What to expect on Monday (Google Book)
The now defunct version of the Google Book Class Action Settlement is a complicated document consisting of 141 pages, 160 definitions, 17 separate articles and 116 separate clauses, not including the substantial provisions contained within the 15 attachments where several important features of the deal were buried.
The initial draft of the agreement dates back to October 28, 2008, when Google announced that it had reached a settlement of the highly publicized class-action lawsuit brought by the Authors Guild and another equally important lawsuit brought by the American Association of Publishers.
Opposition from various quarters caused the parties to reconsider the details of the settlement and a new version is due on Monday November 9, 2009. In my recent article I compared the settlement to the most likely outcome of the litigation the settlement resolves. In this post I speculate about the contents of the revised agreement.
The essential features of the old settlement agreement were:
- Money. Google made some pretty significant financial concessions, including one-time payments of over $100 million dollars and a revenue sharing agreement.
- Digitization, Indexing & Search. In return for these concessions Google received the right to continue to operate its book search engine, substantially in its current form which is arguably consistent with copyright law’s fair use doctrine.
- Commodification. The settlement also gave Google the ability to explore new revenue possibilities in cooperation with authors and publishers. The highlights consisted of extensive book previews, consumer e-book purchases, institutional subscriptions to the entire Google Book database and various other “New Revenue Opportunities”.
- New institutional arrangements. Beyond the mechanics of the agreement itself, the key elements of the new Google Book universe were to be the “Book Rights Registry” and the “Author-Publisher Procedures”. Although the Registry received more attention from critics of the settlement, the Author-Publisher Procedures appeared to be the key vulnerability from a class-action fairness perspective. These procedures determine who controls the exploitation of a work within the Google Book universe and who benefits from that exploitation. In many cases the Author-Publisher Procedures act like a standard form publishing contract that supersedes deals negotiated before the importance of digital rights was widely realized.
- Orphan works exploitation. The treatment of orphan works pervades all aspects of the current Settlement agreement. The agreement increased public access to orphan works by presumptively including almost all works in most commercially significant uses. Orphan works could be digitized, indexed, made available for partial-previews, sold as consumer purchases and incorporated into institutional subscriptions. As well as benefiting Google, revenues attributable to these uses will flow in part to the Registry, and to registered authors and publishers.
- Orphan works monopoly. In its current form the Settlement only solves the orphan works problem for Google.
What should we expect on Monday?
The most desirable change from an antitrust perspective would be to allow Google’s competitors to exploit orphan works on the same terms as Google. The problem with this solution is that it further strains the boundaries of class action law and looks more and more like private legislation. This should not, in my view, be enough to derail the deal if the parties can show that all of the relevant sub-class interests were adequately represented.
The Author-Publisher Procedures enhance the coordinating function of the Settlement by streamlining the incorporation of existing author-publisher contractual terms into the framework of the Google Book universe. However, where an existing author-publisher contract gives both parties some control over electronic exploitation, or simply fails to make any provision for electronic rights, the Author-Publisher Procedures effectively overwrite those contracts. These new terms do not appear to systematically disadvantage either authors or publishers, but they strike me as a one size fits all solution that could be substantially improved upon.
Finally, I expect the revenue sharing aspects of the deal to become more complicated.