The Google Book Settlement

What is the Google Book Settlement?
The Google Book Settlement, often referred to as the Google Settlement, refers to the proposed settlement of lawsuits brought against Google for its Google Library Project. The two suits, Authors Guild v. Google (brought September 20, 2005) and McGraw-Hill, et. al. v. Google (brought October 19, 2005 by McGraw-Hill, Pearson Education, Penguin Group, Simon & Schuster, and John Wiley), sought damages for the Google Library Project's unauthorized digitizing of library content, claiming (correctly) that it violated the legal rights of authors and publishers, the copyrights holders of the digitized work.

The Preliminary Settlement Agreement
After more than three years of negotiations, on October 28, 2008, a settlement agreement was reached. The Google Settlement provided for Google to pay $125 million dollars, which included $45 million to resolve existing claims by authors and publishers; and $34.5 millions dollars for "notice and administrative costs" and to establish a Book Rights Registry. (The Book Rights Registry would be a not-for-profit agency set up to manage the interests of rightsholders with respect to Google Books. The Registry's duties would include the creation and maintenance of and a rightsholder copyright database, and the collection and distribution of their respective Google revenues). The balance of the settlement funds would cover legal fees.

What the Google Settlement Means for Authors
Once the Google Settlement had been agreed upon, authors were given extensive instructions on how to proceed to claim damages if their books had been digitized prior to 2009 without permission (under the settlement agreement, authors got $60 per "Principal Work" of the book; less for "inserts," like forewords, afterwords, etc). As part of the agreement, authors authorized Google, on a non-exclusive basis, to continue to digitize their books, and have the right to determine whether and to what extent Google may use their copyrighted writings.

The Google Book Settlement laid out the potential uses as: selling subscriptions to an electronic books database to institutions; selling online access to individual books; to selling advertising on pages from books; displaying portions of Book in a "preview" format to encourage sales of online access to books; displaying snippets from books; and displaying bibliographic information from books. Google would pay the rightsholders 63% of all revenues Google receives from the commercial uses it makes of the books.

Approval of the Google Settlement
The Google Settlement received preliminary approval on November 17, 2008, and the agreement was vetted through many stakeholders. After taking into account submissions filed with the court on November 13, 2009, the parties to the settlement filed an amended agreement with the U.S. District Court for the Southern District of New York. The amended agreement addressed the concerns raised by the stakeholders, such as privacy, internationality, and assuring specific efforts to track down the rightsholders of unclaimed "orphan" works.

On February 11, 2010, Google filed its brief in support of a motion for final approval of the amended settlement, and it looked like the end was in sight.

Digitized Books Become More Valuable
Meanwhile, in the intervening years since the initiation of the Google Library Project, ebooks became more and more prevalent, and publishers saw the value in having the breadth of their work scanned. The settlement would give the public access to--and rightsholders revenues for--the approximately 15 million books that had been copied by Google up to this point, many of them out-of-print and largely unavailable. Google had formal rights to only about 20 percent of those.

The Google Settlement Rejected
But on March 22, 2011, a Federal judge ruled against the settlement, writing that it would, "...give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission." The judge, Denny Chin, seemed to be being responsive to the objections to the settlement received (including from Google competitors Microsoft and Amazon, as well as the Department of Justice). Further, Chin's opinion also offered that legal matters around copyright--for example, of the distribution of proceeds from orphaned works--were for Congress not Google, a commercial enterprise, to decide.

The ruling throws the future shape of the Google Library Project into question.