Microsoft Counsel Says Google Systematically Violates Copyright

March 6, 2007. Thomas Rubin, Microsoft's Associate General Counsel for Copyright, Trademark and Trade Secrets, gave a speech titled "Searching for Principles: Online Services and Intellectual Property" in which he stated that Google systematically violates copyright.

He focused primarily on Google's book search program. In contrast, he said that Microsoft's competing book search program respects copyright.

He spoke in New York City to the American Association of Publishers (AAP), some of the leading members of which have sued Google in federal court in New York alleging copyright infringement.

Bill Gates is scheduled to give a speech in Washington DC on Wednesday night, March 7, 2007.

Litigation Background. On October 19, 2005, five book publishing companies filed a complaint [35 pages in PDF] in U.S. District Court (SDNY) against Google alleging that its Google Print for Libraries (GPL) program infringes copyrights. The plaintiffs are McGraw Hill, Pearson Education, Penguin, Simon & Schuster, and John Wiley & Sons. All are members of the 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.

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 "Author's Guild Sues Google for Copyright Infringement" in TLJ Daily E-Mail Alert No. 1,218, September 21, 2005; 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; and story titled "District Court Rules in Perfect 10 v. Google" in TLJ Daily E-Mail Alert No. 1,319, February 28, 2006.

Introductory Comments. Rubin began by saying that "authors and publishers often find it difficult just to cover their costs, let alone make a profit, in this new online world. At the same time, companies that create no content of their own, and make money solely on the backs of other people's content, are raking in billions through advertising revenue and IPOs." He did not mention Google until much later in his speech.

He asked several rhetorical questions: "What path will we as a society choose in making the world’s books and publications available online? Will we choose a path that nourishes creativity and innovation over the long term and that preserves incentives for authors to offer their best works online? Or will we choose a path that encourages companies simply to ``take´´ the works of others, without any regard for copyright or the impact of their actions on authors and publishers too?"

He said that "expanding access to online content must be done in a way that respects intellectual property rights".

He also advocated three principles. First, he said that "new services that expand online access to content should be encouraged". Second, he said that "those new services must respect the legitimate interests of copyright holders; put conversely, we must forcefully reject any business model that is based on the systematic infringement of copyrights". Third, he said that "we must all work together to find consumer-friendly and cost-effective solutions to our shared goal of expanding online access to copyrighted and public-domain works".

Microsoft's Book Programs. Rubin then discussed Microsoft's online book search programs, titled "Live Search Books" (LSB) and "Live Search Academic" (LSA). He focused on the LSB program.

He said that this program "involves scanning only books that are out of copyright or otherwise in the public domain. In connection with the program, we are currently scanning out-of-copyright books at partner libraries such as The British Library, the University of California Libraries, Cornell University Library, the University of Toronto Library, and The New York Public Library."

He added that the LSB program gets material through its "Publisher program, under which we receive books still under copyright from publishers with their express permission, either in digital form directly from the publisher, or scanned from hard copy. Participating publishers have access to an online site -- or dashboard -- that enables them to manage their publications on Live Search Books. They can choose the amount of text that a reader may preview, create click-to-buy links next to their books, edit metadata, and so on."

He said that Microsoft's LSB program both uses "technology to dramatically expand access to works" and "respects copyright".

He said that this is the "right path" and that its adheres to the three principles that he articulated at the beginning of his speech.

Google's Copying of Books. He then compared and contrasted Microsoft's LSB program with Google's book program.

He said that "Google persuaded several libraries to give it unfettered access to their collections, both copyrighted and public domain works. It also entered into agreements with several publishers to acquire rights to certain of their copyrighted books. Despite such deals, in late 2004 Google basically turned its back on its partners. Concocting a novel ``fair use´´ theory, Google bestowed upon itself the unilateral right to make entire copies of copyrighted books not covered by these publisher agreements without first obtaining the copyright holder’s permission."

He did not discuss the meaning of fair use, which is codified at 17 U.S.C. § 107, any of the many court opinions on fair use, or why Google's activities do not constitute fair use. (The TLJ stories cited above titled "Google, Publishers and Authors Debate Google's Print for Libraries Program" and "District Court Rules in Perfect 10 v. Google" discuss some relevant cases, and hyperlink to further stories on these cases.)

Rubin (at right), said that "Google's chosen path would no doubt allow it to make more books searchable online more quickly and more cheaply than others, and in the short term this will benefit Google and its users. But the question is, at what long-term cost? In my view, Google has chosen the wrong path for the longer term, because it systematically violates copyright and deprives authors and publishers of an important avenue for monetizing their works. In doing so, it undermines critical incentives to create."

He added that "Google has also undertaken this path without any attempt to reach an agreement with affected publishers and authors before engaging in copying."

"Google defends its actions primarily by arguing that its unauthorized copying and future monetization of your books are protected as fair use", said Rubin. But, "there are serious questions about the merits of Google's fair use defense".

He also criticized Google's opt out approach to copying protected works. He said that "Google takes the position that everything may be freely copied unless the copyright owner notifies Google and tells it to stop. Microsoft and most other companies, by contrast, take the position that they should get the copyright owner’s consent before they copy. The Copyright Act, in our view, supports this approach. It’s hard to see any justification for exempting Google from its requirements."

Finally, he argued that this opt out approach cannot work, because over time others will also provide book search. He asked, "Should copyright owners be obligated to track down everyone engaging in unauthorized copying in order to preserve their exclusive rights in their works? ... This approach would be absolutely unworkable in practice, which is probably why Congress in enacting the Copyright Act placed the burden on those who want to copy to get the express consent of the copyright owner, rather than the other way around."

Google's Other Bad Practices. Rubin extended his criticism of Google beyond its book copying. He said that "Google's track record of protecting copyrights in other parts of its business is weak at best." He discussed YouTube and use of keywords that refer to pirated software.

He said that the Google's YouTube "follows a similar cavalier approach to copyright".

He elaborated that "television companies, movie studios and record labels have all complained that the site knowingly tolerates piracy. In the face of YouTube’s refusal to take any effective action, copyright owners have now been forced to resort to litigation. And Google has yet to come up with a plan to restrain the massive infringements on YouTube".

Rubin also said that "Google employees have actively encouraged advertisers to build advertising programs around key words referring to pirated software, including pirated Microsoft software. And we weren't the only victims -- Google also encouraged the use of keywords and advertising text referring to illegal copies of music and movies."

He said that "These actions bolstered websites dedicated to piracy and reportedly netted Google around $800,000 in advertising revenues from just four such pirate sites. These are not the actions of a company that has the interests of copyright owners as one of its priorities".

Microsoft on Orphan Works. While Rubin spoke of the importance of respecting intellectual property, nourishing creativity, and preserving incentives for authors to offer their works online, he also advocated enactment of legislation usually referred to as the "orphan works bill".

He said that "we need to address the orphan works issue". He continued that "Online providers should make diligent efforts to locate copyright owners, but when they cannot locate the owner, there must be a process or a safety net by which they can move forward without risk of liability beyond payment of a reasonable royalty if the copyright holder later makes herself known."

This bill, which was considered in the 109th Congress, would retroactively diminish the protection under copyright law for certain copyright holders, particularly photographers, illustrators, and other creators of visual works. Both House and Senate committees held hearings. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet, and Intellectual Property (SCIIP) approved its on May 24, 2006.

See, HR 5349, the "Orphan Works Act of 2006". Another version of it was made a part of HR 6052, the "Copyright Modernization Act of 2006". However, neither bill became law. An orphan works bill has yet to be introduced in the 110th Congress.

For more information on the orphan works bill, see , "House CIIP Subcommittee Holds Hearing on Orphan Works" in TLJ Daily E-Mail Alert No. 1,326, March 9, 2006, "Rep. Smith Introduces Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,377, May 24, 2006, and "House CIIP Subcommittee Approves Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,378, May 25, 2006.

The introduction of legislation followed the Copyright Office's (CO) release of its report [133 pages in PDF] titled "Report on Orphan Works". See, story titled "Copyright Office Recommends Orphan Works Legislation" in TLJ Daily E-Mail Alert No. 1,302, February 2, 2006. The primary author of the report, Jule Sigall, subsequently went to work for Microsoft. See, story titled "Jule Sigall Joins Microsoft" in TLJ Daily E-Mail Alert No. 1,510, December 27, 2006.