$125m in the kitty, but who will get the cream?

On Monday Google announced during a European Commission hearing in Brussels that it will exclude from the US Google Book Settlement all European books that are still commercially available [Note only those that are “commercially available”. Could we have a definition please, Google?]. This means that European books will no longer be available to American consumers through Google Book Search unless the author/publisher has expressly agreed to be included. Although they say this is a “step in the right direct”, European authors and publishers, as well as national governments, still expressed serious concern regarding the Google Book Settlement.

As reported by the IPKat (here, here and here), the Google Book Settlement made in November 2008 was a result of a class action lawsuit brought by the Association of American Publishers, the Authors Guild, and other select authors and publishers who had alleged that Google’s scanning of their books infringed their respective copyrights. If approved by federal court in a fairness hearing scheduled in October, the Settlement would enable Google to scan copyright, out-of-print and orphaned works in the US for online inclusion in exchange for $125 million payment to a Books Right Registry from which authors and publishers would then be compensated. The online functionality of the Google Book Search, in conjunction with the approved Settlement, would enable Google to use the content for a multitude of permitted acts such as sales, advertising and third-party licensing. 37% of revenue earned from these uses would go to Google. In the US, Google had previously given authors until 5 May 2009 to “opt-in” or “opt-out” of the settlement terms. Failure to do so would have the effect of “opting in” an author/publisher to the settlement – in effect a compulsory licensing system. This and the issue of Google acting as a de facto exclusive licensor of “orphan works” generated waves of concern throughout the U.S., resulting in the Justice Department commencing a formal inquiry into the Settlement’s antitrust implications this past summer.

European concern also continues to mount. France has begun the process of filing formal objections to the case in New York, while Germany has already submitted its opposition to the settlement citing contravention of national German copyright laws and the European initiatives to create non-commercial digital libraries (more on this below). As reported by Bloomberg, Nicolas Georges, the director responsible for books and libraries at the French Ministry of Culture stated at the hearing:

“The settlement isn’t in line with intellectual property rights, secondly, the settlement raises serious issues in antitrust law and thirdly the settlement poses an evident risk to cultural diversity ... The right of Google to digitize orphan works in American libraries, but coming from around the world, gives them an unequal licensing right for exploitation in the future, a monopoly.”

But what is Europe to do? Due to the territorial nature of copyright law a pan-European settlement or licensing deal would be near impossible to achieve – a problem which in fact had already been addressed last year by the ¡2010: Digital Libraries Initiative’s High Level Expert Group (HLEG) and Copyright Subgroup’s Joint Report which addressed the problem of digitization of orphan works. The Digital Libraries Initiative 2005 launch was followed by a Recommendation adopted by the European Commission in August 2006 in which it called upon Member States to create mechanisms to facilitate use of orphan works and promote the availability of a known orphan works directory. The European Council then invited Member States to have mechanisms in place by 2008 to facilitate the digitization and online access to orphan works. Google, unsurprisingly, beat Europe to the punch.

Information Society Commissioner Viviane Reding and Internal Market Commissioner Charlie McCreevy issued a joint statement yesterday in relation to the Google Books hearing which stated:

“"It goes without saying that digitisation of copyrighted works must fully respect copyright rules and fairly reward authors, who could be the biggest winners from better access to a Europe-wide online audience. However, we also need to take a hard look at the copyright system we have today in Europe. Is the present framework still fit for the digital age? Will the current set of rules give consumers across Europe access to digitised books? Will it guarantee fair remuneration for authors? Will it ensure a level playing field for digitisation across Europe, or is there still too much fragmentation following national borders? What could be the contribution of Europeana, Europe's digital library, when it comes to working on a European response to digitisation efforts in other continents? [This Kat is worried: Europe’s previous recommendations and Joint Reports were derived from the premise of promoting the public sector and ‘cultural and public good’. These are arguably not appropriate frameworks in which to reassess the legal implications of orphan works in the commercial sector.]

Is Europe's copyright framework modern enough when it comes to digitising orphan works and out-of print works? [Well, no! Europe’s recommendations in regard to orphan works have been emphatically lacking. Their addition really has been only to codify the common-sense approach of a ‘due diligence’ search. Can anyone point to a European legal definition of an “orphan work”?]

These books represent the vast majority of European libraries' collections (around 90%). In our view, these books must be recovered and given a new lease of life".

The European Commission will be discussing the above questions with stakeholders, the European Parliament and the Council in the coming weeks with the stated aim of presenting proposals for “the modernization of Europe’s still far too fragmented copyright system…with the focus on finding an online family for orphan and out-of-print works” to the new Commission.
It seems to this IPKat that Europe has a proverbial ‘gun to their head’ in the guise of the Google Book Settlement. Because of this, this IPKat is concerned that any proposed legislation or solutions now put forward will not adequately address the legal and practical ramifications of orphan works and similar issues.

Deadlines to file amicus curae briefs have now passed. The US Government has until 18 September 2009 to file their written submissions to the court. The hearing is scheduled for 7 October 2009. This IPKat, in her guise as AmeriKat, will be in Manhattan during the hearings and hopes to be either in Judge Denny Chin’s courtroom or in the proximity thereof.