On Tuesday, a district judge for the United States District Court of the Southern District of New York rejected a $125 million class action settlement agreement regarding Google Books between Google and a wide array of authors and publishers.
The class action stems from a 2004 agreement between Google and several major libraries to scan as many books as possible. To date, Google has scanned over 12 million books.
Under federal rules, a court must approve any settlement agreement in a class action suit. While Judge John Sprizzo approved an initial draft of the settlement agreement, Judge Denny Chin recently refused to approve the settlement, sending Google, authors, and publishers back into the drawing room.
“In the end, I conclude that the ASA is not fair, adequate, and reasonable,” Judge Chin wrote.
Under the agreement, Google would have been able to continue scanning books, selling subscriptions, selling advertising, and collecting Google Books’ reader information. In exchange, Google would have paid authors and publishers 63% of profits from advertising and sales, while also creating a $35 million Registry that would monitor Google’s use of copyrighted works.
Despite the agreement, Judge Chin argued that the breadth of the agreement required its rejection. In his opinion, Judge Chin looked at the agreement’s impact on privacy, international law, antitrust concerns, copyright, as well as the scope of the relief.
First, Judge Chin ruled that the agreement’s creation of a Registry that would control the copyrighted works use was a matter for Congress to examine–not the courts. He went on to write that questions about “orphaned books” (those books without a known right holder) “are matters more appropriately decided by Congress than through an agreement among private, self-interested parties.”
Indeed, the opt-out agreement would have put Google in control of millions of digitized books, which the company started scanning in 2004. Moreover, Judge Chin opined that the agreement “would do so even though Google engaged in wholesale, blatant copying, without first obtaining copyright permissions.”
Judge Chin was not alone in his opposition to the potential agreement, as hundreds of authors and publishers objected to the settlement. Some argued that the settlement would give Google too much power, while others argued that they simply did not want their work digitized.
“I am opting out because I believe in the integrity of copyright,” one author wrote. “I believe that only I, myself, should have the right to determine how my work can be used.”
After acknowledging the impact that the agreement would have on international law, antitrust concerns, and the scope of the relief offered to authors of scanned works, Judge Chin turned to privacy concerns.
“The privacy concerns are real,” Judge Chin wrote. “Yet, I do not believe that they are a basis in themselves to reject the proposed settlement.”
Despite the Judge’s belief that privacy concerns alone were not enough to stop the agreement, several objections submitted to the court cited such concerns. The Electronic Frontier Foundation and the American Civil Liberties Union filed one such objection on behalf of several authors and publishers.
“Google Book Search can link a reader to every book searched for, browsed, purchased and read,” the objection read. “It even tracks which particular pages the user reads and for how long. For example, in a New York Times article in January 2009, a senior member of Google Book Search’s engineering team admitted that he “was monitoring search queries recently when one . . . caught his attention.” The engineer could easily tell that the reader spent four hours perusing 350 pages of an obscure 1910 book.”
The objection concluded by arguing that there must be built in privacy protections so readers do not have to worry that information about their reading habits will be shared without their permission. Moreover, the objection argued that there should be limited tracking on Google Books, so users can browse anonymously as they do in bookstores.
Essentially, Judge Chin’s ruling, which stresses that the agreement should be an opt-in, not opt-out, agreement, refused to approve an agreement that would have essentially reoriented copyright in the digital age. The moral of the story is that Congress must take on meaningful copyright reform in order to deal with ever new problems regarding the online information environment.