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Important Information Concerning the Google Books Settlement Agreement

Client Advisory

August 28, 2009

"Google's mission is to organize the world's information and make it universally accessible and useful. Today, together with the authors, publishers, and libraries, we have been able to make a great leap in this endeavor. While this agreement is a real win-win for all of us, the real victors are all the readers. The tremendous wealth of knowledge that lies within the books of the world will now be at their fingertips."[1]  

- Sergey Brin, Co-founder & President of Technology at Google

Google and its library partners have agreed to a settlement with authors and publishers (“rightsholders”) permitting Google to digitize and display in-print and out-of-print books with certain benefits to the rightsholders, including the option to control how much, if any, of their materials can be displayed, with Google to pay the rightsholders percentages of the monies achieved through those various display choices. The settlement is the result of class action lawsuits filed against Google claiming that Google scanned, stored and displayed books on its Google Books website without permission. Google denies any wrongdoing and the court has not ruled on any of the parties’ claims. 

The following is for informational purposes. If you have any questions please contact any of the attorneys below.

Settlement

September 4, 2009 is the deadline for  rightsholders (as defined above and below) to (a) accept the terms of the Google settlement, which requires no action from the rightsholder (note that those accepting settlement may exclude any of their works, as explained below), (b) opt-out of the settlement, or (c) accept and object to particular terms of the settlement. 

The settlement only applies to copyright owners of books and inserts published before January 5, 2009 (“rightsholders”). For purposes of the settlement, a “book” is defined as a bound and published work; inserts include tables, charts, graphs, prologues, epilogues, etc.[2]

For works that are in print and widely available, after accepting the terms of the settlement, authors and publishers may dictate what types of displays Google may make, which includes whether the entire book can be displayed. For example, if rightsholders permit preview of the books, they may choose between two types of preview: (a) 20% of a non-fiction book and no more than 5 adjacent pages (or all of a fiction book less the last 5% or 15 pages); or (b) no more than 10% of a non-fiction book.

Under the Agreement, Google is permitted to digitize and display books determined to be out-of-print or not currently available for sale via the customary U.S. channels of trade unless and until the rightsholder directs Google not to do so. Here, rightsholders of out-of-print or non-commercially available books must submit a Claim Form to take advantage of the revenue generating display uses mentioned below. 

The Settlement Agreement does not affect public domain books (out of copyright). Google will continue to display the entire public domain book as they have been doing in the past. 

Settlement Benefits

Proponents of the settlement note that it opens new opportunities to rightsholders to market their books and earn revenue through Google’s display, which will likely grow to be a major destination for research and book purchases; that it gives the opportunity to collect damages payments without the cost of filing suit; and that it offers royalty rates higher than the rates small entities might be able to negotiate for themselves. 

The payments to rightsholders include: (a) a cash payment of at least $60 and up to $300 per principal work for all books digitized prior to May 5, 2009.  A Claim Form must be filed prior to January 5, 2010 to claim the cash payment; and, (b) 63% of all revenues received from display of the books (revenues generated from the free Google Books terminals in libraries and schools will be distributed on a per-printed-page basis).[3] 

An independent, non-profit Book Rights Registry has been established to, essentially, help locate rightsholders, collect and maintain accurate rightsholder information, provide a way for rightsholders to control inclusion or exclusion of their works from the Google Book site, and ultimately ensure that rightsholders see their portion of the revenues earned under the Agreement. 

Those who opt out would not likely receive damage payments, such as those in items (a) or (b), short of litigation (which may be expensive). Please note: it is unclear whether opting out may cause Google to cease using works in their services: opting out may simply reserve the right to sue Google.

Concerns have been raised over whether Google will include outdated materials in its Google Books website. However, first, it is important to note that rightsholders who decide to be included in the settlement still have the option to require removal of any of their works, provided removal claims are filed prior to the April 5, 2011 deadline. Second, if a rightsholder is concerned about having an adequate mechanism to ensure that Google removes outdated versions of its works, the rightsholder might consider remaining in the settlement but filing an objection noting that the terms do not, in its view, include sufficient protections in this regard.

Possible Drawbacks to Participating in the Settlement

General concerns about the proposal include that it could place Google in a position to exercise monopoly power over substantial segments of the book market, able to impose unfair terms on consumers, libraries, and potentially even copyright owners. Moreover, Google may continue to digitize books from the participating libraries regardless of whether a given copyright holder approves of or opts-out of the settlement. 

When a rightsholder agrees to participate in the settlement, he/she gives up all right to claims against Google or the participating libraries for their conduct, including Google’s digitization, Google’s use of digital copies in Google’s products and services, and/or the library’s providing of the books to Google, among others. 

Finally, if rightsholders accept the terms of the settlement, but exclude books from the database, Google and the participating libraries are not required to destroy the back-up tape or media containing the work -- we note, however, that Google/libraries cannot use them. The only way to preserve rights to bring claims against Google and/or the libraries involved for keeping removed books on back-up tapes or media is to opt out.

Conclusion

The decision to participate (including the choice of works to claim or exclude), opt-out, or participate while filing objections, is ultimately that of the rightsholder. Consult an attorney for a full picture of rights and responsibilities. 

Important Dates to Remember

September 4, 2009: Deadline to opt-out of the settlement.

September 4, 2009: Deadline to object if you do not opt out.

October 7, 2009: Settlement court hearing.

January 5, 2010: Deadline to file a claim form for a cash payment.

April 5, 2011: Deadline to instruct Google to exclude book from database.


Questions regarding this advisory should be addressed to Rose Auslander (212-238-8601, auslander@clm.com), Scott M. Sisun (212-238-8728, sisun@clm.com) or H. Thomas Davis (212-238-8850, davis@clm.com).


Endnotes


[1] Google.com, The Future of Google Books ¶6, http://books.google.com/googlebooks/agreement/#3 (last visited August 19, 2009).

[2] Even within the pertinent time period, not all written works under copyright are included in the settlement. For example, the settlement does not cover periodicals, articles within periodicals, or government works not subject to copyright.

[3] For participating works, Google will have the right to display the book and generate revenue based on various uses, including: (a) institutional subscriptions, e.g., time-limited subscriptions for schools and governments; (b) consumer purchases; (c) public access at libraries, non-profit colleges and universities (here, revenues are made by per-page printing); (d) other future commercial uses, e.g., consumer subscriptions, print on demand books and .pdf downloads, etc.; (e) snippets, e.g., lines of material from pages; (f) previews; (g) advertising revenue, and others.

Exhibit A

How to identify publications already digitized by Google

  1. Go to the website: http://www.googlebooksettlement.com ;
  2. Click on the button "Claim books and Inserts";
  3. Click on the "Account type" "Publisher" and create a Registry account;
  4. Fill in all required fields including email address, a username and a password;
  5. Google will then send an email including a verification code;
  6. Sign in by clicking on "sign in" in the above right corner of the website:            http://www.googlebooksettlement.com ;
  7. Enter the verification code, username and password and click on the "Sign in";
  8. Click on "find and claim";
  9. Check "Search for books" and click "continue";
  10. Enter your name in the "Publisher" field and click on the "Search";
  11. The website will then display the publications found;
  12. Click on "Download the results as a spreadsheet" and an excel spreadsheet will be displayed with all publication found; The spreadsheet allows you to identify your publication, and, through column P, assess if the publications have been digitized by Google.


Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. © 2017 Carter Ledyard & Milburn LLP.
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