Tuesday, September 22, 2009

Justice Prevails: The Deal is Done.

Last Friday, the Justice department (DoJ) effectively ended the debate on the Google Book Settlement (GBS). In an exceptionally well-thought-out, rational and practical submission, the DoJ established for everyone the parameters of the argument and the terms under which the GBS should be approved by the NY court. Google, AG and AAP don't have to agree to all of the suggested changes; there are both degrees and some negotiated offsets that will give the plaintiffs some flexibility in authoring the final, revised document, but what Google, AG and AAP will do is exhale a sigh of relief, incorporate many of the suggestions noted by DoJ and, as a consequence, will expect the court to approve the revised agreement. It is unlikely Judge Chin will preside over the final decision-- there simply isn't time before he (presumably) begins the approval process for his elevation to the Appeals Court. It's possible he will approve as is but with some oversight using specific guidelines to address imposed changes, but that would be unlikely given the 'importance' of this agreement to copyright law. More likely, this case will be passed on to a second judge. As a result, it could be another six months before the final revised version is approved by the court.

Encouragingly, the DoJ was balanced in its opinion, specifically noting the wide public interest that this content database will support. It is this argument that - in part - balanced some of their important concerns. Opponents took specific heart in this statement regarding DoJ's emphatic statement that the agreement should not be approved in its present form. It is important to remember that the DoJ and Judge Chin's court represent two separate arms of government and Chin is not obliged to accept all of the DoJ's statement out of hand. The DoJ's statement is wider in scope than the law upon which Judge Chin is to adjudicate: Specifically, potential impacts on competition that may result from this agreement. But in the context of a well-balanced, nuanced and implementable statement, the judge can use the DoJ statement to 'encourage' the plaintiffs to address some expansive concerns that, in the true interpretation of his remit, would otherwise be outside his immediate concern.

It is the opposition to this agreement that is, ironically, left out in the cold. Congratulations are in order for the success of the intense opposition to the agreement (or parts of it); however, the DoJ statement has established the future parameters of the arguments against. With the DoJ imprimatur now ranking the arguments, it would seem unlikely that any new argument or variation of the old will gain support: In their way, DoJ has validated all the legitimate arguments and anything outside of those will not now have 'legitimacy'. The plaintiffs benefit also because they no longer have a moving target, nor a need to 'read the tea leaves' from the Chin court: The requirements are now specific and actionable.

All this tells me that--unless AG, AAP and Google want to grasp defeat from the jaws of victory and ignore the DoJ statement (and they have already returned to the negotiating table so this is unlikely)-- this agreement will be approved with many of the changes DoJ has specified. Justice prevails for both sides of this argument.


Michael W. said...

No, no, no. You're whistling past the graveyard if you think that the settlement is still alive. The DoJ has driven a stake through its heart. As one publishing industry editor emailed me, there's no way the settlement can survive this blow.

The DoJ talks of a revision because those million-plus copyright violations have to be dealt with some way. But it doesn't leave the parties in the dispute room to wiggle and continue their grand schemes.

European objections get serious consideration, and with them taken into account, both the forced-opt-in and the inclusion of foreign authors must go. It's hard to imagine a clearer violations of the Berne Convention. Google hoped to slip that past those overseas. That failed miserably. Germany and France clearly won't settle for anything less than excluding all their authors and, with that accepted, numerous other countries will demand similar treatment.

Without forced-opt-in of almost everybody and the impossibility of separating European from U.S. authors, I can't imagine why Google would stay interested. Google doesn't want to deal, one-on-one with authors any more than it'd want to deal one-on-one with all those who post the webpages they scan. That's too much busy work to make the sorts of profits Google has come to expect.

Keep in mind that, for all the tens of millions in dollars Google was putting up, what they were hoping to get, online publication rights to virtually all the out-of-print books on the planet, made their per-title acquisition cost vanishingly small, often less than a single copy of the book would cost (hence their copying in libraries).

Their whole scheme hinged on obtaining what they actually had before this 4-month delay, a sign-up, opt-in-or-out rate of less than 5% with the vast majority of authors knowing nothing about what was happening. Require opt-in only, meaning a 100% sign-up rate, with all the resulting processing costs, and all that profit goes out the window.

The DoJ also notes the lack of adequate representation for the classes, both past and future. Any effort to get real input from authors and publishers here and abroad, a necessity for a legitimate class action, will collapse the settlement. It was cooked up, we should never forget, by a group so small they probably met in motel rooms. Add authors' groups and publishers organizations from dozens of countries, and any one agreement to fit everyone--one of the chief flaws of the settlement--becomes impossible.

The DoJ also points out that the three parties have done an atrocious job of informing, particularly those in the author's subclass, something contrary to well-established law. As a bare minimum, a first-class letter to the last known address of everyone with a copyright will be required. Send and tracking replies means more human labor, and human labor is the last thing Google wants to pay for.

Finally, any revised settlement have to take into consideration all the anti-trust implications of favoring Google over everyone else. Strip Google of the considerable advantages the present settlement gives them over their competitors, and their execs are likely to say, "why bother?"

In the end, Google may decide this dispute has become more trouble than it's worth and bail out. For all their chatter about creating a huge digital library, all they really wanted were more online billboards on which to hang their ads. And those billboards had to come almost as cheaply and hassle-free as indexing webpages.

Eric Hellman said...

I disagree with PND here and agree with many things Michael W. writes. In many respects, the DOJ is entirely irrelevant to the Settlement. For example, just because DOJ has a theory that a revised agreement could be approved doesn't make that theory true. The Judge doesn't have to accept any part of the DOJ's argument. In fact, it's very unlikely that he would accept the whole argument, because to do so, he would have to create new precedents in class action law, antitrust law, copyright law, even in interational law. Since the judge may not expect to stay with the case, we are likely to see him issue a very narrow decision which would leave the DOJ opinion as an imagining with only intellectual force.

I've written about how Judge Chin might look at the case on my blog.

Eric Hellman said...

I guess PND was right- the debate is over, at least for a while, since the parties have moved to adjourn.

Marion Gropen said...

I think that, if they parties to the agreement hadn't gotten overly ambitious, this would be a done-deal.

If Google had asked for opt-out-only indexing, as it has for websites, it would probably have prevailed in court, and it would probably have gotten the settlement past everyone.

But when it gets the right to publish books that are still in copyright WITHOUT PERMISSION, then the potential for unintended consequences, and real problems grows explosively.

Of course, that's what Google really needs in order to make money on the deal. And it can't do that if it has to get permission from all of those stakeholders. Maybe.

Frankly, I think that most stake holders would be insane not to grant that permission, and that the vast majority will do so. And that Google has very good database tech, and that the Book Rights Registry would work quite well as an opt-in vehicle.

The profits will be smaller, but not trivial, after this gets built into the publishing process, just as copyright registration has been.

As for the use of orphan works, well, the ones with value will be claimed, and the rest will still be searchable. And they'll still be available for inter-library loan, as a general rule.