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4/6. The Consumer Watchdog
sent a
letter [PDF] to senior officials at the Department of Justice (DOJ) and its
Antitrust Division asking that the DOJ
intervene in the copyright infringement action against Google related to its
book search program. The plaintiffs,
publishing companies and the Authors Guild (AG), announced a settlement on
October 28, 2008. The settlement still requires court approval.
The AG's 2005 complaint sought class action status. The settlement would also
create a publisher class. It would also affect the rights of people and entities
not a party to the litigation.
The settlement procedure being pursued by
the parties is to add the publishers as plaintiffs to the AG's action, to dismiss
the publishers' original complaint, and then use the amended AG/publishers'
complaint as the vehicle for settlement. The settlement must be
approved by the District Court under rules governing class actions.
The settlement agreement is attached to a
declaration [323 pages in PDF] filed with the District Court last October.
The CW asks that the DOJ intervene in the District Court
to protect competition. It complains about two items in the agreement, which it describes as
the "most favored nation" and "orphan works" provisions. However, it does not cite
any statutory sections, or provide any legal analysis. Also, it does not discuss
any of the other public policy issues raised by the settlement.
CW has clashed with Google on other issues. See for example, story titled
"Consumer Group Complains About Google" in
TLJ Daily E-Mail
Alert No. 1,906, February 27, 2009.
The remainder of this article contains five sections. The first summarizes
the content of the CW's April 6, 2009, letter to the DOJ. The second reviews the
history of the litigation against Google. The third provides background and
analysis of the orphan works issue. The fourth and fifth sections present two
policy arguments not raised by the CW letter -- the potential for the system
contemplated by this agreement to facilitate and enhance government censorship and
surveillance.
CW Letter. The CW states that the agreement "creates the nonprofit
Book Rights Registry to manage book digital rights issues. Among the deal's most
troubling aspects is a ``most favored nation´´ clause. It guarantees Google the
same terms that any future competitor might be offered."
The CW continues that under this clause the registry "would be prevented from
offering more advantageous terms to, for example, Yahoo! or Microsoft, even if
it thought better terms would be necessary to enable either to enter into the
digital books business and provide competition to Google."
The CW argues that this is an "anti-compete" clause, and "should be
eliminated to remove barriers to entry".
The CW also complained to the DOJ about the settlement agreement's treatment
of "orphan works".
The CW states this: "The settlement provides a mechanism for Google to deal
with ``orphan works´´. Orphan works are works under copyright, but with the rights
holders unknown. The danger of using and selling such works is that a rights
holder will emerge after the book has been exploited and demand substantial
infringement penalties. The proposed settlement protects Google from such
potentially damaging exposure, but provides no protection for others. This
effectively is a barrier for competitors to enter the digital book business. The
orphan works provision of this settlement should be extended to protect all who
might enter the business under the same terms as Google enjoys."
Litigation Background. On October 19, 2005, five book publishing companies filed
a complaint in U.S. District Court (SDNY)
against Google alleging that its Google Print for Libraries (GPL) program
infringes copyrights.
The publishers alleged infringement in the scanning (copying) of books under
copyright, in providing copies of these scans to the libraries which provided
access to the hard copies, in offering searches of these copies to the public
via its web site, and in publicly displaying excerpts of these copied books
(what Google called "snippets").
The publishers sought "A Final Order that permanently enjoins Google from, in
any manner, reproducing, publicly distributing and/or publicly displaying all or
any part of any Publisher's copyrighted works as port of the Google Library
Project, or otherwise, except upon the express prior authorization of the
Publisher owning or controlling the copyrights in such works."
The plaintiffs are McGraw Hill, Pearson Education,
Penguin, Simon & Schuster, and John Wiley & Sons. All are members of the
Association of American Publishers (AAP).
See, story
titled "Major Book Publishers Sue Google for Digitizing Copyrighted Books" in
TLJ Daily E-Mail
Alert No. 1,237, October 20, 2005.
On September 20, 2005, the Author's
Guild and others filed a similar complaint in
U.S. District Court (SDNY) against
Google alleging copyright infringement in connection with the Google Print
project. This is a class action brought on behalf of book authors. See, story titled "Author's Guild Sues Google for Copyright
Infringement" in
TLJ Daily E-Mail Alert No. 1,218, September 21, 2005, and story titled
"University Publishers Accuse Google of Systematic Infringement of Copyright on
a Massive Scale" in
TLJ Daily E-Mail Alert No. 1,142, May 25, 2005.
See also,
story
titled "Google, Publishers and Authors Debate Google's Print for Libraries
Program" in TLJ
Daily E-Mail Alert No. 1,239, October 25, 2005;
story
titled "District Court Rules in Perfect 10 v. Google" in
TLJ Daily E-Mail
Alert No. 1,319, February 28, 2006; and
story
titled "Microsoft Counsel Says Google Systematically Violates Copyright" in
TLJ Daily E-Mail
Alert No. 1,547, March 6, 2007.
These two actions were not consolidated. However, both actions were
filed in the same court, and were assigned to the same judge. Moreover, the
court coordinated discovery in the two actions.
The parties conducted extensive discovery. However, the court did not
decided, or even receive, any dispositive motions, or motions on the
affirmative defenses, such as those arising under
17 U.S.C. § 107 (fair use) or
17 U.S.C. § 108 (reproduction by libraries and archives).
Libraries were not named in either action. The settlement agreement does
not create and bind any library class. However, the agreement sets forth a
generous offering for libraries that elect to participate.
On October 28, 2008, Google, the AAP, and the AG
announced their settlement.
Orphan Works. The agreement does not rely upon any future
Congressional implementing legislation. However, it contemplates Congressional
amendment of copyright law. In particular, in references "orphan works".
It provides that "Google will be able to take advantage of any future
legislative change(s), such as legislation allowing the use of orphan works (if
enacted), that put Google at a competitive disadvantage in its use of Books in
any Google Products and Services that are subject to this Settlement Agreement;
provided, however, that Google may choose to receive the benefit of such
change(s) only if a third party is actually taking advantage of such law(s) in
connection with services that competitively disadvantage Google in its provision
of any such Google Products and Services".
This is a reference to two bills in the 110th Congress -- S 2913
[LOC |
WW],
the "Shawn Bentley Orphan Works Act of 2008",
approved by the Senate on September 26, 2008, and HR 5889
[LOC |
WW],
the "Orphan Works Act
of 2008". Neither was enacted into law.
The AAP has long supported orphan works legislation. The primary opposition
has come from various creators of visual works, rather than creators of textual
works. Book authors, titles, and contents are expressed in text, which in
contrast to drawings and photographs, is inherently susceptible to organization,
alphabetization, and searching. This makes the process of identifying and
locating holders of rights in books easier than finding rights holders for
visual works.
The agreement uses the phrase "allowing the use of orphan works". However,
the above referenced bills create no category of orphan works, create no process
for designating particular works as orphan works, and do not authorize any use
of orphan works. Rather, they would create an affirmative defense to
infringement of a copyrighted work, in a specific legal action, on the basis of
the infringer's prior unsuccessful efforts to locate the copyright holder.
Even without the enactment of orphan works legislation, this agreement
provides Google relief related to that offered by legislation -- limitation on
liability.
For example, if Google digitizes a book subject to U.S. copyright, categories
it as an out of print "Display" book, generates revenue there from, and forwards
revenues to the registry in compliance with the revenue sharing provisions of
the agreement, it is largely immune from liability if a copyright holder comes
forward. The U.S. copyright holder can demand that the book be treated by Google
as "No Display", but cannot recover damages from Google for its prior acts. The
copyright holder can turn to the registry to claim a share of the revenue, but
not damages.
Censorship. Settlement agreements in copyright cases typically focus on
compensation and injunctive relief for past infringement. This agreement is far
from typical. While it
does settle complaints and provides for payment for past copying, the bulk of
this massive agreement establishes a new regime governing digitization and
online display of books subject to U.S. copyright.
This agreement establishes, defines and limits the rights of Google and
libraries that elect to participate, as well as authors and publishers who do
not promptly elect to opt out of the agreement.
Thus this agreement resembles legislation. Indeed, the CW letter
states that "Normally Congress or regulatory bodies would be involved in a transformation
of this magnitude and the interests of all stakeholders would be considered.
Because that has not been the case, it all the more important for the Justice
Department to intervene".
The agreement creates something that looks like a new legal regime,
separate from the Copyright Act. It affects the interests of a many segments of
American society, including publishers, authors, students, educators, libraries,
and the reading public. It affects the rights numerous persons and businesses
that are not a party to the litigation, except pursuant to class representation.
It also affects the powers of government.
First, there is the matter of censorship. This section presents the
hypothesis that moving from a technology of hard copy books to digitized books
that reside on central servers presents increased risks of harm flowing from
censorship efforts. Under this hypothesis, the pertinent issue is not Google's
and publishers' commitment to free speech, but rather the vulnerability of
server based books to censorship despite Google's and publishers' commitment to
free speech.
The agreement addresses censorship and related issues. It provides that
"Google may, at its discretion, exclude particular Books from one or more
Display Uses for editorial or non-editorial reasons. However, Google's right to
exclude Books for editorial reasons (i.e., not for quality, user experience,
legal or other non-editorial reasons) is an issue of great sensitivity to
Plaintiffs and Google." (Parentheses in original.)
It continues that "Accordingly, because Plaintiffs, Google and the libraries
all value the principle of freedom of expression, and agree that this principle
is an important part of GBS and other Google Products and Services, Google
agrees to notify the Registry of any such exclusion of a Book for editorial
reasons and of any information Google has that is pertinent to the Registry's
use of such Book other than Confidential Information of Google and other than
information that Google received from a third party under an obligation of
confidentiality."
The agreement also states that "Google may not intentionally alter the text
of a Book or Insert when displayed to users".
TLJ spoke with Patricia Schroeder, head of the AAP, last October. She stated
that book publishers have a long history of zealously defending First Amendment
rights. She added that publishers will be represented in the management of the
registry created by the just announced agreement.
Nevertheless, one might hypothesize that, despite the best intentions of
publishers and service providers, moving to digitization and central servers presents increased risks. Censoring hard copy books, whether by government decree, private litigation,
or book burnings, is a difficult task. Book printers tend to be spread over much
geographic territory. Shutting down or overseeing all printers is difficult. In
addition, books can be imported, or smuggled, from abroad.
Moreover, once books have been printed and distributed, censorship becomes even more
difficult. Governments, defamation lawyers, and book burners can not simply
issue a recall notice and expect all copies to be returned to them. Books are
distributed through private homes, numerous libraries, and other geographically
dispersed locations.
The just announced agreement contemplates a completely different technology
for storing and accessing textual material. Instead of putting text into
privately held, untraceable, unlocatable, and widely dispersed books, Google's
business model is to put text into central computer servers controlled by one
company. This company is more easily subjected to legal process and government
decree than a vast multitude of hard copy book owners.
Regardless of how dedicated Google and the registry are to free speech
rights, the circumstance remains that they are more vulnerable to effective
censorship than a system based on widely dispersed paper books.
Surveillance. This section offers the hypothesis that digitization of
books, storage on centralized servers, and online use, facilitates government
monitoring of books reading habits. Such monitoring in itself can be harmful. It
can also cause harm by inhibiting people from reading certain works, and inhibiting publishers from publishing those works.
When books are printed on paper, it is difficult for the government to keep
track of who is reading what. One can walk into a Barnes & Noble bookstore, pay
cash for a book, and take it home. There may be no record of the transaction, or
of the location, possession or ownership of the book. Similarly, the government
cannot know if the book is read, loaned, or resold. Also, one can enter a
library, read a hard copy book, and leave no record.
In contrast, if in the future books migrate from hard copy to central
computer servers, and readers obtain and read books through a service such as
Google's, then there is the technological potential for automatically storing
and retrieving individually identifiable information regarding book searches,
book purchases and reading activities.
Just as a central server based system is more vulnerable to government
censorship orders, such a system is also more vulnerable to government data
retention and disclosure mandates. And again, the issue is not Google's
commitment to privacy. It is a question of the vulnerability of its technology
to abusive government surveillance.
Perhaps it is also pertinent to consider the recent history of libraries and
government surveillance.
The Department of Justice's (DOJ) Federal
Bureau of Investigation (FBI) has employed National Security Letter (NSL)
authority under
18 U.S.C. § 2709 to obtain "transactional records" of libraries. NSLs do not
require a court order, and recipients are subjected to a gag order.
See for example,
story
titled "Suit Challenges Constitutionality of National Security Letters" in
TLJ Daily E-Mail
Alert No. 1,202, August 25, 2005, and
story
titled "2nd Circuit Stays District Court Injunction in National Security Letter
Case" in TLJ Daily
E-Mail Alert No. 1,218, September 21, 2005.
The American Library Association (ALA)
stated in a
release that this case demonstrates that "the FBI is indeed using
provisions of the USA PATRIOT Act to obtain library patron reading
records".
And perhaps it is pertinent that the DOJ's
Office of the Inspector General (OIG)
has issued two reports finding that the FBI has abused it NSL authority. See,
report [187
pages in PDF] released on March 13, 2008, titled "A Review of the FBI’s Use of
National Security Letters: Assessment of Corrective Actions and Examination of
NSL Usage in 2006", and
story
titled "DOJ Inspector General Releases Second Report on FBI Misuse of National
Security Letters" in
TLJ Daily E-Mail
Alert No. 1,730, March 30, 2008. See also,
report [30 MB in
PDF] released on March 9, 2007, titled "A Review of the Federal Bureau of
Investigation's Use of National Security Letters", and
report [10 MB in
PDF] titled "A Review of the Federal Bureau of Investigation’s Use of Section
215 Order for Business Records", and story titled "DOJ IG Releases Reports on
Use of NSLs and Section 215 Authority" in
TLJ Daily E-Mail
Alert No. 1,551, March 13, 2007.
There is also the matter of § 215 of the 2001 USA PATRIOT Act, which rewrote
§ 501 of the Foreign Intelligence Surveillance Act (FISA), which is codified in
Title 50 as § 1861. It pertains to "Access to Certain Business Records for
Foreign Intelligence and International Terrorism Investigations". While the
statute does not expressly include library records, it is not disputed that
library records could be obtained. The ALA has also been a vociferous opponent
of § 215.
Finally, it may be relevant that Google is increasingly becoming involved in,
and vulnerable to, various government regulatory regimes. These make it more
susceptible to government pressures. First, for example, the DOJ, which presides
over much of the federal government's surveillance activities, also reviews
the antitrust implications of Google's various activities. Second, Google is
becoming increasingly dependent upon federal spectrum related policies. The
Federal Communications Commission (FCC), which has authority with respect to
spectrum, is dependent upon the DOJ in many ways. For example, only the DOJ can
seek Supreme Court review of Circuit Court decisions adverse to the FCC. The DOJ
has leveraged this and other authority to influence surveillance related
proceedings at the FCC, as for example, in its taking the Brand X case to
the Supreme Court.
Google's current managers have expressed their commitments to user privacy.
However, they also have duties to maximize shareholder value. The DOJ and
FCC both have the ability to decrease that shareholder value. One might consider the
analogy of telecommunications carriers. They have long been subjected to
burdensome federal and state regulatory regimes. As a consequence, they have not
proven to be effective advocates of the privacy of their customers and users
against government intrusions.
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