & culture…

Readings

• A Guide for the Perplexed (ALA – Jonathan Band)– Part 1 (original settlement)– Part 2 (amended agreement with U Michigan)– Part 3 (Amended Settlement Agreement)– Part 4 (Rejection of Settlement)

• GBS: Who is Filing and What are they Saying? • Amended Settlement Agreement• Amended Settlement reaction• The Public Index: “a site to study and discuss the

proposed Google Book Search settlement”

Thanks! Any questions?