Paper or Plastic? Google’s Plan to Digitize Materials Pits Book Lovers v. Book Innovators

By Anna Stolley Persky

As book lovers everywhere know, the invention of the printing press changed our ancestors’ lives irreversibly. The painstaking process of writing a tome by hand became a choice, not a necessity. Books were more affordable; ideas spread. The world was never quite the same.

These days, books can be treasured items—kept on the nightstand, worn and covered in notes. Or they can be treated callously, read quickly on an airplane and then dumped into a hotel trash can.

But our relationship with books is again evolving, thanks to technology. Now we can read books online, on an e-reader, or even by telephone.

In recent years we have debated the future of traditional paperbound books—will they die or are they irreplaceable? Surely similar questions were asked at the dawn of the publishing age as scholars pondered which medium would prevail and how the new world order would be shaped.

Two recent developments have thrown a new urgency, as well as excitement, into the debate over the future of books. In the past year, despite the economic downturn, the e-book market has picked up, with new features aimed at making the reading experience more enjoyable. Despite all of the advances, however, this growth also has resulted in at least one copyright spat.

In October Google, Inc. announced it had settled two class action copyright infringement lawsuits brought by publishers and authors. The complex, 303-page settlement agreement—which, as of this writing, awaits approval from a judge—paves the way for all sides to make money from an unprecedented extensive digitized library of books. The next court hearing is scheduled for the fall.[1]

“It’s coming fast, the future,” says Fred von Lohmann, senior staff attorney for San Francisco-based Electronic Frontier Foundation, a company that advocates for free speech, privacy, innovation, and consumer rights issues connected to technology. “The next generation will not read books principally on paper. Is that a good thing or a bad thing? It is what it is.”

In 2005 publishers and authors sued Google, forcing to the forefront an important question about copyright protection and the fair use doctrine: In short, does it apply to the indexing of scanned documents? The case received media attention as the next great battle over the scope of copyright in the Internet age. The 2008 settlement disappointed those who thought they would see the courts grapple with the issue. Instead, what has unfolded is an entirely new era for books: a vast electronic database of the world’s books in English from the country’s premier academic libraries.

“What is tremendously exciting and powerful about this settlement is that it will reunite readers with books that they otherwise would not have known about or found,” says Jeffrey Cunard, managing partner at Debevoise & Plimpton LLP who represents the Association of American Publishers, a group who deals with issues important to publishers, and the publisher plaintiffs.

The settlement and Google’s reenvisioned book project, while sidestepping the prior copyright fight, has raised the ire of libraries and competitors such as Microsoft Corporation. Ultimately there are the unavoidable questions posed both by the Google settlement and the era of digital books and e-readers: Which companies will survive, and how will their vision shape the marketplace?

“The problem when you have any new technology is that often the first movers into the market have huge economic advantages,” says Jonathan Band, a renowned copyright attorney based in Washington, D.C. “That’s a fact of life with innovative markets. Ultimately, however, no company is able to sustain its lead indefinitely.”

Google’s Big Adventure
In December 2004 Google announced plans to digitally scan the entire contents of five prominent libraries: Harvard University, the New York Public Library, Oxford University, Stanford University, and the University of Michigan. In exchange for permission to digitize the books, magazines, and other works, Google promised to give the libraries their own digital copies.

Google planned to copy nearly 10.5 million books and then display portions of the works—not a chapter or even a page, but a snippet, no more than a line or two. Many academics were thrilled with the potential of Google Books as a research tool. And the participating libraries espoused the service Google would be providing to the public—a way for research to go beyond blogs and into scholarly documents, many of which, they said, have been gathering dust for years.

But in the center of the hoopla, some authors and publishers were quietly, and later much more vocally, outraged.

“I’m one of the people who felt my [work] was taken without my permission and was being put up online and being used commercially by Google without any compensation,” says Paul Dickson of Garrett Park, Maryland, author of more than 50 books and a name plaintiff in the lawsuit against Google. “From the worm’s eye view of the writer, we say, It’s our stuff. If you want to use it, you have to pay for it.”

In separate lawsuits, the Authors Guild and named plaintiffs and five publishers, supported by the Association of American Publishers, said Google was violating millions of copyrights by scanning decades of copyrighted works without permission. Thus began years of what all sides describe as intensive negotiations.

In general, U.S. copyright protection laws allow authors and publishers to control who can reproduce, distribute, and display their “original works.” But, as any law student knows, the protection is not unlimited in scope. The doctrine of fair use allows individuals to use copyrighted material without permission for “transformative” purposes, such as scholarship or review. The authors and publishers said Google’s scanning of books and then indexing them online did not fall under fair use.

Section 107 of the U.S. Copyright Act contains four factors to be considered when deciding if a particular use is fair: the purpose and character of the use, including whether it is for commercial or educational purposes; the nature of the copyrighted work; the amount and importance of the material used; and the effect of the use on the value of or potential market for the copyrighted work.

Google claimed that while it was only publicly providing snippets of information from each book, it had to create full digital copies of each volume to provide a full indexing service. At the time, copyright scholars said providing a research tool of immense scope was a public good.

“I and many other copyright experts thought that Google had a strong chance of winning the suit,” von Lohmann says. “Civilizations recognize that gathering and making available information is one of the highest public goods society can offer. You’d have to have quite an impoverished idea of public good not to recognize that.”

However, publishers and authors pointed out that Google’s purposes had less to do with the public good and more to do with making money.

“This is not a charitable enterprise,” says Paul Aiken, executive director of the Authors Guild, the nation’s leading advocate for writers’ interests. “It’s a commercial enterprise looking for a competitive advantage.”

‘Society Has Been Robbed’
After some fairly intensive wrangling, according to those attending the negotiations, the parties eked out an agreement of surprising scope. In late October 2008 a settlement agreement between Google and the authors and publishers was filed in U.S. District Court for the Southern District of New York. It awaits court approval. Judge Denny Chin is expected to hold a hearing in October 2009.

The settlement received some media attention at the time, but it was eclipsed by the presidential election a week later and the start of the country’s—and the world’s—economic slide.

Nevertheless, advocates and legal scholars took note of the settlement; many say they are disappointed that questions raised by Google’s actions have been left unresolved.

“Fair use is so fuzzy. Academics had a real hope that Google would allow law to be created and the question answered as to whether indexing for search purposes is fair use,” says Christopher A. Cotropia, an intellectual property professor at the University of Richmond School of Law in Virginia. “That question is still unanswered. Society has been robbed of a decision that could have had broad implications.”

But Google responds that it is not focused on providing scholars with answers to complex legal questions.

“Most important to us is our users, not setting a particular precedent or making lawyers happy,” says Alexander Macgillivray, Google’s senior general counsel for products and intellectual property.

The most amazing thing about the Google settlement is its breadth, experts say. Google intends to provide a massive digital library—a feat that has never been done and hardly been contemplated. The agreement makes Google’s prior efforts seem like a baby step in comparison and worries some scholars.

“We are entrusting this very young company whose hallmark is change and experimentation with this great human archive,” says Siva Vaidhyanathan, associate professor of media studies and the law at the University of Virginia in Charlottesville. “We should have a high level of skepticism about Google’s role with this material, and I’m afraid we’ve nothing but surrender and celebration.”

Settlement Scope
The settlement agreement, officially known as the Google Book Search Copyright Class Action Settlement, covers in-copyright books and other material published through January 5, 2009, having no effect on books published after that date. Google will pay $125 million to cover the cost of claims, notice and settlement administration, legal fees, and the creation of the Books Rights Registry. All revenue from the online purchase of books, institutional subscriptions, and advertising will be split, 63–37, between the Books Rights Registry, on behalf of rights holders, and Google.

The registry, which will be formed as a nonprofit organization, will locate rights holders, receive claims, and process and disburse revenue from Google. Eventually the registry will be funded by a percentage of revenues received from Google.

Google already has scanned more than 7 million books and plans to scan millions more from some of the country’s premier academic libraries. The participating libraries, meanwhile, have established a group repository for universities to archive and share their digital collections separately. While librarians and Google agree that the digitized copies are not technically of “preservation quality,” they are still deemed a valuable way to protect deteriorating books and establish a larger collection.[2]

“When people criticize the project, the question is, Compared to what? Nobody else but Google has been willing to spend the hundreds of millions of dollars to digitize these works,” says Paul Courant, dean of libraries at the University of Michigan. “The important thing is that there is now a huge body of work that could have been lost that will now be preserved.”

Under the Google settlement, an individual at home on the computer will be able to search for a book by using keywords, read preview pages from the book, and then purchase full viewing access. The book may be printed out, but it can’t be downloaded. The model covers books not otherwise commercially available, but rights holders of commercially available books can opt to include their books in this model.

With an institutional subscription, universities and others will be able to buy access to the entire database for students and faculty. Users will be able to browse the database at university library terminals or remotely, and read the full text of books online, but they will not be able to download. Public libraries will be given free access to the entire database on a single terminal; they can purchase a subscription for viewing on additional terminals. Public libraries are not permitted to provide remote access to the services they receive for free.

One of the more interesting debates over the settlement pops up in reference to so-called “orphan works,” copyrighted, but out-of-print material where it is extremely difficult or impossible to contact the rights holder. Recent legislative attempts to delve into the problems of orphan works have not yet been successful; the Orphan Works Act of 2008 passed the U.S. Senate unanimously, but it died in the U.S. House of Representatives. The U.S. Copyright Office expects the bill to be reintroduced soon.

Under the settlement agreement, revenues from books that remain unclaimed by rights holders will be treated as unclaimed funds, which the registry can then ultimately distribute to rights holders and public charities. Critics say the settlement allows Google to skirt copyright law governing orphan works and eclipse recent legislative efforts to gain the exclusive right to digitize and display orphan works.

Spokeswoman Jennifer Gavin said the U.S. Copyright Office “has taken no position on the settlement.”

Privacy Concerns
The American Library Association, the Association of Research Libraries, and the Association of College and Research Libraries have filed an amicus brief to voice their concerns over the Google settlement. Representatives from these library advocacy organizations say they wish they had had more input into the terms of the settlement, and they certainly want some say in it now.

In recent years library advocates have become increasingly unified in protecting what they describe as their core principle of free and confidential access to information. In the wake of the USA PATRIOT Act, it was the librarians who became staunch and noisy critics of what they saw as government intrusion. Advocates say they can unify as quickly in a fight against a corporation as they did against the U.S. Department of Justice.

“Privacy issues don’t just loom large, they are front and center as a huge concern for us,” says Prue Adler, associate executive director of the Association of Research Libraries. “We’re very concerned about protecting the confidentiality of patron records, and we take this very seriously.”

Librarians and privacy advocates see enormous potential for corporate intrusiveness if the Google settlement is approved, as is. After all, they say, the settlement is largely silent about what steps Google will take to protect the privacy of their users who may also be utilizing the service in a library setting. The company, for instance, will have the ability to access everyone’s reading habits, advocates warn. Google will know how long you are looking at a particular digital book, what page interests you the most, and what pages you skip.

“There will be an unbelievable dossier on your intellectual interests, and it is, as far as I can tell, left entirely in Google’s hands,” Electronic Frontier Foundation’s von Lohmann says.

For its part, Google says it takes the concept of privacy “extraordinarily seriously.”

“The privacy concerns are premature,” Macgillivray, Google’s senior general counsel, says. “The product hasn’t been designed, let alone rolled out, and, of course, we regularly talk to privacy advocacy groups.”

Libraries Lament
Library advocates also express concern over the settlement provision that grants every public library one free terminal. If a library wants an additional terminal, it has to pay the as-yet-undetermined subscription fee.

“Not all public libraries are the same—one terminal for the New York Public Library and one for Albia, Iowa?” says Corey Williams, associate director for government relations for the American Library Association. “If you’ve been to a public library, you probably see a line for public terminals. How is this going to work?”

These days, a growing number of libraries have what’s called a “multiformat distribution.” In addition to checking out books and compact discs the old-fashioned way—by walking into the local library—patrons can dial-in to a network of electronic databases that allow access to articles, books, even electronic picture books, many of which are downloadable to MP3 players, according to Nancy Davenport, interim director of library services at the D.C. Public Library.

Williams, Davenport, and other library advocates wonder why the Google settlement doesn’t allow some sort of remote access for public libraries: “It’s kind of a throwback, no dial-in access?” Williams says.

But Macgillivray says the settlement allows for “free access for every U.S. public library building and institutional subscriptions, for those that want more.”

“There’s a tremendously rich experience that didn’t exist before,” says Macgillivray, adding that the settlement provides for the possibility of opening up remote access in the future for public libraries.

But for libraries, the concern about access can’t be separated from the concern about Google’s sudden power as the only giant digital library around.

“Google is offering a great indexing access tool, and we’re all about access,” Williams says. “Our question is, What are the strings attached to this particular access? They’re saying, ‘We’re Google. We’re good. Trust us.’ But if Google owns the only option, and the price could change, there’s nothing to safeguard against exorbitant pricing.”

In their court filing, the library associations ask the judge to vigorously monitor the operation of the registry, particularly on issues of the pricing of the institutional subscriptions.

“There is a concentration of market power, so the issue is going to be: does it behave in a procompetitive or anticompetitive way?” says Band, the copyright attorney who represents library associations in the matter. “We are asking the judge to keep a close eye on how the settlement is implemented to make sure that this essential educational resource is available to all libraries on fair terms.”

And as Terry Ross, partner in Gibson, Dunn & Crutcher LLP’s, points out, Google, the authors, and the publishers can always amend their settlement agreement to reflect the complaints of libraries and any other concerned parties.

“Parties can say, ‘We didn’t see this issue, so we’d like an opportunity to amend this,’” says Ross, who specializes in copyright law and has been closely watching the case. “This is such an innovative settlement, I have to assume lawyers on both sides are pragmatic people who will see the issues and come up with some creative accommodation for libraries.”

‘Double-Barreled’
Earlier this year Robert Darnton, director of the Harvard University Library, created a stir in the academic world by publicizing his concerns over the Google settlement in an article in The New York Review of Books. Harvard had been one of the original participating libraries. Darnton wrote:

As of this writing, Harvard says it will continue to allow scanning of out-of-copyright books, but it will evaluate the settlement as it evolves and “would be willing to participate if it evolves in a way that makes collections widely accessible and usable under reasonable terms.”

The issue at this point, experts say, is not whether Google is violating antitrust laws. There is no evidence that it is. The concern focuses on the scope of the settlement—and how Google acts going forward, experts say.

The question of Google’s market power is an important one. Although nonprofits such as the Open Content Alliance are building digital collections, there are no corporate contenders, for now. And this includes Microsoft, who announced in May 2008 it was abandoning its book scanning project.

However, the stage may be set for a battle between titans at some point. To wit, Amazon.com Chief Executive Officer Jeff Bezos’ comment in February 2009: “Our vision is every book ever printed in any language, available in less than 60 seconds.”

Even Richard Sarnoff, chair of the Association of American Publishers, warned in a speech earlier this year that the settlement puts Google in direct competition with Amazon, potentially giving them a duopoly in the online book market.

Of course, there’s always the question of whether Google will, in the end, have a product worth coveting.

“The settlement gives Google a competitive advantage, but it remains to be seen whether that advantage has any serious commercial value,” says Edward T. Colbert, managing partner of Kenyon & Kenyon LLP and a well-known intellectual property and antitrust lawyer.

But if it is successful, some experts wonder if the sweeping nature of the settlement will make it difficult for competitors to even attempt entering the market. Anyone trying to build their own library will have to negotiate on a piecemeal basis for licenses from rights holders. As of this writing, sources close to Microsoft say the company is carefully following the situation and is considering filing legal documents in the case.

“Google has a very audacious plan. It’s a gigantic undertaking, the biggest development in publishing since the invention of the printing press,” says James Grimmelmann, an intellectual law professor at New York Law School. “We as a society have to watch very closely that Google, having seized the moment, doesn’t end up becoming the monopolistic controllers of culture in the new model.”

But not everyone is concerned, as publisher Tim O’Reilly of O’Reilly Media, Inc., writes, “Any claim that we’re on the verge of a huge Google monopoly, such as Darnton claims, is so far from the truth [it’s] laughable. Google is one of many contenders in an exploding marketplace.”

E-Winners
Makers of e-readers are also betting on the profitability of books in the digital age. In the past year e-book devices such as the Sony Reader and the Amazon Kindle have gained in popularity, especially among road warriors. The Kindle 2, introduced in February, costs about $359. Sony Corporation has five models for its Reader, ranging from $300 to $400.

Amazon is expected to see $1.2 billion by 2010 in sales related to its e-reader device, according to a report by a Citigroup analyst, who also estimated Amazon sold 500,000 e-reader devices last year. Sony reports that as of January 2009, it had sold about 400,000 devices and 4 million e-books.

Kindle aficionados cite as a benefit its ability to download books within seconds from coffee shops and airports, while Sony Reader users find that the device provides fast access to reading documents and books, thanks to a memory slot. And in March 2009, Amazon announced that it would begin selling e-books for Apple’s iPhone and its iPod Touch.

Meanwhile, new players such as Plastic Logic, a company whose goal is to lead the plastic electronics revolution and the way people consume information, are trying to elbow their way into the business. While some critics say Amazon and Sony are in danger of cornering the market, technology followers and antitrust experts are less concerned.

“If you’re an innovator with superior business acumen and skill, you are rewarded. That’s how it works,” Kenyon & Kenyon’s Colbert says. “When something better comes along, it will naturally displace the preceding product.”

Amazon’s response: “There will be a lot of winners in this space.”

Battle Over Kindle 2
The new technology already has had its legal challenges. On the patent front, Illinois Computer Research, LLC filed an infringement lawsuit against Sony claiming the Reader violates a patent it owns. The case is in its initial stages.

In February 2009 Amazon introduced its latest version of the e-reader, the Kindle 2, to positive reviews and some cries of copyright infringement. The Kindle 2 boasts a text-to-speech function that uses a computerized voice to read aloud text that is displayed on the screen.

The Authors Guild quickly claimed that the feature violated copyright law by essentially creating a derivative work without authorization. The Guild also asserted that the e-book license simply does not include audio rights. As Roy Blount Jr., president of the Authors Guild, put it: “What the Guild is asserting is that authors have a right to a fair share of the value that audio adds to Kindle 2’s version of books.”

The Authors Guild was roundly criticized by intellectual property scholars and, not surprisingly, technology advocacy groups. Even the National Federation of the Blind jumped into the act.

“The Authors Guild’s arguments have no validity,” Band says. “If they were right, then it would mean that any parent who reads a bedtime story to their child is a copyright infringer, and that’s just an absurd result.”

But Blount responded in a February New York Times op-ed: “For the record: no, the Authors Guild does not expect royalties from anybody doing non-commercial performances of Goodnight Moon. If parents want to send their children off to bed with the voice of Kindle 2, however, it’s another matter.”[4]

And in retreat, Amazon announced in March that it would let publishers decide whether they wanted the Kindle 2 to read their books aloud.

In a statement, Amazon asserted that the feature was legal, but said rights holders “will be more comfortable with the text-to-speech feature if they are in the driver’s seat.”

“Amazon and the copyright owners are locked into a negotiating relationship, and there are times where one side will do something to make the other side happy, even if they think their position is unfounded,” Grimmelmann says.

Brave New World
At this point, one thing is clear: Nobody knows what the future holds for books in any form, digital or paper.

“The Google settlement is going to test how much the consumer is willing to digest books online,” says Allan R. Adler, vice president for legal and government affairs for the Association of American Publishers. “Books in their basic format—meaning printed ink on paper, bound—have proven highly durable and useful for some 400 years.”

For Aiken, the Google settlement acts “as a big sandbox for the publishing industry to figure out what works online.

“There are a number of business models built into this agreement, and nobody knows which ones are going to flourish,” the Authors Guild executive director says. “This agreement will get hard data to a lot of people. It could become clear that buying online editions is a great market, or it could be that it turns out it’s a great market only for certain types of reference books. Time will tell.”

And there are certainly consumers who already have embraced digital reading. Jason M. Silverman, an associate at McKenna Long & Aldridge LLP, received an e-reader for his birthday and isn’t looking back.

“To me, books are big and dusty and you have to carry them around. I don’t miss that,” says Silverman, who brings his e-reader on airplanes, into cafes, and into bed.

But to others, while there are some obvious benefits of digital books and libraries, there is also a sense of loss.

Allison Hayward, a George Mason University law professor and a self-described “book junkie” says she likes the musty smell of the old election law volumes packed into her Arlington, Virginia, campus office.

“I love my books. The old ones, I like thinking about maybe who owned them before,” Hayward says. “The next generation misses out on the experience of grazing through hard copies.”

Authors and publishers say they, too, have mixed feelings thinking that the next generation may primarily read their books online or through e-readers, telephones, or an as-yet nonexistent device.

“It’s funny, there is something sad about it, having the physical presence of books in a house says something to our kids, to others, about what we value,” Aiken says. “But on the other hand, reading is reading.”

And others in the field say the future was just as uncertain in the wake of other earlier inventions such as the automobile, printing press, and personal computer.

“Trying to decide whether something is a good thing or a bad thing in advance is really just an excuse to apply time’s prejudices,” Electronic Frontier Foundation’s von Lohmann says. “It’s not to say that we have nothing to contribute. We just have to really appreciate how likely we are to be wrong.”

Notes
[1] Google Book Search Copyright Class Action Settlement, available at www.googlebooksettlement.com/.
[2] A description of the digital repository can be found at www.hathitrust.org.
[3] Robert Darnton, Google & the Future of Books, The New York Review of Books, Feb. 12, 2009, Vol. 56, No. 2, available at www.nybooks.com/articles/22281.
[4] Roy Blount Jr., The Kindle Swindle?, The New York Times, Feb. 24, 2009, available at www.nytimes.com/2009/02/25/opinion/25blount.html.

Anna Stolley Persky wrote about stem cells and the changing legal environment in the January issue of Washington Lawyer.