District Court Rejects Google Books Class Action Settlement

March 22, 2011. The U.S. District Court (SDNY) issued its opinion [48 pages in PDF] in Authors Guild v. Google, denying, without prejudice, the motion for approval of the proposed class action settlement.

The District Court concluded the Amended Settlement Agreement (ASA) [173 pages in PDF] under review "is not fair, adequate, and reasonable", as required by Rule 23, Federal Rules of Civil Procedure.

Rule 23(e)(2) provides that "If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate."

The District Court elaborated that "As the United States and other objectors have noted, many of the concerns raised in the objections would be ameliorated if the ASA were converted from an ``opt-out´´ settlement to an ``opt-in´´ settlement. ... I urge the parties to consider revising the ASA accordingly."

The District Court explained that "While the digitization of books and the creation of a universal digital library would benefit many, the ASA would simply go too far. It would permit this class action -- which was brought against defendant Google ... to challenge its scanning of books and display of "snippets" for on-line searching -- to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners."

"Indeed," the Court wrote, "the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case."

The District Court also announced that it will hold a status conference on April 25.

Reaction. The Association of American Publishers (AAP) stated in a release that while the just released order "is not the final approval we were hoping for, it provides clear guidance to all parties as to what modifications are necessary for its approval."

The AAP added that "The publisher plaintiffs are prepared to enter into a narrower Settlement along those lines to take advantage of its groundbreaking opportunities. We hope the other parties will do so as well."

The Authors Guild's President Scott Turow stated in a release that "we'll be studying Judge Chin's decision and plan on talking to the publishers and Google with the hope that we can arrive at a settlement within the court’s parameters that makes sense for all parties."

The Consumer Watchdog's John Simpson stated in a release that "Google's entire business model is to never ask permission, but to seek forgiveness if necessary".

He added that the District Court "has ruled simply that you can't take other people's property and use it without asking. This should send the message to the engineers at the Googleplex that the next time they want to use someone's intellectual property, they need to ask permission."

He also said that "Google's business practices continue to raise antitrust questions that need to be investigated".

The Public Knowledge's (PK) Gigi Sohn stated in a release that "We are pleased that Judge Chin has rejected this settlement, even though we agree with him that there are benefits to Google's book project. We were also pleased that the judge agreed with us in the specific issue of orphan works, as he ruled: `Google's ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.´"

Background on Google Books Litigation and Settlement. The Author's Guild filed a class action complaint against Google in the U.S. District Court (SDNY) on September 20, 2005. See, story titled "Author's Guild Sues Google for Copyright Infringement" in TLJ Daily E-Mail Alert No. 1,218, September 21, 2005.

Various large book publishers filed a complaint against Google in the same District Court on October 19, 2005. See, story titled "Major Book Publishers Sue Google for Digitizing Copyrighted Books" in TLJ Daily E-Mail Alert No. 1,237, October 20, 2005. Both complaints alleged copyright infringement in connection with Google scanning and distributing books.

See also, 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, 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, and story titled "Microsoft Counsel Says Google Systematically Violates Copyright" in TLJ Daily E-Mail Alert No. 1,547, March 6, 2007.

Google, publishers and the Authors Guild announced their original proposed class action settlement in October of 2008. They announced an amended agreement in November of 2009. See, story titled "Amended Settlement Agreement Filed in Google Books Case" in TLJ Daily E-Mail Alert No. 2,015, November 16, 2009.

The Department of Justice (DOJ) filed pleadings criticizing components of the agreements. See, story titled "DOJ Files Pleading in Google Books Case" in TLJ Daily E-Mail Alert No. 1,985, September 21, 2009, and story titled "DOJ Criticizes Amended Google Books Settlement" in TLJ Daily E-Mail Alert No. 2,043, February 12, 2010.

Finally, see "Commentary: Google's Net Neutrality Deal Compared to Google's Books Deal" in TLJ Daily E-Mail Alert No. 2,121, August 9, 2010.