Australia: Google Book Search Program - Threat Or Opportunity?

Last Updated: 14 August 2009
Article by Chris Bevitt

Google has achieved a major breakthrough with its online book project following the settlement of its long-running litigation with various publishers.

In 2004, Google launched its Google Print Project. The project has two components: the Print Publisher Program and the Print Library Project. The Print Publisher Program involves Google entering into agreements with book publishers authorising Google to scan the full text of their books into Google's online searchable database. When a user searches online for the book or for particular text, the Google database displays bibliographic information about the book and a link to the text within the search query. Clicking on the link takes the user to a full page of the book containing the search query plus pages before and after that page. If the user decides to purchase the book then Google and the publisher share in the payment. The publisher may also share in advertising revenue if Google ads appear adjacent to the pages. The Print Publisher Program is uncontroversial because it is by agreement with the publishers.

In contrast to the Print Publisher Program, Google's Print Library Project has been the subject of considerable controversy. Under this Project, Google took it upon itself to scan a vast quantity of books into its database without obtaining permission from anyone, apart from the participating libraries which include Harvard, Stanford, Oxford, Michigan and the New York Public Library. The scanning/copying is not an issue for books that are out of copyright. However, Google's Project includes many books that are still subject to copyright, with those books including both in print and out of print books.

Users can browse the full text of public domain materials but for books still within copyright, only a few sentences of text around the search term will appear. Not surprisingly, many authors, publishers and institutions representing those parties took major exception to the Google Print Library Project. Under Australian copyright law, copyright in a book subsists for the life of the author plus 70 years after the author's death. This period was 50 years before Australia signed the US Free Trade Agreement. The copyright owner generally has the sole right to reproduce the copyright work. The law of most countries contains a fair use exception to the copyright owner's exclusive rights. In Australia, the fair use exception is quite limited. However, it is considerably broader in the United States. The US exception allows any use so long as it is "fair". For example, Mr Kelly, a US photographer, sued Arriba Soft for infringing his copyright by compiling a database of images extracted from his website and a range of other websites. Arriba Soft operated a search engine for internet images and displayed the images using a downgraded quality and thumbnails only. The court found that Arriba Soft's copying of the photographs was fair use. Google is relying on this fair use exception to undertake the Library Project.

In late 2005, the Author's Guild of America and five major publishers initiated proceedings against Google for copyright infringement. Despite the law suits, Google carried on with its scanning project and by October 2008 had scanned up to 7 million books including 1 million from the public domain, 1 million scanned under the Publisher Program and 5 million still under copyright.

Google argues that its project will in fact vastly expand the available market for both in copyright and out of copyright books and in print and out of print books. This may well be true, particularly for out of print books, which are effectively unavailable for purchase. Of course, the publishers and authors were rightly concerned that Google would be syphoning off a share of the revenues which they would otherwise have generated from book sales. However, if a user never saw the book then there would never be any revenue; an argument for Google.

After two and a half years of negotiation, the Author's Guild settled its case against Google on 28 October 2008. It is important to note that the settlement is subject to court ratification which is due to occur on 7 October 2009 (the original date of 11 June 2009 was challenged and subsequently changed).

Under the settlement, authors, publishers and Google will share the proceeds of exploiting the books using Google book. The key elements of the settlement are as follows:

  • Google will pay US$34.5 million to establish an Independent Book Rights Registry. This is a new independent entity which will administer the scanning and searching project and collect payments on behalf of authors and publishers. The Registry will have a Board consisting of equal numbers of authors and publishers. The payment will be used to establish the Registry, notify right holders of the settlement and process claims.
  • Google will pay at least US$45 million to compensate authors and publishers whose copyrighted texts have been scanned without permission. Although this looks like a large number, the estimated amount each author/publisher will receive per book is approximately US$60 given the large number of books which have been scanned. The share between publishers and authors will depend on the profit-share agreements between them.
  • If Google runs advertising on a page which displays just one book, the copyright owner will receive 63% of the advertising revenue while Google will retain 37%.
  • The balance of US$45.5 million will go towards the publishers' legal fees in bringing the action.

The following timetable applies to the settlement:

  • Authors and publishers who wish to opt out of the Project must notify Google by 4 September 2009 (the original opt out date of 5 May 2009 was changed following a challenge to the original date by various authors and publishers) - those who opt out will have their books removed from the Project. If someone does not opt out, their book may be scanned.
  • The deadline for opting in (and therefore receiving the one off payment of US$60) is 5 January 2010.

As indicated above, the settlement is subject to confirmation at a final fairness hearing now scheduled for 7 October 2009.

It is important to note that the case/settlement and the new features relate only to US copyright and access by US users. For the rest of the world, including Australia, the position will remain as is currently the case where only a few lines of text will be displayed. For users outside the United States, users will be able to search Google Book Search for books and may see snippets of books still within copyright. But they will not be able to purchase access to the book online and no institutional subscription service will be available unless covered by the publisher under the Print Publisher Program.

So it's not beyond the realm of imagination to consider that a copyright owner outside the US may take action on the basis that Google's actions in scanning the copyright owner's book infringe the owner's Australian copyright (or other country) rights. Such a case would not be straightforward given the need to demonstrate the necessary connection with the Australian copyright. If Google was to divide its site into different country-based sections, this could create the necessary nexus to enable a claim to be brought in Australia.

But for now, Google has achieved a favourable settlement in the US. In exchange for a payment of less than $130 million, Google has acquired rights in relation to a vast array of in-copyright works. Some may argue that Google has paid considerably less than those rights are worth. Others will say that Google has taken a decisive step to preserving the world's literary heritage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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