Google’s ‘Orphaned Books’ Litigation; Effect on Digital Sales

The balancing of copyright law with the dissemination of information on the Internet can sometimes become tangled. And nowhere is that more evident than in the recent so-called “orphaned books” settlement, which involves Google’s attempt to scan and distribute the content of out-of-print books. To help us understand that federal case, and the broader implications of applying U.S. copyright law to digital sales on the Internet, we spoke with Ed Green. He is an attorney with the North Carolina-based law firm Coats and Bennett and an expert on intellectual property law.

Practical eCommerce: Please tell our readers about the “orphaned books” lawsuit against Google.

Ed Green: “In 2004 Google started a project they called the Google Book Search. They made deals with mostly university libraries to collect, scan and digitize books. It was primarily targeting books that were out of print, not currently being published, and not currently for sale from publishers. Google’s intent was to put this content out on the Internet and to make it available to a wider audience — since these are not things that you can order anywhere or purchase at a bookstore — and to just preserve the knowledge, to gather up all of these out-of-print books and put them in a single repository.

“Google was sued by a collection of authors and publishers for copyright violation. The original suit had to do with the fact that Google’s plan was to put what they called a ‘snippet’ of the book out in the search database, where you could log on and see a few pages out of various chapters of the book and then decide whether to purchase the book or not. So, the original lawsuit involved Google’s publishing of these snippets without any kind of copyright license.

“They went in negotiations and came up with a settlement in 2008. It [the settlement] was published and there were oppositions filed by several thousand authors that wanted out of the suit. [The authors] didn’t want any part of it, and a lot of other companies (Microsoft, Amazon and even the Department of Justice) stepped in and filed a brief and opposed the settlement.

“So, they went back in negotiations and came up with another settlement in 2009. There were various objections to that, and the latest version of that settlement was presented to a judge in New York recently for approval. (Somehow along the way, it morphed into a class action lawsuit, which requires approval of a judge.) The judge went through an analysis and disallowed the settlement. He said it wasn’t fair and equitable. So, basically, they’re going back to the drawing board now.”

PEC Since it involves so-called orphaned books, Google presumably couldn’t find the copyright holders to begin with. So, who were the plaintiffs in this case?

Green: “Well, Google knew who some of the publishers were, but since the books were no longer in print, Google thought it was doing the authors and the publishers a favor. It would offer really the only avenue for anybody to make any money off these books since they’re not being printed anymore.

“And, Google was collecting not only orphaned works. They were collecting everything out of print. So, some of these things were in the public domain, either because the copyright had expired or they might have been dedicated to public domain. But a large number of them were so-called orphaned works, or works that are out of print but are still under the copyright term.

“The organizations that have brought suit were not individual authors. They were professional organizations of authors and publishers who may or may not have had books in Google’s collection. In fact, one of the issues the judge had really trouble with in this settlement was that it wasn’t just the works that Google had already scanned, but it [the settlement] had terms about future scanning. It was a broad class of works and there was really no way to know specifically whether a particular author’s works were in there or not, or were going to be included in some of Google’s future activities.”

PEC How does one go about identifying an orphaned work?

Green: “Well, that turns out to be pretty difficult. The term is, of course, not a legal term. It’s slang for these collections of works that the law doesn’t really address very well.

“The law is designed to deal with ongoing works of commercial value and it turns out that is a huge problem. That was another issue that the judge found with the settlement. One example that he quoted in the opinion was he received a letter from a woman whose grandfather had self-published his own memoirs. I don’t know how many copies were sold, but there were a number of copies of this book out there.

“The author died in the 1990s and the copyright to that work passed to his heirs. So, his heirs owned the copyright; they knew who they were and they knew what their rights were. But anyone who just comes across this book — it’s self-published and the publisher is dead — this would appear to be an orphaned work, when in fact it wasn’t.

“The man’s heirs maintained the copyrights and they may wish to publish it again sometime in the future. The judge cited that as an example of how you can’t really tell with any degree of certainty, just because a book’s out of print, whether it falls under the [orphaned book category].

“Of course, in the settlement they had various legal definitions that [helped define] an orphaned work, and the court pointed out that a lot of works could fall in there that aren’t really orphans, with valid ongoing copyright holders that have an interest in the works.

“So, it’s a bit of a loose catchphrase — orphaned works — that refers to any book or work that’s out of print, but still has a copyright term. But even knowing what the term of the copyright is can be problematic. Copyright in the United States is the life of the author plus 70 years. So, it’s a tough nut just trying to figure out what we’re talking about.”

PEC Do the plaintiffs agree at all with the proposition of using the web to disseminate this knowledge?

Green: “Some just flat out do not. The court received letters from authors that stated, ‘I do not wish my work to be rendered into electronics and made available on the Internet. Period.’ Under traditional copyright law, the copyright holder has the right to withhold that.

“One example was a woman who had published works about animals and in the original books included beautiful photographs or renderings of these animals. Her purpose of writing this was to protect the animals as an environmental thing. She was afraid that once this work was digitized and scanned in, and only the text made available without the context of the photographs, that the work would lose some of its essential character. And she was worried that it might be used for purposes other than what she had written the work.

“So, there are people who simply objected to the entire concept. There were others, of course, who were happy to learn that there may now be a way to make money off their books that the publisher won’t print anymore because they didn’t think there was a market for it.

“So, it was far from any kind of consensus, which is quite typical of a class action lawsuit. But, that points at some of the issues that traditional copyright law. One of the judge’s problems with the settlement was that it was so broad and far-reaching that, in a way, it has supplanted traditional copyright law by taking away rights that law gives to authors and publishers or owners of the copyright, and subjecting them instead to the terms of the settlement agreement, which as a class action suit would cover people who weren’t even involved in the suit and didn’t have any voice in it.”

PEC By scanning and digitizing the books, does Google itself obtain some sort of protection or copyright to those works?

Green: “No, absolutely not. Google’s extent of ownership would be determined; presumably that’s what the settlement agreement did. In fact, it was about the terms of a license from the copyright owners for Google to do this. But Google would have no copyright in it. A copyright is a right given to the author of a work of original creativity.”

PEC As an expert on intellectual property law, what is your solution for this issue?

Green: “I think the more traditional aspects of copyright law seem to be adapting to the digital age reasonably well. This ‘orphaned works’ is sort of a unique situation in that you have works that are protected by copyright law, which is designed to ultimately provide remuneration for copyright owners, which is the incentive for them to create more works so that they can commercially exploit works. And so you have a situation where, because they’re out of print, a publisher has decided not to make them ongoing, moneymaking, commercial exploitations; and yet copyright law still protects them for that primary purpose.

“So, that’s the sort of situation that is unique to this particular dispute. And, in terms of a solution, I think ultimately what Google had crafted in the settlement agreement is similar in some ways to something that the music industry did decades ago. There are two organizations called ASCAP and BMI, which are music rights-licensing organizations. For example, a nightclub or a restaurant or a health club plays music for the aerobics class — basically any venue that makes money that has people come in for commercial purposes that wants to play music can get a license from these organizations. It’s a blanket license to play any of the music that this organization covers, and then they [ASCAP and BMI] collect monthly licensing fees and turn around and distribute them those to the singers and songwriters and musicians based on various formulas about whose music was the most popular. I think ultimately we will probably see something similar to that.

“But the key point there is that anyone who wants to can join [ASCAP and BMI]. Those on the creative side, the musicians and the songwriters, and the venues, any hotel, any nightclub can get a license from these organizations. One of the big problems with the [orphaned books] agreement was it was only Google. The U.S. Department of Justice in fact [realized it was] sanctioning a monopoly here. Why should Google have the right to circumvent copyright law or supplant copyright law with this private agreement? That may be good for the authors and it may be good for the publishers and it’s certainly going to be good for Google, but they’re not the only game in town. So, now if Amazon wants to do something similar, they’re going to have to go back to square one and renegotiate this whole deal. And Microsoft is going to have to do it all over again, and then we’re going to have multiple bodies out licensing this stuff around.

“So, I think ultimately this is going to generate enough interest that I think the entire industry needs to get together and look at something sort of like the model that ASCAP and BMI have been doing for music now for decades, and that works fairly well.”

PEC Does the law apply to other digital products besides books, such as photos, paintings or movies?

Green: “Yes, absolutely. There are very few variations in copyright law that are specific to particular types of works. For example, there’s an exclusive right to display a work. While that makes sense for a photograph or a painting, it doesn’t really make sense for a book. But, other than technicalities like that, the law is the same. The copyright term is the same, the rights that a copyright owner has are the same, the methodology of licensing and all that — copyright law doesn’t really distinguish.

“So, you’re going to have precisely the same problems with photographs; actually even more so because with images or photographs there’s often no information. You don’t even know who the publisher is. At least in a book, you’ve got a title page where you can try to hunt down a publisher. But for a lot of other creative works — particularly those that are amenable to electronic reproduction like imagery or audio-visual works, movies, television shows — they’re going to run into the same issues.”

PEC Please tell us a little about the law firm of Coats and Bennett and your practice within that firm.

Green: “We are a small intellectual property boutique firm. That’s our specialty. All we do is intellectual property law. We do primarily patent law. In fact, most of our people are technically oriented and we deal with inventions and patent issues. But a part of our practice includes copyright, trademarks, trade secrets, Internet issues, and of course intellectual property litigation.”

PEC Anything else on your mind for our readers today?

Green: “I find that primarily when people are involved in selling these types of products, if they’re selling ebooks or images or photographs or something like this, intellectual property issues like copyright are usually pretty well accounted for because everybody’s thinking of them. Where I’ve seen trouble with our ecommerce clients are in some of the peripheral things.

“For example, I had a client who had hired a website developer to build her website — through which she sold her professional services — and they had a falling out. She moved the web hosting to another company and two years later, she got a letter from an organization that claimed to own the copyright to images that were used on her website, and it included a very large bill for licensing for past work. She had absolutely no hand in the selection of these images or the creation of this website. So, we of course looked to the contract that she should have in place with her vendor, but she didn’t have one. Ultimately I don’t think she was liable for copyright infringement, but the copyright owner was going after her and any litigation would have been troublesome and expensive even if ultimately the website developer was liable for it.

“So, I think the main thing to keep in mind for people that are getting into this business is to make sure that intellectual property issues are addressed in peripheral things. In the main products you sell you need to be clear who owns the copyright and you need to have the right to sell it, but everybody knows that so they address that. But, when you’re dealing with website developers or advertising firms or anybody else, just be aware of intellectual property issues, such as copyright. Make sure that your contracts with your vendors at least address it and who’s going to be liable for infringement and who has responsibility for clearing these things.”