A New York federal court has rejected the class action settlement agreement negotiated between Google and members of the publishing industry. The settlement agreement with its attachments runs 300+ pages. I did a 10-page annotated summary of the proposed Google Book Settlement Agreement which you can find here. While my annotated summary prepared in mid-2009 does not incorporate the November 2009 amendments, it still provides a good overview of the settlement agreement’s complexity.
Perhaps the most significant language of the 48-page opinion is on page 46 when Judge Denny Chin writes “ . . . many of the concerns raised in the objections would be ameliorated if the [settlement] were converted from an opt-out settlement to an opt-in settlement.” Judge Chin discussed numerous objections to the settlement:
Notice to Members of Class Is Adequate. Judge Chin concluded that the class received adequate notice of the settlement. The settlement applies to anyone who has a copyright interest in a book that was published on or before January 5, 2009. I know many authors who were unaware of the settlement or unaware of its significant impact.
Class Representation Is Not Adequate in All Respects. The named plaintiffs in the class action are the Authors Guild, the Association of American Publishers, McGraw-Hill Companies, Simon & Schuster, John Wiley & Sons, and five individual authors. Judge Chin concluded that the interests of these named plaintiffs are not always consistent with the interests of all authors and publishers in the class who would be affected by the settlement.
Scope of the Settlement Is Too Broad. This lawsuit started as a result of Google digitizing books and posting snippets of those books in search results. In addition to allowing the continued posting of snippets, the settlement would in many cases authorize Google to sell and merchandise complete books without direct authorization from copyright owners. The settlement would also release Google from other potential author and publisher claims that were not the original focus of the lawsuit. Most troubling, the settlement gives Google a work-around for orphan works, a task more appropriately left to Congress which has considered orphan works legislation in the recent past.
The Settlement Is Inconsistent with Copyright Law. It is the copyright owner’s exclusive right to determine who may use his work. A copyright owner’s silence or inaction can not be deemed to be consent or permission to use the copyright owner’s work. Yet, this would be the result of an opt-out versus opt-in Google settlement agreement.
The Settlement Raises Antitrust Concerns. The settlement would give Google a de facto monopoly over orphan works and other unclaimed works. While Google would have millions of scanned books in its database which Google could use for commercial purposes, Google would not be generous about sharing that database with other commercial users.
The Settlement Raises Privacy Concerns While Google would be able to collect significant data about what and when people read, Judge Chin did not see privacy issues as “a basis in themselves to reject the proposed Settlement”.
The Settlement Raises International Law Concerns The class includes non-US works that were registered with the U.S. Copyright Office or that were published in Canada, the United Kingdom, or Australia, on or before January 5, 2009. Subjecting foreign authors and publishers to the terms of the Settlement may violate provisions of the Berne Convention and other international copyright treaties.
In conclusion, Judge Chin found that the settlement was not fair, adequate, and reasonable. You can read the entire opinion here.