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Google Settles Book Search Suit

goog settlesThroughout 2007, Microsoft and Google seemed locked in a race to digitize  and index the books of the world.  For months the companies seesawed back and forth with news of agreements granting exclusive access to world renowned library collections.

Google tied up the University of Lausanne in France and the University of Mysore in India.  Microsoft captured the British Library in the U.K. and the University of Toronto in Canada.  Google wooed Stanford and Harvard.  Microsoft snared Cornell and the University of California.

Back and forth it went in what seemed to be a small but important front in the companies’ ongoing competition for audience eyeballs and next generation search technology.  Then last spring, in May, abruptly, it stopped.

With little warning, and to limited fanfare, Microsoft pulled the plug.  Organizing all the world’s information wasn’t their mission.  Microsoft was interested in next generation search and a sustainable business model.  Creating a library instead of crawling existing ones apparently was no longer worth it, so they ceded the fight.  Copyright lawyers chasing Google’s Book Search project were less generous, until today.

Alleging “massive copyright infringement,” the Authors Guild claimed in a 2005 class action lawsuit that Google’s process of scanning copyrighted works without author approval, even though no more than a summary was publicly displayed, was willful violation of copyright law. In 2006, the Association of American Publishers joined the suit.

The lawsuit has waged since.

Unlike Microsoft’s approach, which required authors to opt in before their work was indexed and stored, Google made no such distinction.  By storing digital copies of copyrighted works and making them searchable, the plaintiffs claimed, Google was profiting from the unauthorized use of copyrighted material.

Tuesday, the two sides announced a settlement (release).

Assuming the U.S. District Court in New York approves it, the deal could become effective by summer 2009.  With it will come not only the end of longstanding litigation, but the beginning of a new “paid content” business model for Google.

Richard Sarnoff, Chairman of the Association ofAmerican Publishers characterized the deal as a "win for everyone" and said it "creates an innovative framework for the use of copyrighted material in a rapidly digitizing world, serves readers by enabling broader access to a huge trove of hard-to-find books,and benefits the publishing community by establishing an attractive commercial model that offers both control and choice to the rightsholder.”

Under the terms of the proposed settlement, a total of $125m will change hands. 

To compensate for past practices, authors (rightsholders) of the copyrighted books Google has already scanned will receive a total of sixty dollars per title.  A total of $45m is earmarked for resolving these existing claims.

Another $35m is being set aside to establish a registry service which, similar to the music industry’s Ascap, will be responsible for both locating rightsholders and distributing payments from revenue earned through Google’s use of copyright books moving forward. These revenues will be generated from the sale of full access to the scanned literature. 

Unlike in the past, when the scanned books were only displayed in summary, in the future, Google will be authorized to show up to twenty percent of their content as a preview.  Access to the remainder of copyrighted publications, which previously was unavailable, will become available for a fee.   

To participate, rightsholders of books currently in-print will have to opt in by notifying in order for digital copies of their work to be sold. Out-of-print titles will automatically be included unless the rightsholder(s) opt out. Provisions are included to allow for only partial reprints for those authors/publishers that are concerned digital access might reduce the sale of their titles elsewhere.

Pricing for full access will vary but, according to the agreement, Google will take up to 30% of the sales.  Rightholders (authors and publishers) will receive the remaing 70% in "Net Purchase Revenues" through distributions from the new registry service. On occasion, Google is authorized to offer discounts in sale prices. Google is also able to deduct up to 3.75% for sales made through an affiliate program. The pricing terms in the agreement would last for three years and be up for renegotiation in four year increments to follow.

Public libraries will have a unique portal to provide free access to their visitors.  Universities may also be eligible for free access too. Other institutions will be able to purchase subscriptions for access to the 7 million, and growing, titles in Google’s digital archive. 

All works in the public domain will remain available to all viewers for free. 

Libraries at the Universities of California, Michigan, Wisconsin, and Stanford provided input towards the settlement.

Potentially defining the project as something to watch with relevance beyond just books, Google’s co-founder Sergey Brin suggested to the Wall Street Journal in an interview that the Rights Holder Registry might be something Google will emulate with other digital media it archives and hosts, notably video.

When Google video started,” Sergey said, “we had both a free and paid model, but we deemphasized the paid model.  I do support this idea that there are definitely high value pieces of information that people are willing to pay for and buy…  I hope that we can broadly [apply the] new model to more media types.”   
[ed. Note: The WSJ interview transcription appeared to have left out a few words.  As written it reads “I hope that we can broadly new model to more media types.”  We’ve edited the quotation as indicated to fill in the blank for the apparent missing words.]

If embraced, it’s possible Google as a "content seller" could become a competitor to retailers like Amazon. (Google could also be a potential licensor of content. Google Book Search for Sony’s Reader? or Amazon’s Kindle?).

The settlement agreement, in its entirety, can be found here.

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