[Continues D is for Digitize: Day One. Posted by Peter Hirtle]
Friday: L is for Lawsuit
Kiran Raj (filling in for Michael Guzman), Cynthia Arato, and Jonathan Band opened the panels portion of the conference with what was for me (as a non-lawyer who has looked primarily at copyright) a tremendously useful introduction to the legal issues surrounding the settlement. Much of the session was an explication of Rule 23, the federal procedures governing class action settlements. Since this was all new to me, I will probably present it in too much depth.
Kiran Raj noted that the class in GBS has not been certified yet, and the issue of whether it can be certified is therefore open. (Judges are also supposed to give heightened scrutiny to settlements involving non-certified classes). He outlined four requirements for certifying a class:
Numerosity - it must be impractical to otherwise join all members. There is no question in this case, since the number of potential class members numbers in the millions.
Commonality - there must be elements that are common to all members.
Typicality – are the claims typical to the entire class?
Adequacy of representation – has the class counsel adequately represented the interests of all the members of the class?
Other elements that must be taken into account under the heightened scrutiny required when a class is not certified but a settlement is proposed are the fairness of the settlement to the proposed class members and the sufficiency of the notice required by by Rule23(e). Many of the objectors to the settlement cited the poor notice.
Cynthia Arato built on the theme of objections to the settlement, and suggested that the fact that the the settlement has been withdrawn suggests that the parties recognized the validity of some of the objections.
Here are some of the objections she noted:
- Notice. Objectors argue that given scope of GBS and its affect on property rights going forward, it is important to provide notice to all class members – something GBS has not done. GBS also waives trademark and other rights, a fact not mentioned the notice that did go out.
- The promised translations of the settlement were not done.
- The plaintiffs are domestic authors and publishers. They cannot therefore represent foreign class members and owners of orphan works (though Jonathan Band later pointed out the named publishers include international publishers, such as Bertelsmann). GBS also binds foreign authors who may not have yet had their rights infringed by Google.
- No jurisdiction. The initial lawsuit was about scanning and snippets; the settlement is much, much broader, and hence inappropriate.
Jonathan Band then presented a useful summary of DOJ’s objections.
DOJ was the game-changing filing. DOJ echoed Cynthia Arato’s procedural points on Rule 23. Notice was not adequate, representation of foreign rights holders may not have been adequate, and there is a tension between interests of parties and orphan works. The DOJ solution: scale settlement back to the issue in the litigation and fight over snippet display. (Of course, to my mind doing so would destroy much of the game-changing utility of the proposed settlement).
The other half of DOJ’s brief talked about some of the settlement’s negative impacts on competition, including the potential for price fixing in consumer purchase and that fact that only Google can offer services for unclaimed works. Again, DOJ’s solution was to step back to snippet display.
Band noted that the brief was in tension with itself. The first half calls for more respect of the interests of rights holders. The second half calls for more competition, which might actually hurt the rights holders more. He did concede that he may have misread the brief – or that some of DOJ’s objections in it are more serious than others. Both he and Kieran Raj noted how unusual it is for the Antitrust Division to make comments about Rule 23. Almost half of the brief is about Rule 23, and that is different. Jonathan also thought it odd that DOJ is so concerned about foreign rights holders. He has since been told that the DOJ filing was more than just Antitrust and was intended to represent the whole government (possibly including the Copyright Office).
A number of interesting issues came up in the discussion afterwards. The biggest that I could see is that assuming that one scales back the settlement, how far do you go? Does it go all the way back to snippet view (in which case I would hope that Google drops the whole thing and fights the fair use issue). Arato noted as well that if the settlement is pared down, then there will be less money. Google should pay a lot less; the absurd attorneys’ fees would have to be reduced; and there may not be enough money to fund and operate the Books Rights Registry (BRR).
Other interesting points from the discussion:
- Band: He is more worried about representation on the BRR than in the settlement, since the BRR will be an ongoing group. Because libraries buy primarily scholarly books, the GBS collection will be heavily weighted towards scholarly works. Academic authors, therefore, should be heavily represented on the BRR. CA: Depends on whether the court says that the plaintiffs are adequate representatives. If the settlement is narrowed to impact less the orphan works and foreign representatives, then the adequacy of current representatives may go up. New parties are not being added, but maybe they can be added informally.
- Raj worried that if DOJ signs off on a revised settlement, all of the other objections may become moot. DOJ needs to be sensitive to this.
- Band suggested one way to scale back the scope of the settlement would be to have opt-in for consumer purchase but opt-out for academic market. His preference, however, is to maintain opt-out in its entirety.
- Band also noted a point that should never be forgotten: If GBS is a mess, it is because our copyright laws are a mess. It is trying to fix the problem that our current copyright law has unending copyright term extensions. (I would add as well that we stupidly gave up registration and other formalities. If one had to opt-in and frequently renew copyright in order to secure statutory protection, we wouldn’t have any need for GBS.)
I is for Industry
The second session was in theory supposed to consider the commercial impact of GBS. In practice, while there were interesting presentations, none of the speakers were directly involved in publishing industry.
Michael Cairns opened with a recapitulation of his calculations that rather than “millions” of orphan works, as many of the critics are want suggest, there are instead only 580,388 potential orphan works – and the number is likely to be much lower. The full analysis is available on his blog. Cairn’s analysis only looks at English language books, and I would agree with him that the number of English language orphans is much, much lower than hysterical critics indicate. And since Google has said that they will consider commercial availability abroad as well as in the US when considering whether a book is included in the settlement, the number of foreign orphans is also likely to drop precipitously. The very best thing would be for Google to release data on the nature of what it has scanned according to the terms of the settlement so we would have accurate information on the orphan works issue instead of having to rely on Books in Print data (as Cairns does) or on WorldCat records (as Lavoie and Dempsey have done).
Andrew Devore presented a crisp summary of the objections to the settlement that his firm filed on behalf of Arlo Guthrie and others. What started as straight-forward copyright suit has become an extremely audacious change in the framework for the exploitation of digital works. He is deeply concerned that the potential good for digitization comes at an enormous cost to authors. GBS shifts future rights to Google and dramatically limits the rights of authors to control future uses. Google is a search and advertising company. GBS would help cement Google’s monopoly over search. Devore’s clients are also concerned about releasing trademark and publicity rights. He argued that insert works are undervalued in the settlement. And he noted that there is no compensation for or control over non-display uses (though Grimmelmann in his tutorial the day before questioned whether copyright law gives authors any right to these uses.) In general, he worried that GBS will establish a foundation for the digital book industry by granting perpetual rights to Google. I couldn't help but wonder why, if his clients are so worried about these issues, don't they just opt-out of the settlement (rather than trying to scuttle it for everyone else)?
Michael Healy followed with a presentation on the scope and changing nature of the publishing industry. Perhaps his most telling observation: Publishing and razors are comparably-sized industries.
Victor Perlman objected that photographers and illustrators are excluded from the settlement. This is a complaint that I just don’t understand. I have no doubt that once the text is accessible via the settlement, Google would next try to negotiate rights to the content excluded from the settlement (just as I am sure they would want to negotiate with foreign Reproduction Rights Organizations to allow access to the full-text outside of the US). The negotiations with just the too-narrow group of partners has been incredibly difficult; I don’t see how adding more would have helped.
Dan Clancy from Google was put into the position of having to defend Google. Everything, he argued, is changing as we move to a digital economy and the digital world. GBS has become a Rorschach test on how people feel about the future, and how in general privacy will be protected, research uses are enabled, the scope of fair use, etc.
He noted that 97% of the market is for in-print books. There is some latent value in out of print books, but it isn’t much (which is why libraries move books to off-site storage). The cost of clearing rights is much greater than any economic value.
Consequently, the settlement is nowhere close to creating a foundation for the digital books industry. You can’t build this on the 3% of books that no one wants.
(Continued by D is for Digitize: Day 2 Afternoon)
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