Monday, November 10, 2008

Settlement in the Google Copyright Lawsuits

I started this blog in September, 2005, the same month that the Authors Guild filed a class action lawsuit against Google for copyright infringement. A month later, five publishers also filed suit because of Google's plan to photocopy the world's books.

In the three years since, I have published multiple posts railing against the stupidity of these groups in taking such action. Read one of the early posts here from November 12, 2005.

Most recently, I wrote about the lawsuits on April 25th of this year here. In that post, I talked about a lengthy article Jeffrey Toobin had written for The New Yorker. Here is a quote from that article:

. . . most people involved in the dispute believe that a settlement is likely. “The suits that have been filed are a business negotiation that happens to be going on in the courts . . .”

But a settlement that serves the parties’ interests does not necessarily benefit the public. “It’s clearly in both sides’ interest to settle,” Lawrence Lessig, a professor at Stanford Law School, said . . . Google wants to be able to get this done, and get permission to resume scanning copyrighted material at all the libraries. For the publishers, if Google gives them anything at all, it creates a practical precedent, if not a legal precedent, that no one has the right to scan this material without their consent. That’s a win for them. The problem is that even though a settlement would be good for Google and good for the publishers, it would be bad for everyone else.”
I pointed out that settlement of the Google suit would have enormous consequences for the publishing industry.

Google is happy to settle. By settling, Google gets to go back to scanning books and, at the same time, creates a precedent that will help prevent new competitors from springing up.

“If Google says to the publishers, ‘We’ll pay,’ that means that everyone else who wants to get into this business will have to say, ‘We’ll pay,’ ” Lessig said. “The publishers will get more than the law entitles them to, because Google needs to get this case behind it. And the settlement will create a huge barrier for any new entrants in this field.”
So, now, any future competitor to Google Book Search will not only have to take on the enormous expense of scanning the world's books, but also agree to pay the publishers for a listing in a giant card catalog. A giant card catalog that benefits those publishers (and their authors) by drawing attention to their books.

The likelihood that any company will be able to afford to pay scanning costs as well as pay publishers a licensing fee is very slim.

Two weeks ago, on October 28th, Google reached agreement with both the publishers and authors.

According to The New York Times here, under the terms of the agreement:
  • Google pays $125 million to settle the two lawsuits
  • Google will show up to 20 percent of the text at no charge. Users will be able to pay a fee that will permit them to read the entire book online
  • Google will take 37% of the revenue from these fees, leaving 63% for the publishers and authors of the books involved
  • Google will share ad revenue for any ads on the pages of the scanned books and sharethe revenue with the publishers and authors using the same 37%/63% split
  • A portion of the $125 million settlement will go to establishing a digital book registry to administer this new system and to resolve any existing claims (and legal costs) by publishers and authors

A year before this settlement, on October 30, 2007, I pointed to a small detail hidden away in the fine print of Google's agreement with the world's libraries:

In exchange for providing free digital copies to libraries, it demands that those institutions not open their doors to Google's competitors in the search engine business.

This from the company whose motto is, “Don’t be evil.”


No comments: