Our Principles For the Mass Digitization of Books: Protecting Innovation, Competition, And The Public Interest

by Peter Brantley

Friday marks an important deadline in the ongoing debate about the Google Book Settlement. It’s the deadline for the Department of Justice to submit its findings to the US District Court.

The members of the Open Book Alliance recognize the tremendous value that the mass digitization of books can bring to consumers, libraries, scholars and students. Making books searchable, readable and downloadable promises to unlock huge amounts of our collective cultural knowledge for a broader audience than was ever possible.

However, as we’ve said repeatedly, there are right ways and wrong ways to go about this. The current settlement proposal is the wrong way. It would stifle innovation and competition in favor of a monopoly over the access, distribution, and pricing of the largest digital database of books in the world.

The right way to make the promise of the digitization of books a reality must follow these principles:

• Any mass book digitization and publishing effort be open and competitive vs. exclusive and monopolistic.
• It needs to prioritize and promote long-term benefits for consumers rather than isolated commercial interests.
• It must be done in a way that respects authors’ rights, rather than trampling them.
• The process of achieving this promise must be undertaken in the open, grounded in sound public policy vs. a private settlement that bypasses the rights and responsibilities of our elected officials.

Google CEO Eric Schmidt says that he doesn’t want to hear criticisms of their “solution”, but would rather hear critics come up with a better solution. Well, there are no easy solutions to this challenge, but the Open Book Alliance and other reasonable voices have suggested some possible paths to explore, including compulsory licensing of digitized books, continued oversight by the Department of Justice to ensure a level competitive playing field, and Congressional action to address copyright and orphan works laws.

It’s important to remember that this controversy was created by Google and its partners in the first place; it isn’t incumbent upon the huge number of innocent bystanders to fix their bad deal. But we are more than happy to continue to engage in discussions about how to make the promise of the digitization of books a reality, discussions that will never occur if this settlement is allowed to proceed as it is currently written.

The Open Book Alliance sees the mass digitization of books as one of the most important developments in knowledge-sharing in centuries. Our hope is that it is done in a way that benefits the largest number of people across the economic and geographic spectrum, while protecting innovation, competition, and the public interest.

Videos from Last Week’s House Judiciary Committee Hearing

Last week’s hearing on the Google Book Settlement controversy, hosted by the House Judiciary Committee, had a number of moments that demonstrated the concern over and discontent with the proposed settlement. Here are videos of a few of the highlights:

Rep. Hank Johnson (D-GA) addresses concerns of copyright issues and antitrust implications of the deal between Google and its partners:

Part 1:

Part 2:

Marybeth Peters, U.S. Register of Copyrights, questions whether the entire settlement itself encroaches upon Congress’ responsibilities:

 

Rep. Charles Gonzalez (D-TX) shares his opposition for the settlement by pointing out that the public interest is not being served by this private deal:

Finally, Paul Misener of Amazon.com talks about Google getting an “opt-out” monopoly, something that no other company would get as part of this settlement, and that it is simply just not true that this is a non-exclusive deal:

UPDATED: Nice Roundup of Court Filings Opposing the GBS

James Grimmelmann of the New York Law School has posted a great summary of the many court filings opposing the Google Book Settlement case on his Laboratorium website.

UPDATED: 88 new filings today opposing the GBS. Interestingly, Grimmelmann notes that former Author’s Guild president Robert Massie opted out of the settlement (6th bullet down.)

In Case You Missed It…

Among the flurry of court filings earlier this week calling out concerns about Google’s book settlement with the Authors’ Guild and AAP, was a little noticed but very interesting filing in opposition from Connecticut Attorney General Richard Blumenthal.  Blumenthal is no stranger to tough fights and standing up to powerful interests.  

Inside the brief are arguments about how the settlement runs up against the doctrine of sovereign immunity and CT’s own unclaimed property laws. But most interesting, from our perspective, is AG Blumenthal’s analysis that “the Settlement appears to raise objectionable issues” … from the point of view of the federal antitrust laws or federal copyright laws.” It further anticipates that the DoJ may focus on this issue. With the deadline for DoJ’s submission to the Court coming up next week, we think this is a significant development.

This analysis is also in line with the arguments contained in the Open Book Alliance brief, which makes the central and crucial point that Google and its partners are attempting to circumvent the nation’s antirust laws via court action in order to create a horizontal cartel for the sale and distribution of digital books.

From the Connecticut filing…

Connecticut has limited its comments herein to state specific issues that it does not expect will be addressed by objectors or commenters other than the states. Connecticut anticipates that other states will submit comments about the Settlement Agreement. The U.S. Department of Justice has indicated that it has opened an antitrust investigation into the proposed settlement in this case, and the Court has given the Department of Justice until September 18, 2009 to present its views in writing. See, Order, July 2, 2009 (Docket Item No. 120). Connecticut anticipates that the Department of Justice may submit views on the legality or advisability of the settlement from the point of view of the federal antitrust laws or federal copyright laws. The Settlement Agreement appears to raise objectionable issues under these headings. Connecticut’s decision to focus on the issues of unclaimed property, unlawful conversion of charitable assets, and unconsented inclusion of the sovereign within a defined class should not be interpreted as assent or acceptance of any other feature of the settlement.

Antitrust Implications of GBS Highlighted in Rep. Hank Johnson’s (D-GA) Questions at HJC Hearing

Yesterday, we called attention to the line of thoughtful questioning by Congressman Hank Johnson (D-GA) during the House Judiciary Committee’s hearing on the Google Book Settlement. Today, we are posting an unofficial transcript of Rep. Johnson’s part of the hearing, below.  

Rep. Johnson expressed concerns with copyright issues, but he spent most of his time on a line of questioning that addressed the significant antitrust implications raised by the proposed settlement. 

With the deadline one week away for the Department of Justice to submit a brief to the Court, we believe more attention should be focused on how this settlement potentially violates antitrust regulations.

Hank Johnson (GA-04): Thank you Mr. Chairman. Who were the parties to the settlement agreement? In other words, who sued whom? 

Authors Guild: We sued him, down there [points to David C. Drummond] 

Hank Johnson (GA-04): Who sued whom? 

Authors Guild: The Authors Guild brought the first class action lawsuit against Google in September 2005. Five publishers then filed a month later in a non class action lawsuit, also against Google basically over the same set of facts. 

Hank Johnson (GA-04): Was there any entity with the interests of the orphan works owners a party to the litigation? 

Paul Aiken, Executive Director, Author’s Guild: Orphan works are… works… 

Hank Johnson (GA-04): I understand, so it’s totally impossible to form group that represents the orphan rights owners but perhaps there can be some kind of entity set up to that would be like a fiduciary for the orphan works owners. That was not done in this litigation. What troubles me about this settlement is what has been included in the scope of this agreement.  Of course settlements are part of ordinary litigation, I love settlements myself.  It seems this settlement will bind orphan works owners. It’s not clear to me that copyright owners of orphan works were adequately represented. I am also particularly sensitive to the antitrust implications of the settlement. I am troubled by the exclusive access Google will have. Why should Google be the only entity permitted to see access to orphan works? Mr. Balto? 

David Balto, Center for American Progress: It’s important to note that the number of orphan works is extremely limited…

Hank Johnson (GA-04): It doesn’t matter if it’s one or ten thousand. 

David Balto, Center for American Progress: My testimony submits that it’s relatively modest, less than a million works. The problems people are presenting with orphan works would prevent orphan works from ever being accessible. I think this is one sound approach to doing so. 

Hank Johnson (GA-04): So Google as gatekeeper is the way to settle this universally? 

David Balto, Center for American Progress: I used to be an antitrust enforcer and these people have gotten really sound antitrust advice. They have tried to have there not be a critical gatekeeper and have tried to makes orphan works issues accessible. I tend to think it’s not that significant an advantage. 

Hank Johnson (GA-04): There are those that would disagree with you and I’d be one of those. 

David Balto, Center for American Progress: By the way, there’s a great brief by these thirty antitrust law professors, and thirty is more than two, and they’ve gone and analyzed the settlement at length and found it to be nonexclusive and I recommend that analysis to you. 

Hank Johnson (GA-04): Professor Picker, why should Google be permitted to be the only one to sell access to orphaned works? 

Randall Picker, University of Chicago: As you said, in most tort and class action cases it’s pretty routine to appoint a representative as guardian to future claimants. A very natural approach here would have been to do this. To go back to what Google has said, they favor broad licensing access to orphan works and I agree with them. 

Hank Johnson (GA-04): Where would they get the license from? 

Randall Picker, University of Chicago: Only from the government or the courts. 

Hank Johnson (GA-04): So in other words you are going to bind the legislative branch to a decision made by the judicial? 

Randall Picker, University of Chicago: That’s a tricky question. I don’t know the answer to the question of whether or how you separate legislation from a settlement. 

Hank Johnson (GA-04):  This would be a classic case of legislation from the bench. This gives parties to the litigation and others a view of the various issues involved here.  The scope of the settlement is coming very close to whittling away the rights of the US Congress. The Congress should decide who has rights over open works and not private entities negotiating a settlement. How does Google Books work? 

David C. Drummond: Many of the books we have are in the public domain so you can download those. The in copyright books will be in the cloud. Amazon knows a lot about this, they’ll be streamed to you and not downloadable. Once you purchase, you’ll have indefinite access. 

Paul Misener, Amazon: One of the future business models reserved to Google in the proposed settlement is for print on demand. Which is the way the industry is going. 

Hank Johnson (GA-04): What about audio books? 

David C. Drummond, Google: Only thing that is covered under the settlement is the ability to make books available to the visually impaired. 

Hank Johnson (GA-04): Why aren’t audio books covered? 

David C. Drummond, Google: We just didn’t cover it. 

Hank Johnson (GA-04): I don’t think this settlement will withstand a separation of powers review on the issue of applicability to anyone other than parties to the settlement.  Can you talk about that Mr. Simpson? 

John Simpson, Consumer Watchdog: I think one of the problems here is that settlement goes so far beyond the original complaint. I would put myself in the camp that snippets are appropriate for fair use.  But it’s gone way beyond that into the realm of new business model. I think that’s a problem. 

Hank Johnson (GA-04):  How can you create a competitive environment if there is only one provider? I am concerned about that. 

Thank you.

Cooler Heads, Prevailing

There’s been a fair amount of reporting already about today’s examination of the Google Books Settlement by the House Judiciary Committee, much of it about the witnesses.

We want to make sure due attention is paid to one of the questioners, Congressman Hank Johnson (D-GA) who also serves as Chair of the Subcommittee on the Courts and Competition Policy.  With his purposeful, zen-like delivery, Rep. Johnson closed the hearing with a series of thoughtful questions and observations. Quoting from Stephen Shankland’s story on CNET today:

“I’m troubled by the exclusive access Google will have to orphaned works. Why should Google be the only entity permitted to sell orphaned works?”

“The settlement is coming very close to whittling away the powers of the U.S. Congress. The treatment of orphaned rights holders is a matter that should be determined by Congress.”

From our notes, Rep. Johnson criticized the settlement as being a classic case of legislating from the bench, believes that the settlement will have a tough time withstanding a separation of powers review, and expressed concerns with the settlement’s antitrust implications. Fundamentally, Rep. Johnson commented that the scope of the settlement is most troubling, with a private settlement erecting Google as a gatekeeper.  He also cited the lack of consumer protections outlined by some witnesses as an area of concern.

It was a fitting end to what shaped up to be an informative hearing with knowledgeable witnesses on a subject that everyone – Congress, consumers, authors – needs to learn more about.

Open Book Alliance Response to Google Editions Retailer Access “Concession”

At today’s House Judiciary Committee hearing on the Google Book Settlement, Google’s chief legal officer David Drummond made news with an announcement about Google Editions.

Below is the Open Book Alliance’s response to this announcement, from Peter Brantley, co-chair of the Alliance:

“Google’s announcement today that it would give retailers access to out of print books via Google Editions is much ado about nothing. 

First, Google has always planned on doing this. David Drummond himself, when asked if this was a major change, was quoted today saying, ‘It is and it isn’t. We always had this vision…’

 

Second, if Google Editions ever comes to fruition — and it’s pure vaporware right now — it doesn’t address the fundamental problems with the Settlement that so many have cited, including the fact that Google would still has sole control over access to the books, and shoppers would still be subjected to questionable and undefined privacy policies. 


Finally, the only way that this even becomes reality is on the condition that the settlement is allowed to proceed as it’s currently written. As we’ve seen today, there are serious questions about the legality of this settlement’s rewriting of copyright law.


 The bottom line is that this “concession” by Google is nothing more than another smokescreen, designed to misdirect and confuse an increasingly concerned industry.” 

Publisher’s Weekly: Peters’ Testimony a “Disastrous Development” for Google Book Settlement Cartel

Publisher’s Weekly just posted a story online that highlights the powerful and blistering testimony of Marybeth Peters, the U.S. Register of Copyrights.

The story noted that:

“While the days other witnesses reiterated their well-known views on the deal for the subcommittee, Peters’s testimony stands as a disastrous development for the settlement parties, just weeks before its October 7 fairness hearing. Peters’s strong views could now put Congress and the courts on a collision course, as Judge Denny Chin, in approving the settlement, would have to essentially ignore the Copyright Office’s assessment of the deal’s legality. While that may be in Chin’s purview, Peters’s testimony suggests Congress could seek some legislative redress were that to happen.” 

U.S. Copyright Office “Increasingly Concerned” About Google Book Settlement

Today’s House Judiciary Committee hearing on the Google Book Settlement saw some early fireworks, as Marybeth Peters, head of the U.S. Copyright Office, lambasted the proposed settlement, saying it “inappropriately creates something similar to a compulsory license for works, unfairly alters the property interests of millions of rights holders of out-of-print works without any Congressional oversight, and has the capacity to create diplomatic stress for the United States.”

Amy Schatz of the Wall Street Journal has details on Ms. Peters testimony here.

More from Ms. Peters today:

“When the parties announced last fall that they had reached a settlement in what was becoming a long and protracted litigation, our initial reaction was that this was a positive development. But as we met with the parties, conversed with lawyers, scholars and other experts, and began to absorb the many terms and conditions of the settlement — a process that took several months due to the length and complexity of the documents—we grew increasingly concerned. We realized that the settlement was not really a settlement at all, in as much as settlements resolve acts that have happened in the past and were at issue in the underlying infringement suits. Instead, the so-called settlement would create mechanisms by which Google could continue to scan with impunity, well into the future, and to our great surprise, create yet additional commercial products without the prior consent of rights holders. For example, the settlement allows Google to reproduce, display and distribute the books of copyright owners without prior consent, provided Google and the plaintiffs deem the works to be “out-of-print” through a definition negotiated by them for purposes of the settlement documents. Although Google is a commercial entity, acting for a primary purpose of commercial gain, the settlement absolves Google of the need to search for the rights holders or obtain their prior consent and provides a complete release from liability. In contrast to the scanning and snippets originally at issue, none of these new acts could be reasonably alleged to be fair use.

“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.”

Her full testimony can be found here. 

Fact v. Fiction on the Google Book Settlement

As today’s House Judiciary Committee hearing gets under way, we have released a list of seven Fiction v. Fact issues that we urge the Committee members to address. As Open Book Alliance co-chair Peter Brantley said…

“There’s been a lot of questions about the nature of this settlement, and unfortunately, there remains some inaccurate information out there. We sincerely hope that today’s hearing helps clarify some of the facts about the settlement, and we encourage the members of the House Judiciary Committee to explore these areas in its questioning of Google and its partners.”