The Google Book Settlement and the Fair Use Counterfactual

Abstract

The sprawling Google Book litigation began as a dispute between the search engine colossus and a variety of authors and publishers over the legality of book digitization for the purpose of indexing paper collections and making them searchable. However, through the metamorphic power of class-action litigation, a dispute over mere indexing and search has been transformed into a comprehensive agreement over the future of the book as a digital commodity. Understanding this transformation and its implications is the central ambition of this Article. It does so by comparing the pending (now amended) Google Book settlement to the most likely outcome of the litigation the settlement resolves. This counterfactual provides a useful benchmark by which to assess the effects, and thus the merits, of the Google Book Search settlement.

The Settlement differs from the predicted fair use ruling in four critical areas. First, the Settlement permits Google to engage in a significant range of uses, including the complete electronic distribution of books that go well beyond fair use. Second, the Settlement provides for initial cash payments by Google to the copyright owners and a fairly generous revenue sharing agreement, neither of which would have been required under a fair use ruling. Third, the agreement creates a new set of institutional arrangements that will govern the relationship between Google and the copyright owners covered by the Settlement. The foundations of this new institutional framework are the Settlement agreement itself, the creation of a collective rights management organization called the “Book Rights Registry” and the “Author-Publisher Procedures.” The fourth area in which the Settlement differs from the likely fair use outcome relates to the accessibility, commoditization, and control of orphan works.

Keywords: Google, Google Book Search, Google Settlement, Authors Guild, Copyright, Fair Use, Class Action, Antitrust

JEL Classification: K00