A New York judge has denied final approval for a proposed settlement between Google and book publishers, saying that the agreement is not fair, adequate and reasonable.
The settlement, referred to in the decision as the “Amended Settlement Agreement,” would have given money to rights-holders whose works Google has already digitized while allowing Google to continue its work scanning books.
In his decision, Judge Denny Chin said the ASA would give Google an unfair advantage over its competition, “rewarding it for engaging in wholesale copying of copyrighted works without permission.”According to the terms of the settlement, Google would have paid $125 million to publishers and rights-holders whose books have already been scanned. The money would also have been used to find the authors of scanned books who have not come forward.
The 166-page settlement would have given Google the right to continue scanning books and inserts, to sell subscriptions to an online database of books, to sell access to individual copies of books and to sell ads on book pages. In return, publishers and rights-holders would receive 63 percent of revenues from Google’s sales.
Additionally, the ASA established a book rights registry to keep records of all the rights-holders and to make it easier to organize payments. It also established a board to “represent the interests with respect to, and assume responsibility for certain decisions pertaining to, unclaimed works, including pricing and book classification,” the judge’s decision read.
Importantly, rights-holders could opt out of Google’s database at any time, and Google was bound by the agreement to make “reasonable efforts” to remove the opt-outs from the database “as soon as reasonably possible” — 30 days at most.
Chin wrote that of the roughly 500 comments filed on the original proposed settlement, most opposed it. Critics said some interested parties were not given enough notice of the proposed settlement and that some rights-holders were not well-represented in the ASA. Copyright, antitrust, privacy and international law concerns were also presented.
A major sticking point was “orphaned” works whose only apparent copyright holder is dead, cannot be located or is unknown. Commenters said this would essentially give Google the rights to sell any work whose rights-holder could not be found, a situation that gave the search company essentially a monopoly over orphaned works. A number of loopholes were also pointed out.
Chin noted in the decision:
As counsel for Amazon argued: “[T]he law of the United States is a copyright owner may sit back, do nothing and enjoy his property rights untrammeled by others exploiting his works without permission.” (Hr’g Tr. 46-47 (David Nimmer)). Under the ASA, however, if copyright owners sit back and do nothing, they lose their rights.
The judge went on to say in his conclusion that “many of the concerns in the objections would be ameliorated if the ASA were converted from an ‘opt-out’ settlement to an ‘opt-in’ settlement.”