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Judge Chin Rejects the Amended Settlement Agreement in the Google Books Case

By Mary Rasenberger

Judge Chin issued his long-awaited decision in the Google Books case yesterday, rejecting the Amended Settlement Agreement (ASA). He did so on the grounds that the ASA does not meet the "fair, adequate and reasonable" standard for class actions settlements. Acknowledging the many benefits of the ASA, Judge Chin nevertheless found that the ASA "would simply go too far."

As described in prior posts on this blog, the ASA was the result of a copyright infringement lawsuit brought by the Authors Guild and the Association of American Publishers against Google for Google's scanning all of the books found on the shelves of its library partners - the libraries of major academic institutions - and then displaying snippets of those books on its Google Book Search service. The parties negotiated a settlement agreement in the form of a class action settlement on behalf of all authors and publishers of a book (or "Insert," portion of a book, such as an article, chapter, or preface) and their assignees or heirs who owned a copyright interest in the book as of January 9, 2009. The ASA, a complex 160-plus page agreement (and a true masterpiece of an agreement), released Google from claims for its scanning and past snippet use of the books and Inserts and gave Google the rights, among others, to display and sell copies of out-of-print books without permission (but a right holder cold opt-out) and of in-print books with permission.

Judge Chin notes that approximately 500 submissions were filed commenting on the settlement, with the vast majority objecting, and that 6,800 class members opted out altogether. He succinctly summarizes the principal legal arguments made objecting to the ASA and addresses each in turn:

1. Inadequate notice to the class: Some class members argued that as huge an effort as the notice was (1.26 million individual notices were sent), it did not reach all class members.

Judge Chin rejected this argument because of the number of individual notices, the fact publisher and author associations worldwide were notified, and a website was established to provide information, as well as the enormous publicity surrounding the case, which together ensured adequate notice. He states that "it is hard to imagine that many class members were unaware of the lawsuit."

2. Inadequate class representation: Certain objectors argued that they were part of a group of authors or publishers that were not adequately represented by the author and publisher class representatives because they had different interests. This included academic, foreign and insert authors, as well as those who have not claimed their works but who, by their silence, would be granting Google a future license.

The court concluded that "there is a substantial question as the existence of antagonistic interests between the named plaintiffs and certain members of the class" and viewed the differing interests as "troubling."

3. The forward-looking and opt-out licenses exceed what a court is permitted to approve under Rule 23: One of the main arguments put forth by various objectors was that the claims in the suit related to Google's acts of scanning and making snippets available, activities Google argued were fair use, but the relief included broad grants of future licensees, including from those who never consented. These licenses would relieve Google and others from future claims for acts not necessarily contemplated in the lawsuit. In other words, the settlement releases "claims not properly before the Court."

Judge Chin concludes that the licenses for future uses do exceed what the court is permitted to approve under Rule 23. He quotes the Justice Department's brief stating that the ASA "is an attempt to use the class action mechanism to implement forward looking business arrangements that go far beyond the dispute before the Court." Judge Chin finds three aspects of the ASA particularly troubling under Rule 23 - inadequate representation (discussed above), over-breadth of the releases and the encroachment of Congress' authority to create and revise the copyright laws (discussed below). In particular, Judge Chin finds that the released claims do not come within the scope of the pled claims under the Firefighters and Wal-mart Stores standards.

4. The ASA encroaches on Congress' legislative prerogative to enact and amend copyright laws: Congress alone, and not the courts, has the right to address issues presented by new technologies. The ASA's opt-out provisions for out-of print books (i.e., the automatic license to Google unless a right holder comes forward and opts out) expropriates rights of authors and publishers without permission in contravention of the exclusive rights of copyright in the U.S., international treaties, foreign copyright laws and section 201(e) of the Copyright Act -- which expressly prohibits any government body (including the judiciary) from expropriating or taking any copyright rights without voluntary transfer of the copyright owner.

The court agrees with these arguments -- that Google's license to display and sell out-of-print books without the permission of the rights holders (who may only opt-out) encroaches on Congress' authority to enact and amend copyright laws. Judge Chin cites to Supreme Court and other precedent stating that it is up to Congress to determine whether and how copyright should be amended to address issues such as orphan works and mass-scale digitization. He also concurs with many of the objectors who argued that the opt-out provision for out-of-print books is contrary to the fundamental principles of copyright -- "that it is incongruous with the purpose of copyright law to put the onus on copyright owners to come forward ... when Google copies their works without first seeking their permission."

5. The ASA would give Google a de facto monopoly over unclaimed works: Only Google will have the right to make all out-of-print books available without having to seek permissions on an individual basis. No one else can effectively compete with that, as no one else will have the rights to the out-of-print, unclaimed works.

This is perhaps the most troubling aspect of the ASA - that it would give Google a "right, which no one else in the world will have..." (citing the Internet Archives' submission), giving it a monopoly over unclaimed (or orphan) out-of-print books. No other entity will be able to license as complete a database as Google. The ASA would also arguably give Google even more control over search, given its exclusive rights to the data on the unclaimed books.

6. The ASA does not provide enough protection for privacy of users: The concern is that Google will be entitle to collect enormous amounts of data from users and their use of Google Books Search and has not agreed to sufficient protections in the ASA.

Judge Chin is sympathetic to these arguments, but does not find them to be severe enough that they alone would provide a sufficient basis for rejecting the ASA.


This well-reasoned, sound decision itself explains the long wait. It is clear that Judge Chin carefully reviewed all of the briefs and submissions, as well as scholarship on the case and case law precedent, and carefully and judiciously weighed the various arguments in light of the precedent. While there is certain to be an appeal, this will be a very hard decision to overturn.

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This page contains a single entry from the blog posted on March 23, 2011 8:14 PM.

The previous post in this blog was Fair Use Decision.

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