Google Book Settlement, Part I: How Disputes Are Resolved
In 2003 Google announced it had begun scanning books. Its goal was to create a digital library of every piece of printed work that has been put in fixed form. It was, and still is, a noble goal. Google placed these scanned books in a database and made them searchable. On the side of the searchable content were ads through which Google earned revenue.
Arguing that Google’s scanning and displaying a portion of copyrighted work was infringement, Authors’ Guild commenced suit on behalf of all authors, known and unknown, and the authors’ heirs, to either stop the displaying of copyrightable material or make Google pay for it. Others, like the American Association of Publishers, joined in the suit, as well. Before the question of whether Authors’ Guild could speak for all authors, known or unknown, and the authors’ heirs was answered, the parties to the suit made a deal.
A Bit About Class Action Suits
Traditionally, class action suits are designed to provide compensation (money damages to put the injured party in the position that she should have been had the wrongdoing not occurred) and/or injuctive relief (to get the party to stop doing the wrong deed). In a common settlement, this would include the payment of money to authors whose works had been unlawfully displayed and/or Google’s cessation of displaying of copyrighted works. Going forward, Google would have had to obtain permission from the rights holders to scan and then display the books in its BookSearch.
The Orphan Works Dilemma
Approximately 10% are books that are in print (or in Google Book Settlement Agreement parlance “commercially available”) and under copyright. In other words, many of the books that are of interest to the readers and authors who visit Dear Author are in that 10% category.
The problem for Google is that there are many works for which obtaining permission is quite difficult because the author is unknown, or the publisher who holds the copyright refuses to respond, or for many other reasons. These have become known as “orphaned works”. Over 70% of the books under copyright are orphan works. Without the ability to protect itself from late cropping lawsuits by the owners of orphan works, the settlement would not likely be as attractive to Google.
Consequently, Google Book Settlement Agreement (hereinafter “GBKS”) became more than remediation/compensation or injunctive relief. Instead, GBKS created a prospective agreement altering copyright terms for all copyrighted books.
How Disputes Are Resolved
The GBKS is a topic too great for simply one post. This is merely an introduction. There is more to follow. Today’s post will be how disputes between “Rightsholders” are resolved. (Note all words in quotations are terms defined by the legal document and therefore have special meaning).
1. For every book that has been scanned and displayed without permission, the copyright owner will be paid a minimum of $60 for a
Principal Work“, $15 for an “Entire Insert“, and $5 for a “Partial Insert“.
2. Google intends to display portions of the “Book” on the internet, sell subscription access to the “Books” it has scanned, generate ad revenue, and leverage the scanned “Books” for profit in other revenue models.
4. There are more than one “Rightsholder” to each “Book.” At a minimum, an in print, “Commercially Available” “Book” has an author and a publisher. If the “Book” is an anthology, each anthology author is a “Rightsholder” (and no, the GBKS makes no special provisions for multi authored items. This is just one of its many flaws).
5. If there is a disagreement between author and publisher over the “Display Uses“, then the most restrictive use prevails. In other words, if Author A of Anthology wants 20% of the Book shown and Author B doesn’t want any of it displayed, Author B wins.
6. In the case of a dispute, Authors and Publishers are sent to arbitration. Of particular note, disputes between Publishers who are parties to the GBKS are not bound by Arbitration. They get to use the court system. Authors, though, have no such right.
7. Arbitration is set out in Article IX of the GBKS. The decision of the Arbitrator is final and binding. The place of Arbitration is New York, NY. The Arbitrator is drawn from a special pool of arbitrators picked by Google and the Registry. Some issues such as the subscription issues are allotted a three arbitrator panel. There is no stare decisis in GBKS Arbitration.
Stare decisis is a fundamental legal concept. It means that decisions that are made before instruct the conduct for the future. In the GBKS, Author A and Author B could bring the same but separate dispute against Publisher and arbitrators could decide the exact same issue differently with no repercussions.
The reason that stare decisis is so important is that it provides finality to disputes. If a high court says that copyright issues are to be determined in X way and not Y way, then we know going forward that we have to do things X way. If precedent is not followed, then confusion and inconsistent decisions follow with no certainty creating only more and more disputes.
8. In some jurisdictions (a region of courts like the upper East Coast is the 2nd Circuit; several states in the Midwest are in the Eight Circuit and so forth), decisions made in arbitration can be binding in cases not involving the GBKS so long as the issue is the same and the parties are the same. For example, if Author A gets into fight with Publisher over whether Publisher has the right to authorize certain pricing under the GBKS, the two get sent to Arbitration. The Arbitrator makes a decision.
Author A and Publisher have disagreement over pricing issues outside the GBKS and Author A takes Publisher to court. Publisher can say to the court “Hey, Author A and I fought over this already and this is the decision that was made” and Court can say “Bye Bye Author A”.
Thus, question no. 1 for an agent or lawyer is “If my existing contract with my publisher does not require Arbitration or the Arbitration terms in my existing contract are different, to what extent do I have to abide by the terms of the GBKS?”.
More next week. Please note that I will be away from the computer for much of this week but will try to respond to direct questions about the general settlement agreement. Further, as the above is not legal advice and no one is in an attorney/client relationship here, I cannot answer specific questions. In fact, I urge you to contact a lawyer if you have specific questions about how your contract is affected by the GBKS.
Definitions from the GBKS used in this post and are reprinted exactly from the Settlement Agreement:
Principal Work means a Book’s principal written work. A Principal Work can be a collective work, such as a collection of short stories or plays. A Book contains only one Principal Work but may contain other text, such as a foreword, afterword and annotations. A foreign language translation or an abridged version of a Principal Work is a different Principal Work. Two (2) or more Books that contain the same Principal Work but that each contains different or additional Protected Expression are considered to be different Books. By way of example, two (2) Books that have the same Principal Work (e.g., The Old Man and the Sea) but have different forewords or additional annotations (e.g., the Hueber Verlag and the Scribner editions) are different Books under this Settlement Agreement. A hard cover Book and a soft cover Book may have the same Principal Work, but are considered different Books under this Settlement Agreement (even if they contain no additional matter) if the hard cover Book and the soft cover Book have different ISBNs.
Insert means the following content, if and to the extent such content is independently Protected by the Copyright Act and, if a "United States work" as defined in 17 U.S.C. § 101, is covered by a registration with the United States Copyright Office as of the Notice Commencement Date, and is either (a) contained in a Book if there is no Person who has a Copyright Interest in such content and a Copyright Interest in such Book’s Principal Work, (b) contained in a Public Domain Book, or (c) contained in a Government Work that, on or before the Notice Commencement Date, was published or distributed to the public or made available for public access: (i) text, such as forewords, afterwords, prologues, epilogues, essays, poems, quotations, letters, song lyrics, or excerpts from other Books, Periodicals or other works; (ii) children’s Book illustrations; (iii) musical notation (i.e., notes on a staff or tablature); and (iv) tables, charts and graphs. The term "Insert" does not include (1) pictorial works, such as photographs, illustrations (other than children’s Book illustrations), maps or paintings, or (2) works that are in, or as they become in, the public domain under the Copyright Act in the United States.
Commercially Available means, with respect to a Book, that the Rightsholder of such Book, or such Rightsholder’s designated agent, is, at the time in question, offering the Book (other than as derived from a Library Scan) for sale new through one or more then-customary channels of trade in the United States.
Book means a written or printed work that (a) if a "United States work," as defined in 17 U.S.C. § 101, has been registered with the United States Copyright Office as of the Notice Commencement Date, (b) on or before the Notice Commencement Date, was published or distributed to the public or made available for public access as a set of written or printed sheets of paper bound together in hard copy form under the authorization of the work’s U.S. copyright owner, and (c) as of the Notice Commencement Date, is subject to a Copyright Interest. The term "Book" does not include: (i) Periodicals, (ii) personal papers (e.g., unpublished diaries or bundles of notes or letters), (iii) written or printed works in which more than thirty-five percent (35%) of the pages contain more than fifty percent (50%) music notation and lyrics interspersed, if any (for purpose of this calculation, "music notation" means notes on a staff or tablature), (iv) written or printed works in, or as they become in, the public domain under the Copyright Act in the United States, or (v) Government Works. References in this Settlement Agreement to a Book include all Inserts contained in the Book, except where this Settlement Agreement provides otherwise.