Archive for the ‘Google settlement’ Category

The Department of Justice comes down against Google settlement

September 21, 2009

The Department of Justice (DoJ) has filed a statement in the Google settlement case

It’s important to note that they are not making a decision in the case, merely stating their opinion to the United States District Court, Southern District of New York, as many others have done. The latter court will have a “Fairness Hearing” about the settlement on October 7, 2009.

The thirty-two page document, authored by William F. Cavanaugh (Deputy Assistant Attorney General, Antitrust Division), Preet Bharara (United States Attorney for the Southern District of New York), and John D. Clopper (Assistant United States Attorney), will presumably carry more weight than some of the others.

In fact, my guess is that some commentators will see this as a test of the current administration’s influence.

I won’t say I’ve read a lot of Department of Justice documents 😉 , but this struck me as unfailingly polite. It sort of seemed like a police officer coming up to somebody and saying:

“Gee, I hate to mention this, but your car is parked next to a fire hydrant. That appears to me to be a violation of Civic Code THX1138. If you don’t move your vehicle, it may be necessary for me to give you a ticket. I’m looking forward to you taking action to resolve the situation.”


For example, there is this early comment:

“The Proposed Settlement is one of the most far-reaching class action settlements of which the United States is aware; it should not be a surprise that the parties did not anticipate all of the difficult legal issues such an ambitious undertaking might raise.”

In other words, “Even though Google has to pay up to thirty million dollars in legal fees to the other side, all those high-priced lawyers couldn’t figure it out like we can.”


I’m going to give you a rundown of the document: just my own summary, with some brief excerpts as highlights.  You can read it yourself here.

The document starts out by talking about the potential benefits of the settlement.  They say that it has “…the potential to breathe life into millions of works that are now effectively off limits to the public.”  They also talk about the advantages to those with print disabilities, and how clarifying copyright status and ownership works for out-of-print books would be a “welcome development”.

They contrast that with their concerns.  The first is one that I’ve expressed before: this is a matter that should be handled by the Congress, rather than by private parties.  They are also particularly concerned about what is called “Rule 23” (more on that later…it has to do with class action suits being fair to everybody in the class), copyright law, and antitrust laws.   They say simply:

“As presently drafted, the Proposed Settlement does not meet the legal standards this Court must apply.” 

They are also concerned about the settlement affecting future activity, not just past conduct.  That’s not a deal-killer, but an important point.

They say they are guided by three principles: 

  1. Getting books digitized and out there, especially for people with print disabilities, is a good thing 🙂
  2. Consumers deserve a competitive marketplace
  3. Rule 23 needs to be used to make sure rightsholders who weren’t part of achieving the settlement are protected

They suggest that the best thing would be for the two parties to keep talking and come up with an improved settlement that satisfied all the concerns. They say

“Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost.”

They then go on to discuss their concerns.

Rule 23

The basic set-up here is that a class action suit has to take care of all the members of the class.   The main concern is that the arrangement between Google and the Registry will allow them to benefit from the works of “absent members”, unless those absent members opt out.   They are also concerned that affected people may not have been properly notified…given the number of people who have written things that still have copyright protection in the world, that’s a lot of people to send letters. 

They discuss a range of possible problems, and aren’t as concerned about some things as others.  However, their biggest concern is this:

“…essentially authorizing, upon agreement of the Registry, open-ended exploitation of the works of all those who do not opt out from such exploitations. See Proposed Settlement Agreement, dated Oct. 28, 2008 (“S.A.”) § 4.7 (allowing the Registry to authorize future business models without any class notification). Such licensing is far afield from the facts alleged in the Complaint. And the rights conferred are so amorphous and malleable that it is difficult to see how any class representative could adequately represent the interests of all owners of out-of-print works (including orphan works).”

They are also worried that rightsholders of in-print and out-of-print works are treated very differently.  Google has to work with rightholders of in-print works, but not of out-of-print works.  They point out that rightsholders for orphan works are a huge and wildly diverse group. 

“Moreover, no amount of notice is likely to protect those orphan rightsholders who are unaware of their rights or unclear how or whether they want to exploit them. Yet, if an out-of-print copyright owner does not come forward within five years, profits from the commercial use of the out-of-print work are distributed to pay the expenses of the Registry and then to the Registry’s registered rightsholders.”


“…the Registry and its registered rightsholders will
benefit at the expense of every rightsholder who fails to come forward to claim profits from Google’s commercial use of his or her work.”

So, one of the concerns is that the present rightsholders can say whether or not they want things done, but the absent ones who don’t hear about it or don’t opt out don’t control it.  The present rightsholders benefit from the exploitation of the non-present ones.

They say that the parties to the agreement say essentially that, “Hey, there will be money for people who wouldn’t have it otherwise, so they’ll want to come forward.” But, the DoJ points out that you can’t just hope that will happen. They also say that the fact that the rightsholders might be compensated for “…a fundamental alteration of their rights” doesn’t prove that the folks whose rights are staying the same (or who can easily have them stay the same) are representing the other ones…especially when they can benefit from that alteration of rights.

Secondly, they worry about international rightsholders.  They clearly weren’t represented in the settlement, and other countries have been expressing their concerns about it. 

Third, the class of rightsholders that could be affected is so broad (including foreign rightsholders who may not have even decided to publish in the US yet) that it would be really hard to give sufficient notice.  They are careful to say that they don’t know that sufficient notice wasn’t given, but that the issue should be carefully examined.

They then go on to make some suggestions that could make the settlement compatible with Rule 23.  Changing it to an “opt-in” rather than an “opt-out” would help.   They also seem to use the parties’ own words…the parties have been arguing that most people will want to join in, and won’t be as hard to find as people think.  If that’s the case, why not change to opt-in? 

Other possibilites are to extend the deadline, put other representatives in place, use the money differently, and so on.

They say they are looking forward to more ideas from the parties.


They say that there are still investigations on-going, but that they can make two main points now. 

 1. Book publishers appear to be able to “restrict price competition”.  Wholesalers aren’t allowed to dictate to retailers what their prices can be.  They can set “suggested retail prices”, but can’t fix the sale prices. 

Competitors can’t get together and set prices.  The DoJ says:

“…the parties contend that the Proposed Settlement’s pricing terms should be viewed not as a form of horizontal collective action by publishers and authors actionable under Section 1, but simply as a unilateral offer by Google to each individual rightsholder to contract on specified terms. The Department is not persuaded by this description.  Class representatives – who compete with each other – collectively negotiated these pricing terms on behalf of all rightsholders. That some individual authors or publishers might opt out of those terms does not make them any less the product of collective action by competitors.”

A comparison is then made to the music licensing groups, like BMI and ASCAP.  They explain why it isn’t the same, for a number of reasons.

The DoJ also has concerns about there being a set royalty rate.  They point out that is anti-competitive, and appears to be unnecessary, since millions of e-books are available without a set rate.   You also can’t make the deal based on the fact that it saves transaction costs: those are deemed to be worth it in most cases in retail. 

The agreement also has a price-setting algorithm and a limit on discounts, both of which are not okay. 

There is also this:

“The Registry is effectively controlled by large commercial publishers. Allowing it to set the prices of orphan works effectively allows known rightsholders to choose the price at which their competitors’ books (those of unknown rightsholders) are offered for sale. Citizen Publ’g, 394 U.S. at 134-135 (joint sales of newspaper advertising and subscriptions by competing newspapers held to be “plain beyond peradventure” per se violations of § 1). Known rightsholders would appear to have every incentive to ensure that the orphan works will not offer effective competition.” 

2. They worry that the settlement will restrict competition.

They make a point I’ve made myself.  The settlement does allow the Registry to license the works to competitors of Google.  However, that is limited by the rights granted to them under the law, which may be insufficient.  They put it this way:

“The Proposed Settlement appoints the Registry to negotiate with Google on behalf of the entire class regarding new commercial uses of digital books, and releases Google from any copyright liability arising from those new uses. S.A. §§ 4.7, 10.1(f), 10.2(a). The Proposed Settlement does not forbid the Registry from licensing these works to others. But the Registry can only act “to the extent permitted by law.” S.A. § 6.2(b). And the parties have represented to the United States that they believe the Registry would lack the power and ability to license copyrighted books without the consent of the copyright owner – which consent cannot be obtained from the owners of orphan works. If the parties are correct, the Registry will lack the ability to provide competitors with licenses that will allow them to offer to the public anything like the full set of books Google can offer if the Settlement Proposal is approved.”

They go on to talk about how it would be prohibitively difficult for a competitor to get the same (or a better) deal.   They bring up the Sherman Act, and talk about how this could lead to “market foreclosure”, effectively preventing other folks from getting into the act. 

“Consumers may benefit from the creation of digital libraries that would not otherwise be feasible, but they should not be required to pay the price of eliminating competition among authors and publishers on the one hand and de facto exclusive control of the library by Google on the other.”

They then bring up two additional considerations.  One is that this would make books more available to the disabled…that’s specifically built into the agreement. The second (and this will please a lot of people) is that the books should be available in “multiple, standard, open” formats.

“Once these books are digitized, the format in which they are made available should not be a bottleneck for innovation.”

I say that means we should have them in a Kindle-compatible format.  😉  I know we can convert EPUB, but a little unprotected mobi action would be nice…or even text files.

The DoJ Conclusion:

“This Court should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations to modify it so as to comply with Rule 23 and the copyright and antitrust laws.”

My Conclusion

You know, at least to this blog post.  🙂  Some people are painting this as Google wanting to make books available for free, and Amazon wanting to stop them because they want to sell the books.   They make it “populist Google” on the one side, and “corporate Amazon” on the other. 

It’s nowhere near as simple as that.  A lot of us onliners like to think of the internet as “power to the people”.  After all, you don’t need a big studio to make a movie, or a record company to make a song…or a publisher to get your book out there.    With the internet, you can reach the market with no one in-between. 

However, while the DoJ clearly agrees that making books available on the internet is a good thing, they don’t think that this agreement (the way it stands) is the way to do it, because it’s got problems. 

If this settlement is not approved, I still think you’re going to get those books out there.   That 1935 self-published book on how to save the Music Hall now that radio is here?  You’ll get it.  Volume 27 of the “Adventures of the Ballyhoo Boys”?  The one that sold ten copies…and all of those to the author’s relatives?  Yep, that’s coming, too.  The 1962 “Road Atlas of Zanzibar”?  Sure, why not?

I think we just have to be careful that we don’t give up too much and create too much of a mess so we can get what we want…and what’s going to come eventually anyway.

I’ve got plenty to read…I can wait a little while for a better solution.

UPDATE: After this statement from from the DoJ, it appears that Google and the Authors Guild want more time to do a rewrite to address the above concerns.  I’m thinking that “opt-in” rather than “opt-out” is a possibility, along with some other tweaks.

UPDATE: The fairness hearing has been delayed.  No new date has been set…it may take awhile to rewrite the agreement.  It wouldn’t surprise me if it takes a year, although it could certainly be faster than that.  Presumably, more money for the lawyers: gee, I wonder if Google will have to pay more for the other side’s legal fees.  🙂

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.


In the settlement

September 17, 2009

I wrote earlier about the Google settlement, which was reached between that company and the Authors Guild (sic) and the American Association of Publishers over Google digitizing books.  That settlement is awaiting approval, with an important fairness hearing scheduled for October 7, 2009. 

It’s a large, complicated document: the settlement itself is 141 pages, and there are a quite a few other attachments and filings that are relevant.

I was surprised at some of the things in the settlement, and I don’t expect that everybody will read it…even on a Kindle.  🙂 

So, I thought I’d list some of the points I thought were interesting:

  • Google (not admitting wrong-doing) pays $45 million into a fund to pay authors whose works were digitized before the “opt-out” deadline
  • If they did a whole book, you get at least $60
  • Google also pays $34.5 million to get the Registry running (which represents rightsholders, among other things)
  • Google will pay up to thirty million dollars in attorneys’ fees
  • Rightsholders are allowed to make deals with groups besides Google, even direct competitors
  • Google determines whether or not a book is commercially available (new, not used) (which affects the uses Google can make of it)
  • A rightsholder can dispute Google’s determination: Google then has 30 days to fix it
  • Google can choose not to display (make available in full) books for editorial reasons
  • Google can not alter the text (with certain limitations, like adding some hyperlinks)
  • It allows for book annotations (with specific prohibitions)
  • “Google may not place on, behind or over the contents of a Book or portion thereof (including on Preview Use pages or Snippet
    Display pages), as displayed to a user, any pop-up, pop-under, or any other types of advertisements or content of any kind.”
  • Google can not let people preview the last 5% (minimum fifteen pages) of fiction books (to prevent spoilers, presumably)
  • The Registry is explictly prohibited from using robots to drive up search results ad revenue (which is shared with the Registry)
  • The Registry will be not-for-profit
  • Unclaimed fees, after being used to defray costs, will be donated to non-profits that “will include entities that advance literacy, freedom of expression, and/or education”
  • The settlement mentions “revenue from licensees of the Registry other than Google”
  • Google can accomodate people with print disabilities, which could mean text-to-speech
  • A library can grant “special access” to “to a user who has provided
    written documentation that a Person having the credentials of a Competent Authority has certified that such user has a Print Disability”
  • Google can exclude books for “editorial reasons”, which is described as an issue of “great sensitivity”
  • Specific copy and paste rules are created for certain circumstances, for example “the user will not be able to select, copy and paste more than four (4) pages of the content of a Display Book with a single copy/paste command”
  • Google and the Registry agree on a set of price points
  • Rightsholders are deemed to have authorized the Registry to exercise their rights (Article VI, 6.7)

Those are just my takes on a few things that caught my eye.  You can read the Settlement agreement yourself here:  The Fairness Hearing is scheduled for October 7, 2009.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

The Right to Not Copy

September 7, 2009

“Section 106 of the 1976 Copyright Act generally gives the owner of copyright the exclusive right to do and to authorize others to do the following:

• To reproduce the work in copies or phonorecords…”

Copyright Basics
United States Copyright Office

There is a major legal drama going on right now that will affect what you read in the future.  It involves some of the biggest powers in the literary world: Amazon; the American Association of Publishers; and the Authors Guild.  Groups and individuals filing documents include such diverse entities as: the American Association of People with Disabilities; the Urban Libraries Council; Sony; Arlo Guthrie; David Eddings; and the Federal Republic of Germany.

The pivotal player, the one that started the whole process, is a company not associated with paper and ink, an icon of the virtual world: Google.

Google made a name for itself as a search engine for the internet.  It makes sense for it to try to extend that reach, and it has done so successfully.  With Google Earth, for example, it essentially took places (like your house), and digitized them.   It has (imperfect) translation tools, spreading the value of Google’s searches for English speakers to websites in Arabic, Hindi, and Norwegian. 

It was a logical move for Google to want to get paperbooks onto the internet, and accessible to its search services.

Google began to scan books.  It made arrangements with libraries to have access to their collections.  It patented a method of improving the Optical Character Recognition process that turns a scanned image into text.

A challenge arose to Google’s actions. 

“On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”
–Reportedly said by Stewart Brand in 1984

Many people only quote this portion: “Information wants to be free.”  The dichotomy in Brand’s statement is important.  If we accept that information it is a commodity that requires human effort, skill, talent, and time to produce, it seems reasonable that it is a marketable product.  Markets imply competition.

If Google had only been scanning public domain books, that would have been one thing.  Public domain books belong to the public: anyone can reproduce them and sell them.  This is part of copyright law: for example, books first published in the United sates prior to 1923 are in the public domain in the United States.

Google was also scanning other books, ones that were still under copyright protection.  That was a much more complicated situation.  There are conditions under which scanning a book that was under someone else’s copyright could be legal, even without the rightsholder’s consent.

The Authors Guild (sic) , a group that calls itself “the nation’s leading advocate for writers’ interests in effective copyright protection…”, and the Association of American Publishers were the plaintiffs in a settlement between those groups and Google.  The Motion for Preliminary Settlement Approval which was filed on October 28, 2008 in United States District Court Southern District of New York.

Google did not admit any wrong-doing in the settlement, and agreed to pay a minimum of forty-five million dollars to authors who works were digitized prior to an opt-out deadline.  Google also agreed to pay thirty-four and one half million dollars towards a registry that would represent the interests of rightsholders, and coordinate payments to them, as well as finding information from rightsholders.

This is a complicated settlement that will allow Google to continue to scan books, and arranges for rightsholders who make claims to receive payment.

Other groups have filed statements, both supporting and opposing the settlement.

Some media articles have painted this a battle between commercial interests: among others, Google and Sony on one side, and Amazon, Microsoft, and Yahoo on the other.

Certainly, there are titanic economic forces involved, and the interpretations of the settlement and arguments for and against deserve fuller treatment in later posts.

I see this, though, as a classic social struggle.

There is the position of the societal benefit in Google making books available to readers which otherwise would not be. 

The opposing viewpoint is the right of individuals to control the uses of their creative output.

Both sides have legitimate arguments. 

To be clear, I don’t think any of the commercial entities are working solely for altruistic aims.  There is money to be made (or lost) depending on the final determination.

What the settlement does, though, is shift the burden away from the publisher to get the rights before doing the book to the author, to choose not to allow that publication.

When authors were granted copyright under copyright law, that was an agreement between the United States government and that individual writer. Yes, that agreement could be altered by law (and has been a few times).

This, though, is a proposed settlement that requires authors to say that they do not want books published by Google. It creates a registry that purports to speak on behalf of authors. This is a fundamental alteration of the current arrangement.

Before the agreement, Google would have had to find an author (or other rightsholder) to get permission to publish the book. If a person could not be found, the book might remain unpublished…which might have been the intent of the person who created the work.

Under the settlement, Google makes an effort to see if the book is in print. If not, and no one has stated an objection, Google can publish the book. Google then gives part of the money to the Registry, which holds it in case the author claims it.

The author (or the author’s heirs) or other rightsholders, now have to be vigilant, which was not part of the original agreement with the government. If you file an objection that your book is still in print, or simply that you don’t want it published, Google has thirty days to rectify the situation.

Here is one paragraph from the proposed settlement to illustrate this:

“Mistakes. If a Book was mistakenly determined by Google not to be Commercially Available, then the Rightsholder of the Book may notify Google, or may authorize the Registry to notify Google, of such mistaken determination. To verify the claim, the Registry will provide, upon Google’s reasonable request, information supporting any assertion by the Rightsholder of the Book that the Book is Commercially Available. If the Rightsholder demonstrates that the Book is Commercially Available, then, as Google’s sole obligation and the Rightsholder’s sole remedy (subject to Section 3.2(d)(iv) (Disputes)), Google shall correct the determination as to whether the Book is Commercially Available within thirty (30) days.”
–Section 3.2 (d) (iii)

In other words, if an author is selling a book, and Google scans it and doesn’t find out that the book is being sold, Google can display the book.  The author has to notify Google or the Registry of the situation.  The Registry presents the evidence to support the author’s claim.  If Google accepts the evidence, Google has thirty days to stop displaying the book.

People argue that the public benefits if a book is available to them when the rightsholder can not be located. The loss of that book (until it falls into the public domain) is seen by those people as a societal loss.

However, the book did not exist until the author wrote it. The author was granted control over that material (except in certain circumstances) by the US government. It shouldn’t be up to entities that stand to benefit from the book being published to agree that the author has to defend the choice to publish or not publish in an unprecedented manner.

If the United States government determines that there is a “must keep published” need to maintain copyright, that change should be made by the elected Congress of the United States.

As a reader, I would love it if every book I ever wanted was available to me. As an author, I don’t want that choice of availability or not taken away from me, except as defined by law.

There are many other elements of the decision that deserve discussion.  If you are interested in reading it for yourself, it is here:

The Public Index has related documents, including those filed supporting and objecting to the settlement:

I know this is a controversial issue, and one that has sparked passions on both sides.  Even though I don’t think it is the motivation of all of those submitting objections to the settlement, I think opposing it benefits individual authors.  I am interested in knowing what you think.  Please feel free to leave comments here.

Thanks to Andrys Basten of A Kindle World for proofreading and suggestions that helped this article. 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

Today (September 4) is the last day for authors to opt out of the Google settlement

September 4, 2009

There has been quite a bit of discussion about the Google settlement, and I’m going to address that more later.

I wanted to alert authors that today (September 4)  is the last day to opt out of the settlement.  You can do it online at the below address:

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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