The Google Settlement: TWUC Advises Members Not to Opt Out of Google Settlement

In 2004, Google announced publicly that it had entered into agreements with several major university libraries in the United States to digitize books in their holdings, giving as one reason that Googlers could view snippets of books that had been scanned and indexed. The participating libraries have allowed Google to digitize over seven million books, and in return the library providing the book for scanning received a digital copy for the library. Some of these scanned books are in the public domain but a great many of these books are still protected by copyright. No copyright holders were informed or asked for their permission to do this. Although this settlement may influence how Canadian rightsholders, users and legislators think about the digital availability of books, the settlement applies only to uses of digitized books within the United States and only to books published in the United States by January 5, 2009. However, most books published in Canada will be covered by the settlement if and when the settlement receives court approval, because most foreign books, from the perspective of U.S. copyright law, are “published” in the United States. The general expectation is that the New York court will give its approval for the settlement when it holds a “fairness hearing” in June

On September, 2005, a class action was launched by the Authors Guild in the United States to prevent Google from posting copyright material online without permission from the copyright holders, and on October 19, 2005, five large U. S. publishers (McGraw-Hill, Pearson, Penguin, John Wiley and Simon & Schuster) launched a suit against Google on similar grounds. In October, 2008, the Authors Guild, the Association of American Publishers and Google, after three years of negotiations, announced that they had agreed to settle the two separate court cases. The settlement requires Google to provide a fund of $125 million, allocated as follows: $34.5 million to notify copyright holders about the settlement and to establish a Book Rights Registry of copyright holders; $45 million to resolve claims from authors and publishers for unauthorized digitization prior to May 5, 2009; $30 million to pay legal costs of the class action and a further $15.5 to settle the publishers’ separate action including legal costs and a fund of unknown size “to serve the interests of both publishers and authors”. Copyright holders whose books were digitized by Google prior to May 5, 2009, will likely receive $60 per book (but possibly up to $300 per book, depending on how many make claims by January 5, 2010) from that $45-million pot. If the total claims for digitizing books exceed the $45 million, then Google will make up the difference so that claimants whose books were digitized will receive at least $60 per book.

Copyright holders who do not want to be part of this settlement with Google have until May 5, 2009, to opt out of the settlement agreement. A person who opts out remains free, as an individual, to sue Google and the libraries who assisted Google. However, even a person who does not opt out can remove his or her books from all uses by Google and the participating libraries until April 5, 2011. Even after that, books can be excluded at any time from display uses by Google.

Copyright holders whose works were digitized before May 5, 2009 and who wish to remain part of this settlement have until January 5, 2010, to claim digitization payments. There will be no payment for digitization after this May deadline, although Google will be legally entitled to continue to digitize books published prior to January 5, 2009 and there may be “inclusion fees” related to the database of books available to subscribers.

A court hearing will be held beginning June 11, 2009, to assess whether the settlement is fair, reasonable and adequate. If a great number of copyright holders have opted out by May 5, or if a great many objections are presented to the court by copyright holders who have not opted out, it may influence the court not to approve the settlement or to modify it, and negotiations between Google, the Authors Guild and the publishers will likely resume and will have to take into account any comments from the court.

If the settlement is approved by the court, copyright holders whose works are digitized and who do not opt out of the settlement will be able to earn, in addition to receiving cash payment from the settlement for works digitized by May 5, 2009, payment from Google for advertising on the same screen on which their books are displayed and for subscriptions from libraries and other institutions, as well as from e-books purchased online from Google. In each case, Google will keep 37% of all monies it receives and send 63% to the Book Rights Registry, which will deduct an administration fee and distribute the balance to copyright holders registered with it.

After study of the settlement and its implications, the Writers’ Union of Canada advises members not to opt out of the settlement. Right now, this means that you do not need to do anything. It is likely that this settlement will be approved following the court’s “fairness hearing” on June 11, 2009 and, following the court decision, the Union will provide further advice on signing up with the new Book Rights Registry. Registration is not required until January 5, 2010 and the Union’s recommendation is to wait until after the New York court has made its decision on “fairness”, perhaps adding some conditions of its own to the ones agreed by the parties to the lawsuits.

Even after court approval, it will take a long time to implement the settlement. Meanwhile, it is likely that millions of books will be made available online, especially books that are out-of-print, for which thousands of writers will eventually receive some money. Government and educational institutions will be able to purchase subscriptions, but there will be some free access to users in public libraries and non-profit colleges and universities with a per-page fee for printing. Viewers generally will be able to download a short segment of a book and, if they like what they read, can order a print version from the book’s publisher or, eventually, to order an electronic version from Google. These will be opportunities for the writer whose work is digitized by Google to make a little money, although for most writers this is likely to be a modest amount. Most larger publishers will enter into their own separate agreements with Google, so the general rules for permitted digital uses and revenue sharing may differ a little depending on what individual publishers have negotiated with Google.

While the Writers’ Union sees the settlement as a valuable marketing tool for many writers, it does have some concerns. These include a concern that there will be little or no competition for Google’s Book Search and that, without competition or regulation, the cost of access may be racheted up in future. Any other company wanting to establish such a service will have to sign up rightsholders one by one without the benefit of court approval. Another concern is about how much money will actually reach authors through these new means of delivery. For most, it is unlikely to be significant. It should also be noted that the proposed settlement is not only about the commercial uses currently described in the settlement. It is a term of the settlement that Google and the Book Rights Registry may agree in future on “other potential commercial uses”, for example, print-on-demand books, course packs and abstracts or compilations of books, as long as rightsholders are notified, perhaps just through the Book Rights Registry website, that they may exclude their books from any of these additional uses.

Copyright legislation to deal with electronic uses is lagging, especially in Canada, but it is clear that electronic publishing is coming upon us swiftly in Canada as well as in the United States, and publishers and authors are endeavouring to establish new business models of their own. The National Council of Writers’ Union of Canada, in support of the Authors Guild, urges TWUC members to remain in the settlement with Google and not to opt out. It does not seem worthwhile for an individual to retain the right to sue Google or U.S. libraries, and books can be removed later from the servers of Google and the participating libraries if desired. TWUC will provide further advice after the “fairness hearing”.

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