Judge Burns Google Books Settlement

A major 2008 settlement between Google Books, authors and publishers has been rejected by a New York federal Judge. Judge Denny Chin of the Second Circuit Court of Appeals rejected the US$125 million settlement because he said it would give Google too much power in the search market.

The 2008 settlement included the Author’s Guild and Association of American Publishers. Google reportedly agreed to pay $125 million and additional royalties every time a book is viewed online using Google Books. The settlement would have allowed Google to publish millions of books online and sell access to consumers and libraries. The deal has been traveling to different courts and finally arrived the Second Circuit Court of Appeals.

Although its current form has been rejected, Chin has left the settlement open to amendment. He wants the settlement to be “opt in,” which would require Google to have copyright holders consent. The current form is “opt out,” which means copyright holders have to opt out of Google Books or Google could publish their work by default.

Google wants to let users search the texts of its database of 12 million books. Google has had plans to eventually scan and create a virtual form of every text created.

Was Google Books Wielding Too Much Power?

“Google sought to be the commercial’ repository and disseminator of all text-based writings without regard for commercial, academic or scientific copyrights on just about everything that has ever been written since the papyrus, charcoal and The Rosetta Stone,” Laura DiDio, principal analyst at ITIC, told the E-Commerce Times. “So I think Judge Chin made an excellent decision.”

Google has control over a wealth of information and how it is accessed. “No singular entity should have that much control,” said DiDio. “What about author’s rights? In addition to the copyright issues, there’s also the very crucial matter that Google seeks to control how published material is indexed, presented and written. That’s just mind boggling. If allowed, this would have created an instant monopoly in the search market. Google would have had an unfair competitive advantage over competitors from which they would have had little or no hope of overcoming. And there would almost certainly be antitrust challenges to this.”

The settlement between the authors and publishers and Google was originally completed in 2008.

“The wheels of justice sometimes turn slowly,” said DiDio. “I think the judge overturned it because it was too broad and therefore unenforceable and also because more legal challenges were inevitable. I thought Judge Chin got straight to the heart of the matter in his ruling: namely that the original ruling ignored the authors’ copyrights. The authors had no choice in the matter.”

A new settlement would most likely give more rights and options to copyright holders.

“Chin very astutely left the door open for an amended settlement by rejecting the current one ‘without prejudice,'” said DiDio. “Chin’s decision, which calls for the settlement language to incorporate an ‘opt in’ clause, will prevent Google from using and disseminating copyrighted material by default if the copyright owners fail to opt out.”

The Next Chapter for Google Books

Google is a powerful force that’s good at adapting to change. “Google’s management team is smart and aggressive,” said DiDio. “They will regroup fast. Publicly, they will probably go for an appeal. Privately, they’ll almost certainly try another tactic that is more palatable but one that also ensures that the upper hand in the search market with respect to published works, stays firmly within their grasp. This is going to be a long, drawn out war.”

New rules will need to be introduced in Google Books to make it more fair for authors and competition. “Authors should be able to opt in and opt out,” said DiDio. “This is also very new territory. I think Google should let authors dip their beaks and receive royalties based on the number of downloads/hits their material gets in a given year. Google needs to share the wealth with the creators of the material. I also don’t think that Google should be the only search engine that gets exclusive rights to disseminate, index and present all written works.”

Google’s Troubles With Intellectual Property

Governments have to keep Google in check when its practices begin to ignore copyright and antitrust laws. “Google is having increasing trouble working with governments, this seems to reflect growing momentum to block their key efforts,” Rob Enderle, principal analyst at the Enderle Group, told the E-Commerce Times. “Court process moves slowly and this apparently wasn’t a high priority with the court.”

Google has had problems in the past with intellectual property issues. “They will either have to appeal or alter the offering according to the court’s wishes,” said Enderle. “Authors need to be protected or we won’t write; the initial deal didn’t do enough to protect authors. Google is really getting a reputation of ignoring the rights of those that create content. Android has generated 37 lawsuits mostly on intellectual property issues for instance, and Google has been regularly accused of IP theft.”

Google may need to change its attitude if it wants to avoid further legal action. “I think there is a bigger problem at play here: Google is acting as if they are a robber baron on a lot of fronts, which likely means courts will assume they are guilty,” said Enderle. “Microsoft was in this same space a decade ago and it got very expensive. Google needs to find a way to embrace and assure that content creators get compensated from those that write articles like this one, to folks who write books, or create code. They seem to have this medieval attitude that they are the lords and writers are their serfs, and unless that attitude changes this won’t end well.”

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