Literary Works Archives

April 17, 2009

E-books and Digital Marketing: How Publishers Are Using the Internet to Reach Readers

Ed McCoyd


An e-book is a book sold in digital form, for reading on a computerized device such as a desktop or laptop computer, a "personal digital assistant" such as a Palm handheld or Pocket PC, a handheld device dedicated for reading electronic content, a mobile product (such as a cell phone or Blackberry), or other digital platform.

While e-books still only account for a very small portion of total book industry sales, their sales numbers have been increasing steadily for the past several years, from an estimated $20 million in wholesale revenues in 2003, up to $30 million in 2004, $44 million in 2005, $54 million in 2006, $67 million in 2007, and more than $113 million in 2008. The number of e-books that are available has also grown since publishers began offering e-book products. Last month it was reported in Publishers Weekly that ninety percent of the top 50,000 trade (i.e., general interest fiction and nonfiction) book titles were available in both print and electronic editions.

E-books are also becoming increasingly available in the education market. The MBS textbook exchange, for example, offers e-books from many of the largest publishers of postsecondary instructional materials. Higher Ed publishers Pearson, Wiley, Cengage, McGraw-Hill, Houghton Mifflin, and Bedford, Freeman & Worth have created CourseSmart, another e-textbook store, in an effort to spark student adoption of e-books by providing a critical mass of available titles at one site.

The e-book format even empowers educators to mix and match content from a wide variety of books into one electronic package. O'Reilly Media's SafariU lets professors create custom computer science course materials, from a selection of thousands of books and articles from O'Reilly, Pearson, and other publishers. Similar platforms include Primis from McGraw-Hill, and Cengage Learning's iChapters.

E-books are available in a wide range of formats for multiple devices. Adobe PDF-formatted e-books can be rendered on desktop and laptop PCs and a range of handheld devices. The Mobipocket format, which is optimized for handhelds, works on Palm OS, Windows Mobile, and Blackberry handheld devices, as well as on Symbian OS phones. Other popular reading formats include Sony, Kindle, Microsoft Reader, Palm Reader, and others.

There are also hardware devices dedicated for e-book reading. One is called eBookwise, a device from the e-book retailer (recently acquired by Barnes & Noble). Another that has captured people's imaginations is the Sony Reader. This device uses an innovative screen technology known as E-Ink electronic paper display, which consists of capsules that turn white or black based on an electric charge to configure the text. What makes E-Ink unique is that it when you read it, it's the light around you that enables you to read the text, rather than light projected from the screen. Consequently, you can read on the device on a beach, and generally it's contended that this technology creates less glare and eye strain. Furthermore, without backlighting, the need for battery power is reduced, enabling a lightweight device that can render up to 7,500 page turns without recharging. There approximately 45,000 titles available in this format on the Sony Connect bookstore. Sony and Borders have also teamed up to sell books in this format, and e-books formatted for the Sony Reader are also available on, a site with over 130,000 e-book titles available in a range of formats including Sony, Adobe, Mobipocket, and Microsoft Reader.

The E-Ink screen is also featured on the iLiad and the iLiad Book Edition available from the Dutch iRex Technologies. These devices display e-books in the popular Mobipocket format.

Amazon has made a huge splash with its Kindle e-book reading device, which also uses an E-Ink screen, and has a built-in wireless connection enabling device owners to access the Amazon bookstore anywhere, anytime. Customers grabbed up Amazon's entire inventory of the device within the first few months after it went on the market in November of 2007. In February of 2009 Amazon released the "Kindle 2," a new version of the device with improvements including a slimmer and more lightweight design, sharper screen display, and longer battery life, to name a few. The fact that more than 245,000 titles are now available for use on the Kindle is clear evidence that book publishers are also embracing the technology.

In May of 2008, Amazon CEO Jeff Bezos made the interesting announcement that sales of books for use on the Kindle were accounting for 6% of all Amazon sales of books available in both Kindle and print formats (125,000 books at the time). In August of 2008, Amazon executive Ian Freed said that owners of the Kindle more than doubled their overall number of book purchases after getting the device, and that they continued to buy as many printed books as they had prior to owning a Kindle. In February of this year, Bezos announced that e-books were accounting for 10% of all sales on Amazon. Today, the Kindle has the added cache of being known to have been acquired by many celebrities and public figures - as of February, Tiki Barber, Oprah Winfrey, Jennifer Aniston, Warren Buffet, Dick Cheney, Martha Stewart, and Whoopi Goldberg were all reported to own Kindles.

Numerous platforms and applications for reading e-books on cell phones and mobile devices have recently been unveiled. Last month, Amazon began making e-books for the Kindle also available in a format that renders them on the iPhone and the iPod Touch. Stanza, an application from the company Lexcycle, also makes e-books available for these two devices. eReader Pro rendering software from Fictionwise works on Blackberrys and a wide range of other mobile devices, and e-books solutions for mobile are also being provided by Macmillan Publishing Solutions, Expanded Books, Incelligence, and ScrollMotion.

A relatively new format innovation is .EPUB, developed by the International Publishing Forum (IDPF). EPUB is a standard that enables publishers to create one reflowable file of an e-book, which retailers and wholesalers can then easily convert into formats for various consumer devices (Mobipocket, iLiad, etc.). Furthermore, an EPUB file can be rendered directly on many of the devices.

E-books are also available via libraries. The vendor Overdrive's Digital Library Reserve platform offers more than 80,000 e-book and downloadable audiobook titles to libraries. Libraries purchase the books outright, and the encryption attached to the book permits a one-patron-at-a-time lending model. The patron "checks out" the book and reads it on the device of his or her choosing. When the lending period expires, the book automatically "checks back in" and the next patron can access it. Netlibrary offers a comparable model for more than 160,000 e-book titles and a growing collection of audiobooks.

Digital Marketing

The Internet is accounting for an increasing amount of people's leisure time. Book publishers need to compete with the Internet by using the Internet. They are now pursuing a variety of online strategies to market and sell their products.

One approach is the distribution of book "widgets," which are copyable and transferable digital "objects" that resemble the books they promote. A widget typically is a replica of the book's cover. If you click on it, you may get access to portions of the work, such as the table of contents and a sample chapter, plus a link to buy the product. Widgets can be posted anywhere on the Internet, including on individuals' pages on community sites like MySpace and Facebook as a form of "viral" marketing, in online book reviews, and elsewhere.

Another form of widget is videos featuring authors discussing their books. While author videos are not new, what is new is the ability to distribute them through social networking and streaming video sites. Online video production companies currently providing services to publishers and authors include TurnHere, Vidlit, and BookShorts, to name a few.

Web sites developed by publishers may be built around a particular author, or even a specific book. Nowadays the sites contain features to make them "sticky," that is, to create a relationship with readers that makes them enthused about the site and causes them to keep returning. These features may include digitized elements of book covers that users can download as screen savers; community chat rooms; chats with the author; community games, such one in which users of the site can contribute sections to a collectively-written story; blogs; newsletters; and RSS feeds.

There are even social networking sites dedicated to users' book interests, including and

Marketing to customers via their mobile phones is also being employed. The romance novel publisher Harlequin sends out serialized stories in electronic format to readers' mobile phones, for example, to maintain a connection with customers.

It will be fascinating to see what the future holds as publishers, along with their authors and technology partners, continue exploring ways to employ the Internet and digital technologies generally to reach readers and distribute books to them.

Ed McCoyd is an attorney and director of digital policy at the Association of American Publishers, the leading trade organization of book publishers in the U.S. He works on issues including the use of digital technologies to market, sell, and distribute publishers' products; the prevention of electronic piracy of books; the provision of accessible instructional materials to postsecondary students with disabilities under applicable federal and state laws; and environmental issues associated with the procurement of book paper. He can be reached at

Prior to joining AAP's staff, Ed served as director of legal services at the Authors Guild, providing licensing and copyright advice to published writers and advocating for authors' rights. Ed is also the author of the book To Live and Dream: The Incredible Story of George Foreman, as well as the song "Besame," featured in the major motion pictures "16 Blocks" (starring Bruce Willis) and "Cleaner" (starring Samuel L. Jackson, Eva Mendes, and Ed Harris).

June 26, 2009

Libel Tourism Legislation

By Bennett Liebman

For large parts of the 20th century, the New York State legislature set the agenda for legislation that would be subsequently passed in other statehouses. It is regrettably no longer the case today, as the New York State legislature is more often noted for its alleged incapacity and dysfunction rather than for its transformative qualities.

Yet, the 2008 legislation that New York State passed on "libel tourism" may end up being a national model. Other states are following the New York example, and the United States Congress may also end up following the New York State model on libel tourism.">More ... (PDF)

October 18, 2009

Shepard Fairey Lied

It appears that Shepard Fairey lied, deliberately destroyed evidence of the actual image used in the Obama Hope poster, and in a cover-up, created false documents to support his fraud. He has now issed the below press release in apology. Fairey's attorneys have given notice to AP that they intend to withdraw upon his acquiring new counsel.

For Immediate Release
Contact: Jay Strell- Sunshine, Sachs & Associates,
(212) 691-2800/ (917) 362-9248 cell

OCTOBER 16, 2009

In an effort to keep everyone up to date on my legal battle to uphold the principle of fair use in
copyright laws, I wanted to notify you of a recent development in my case against The
Associated Press (AP).

On October 9, 2009, my lawyers sent a letter to the AP and to the photographer Mannie Garcia,
through their lawyers, notifying them that I intend to amend my court pleadings. Throughout the
case, there has been a question as to which Mannie Garcia photo I used as a reference to
design the HOPE image. The AP claimed it was one photo, and I claimed it was another.
The new filings state for the record that the AP is correct about which photo I used as a
reference and that I was mistaken. While I initially believed that the photo I referenced was a
different one, I discovered early on in the case that I was wrong.

In an attempt to conceal my mistake I submitted false images and deleted other images. I
sincerely apologize for my lapse in judgment and I take full responsibility for my actions which
were mine alone. I am taking every step to correct the information and I regret I did not come
forward sooner.

I am very sorry to have hurt and disappointed colleagues, friends, and family who have
supported me in this difficult case and trying time in my life.

I am also sorry because my actions may distract from what should be the real focus of my
case - the right to fair use so that all artists can create freely. Regardless of which of the two
images was used, the fair use issue should be the same.

October 19, 2009

Shepard Fairey Litigation - The AP's Response

Statement from Srinandan R. Kasi, VP and General Counsel, The Associated Press

Striking at the heart of his fair use case against the AP, Shepard Fairey has now been forced to admit that he sued the AP under false pretenses by lying about which AP photograph he used to make the Hope and Progress posters. Mr. Fairey has also now admitted to the AP that he fabricated and attempted to destroy other evidence in an effort to bolster his fair use case and cover up his previous lies and omissions.

In his Feb. 9, 2009 complaint for a declaratory judgment against the AP, Fairey falsely claimed to have used an AP photograph of George Clooney sitting next to then-Sen. Barack Obama as the source of the artist’s Hope and Progress posters. However, as the AP correctly alleged in its March 11, 2009 response, Fairey had instead used a close-up photograph of Obama from the same press event, which is an exact match for Fairey’s posters. In its response, the AP also correctly surmised that Fairey had attempted to hide the true identity of the source photo in order to help his case by arguing that he had to make more changes to the source photo than he actually did, i.e., that he at least had to crop it.

After filing the complaint, Fairey went on to make several public statements in which he insisted that the photo with George Clooney was the source image and that “The AP is showing the wrong photo.” It appears that these statements were also false, as were statements that Fairey made describing how he cropped Clooney out of the photo and made other changes to create the posters.

Fairey’s lies about which photo was the source image were discovered after the AP had spent months asking Fairey’s counsel for documents regarding the creation of the posters, including copies of any source images that Fairey used. Fairey’s counsel has now admitted that Fairey tried to destroy documents that would have revealed which image he actually used. Fairey’s counsel has also admitted that he created fake documents as part of his effort to conceal which photo was the source image, including hard copy printouts of an altered version of the Clooney Photo and fake stencil patterns of the Hope and Progress posters. Most recently, on Oct. 15, Fairey’s counsel informed the AP that they intended to seek the Court’s permission to withdraw as counsel for Fairey and his related entities.

The AP intends to vigorously pursue its countersuit alleging that Fairey willfully infringed the AP’s copyright in the close-up photo of then-Sen. Obama by using it without permission to create the Hope and Progress posters and related products, including T-shirts and sweatshirts that have led to substantial revenue. According to the AP’s in-house counsel, Laura Malone, “Fairey has licensed AP photos in the past for similar uses and should have done so in this case. As a not-for-profit news organization, the AP depends on licensing revenue to stay in business.” Proceeds received for past use of the photo will be contributed by the AP to The AP Emergency Relief Fund, which assists staffers and their families around the world who are victims of natural disasters and conflicts.

October 20, 2009

Shepard Fairey Motion to Amend

Anthony T. Falzone (admitted pro hac vice)
Julie A. Ahrens (JA0372)
Stanford Law School
Center for Internet and Society
559 Nathan Abbott Way
Stanford, CA 94305
Telephone: (650) 736-9050
Facsimile: (650) 723-4426

Mark Lemley (admitted pro hac vice)
Joseph C. Gratz (admitted pro hac vice)
Durie Tangri LLP
332 Pine Street, Suite 200
San Francisco, CA 94104
Telephone: (415) 362-6666
Attorneys for Plaintiffs and Counterclaim Defendants
THE ASSOCIATED PRESS, Defendant and Counterclaim Plaintiff,
INC. Counterclaim Defendants,
Case No.: 09-01123 (AKH)
ECF Case

MANNIE GARCIA, Defendant, Counterclaim Plaintiff and Cross-claim Plaintiff/Defendant,
THE ASSOCIATED PRESS, Cross-claim Plaintiff/Defendant.

Plaintiffs-Counterclaim Defendants Shepard Fairey (“Fairey”) and Obey Giant Art, Inc. and Counterclaim Defendants Obey Giant LLC and Studio Number One, Inc. by and through their attorneys, respectfully request leave to amend the following pleadings: (A) Plaintiffs Fairey and Obey Giant Art, Inc.’s Complaint; (B) Plaintiffs-Counterclaim Defendants Fairey and Obey Giant Art, Inc. and Counterclaim Defendants Obey Giant LLC and Studio Number One Inc.’s Answer and Affirmative Defenses to the Counterclaims of Defendant The Associated Press (“The AP”); and (C) Plaintiffs-Counterclaim Defendants Fairey and Obey Giant Art, Inc. and Counterclaim Defendants Obey Giant LLC and Studio Number One Inc.’s Answer, Affirmative Defenses, and Counterclaims to the Counterclaims of Defendant Mannie Garcia (“Garcia”). Plaintiffs and Counterclaim Defendants (“Plaintiffs”) move to amend these pleadings to reflect new information Plaintiffs’ counsel first learned on October 2, 2009 relating to the identity of the photograph Mr. Fairey used as a reference to create the Obama Works at issue in this case. The pleadings, with redlining indicating the proposed amendments, are attached to this motion as Exhibits A through C, respectively. The AP stated that it would not oppose this motion as long as Plaintiffs provide the Court with a full explanation as to why the amendment is necessary. Mr. Garcia’s counsel informed Plaintiffs’ counsel that Mr. Garcia does not oppose the motion so long as he is granted an additional 60 days for discovery. In Plaintiffs’ original complaint for declaratory judgment and in their answers to claims alleged against them by The AP and Mannie Garcia, Plaintiffs alleged that Mr. Fairey used a photograph of George Clooney and Barack Obama (identified in the original Complaint as the “Garcia Photograph” and identified by The AP in its Counterclaims as the “Clooney Photograph”) as a photographic reference to create the illustration of Barack Obama that appears in the Obama Works at issue in this case. In addition, Plaintiffs denied that Mr. Fairey used a photograph of Barack Obama alone (identified by The AP in its counterclaims as the “Obama Photograph”) as the photographic reference he used.

On October 2, 2009, counsel for Plaintiffs learned new information revealing that Plaintiffs’ assertions were incorrect. Mr. Fairey was apparently mistaken about the photograph he used when his original complaint for declaratory relief was filed on February 9, 2009. After the original complaint was filed, Mr. Fairey realized his mistake. Instead of acknowledging that mistake, Mr. Fairey attempted to delete the electronic files he had used in creating the illustration at issue. He also created, and delivered to his counsel for production, new documents to make it appear as though he had used the Clooney photograph as his reference.

On October 9, 2009, Plaintiffs’ counsel sent a letter to counsel for The AP and counsel for Mannie Garcia notifying them of the situation and of the need to amend Plaintiffs’ pleadings accordingly. Plaintiffs’ counsel enclosed proposed amendments with that letter, and specifically advised counsel for The AP and Mr. Garcia that Plaintiffs no longer contend Mr. Fairey used the Clooney Photograph in creating the Obama Works at issue in this case and that Plaintiffs do not deny he used the Obama Photograph. In this letter, Plaintiffs’ counsel also informed opposing counsel that Plaintiffs no longer contend that certain documents Plaintiffs produced in discovery (bearing Bates numbers FAIREY00669 through FAIREY00672) were used in the creation of the Obama Works, and that Mr. Fairey had created these documents in 2009, after the original complaint was filed in this matter. Plaintiffs’ counsel also produced additional documents (bearing Bates numbers FAIREY104735 through FAIREY104766) and explained that Mr. Fairey had attempted to delete some or all of these documents at or around the same time he created the documents bearing Bates numbers FAIREY00669 through FAIREY00672, but that he had been unsuccessful in deleting all copies of them. Finally, the letter corrected certain misstatements Plaintiffs’ counsel had previously made (understanding them to have been true at the time) while meeting and conferring on discovery.

Plaintiffs therefore respectfully request that the Court grant their motion to amend their pleadings in light of the information above.

DATED: October 16, 2009 Respectfully Submitted,
Anthony T. Falzone (admitted pro hac vice)
Julie A. Ahrens (JA0372)
Stanford Law School
Center for Internet and Society
559 Nathan Abbott Way
Stanford, CA 94305
Telephone: (650) 736-9050
Facsimile: (650) 723-4426

Mark Lemley (admitted pro hac vice)
Joseph C. Gratz (admitted pro hac vice)
Durie Tangri LLP
332 Pine Street, Suite 200
San Francisco, CA 94104
Telephone: (415) 362-6666
Attorneys for Plaintiffs and Counterclaim

Shepard Fairey Motion to Amend Exhibits

The Exhibits to the Motion to Amend may be found at:

October 21, 2009

AP's Response to Fairey's Motion

AP's Motion to Amend the Pleadings and exhibits thereto are available at:

January 28, 2010

Today is the Deadline for Objections and New Opt-outs in the Google Books Settlement

By Mary Rasenberger

Today is the deadline for filing objections to the amended settlement agreement in the Google Books case. It is also the deadline for opting back in to the settlement (for those who opted out of the original settlement) and for opting out (for those who did not opt out of the original settlement and wish to do so now). There are clear directions on the Google Books Settlement site for opting out or opting back in.

The original settlement agreement, filed in October 2008, was the result of two years of negotiations among the named parties in the class action lawsuit brought by U.S. authors and publishers claiming that Google infringed their copyrights by scanning their books and displaying excerpts without authorization. The amended settlement agreement was filed this past November in response to objections submitted by the U.S. Department of Justice and numerous class members.

We'll see what today brings, but so far it's been relatively quiet compared to the storm of filings that preceded the original September 4th deadline for objections to the original settlement agreement. Hundreds of objections had been filed well in advance of that deadline.

The first objections to the amended settlement agreement were filed Tuesday; and less then a dozen appear on the court's docket as of this writing. A couple dozen opt-outs have been filed with the court, some expressing their objections - although anyone who opts out technically does not have standing to file objections. Ursula LeGuin's petition requesting that the United States be exempt from the settlement and signed by over 350 authors does not appear on the docket yet - but she states on her website that the petition has been filed. In addition, a couple of letters in support of the amended settlement have been filed.

One explanation for the apparent relative apathy is that objectors and supporters feel they have already said their piece in objections filed to the original settlement and don't have much to say about the amendments. Indeed, the amendments do not address most of the objections to the original settlement raised by class members, but are mainly directed to the anti-trust and class action concerns that the Department of Justice raised in its brief. Judge Chin clearly instructed in his November 19, 2009 order that objections be limited to the amendments, which thus far most objectors seem to be heeding to.

Most of the actual objections filed thus far (i.e., not amicus or opt-outs) focus on the amended definition of the settlement class. Class members are now limited to authors or publishers of a book published and registered in the U.S., or published in, the U.K., Australia or Canada prior to January 5, 2009. This amendment was clearly intended to remove many foreign rights holders and their objections from the settlement, including the Germans and French, whose governments had filed objections. Over three-quarters of the more than 400 objections to the original settlement were filed by foreign rights holders. The new definition does not actually remove many foreign right holders, however. It encompasses right holders of any book published at any time prior to January 5, 2009 in any of the named countries; and this includes numerous books by authors and publishers of excluded countries. Go to any foreign language or university book store in Canada, the U.K. or Australia, and you will find many foreign language books. Thus, many of the objectors this time around have complained that the new definition is murky and does not resolve their concerns.

Another explanation for the relative quiet around this deadline might be mere ennui - is this becoming like the health bill - how much longer can we talk about it? Also, there appears to be a coming to terms with the settlement, or perhaps its inevitability, at least among some of the former opponents. Gail Steinbeck, an early and vocal opponent of the settlement, has recently come out in support of it.

The filing that will undoubtedly have the most influence is the U.S. Department of Justice Statement of Interest on the amended settlement agreement, due next Thursday, February 4th. It will be interesting to see what positions Justice takes to the amendments, since so many of them are intended to directly address its objections -- mainly the more easily remedied specific anti-trust concerns. The amended settlement agreement does not fully address all of Justice's concerns, however, most notably the issues Justice raised about the opt-out provisions for out-of-print works, especially as applied to unclaimed works. Justice indicated that converting the opt-out to an opt-in would resolve many of the problems with the settlement, but never stated that it was necessary to eliminate the opt-out provisions. The opt-out is likely an area of some contention within the government, given Google's heavy lobbying and public insistence that eliminating the opt-out would kill the deal, side by side with a recognition that opt-outs in copyright law are better suited to legislation. As such, I would expect to see continued ambiguity in the government's brief.

The Fairness Hearing scheduled for February 18, 2010. Objectors and supporters may discuss issues related to the original settlement and the amendments. If you wish to appear, you must file your notice of intent to participate by next Thursday, February 4th.

Mary Rasenberger is an attorney with Skadden, Arps, Slate, Meagher & Flom. This blog entry represents her personal views in her individual capacity and not those of Skadden, any other law firm or any client. This blog is not sponsored by Skadden or any other law firm, or any client.

February 8, 2010

TV Writers Settle Decade-Long Age Discrimination Litigation

By Barry Skidelsky, Esq. (co-chair NYSBA/EASL/TV-Radio Committee; contact: or 212-832-4800).

On January 22, 2010, 17 television networks and production studios and 7 talent agencies settled 19 of 23 separate class actions filed in Los Angeles Superior Court, based on alleged intentional and unintentional age discrimination in the selection, employment and representation of television writers. As three companion cases had previously settled, Creative Artists Agency (CAA) is left as the lone holdout.

The procedural history of the TV writers’ cases (which is set forth in Alch et al v. Time Warner Entertainment et al, 122 Cal. App. 4th 339 (2004), subsequent history omitted), began in 2000 as a federal court action under applicable federal law, including the Age Discrimination in Employment Act (which generally protects workers aged 40 or more). That action was dismissed with leave to amend in 2002. Rather than pursue their federal case, Plaintiffs then instead filed 23 separate complaints in California state court, based on state law statutes involving fair employment, civil rights and unfair competition. The parties litigated aggressively over 10 years in the trial courts before five different judges, during which period 20 of the named plaintiffs died and five different appeals ensued, two of which reached the California Supreme Court (primarily involving class certification and discovery matters). Although the past decade saw thousands of pages of documents produced and thousands of interrogatories answered, discovery was still at an incipient stage and the class not yet certified. Thus, with final resolution still years away, the parties agreed (without any admission of liability by defendants) that it made sense to now bring these protracted cases to a close and obtain preliminary approval of the settlement.

The amount of the settlement is $70 million, the largest-ever settlement in the history of age discrimination litigation. Of that sum (two-thirds of which is to be funded by insurance carriers), about $25 million is expected to be paid to plaintiffs’ counsel; and, about $2.5 million is to be set aside into a so-called Fund for the Future to be created (which intends, inter alia, to make loans and grants to TV writers). The remainder of the record-breaking settlement sum is to be paid pursuant to a single formula to class members, which includes both professional and aspiring writers, subject to withholding taxes and union pension or health and welfare deductions as may be appropriate (interestingly, the Writers Guild was not a party to this litigation).

Writers who believe they were unlawfully denied a TV writing opportunity during the class period (from October 22, 1996 to January 22, 2010) and want a piece of this pie must file a claim form (available at no later than April 13, 2010. A final approval hearing of the TV writers’ settlement is scheduled for May 5, 2010, in L.A. Superior Court.

It should also be noted that the United States Equal Employment Opportunity Commission (EEOC) has reported a significant uptick in age discrimination complaints. The latest figures show that for the 2008 fiscal year, 24,582 charges of age discrimination were filed with the agency, almost a 29% increase over the prior year, and by far the largest number of such charges filed in the past 10 years. No employer, not even a law firm, is immune. In fact, on January 28, 2010, the EEOC filed an age discrimination complaint in federal court in Manhattan (SDNY) against the nationally known law firm of Kelly Drye and Warren, the details of this action being beyond the scope of this article. Suffice it to say that, without doubt, the difficult economic circumstances we all face today is having a disparate impact (no pun intended) on baby boomers and other older workers; and, all employers (including law firms) would be well advised to review and improve their hiring and other employment practices.

February 15, 2010

Justice Department's Statement of Interest - Google Books Case

By Mary Rasenberger

A careful reading of the Statement of Interest filed in the Google Books case by the Justice Department last week shows a harsher assessment than was evident in its earlier filing. The government’s brief rejects the amended settlement agreement (“ASA”), finding that the parties’ attempts to cure the issues the government identified in its earlier brief do not go nearly far enough: “Despite this worthy goal [trying to create a mechanism to allow for lawful large-scale book digitization], the United States has reluctantly concluded that the use of the class action mechanism in the manner proposed by the ASA is a bridge too far.”

Given the stakes and pressures that were likely put to bear on the government, it is an incredibly strong document. It will be remarkable if Judge Chin (or his successor in the case, if he is moved up to the Second Circuit soon) approves the ASA as-is, even after the substantial responses filed by the parties.

The government’s main issue with the ASA is that it uses the class action suit to create a far-reaching commercial arrangement that looks far into the future (indeed in perpetuity) and far beyond the claims off the suit. It does this by granting Google legal rights that it never could have obtained through a private arrangement or through a judicial resolution of the suit – and these legal rights fly in the face of “the core principle of the Copyright Act that copyright owners generally control whether and how to exploit their works during the term of copyright.” Secondarily, providing these rights, the government argues, confers significant, possibly anti-competitive advantages to Google.

The government’s September 18th brief focused on the anti-competitive concerns and more technical class action issues, and did so in an equivocal enough way that it left room for the parties to make the minor changes they did in the ASA and be able to wipe their hands with a straight face. The recent brief, in contrast, does not mince words and hits hard on the underlying problem many objectors have with the ASA - it attempts to use the class action process to get around the existing legal system rather than to support it. As Marybeth Peters, the Register of Copyright, has said, and many have repeated: the settlement turns copyright on its head. It creates a whole new legal system of opt-out regime for the benefit of a single entity, which is totally at odds with copyright’s grant of exclusive rights to authors.

To summarize the government’s brief at a very high level, there are three key objections to the ASA:

1. Class action law does not permit settlements to replace commercial transactions that go far beyond the claims at issue in the case or restructure the law;

2. The settlement turns copyright on its head by creating an opt-out regime for the vast majority of works at issue; and

3. Granting an across-the-board license to Google for non-commercial works on an opt-out basis creates potential anti-competitive advantages, as no competitor will be able to obtain those rights, especially in the case of unclaimed works.

At the same time, the government is rightly sympathetic with the parties’ attempt to use the class action process in this way. The current law and practice is arguably defective, and makes mass-digitization, even when it serves a good public purpose, impossible to do legally. Orphan works legislation might help some, as would collective licensing arrangements or perhaps a statutory license for libraries. But you don’t have to be a class action lawyer to know that Rule 23 (the civil procedure rule allowing for class action lawsuits) is not intended to be used to create new law. We have one mechanism for fixing the law in this country – legislation. As judges in countless cases have said: you have a problem with the law, take it to Congress.

Sure, it’s been impossible in recent years to pass copyright legislation, but that doesn’t mean we get to amend the law ourselves in class action lawsuits.

For those interested in more detail, I’ve summarized some of the specific arguments in the government’s February 4th Statement of Interest below. The arguments are made in the context of two separate sets of laws: class action law and antitrust law.

Class Action Law Related Issues

The Government’s brief states: “The Supreme Court has cautioned that 'Rule 23… applied with the interests of absent class members in close view, cannot carry the large load of restructuring legal regimes in the absence of congressional action – however sensible that restructuring might be.'”

The arguments regarding non-compliance with the Rule 23 class action rules are some of the more interesting and compelling ones raised in the case. The Rule 23 law gets at some of the smell test issues in this case, described above – i.e., even though it sounds good, it looks good, it doesn’t smell quite right. It seems at odds with some of our underlying basic legal principles to allow a class action law suit filed by a small group of associations and individuals, who admittedly do not represent all author and publisher class members throughout the world or even the U.S., to take away hundreds of thousands (if not millions) of individuals’ rights without their consent. It’s even odder when you consider that the law suit was brought to enforce those very rights.

It turns out, according to one Justice (and certain other objectors, e.g., Microsoft, Amazon, Scott Gant) that the class action law does have standards, if not crystal clear ones, that don’t necessarily promote this kind of sweeping conversion of rights.

Both the parties’ and the government’s briefs discuss the standards set forth in the Supreme Court’s Firefighters case (Local Number 93, Int’l Assoc. of Firefighters v. City of Cleveland, 478 U.S. 501 (1986)). Under Firefighters and its progeny, the Court may approve a settlement that meets the following three-prong test: (1) the settlement springs from and serves to resolve a dispute with the Court’s subject matter jurisdiction, (2) the settlement comes within the general scope of the case made in the pleadings, and (3) it furthers the objectives of the law on which the complaint was based. The government concludes that:

1. It’s difficult to see how this settlement meets the first prong in that it resolves future claims by absent class members for activities well beyond the facts underlying the complaint;

2. The ASA does not meet the second prong because it creates a business relationship that covers future conduct that goes way beyond the claims in the complaint and provides Google with benefits that it never could have obtained through the litigation itself or even through a privately negotiated deal (i.e., the opt-out for non-commercial works); and

3. The ASA does not further the objectives of copyright law, but is inconsistent with the policy of Copyright Act, which provides for exclusive rights and not opt-outs.

The government concedes that a settlement of a class action may go “somewhat” beyond the conduct complained of in the complaint, but can’t go so far as “to abridge or enlarge substantive rights” and “usurp the legislative function.”

The government further states that the ASA does not remedy the lack of adequate representation of the interests of a large number of members (namely, unclaimed work owners, foreign rightsholders) in the settlement negotiations, and that appointing a fiduciary with limited powers for unclaimed works at the Registry does not solve the problem. It also exhorts the Court to look more closely at the notice provided to potential class members to determine if it was adequate, specifically requesting that the Court “undertake a searching inquiry to ensure both that a sufficient number of class members have been or will be reached and that the notice provided fives a complete picture of the broad scope of the ASA…”

Last, the government raises concerns about Attachment A of the ASA. Attachment A is a sub-agreement that controls potential disputes between authors and publishers, mainly regarding possession of rights and splits, and supersedes all agreements between publishers and authors, even foreign ones. The government notes that there may be a conflict of interest between subclasses of authors and publishers, which raises “serious questions” regarding adequacy of representation under Rule 23.

Antitrust Issues

The antitrust issues discussed in the brief are essentially the same ones addressed in the government’s September 18th brief; and they are the primary issues that the parties attempted to address in the ASA’s amendments. The government states that the parties made “constructive revisions” to address these potential anti-competitive problems, but that the amendments do not go far enough to remedy:

1. The creation of an industry-wide revenue-sharing formula at the wholesale level applicable to all works;

2. The setting of default prices and the effective prohibition on discounting by Google at the retail level; and

3. The control of prices for orphan books by the known publishers and authors with whose books the orphan books likely will compete.

With respect to the first issue, the government notes that the ASA gives Google the right to renegotiate the wholesale revenue split with rights holders, but only for commercially available works. The government believes that the carve-out for non-commercial works may render the amendment somewhat meaningless, given the fact that the vast majority of works at issue are not commercially available under the ASA’s definition and that this will be especially true if the publishers take commercially available books out of the settlement, as many have suggested they will do.

The government also does not believe that the “fixes” regarding the use of pricing algorithms go far enough to prevent a de facto horizontal agreement. It analogizes the publishers’ and authors’ agreement to allow Google to price the works (using its algorithms) to the delegation of pricing to a common agent - a practice found to be unlawful. Far preferable would be actual bilateral negations than the ability to opt-out of the default use of algorithms.

The government’s biggest concern, however, relates to the pricing of orphan works, since the Registry’s board, consisting primarily of commercial publishers and authors, would have the ability and incentive to limit competition from unclaimed works. The parties have responded to this criticism (also in the government’s September brief) by providing in the ASA for an “Unclaimed Works Fiduciary,” but this fiduciary’s powers are limited – for instance, he or she will not have the ability to set prices for works, or renegotiate splits. As such, the government does not believe the appointment of fiduciary cures the underlying problem.
Last and most importantly perhaps, the government finds that the amendments do not address Google’s de facto exclusive rights to use orphan and rights-uncertain works. The government states that no other entity will have the ability to offer these works legally. Although the ASA attempted to address this concern by expressly allowing resellers to provide access to these works, the government does not equate these reseller rights with the right Google has to freely exploit orphan and other unclaimed works. It concludes: “the reseller clause cannot create new competitors to Google.”

So now what?

The government’s brief advises the Court that the public interest would best be served by direction from the Court encouraging the continuation of settlement discussions between the parties. But if we can be realistic for a moment – what are the chances of Google agreeing to all of the concessions that Justice’s analysis would require to make the settlement copasetic? Google has made it clear that, from its perspective, the opt-out for out-of-print works, and especially the orphans, is essential to the deal. If you read the government’s brief carefully, it does not appear that its cumulative objections all could be adequately addressed without getting rid of the opt-out for non-commercial works. The government does state, however, that if the opt-out is retained, Google should be required, among other things, to conduct a search for unclaimed work prior to their use, similar to the reasonable search requirement in the last iterations of the orphan works bill. Google has publicly stated that, although it supports orphan works legislation, that legislation would not provide it with the flexibility it would need to create the inclusive database envisioned.

Briefs Filed in Support of the Amended Settlement Agreement in the Google Books Case

By Mary Rasenberger

An impressive number of pages were filed this past Thursday (February 11, 2010) by the parties in the Google Books Search case in support of the amended settlement agreement (“ASA”). Only a week after the Justice Department filed its brief, both Google and the named Plaintiffs (publishers and authors collectively) filed briefs worthy of fat binder clips. The Plaintiffs' briefs alone comprise nearly 250 pages, including a 170 page Supplemental Memorandum Objecting to Specific Objections (and with the numerous declarations and exhibits the parties' papers amount to over 2,500 pages altogether).

The briefs remind the Court of the benefits of and support for the settlement, and as would be expected, address the government’s concerns set out in its February 4th Statement of Interest. Google’s brief addresses the government’s objections in great detail supported by substantial case law; the brief also discusses a somewhat random, handful of objections filed by others (fairness to third parties, burden of determining whether a book was registered, inaccuracies in the database, security, and time limit on removal).

The Plaintiffs’ principal brief makes some compelling arguments as to why the ASA is preferable to the alternative outcomes in this case (e.g., protracted litigation, the risk of an on/off decision) and why the settlement is reasonable in light of the case. It summarizes the ASA and its benefits and takes on some of the Rule 23 and other concerns raised by the government. The Plaintiffs’ supplemental brief appears to take on the entire catalog of objections filed by all objectors with standing. Impressive as it is, the supplemental brief may have bit off more than it could chew. Some of the responses, some even to significant objections, come off as non-responsive or conclusory. Moreover, the same objections in some cases are addressed separately in the two briefs, not always completely consistently. They don’t always cross-reference arguments made in the other brief (e.g., the discussion of adequacy of notice in the supplemental brief seems very conclusory if not read alongside the discussion in the principal brief, which is not referenced).

For instance, in response to arguments that the ASA cannot bind foreign members of the class because (1) the law is at odds with that of other countries and (2) the Court lacks personal jurisdiction, the Plaintiffs state in the supplemental brief (pp. 61-63) that members of the class can be bound so long as notice meets the Rule 23 requirements, and that notice was compliant (here referencing their arguments as to why it was compliant). Admittedly, I have not read the cases they cite, but maybe they could explain why compliant notice would address these concerns.

In response to Justice’s and others’ concerns about the fact that Google alone will have the right to offer orphan works (i.e., books for which a copyright owner cannot be located) and the impossibility for others to obtain the rights to the orphans and enter that market, in the Supplemental Motion (pp 149-150), the Plaintiffs summarily respond: "This argument relies on unsupported and illogical speculation that the subset of out of print [orphan] books is so uniquely valuable and desired that other subscription products will be unable to compete with the Institutional Subscription."

Considering that the government and many others viewed this as a significant issue, the response seems flippant. Of course, a subscription database that includes all books, including out-of-print books for which no owner has come forward, is much more valuable than one that is created on an opt-in basis and so would not include orphans. As a library, which one would you chose? And if these works don’t increase the value of the database, then why is the opt-out so crucial to the settlement? Why does Google insist it needs these out-of-print works (a huge portion of the books at issue in the settlement)? If the out-of-print, unclaimed works really are so valueless, then make them available to Google on an opt-in basis and 95% of the objections go away.

Some odd responses aside, the parties’ recent briefs keep the ball in play. Perhaps most interestingly, filing these briefs indicates that the parties do not intend to go back to the negotiating table again as the government recommended. Moreover, the briefs contain some solid, convincing arguments. They are worth a thorough read for the interested – who have a lot of free time. (It does feel like reading the original settlement agreement all over again.) Most importantly, one hopes that Judge Chin will have the time to read it all. He may just want to run for the hills when he sees all that paper. I mean the Second Circuit.

The briefs have good table of contents, as you’d expect. One approach to reading the briefs is to do so on a topic by topic using the table of contents, rather than try to read them in linear fashion. And for those of us who’d love to see a list of all objections filed in the case, the supplemental brief serves as a pretty good proxy.

March 9, 2010

Supreme Court Clarifies Jurisdictional Requirements; Revives Copyright Class Action Settlement

By Cliff Sloan, Judith Kaye, Mary E. Rasenberger & David W. Foster

On March 2, 2010, in Reed Elsevier, Inc. v. Muchnick, the Supreme Court reinstated a class action settlement, approved by the district court, of copyright claims entered into by freelance authors, publishers and electronic database companies. In doing so, the Supreme Court provided important guidance on whether mandatory pre-conditions for suit, such as the requirement for copyright registration in the copyright statute, are jurisdictional.

The Reed Elsevier case involves a longstanding dispute between freelancers and publishers and databases. Nearly a decade ago, in New York Times Co. v. Tasini, 533 U.S. 482 (2001), the Supreme Court held that “owners of online databases and print publishers had infringed the copyrights of six freelance authors by reproducing those authors’ works” in electronic databases “without first securing their permission.”

After Tasini, attention turned to a class action lawsuit by freelance authors against publishers and databases in the Southern District of New York. After years of negotiation and mediation, the freelancers, publishers and electronic database companies agreed on a global settlement. Although the copyright statute requires registration of a creative work before a copyright infringement suit can be brought, the class action settlement resolved potential claims regarding both registered and unregistered works. The district court certified the class and approved the $18 million settlement.

Ten freelancers objected to certain provisions of the settlement on procedural and substantive grounds, and they appealed. The Second Circuit sua sponte asked the parties to address whether the district court lacked jurisdiction to approve the settlement because it included unregistered works. All parties maintained that there was no jurisdictional problem with the settlement, but the Second Circuit disagreed. Ruling that the district court lacked jurisdiction, it threw out the settlement.

The publishers and databases then sought certiorari from the Supreme Court, which was granted. Because none of the parties agreed with the Second Circuit’s holding on jurisdiction, the Supreme Court appointed a law professor as amicus to defend the Second Circuit’s opinion. Skadden filed an amicus brief in the Supreme Court supporting reversal on behalf of ten leading media and publishing companies and organizations.

In an 8-0 ruling (with Justice Sotomayor recused), the Supreme Court reversed. It held that the copyright registration requirement — Section 411(a) of the copyright statute — is mandatory, but not jurisdictional and thus the Second Circuit should not have thrown out the settlement on jurisdictional grounds. Writing for the court, Justice Thomas applied the rule from Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), for distinguishing between jurisdictional statutes, which govern a court’s power to hear a case, and mandatory claim processing rules. The court held that Congress had not clearly stated that the limitations in Section 411(a) are jurisdictional. As a result, the court would not conclude that the mandatory registration requirement is jurisdictional.

Justice Ginsburg, joined by Justices Stevens and Breyer, concurred in part and concurred in the judgment. They stated that there appears to be some tension between the rule announced in Arbaugh and the result in Bowles v. Russell, 551 U.S. 205 (2007), which found that a time limit for an appeal was jurisdictional. The concurring justices resolved that tension by reading Bowles to apply only when a long line of Supreme Court cases has held a statute to be jurisdictional, and that interpretation has been left unchallenged by Congress.

The Supreme Court emphasized the limits of its Reed Elsevier decision. In sending the case back to the Second Circuit, the court expressed no opinion on the merits of the settlement. It also observed that the registration requirement remains a “precondition to suit,” and left open the possibility that “district courts may or should enforce sua sponte” the registration requirement by “dismissing copyright claims involving unregistered works.” The court also noted that it did not reach the question whether, even if the registration requirement were jurisdictional, the court would have authority to approve the settlement.

Beyond the impact in the Reed Elsevier case itself, the most important effect of the decision is the court’s emphasis that it will not lightly presume that statutory requirements are jurisdictional. A conclusion that a requirement is jurisdictional is warranted only if it is clearly stated or mandated by Congress. The court stressed, as it has in other recent opinions, that it will look skeptically at “drive-by jurisdictional rulings” ­— casual statements about “jurisdiction” in past opinions that are unsupported by clear authority in statutory language or intent.

The decision leaves open the question of whether and how compliance with section 411(a) may be waived by a defendant, whether expressly or by default. Until there is a fully developed body of law on the issue, copyright litigators would be wise to raise failure to comply with section 411(a) at the earliest practical moment in the litigation.

Cliff Sloan, Judith Kaye, Mary E. Rasenberger, David W. Foster are attorneys with Skadden, Arps, Slate, Meagher & Flom. This blog entry does not represent the views of Skadden, any other law firm or any client. This blog is not sponsored by Skadden or any other law firm, or any client. The blog is provided for educational and informational purposes only and is not intended and should not be construed as legal advice.

December 1, 2010

HarperCollins Publishers v. Gawker Media

By Barry Werbin

The HarperCollins case settled on Nov. 30 according to the latest news reports, after the court ordered Gawker last Saturday to remove 21 pages. "'In settling the case, Gawker has agreed to keep the posted material off its website and not to post the material again in the future,' HarperCollins spokeswoman Erin Crum said in a statement."

Please see the following link for more information:

February 23, 2011

Google Books Settlement - Deadline to File a Claim Extended

By Mary Rasenberger

After a year of almost complete silence from the court in the Google Books Settlement case, it has approved a stipulated request by the parties to extended the deadline for filing a "claim" for an upfront payment in the Google Book Settlement from the upcoming March 31, 2011 deadline until one year after the Court's final approval of the settlement to file.

Any author or publisher whose works were scanned by Google on or before May 5, 2009 may be entitled to claim a Cash Payment as compensation for the scanning. Google has agreed to pay for works it scanned prior to that date, at least US$60 per Principal Work, US$15 per Entire Insert, and US$5 per Partial Insert.

For more information on how to file a claim and to determine whether a book was scanned, go to the Google Books Settlement site at

Per the court's order the following should soon appear on the Google Books Settlement site:
The parties amended the Settlement by extending the deadline to make a claim for a Cash Payment. The deadline has been extended from March 31, 201 1 to the one year anniversary of the date on which the Court grants final approval of the Settlement. (If the Court does not grant final settlement approval, then, of course, there are no longer any deadlines). Please visit and read the "Important Update" for details on how to make a simplified claim for a Cash Payment. Also, please visit that website periodically to learn when the Court has made its determination whether or not to grant final settlement approval.

The deadline to remove works from the Google databases remains unchanged. It is still April 5, 2011. An author or publisher may request that a book not be scanned or if it has already been scanned that it be deleted from the database. Google is only obliged to honor these requests if made prior to the April 5th deadline if the work has already been scanned. After April 5th, the author or publisher may request that no display uses, including display of snippets and display of the entire work for a fee, be made, but cannot prevent Google from making non-display uses such as indexing and data-mining.

Once a book is removed, the digital copies of it will not be accessible to Google, other than on back-up tapes or other electronic back-up storage media. There is no guarantee that it will later be added back in to the database if the rights holder changes their mind and decides that they want it included, as the book may have to be rescanned.

The case is still before Judge Chin, now sitting by designation in the Southern District of New York after being elevated to the Second Circuit, and the Amended Settlement Agreement is still awaiting approval. It is hoped that a decision will be forthcoming soon.

See the Authors Guild's announcement at:

March 23, 2011

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.

September 19, 2011

The Google Books Project: Now the Authors File a Lawsuit Against the Libraries

By Caroline Camp

Six years after filing a lawsuit against Google, the Authors Guild has taken aim at another group involved in the Google Books Project - the libraries themselves. On September 12, 2011, the Authors Guild, along with other individual authors and associations of authors, filed a complaint against HathiTrust and five American universities for copyright infringement. (Authors Guild, et al. v HathiTrust, et al., 11 Civ 6351 (S.D.N.Y., Sep. 12, 2011)).

HathiTrust is a partnership of libraries and universities that was formed in 2008 as a central repository for digitized collections. HathiTrust now has digital collection of nearly 10 million works, most of which had been scanned by Google.

As it is now commonly known, Google had contracted with several public and university libraries to create digital archives of their library collections. Under the agreements with these libraries, Google was able to reproduce and retain digital copies. Eventually, Google planned to index the archives so users could search them in its online search engine. In the 2005 complaint, the Authors Guild alleged that these acts of reproduction were in violation of the copyright holders' rights.

The Google Books lawsuit remains unsettled. After years working on the Amended Settlement Agreement [ASA], and after some 500 letters of opposition were filed against it, Judge Denny Chin finally rejected the proposed settlement on March 23, 2011 (The Authors Guild et al. v Google Inc., 05 Civ. 8136 (S.D.N.Y.)). Chin extolled the benefits of realizing the digital books project, but determined that the ASA, in granting prospective licenses, went too far. "The establishment of a mechanism exploiting unclaimed books is a matter more suited for Congress than this Court."

In response to Chin's opinion, HathiTrust issued the following statement: "Libraries are not leaving the future of digital books to Google. In light of Judge Chin's rejection of the Google Books Amended Settlement Agreement, HathiTrust will maintain our commitment to long-term digital preservation of library collections curated by generations of librarians at great research libraries around the world." (

Before the next scheduled hearing for the Google Books suit had even taken place, the Authors Guild filed a complaint against HathiTrust, seeking an injunction. "These books, because of the universities' and Google's unlawful actions, are now at needless, intolerable digital risk," said Authors Guild president Scott Turow. ( Yet why go after the libraries themselves?

Unlike Google, the libraries may have a potential safe harbor under § 108 of the Copyright Act, as modified by the Digital Millennium Copyright Act. According to a statement issued on September 15, 2011, HathiTrust's primary motive has been, and remains, preservation. However, the complaint alleges that members of HathiTrust, by contributing copies of the works in their collections to its digital library, are acting outside the limited circumstances under which libraries are permitted to reproduce and distribute copyrighted works.

In addition creating digital archives of library collections, HathiTrust has also embarked upon a related Orphan Works Project. HathiTrust and its partners claim to make great efforts to locate and contact copyright holders. If researchers are unable to make contact with the rights holders, they will publicly list the works and their relevant bibliographic information as Orphan Candidates for 90 days. If no rights holder materializes, a work is made accessible to the University of Michigan community.

HathiTrust has argued that the complaint assumes that all U.S. works published between 1923 and 1963 are in copyright, but HathiTrust's Copyright Review Management System has reviewed 200,000 such works and has found that over 50% of them are in the public domain. Systematic digitization of these works is intended to support HathiTrust's mission of sharing the record of human knowledge by making these public domain works available.

However, the benefits of the Orphan Works Project are unlikely to hold sway with the court. Judge Denny Chin rejected the ASA in large part because of the Book Rights Registry, which also addressed the problem of orphan works. "The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties." Further, he pointed out that Congress has made many efforts to address the issue of orphan works.

Perhaps it is a bit optimistic to say that the legislature is handling the matter. Orphan works legislation was first introduced in 2006, and then again in April 2008. The Shawn Bentley Orphan Works Act passed the Senate in September 2008 and was referred to the House Committee on the Judiciary, but no House vote was ever taken, the Bill never came into law, and the 110th Congress ended. No new orphan works legislation has been introduced before Congress.

Google and HathiTrust could make great strides towards a solution to the problem of orphan works, without the help of Congress. In so doing, they might violate copyrights as well as gain control over a vast array of unclaimed works. This is part of the antitrust concern evinced in the initial complaint against Google.

At the latest hearing for the Google Books case on September 15th, the parties said they would continue to negotiate an agreement ( According to one New York Times reporter, the negotiations have been "damped" by news of the latest lawsuit. On September 19th, HathiTrust backed down and announced that it would suspend the release of over 100 orphan works whose copyright owners cannot be found. (

Update on Google Books Settlement

By Mary Rasenberger

In a new twist in the Google Books case, it appears that the publishers and authors may be going separate ways. The parties had a conference with Judge Denny Chin this past Thursday September 15th. Judge Chin had admonished the parties in the last conference on July 20th to hasten their settlement discussion and to come prepared on September 15th with a new settlement agreement, and if no settlement could be reached, a discovery and briefing schedule on the merits. From the start of the conference, it was clear that the parties had not come prepared to discuss a new settlement.

Michael Boni, the attorney for the Authors Guild, commenced the conference by proposing a scheduling order that provides for discovery and briefing on Summary Judgment to be completed by the end of July 2012. Judge Chin followed up with the obvious question - whether this meant they had given up on settlement. The parties indicated that settlement discussions will continue as they proceed on the merits. Bruce Keller for the publishers and Daralyn Durie for Google stated that they were close to settlement. Keller explained that the publishers believed they had made sufficient movement forward that they did not think they would need to rely on the schedule. Durie agreed that it "appears to be probable" that they will reach a settlement. The Authors Guild did not appear as optimistic about settling, although Boni conceded that the authors would like to "continue a dialogue."

Boni and Keller also indicated that they may want to separate their cases (by filing amendments to the joint third Amended Complaint); further suggesting that the publishers may settle without the authors and the Authors Guild might proceed alone with the suit on the merits. When asked if Google was agreeable to the proposed schedule, Durie stated that Google would like to see the proposed amendments to the complaint before it agrees to the schedule.

Judge Chin agreed to the scheduling order proposed by the Authors Guild. Noting that the case would then continue for almost another year, he called the schedule "generous," but agreed with Keller that the parties may need extra room in the schedule to continue settlement discussions. The schedule will have discovery completed by the end of May and all briefs on summary judgment motions submitted by the end of July 2012. Judge Chin noted that he would pick a day for a hearing, but that they will have to find another courtroom, as he will finally lose his in the Southern District (having been promoted to the Second Circuit over a year ago).

Judge Chin seemed anxious to see a settlement in the case and asked if there was anything the court could do to help the parties reach a settlement, offering first to obtain a mediator, which was rejected by Google as unhelpful, since the discussions had thus far been among principals. He then discussed finding a new magistrate judge to assist with settlement if needed, and identified Judge James Cott, the magistrate assigned to the parallel photographers' case against Google. (Judge Chin reported that Judge Eaton, the magistrate judge originally assigned to the case, has since retired - the case was originally filed in 2005 after all.) The Authors Guild is amenable to such assistance, according to Boni, who did not think the discussions necessarily had to continue between principals of the parties, rather than the attorneys.

More GBS Litigation: Authors Guild et al. v. HathiTrust et al.

Another indication of a possible rift between the publishers and authors regarding Google Books is the complaint filed last Monday in the Southern District of New York (see: ) by the Authors Guild --without the publishers--against the principal libraries participating in the Google Books Search case, only several days before the awaited conference in the Google Books case. The Authors Guild, together with authors' groups from Australia, Quebec, the U.K. and a small group of authors, sued HathiTrust and 5 state universities whose libraries are participating in HathiTrust's digital repository, 4 of which have also joined a consortium of HathiTrust members called the HathiTrust Orphan Works Project.

Although key participants in the Google Books Search project (as Google scanned books in the libraries' collections to create the Google Books Search database), the libraries were not part of the Google Books litigation and only participated in the periphery of settlement discussions. Pursuant to separate agreements with Google, each participating library had agreed to let Google scan the books in its library and Google in return agreed to provide the library digital copies of the scans to use for its own purposes. The HathiTrust, a partnership of more than 50 research institutions, was formed to combine the partners' digital libraries, which are comprised largely of the Google scans delivered to the libraries thus far, to create a shared digital repository. According the authors' complaint, approximately 73% of the 10 million volumes already in this digital collection, called the HathiTrust Digital Library, are protected by copyright.

Users can search bibliographic data of the scanned works in the HathiTrust Digital Library and can search the texts for the number of times a search term appears. In addition, full access to works identified as "orphaned" is provided to authorized users. The Orphan Works Project was initiated by HathiTrust to identify those works for which a copyright owner could not be found and to make those works available online through the HathiTrust Digital Library. Using a modified version of the "reasonable search" requirement outlined in the several iterations of the never-enacted orphan works legislation, the Orphan Works Project, led by the University of Michigan library, is researching the ownership status of various works. According to the HathiTrust's protocol, if a copyright owner cannot be identified through a specified multi-step diligence process, the HathiTrust will then post the work on a HathiTrust Orphan Candidates webpage for 90 days. If no copyright owner comes forward during that 90 day period, the work is made available for "full" view to authenticated users of the universities' libraries, including students, faculty, other staff and possibly alumni.

The complaint alleges infringement of the reproduction right by virtue of the various copies of copyrighted works in the HathiTrust Digital Library made in the course of scanning, ingesting, storing and preserving digital copies, providing back-ups and access to bibliographic data or search and, in the case of the designated orphans, full viewing. In addition, the complaint alleges unauthorized distribution, presumably of the designated "orphans." The authors also noted concerns with the security employed by the HathiTrust against further copying and distribution of the works in the HathiTrust repository. Wherein the proposed Google Books Settlement, rejected by Judge Chin, the authors and publishers had negotiated an agreement with Google to provide specific robust security measures; it is not clear how the works will be protected in this repository.

Oddly, the complaint also alleges violations of § 108 of the Copyright Act, which contains specific exceptions applicable to libraries and archives, including for preservation of unpublished works, making replacement copies of damaged or destroyed published works and for certain inter-library loans. One condition to the preservation and replacement exceptions is that any digital copies not be made available outside of the premises of the library or archive. While the activities of the HathiTrust alleged in the compliant are certainly outside the scope of what is permitted under § 108, it is difficult to see how those acts are "violations" of § 108 rather than violations of the § 106 reproduction, distribution and display rights that fail to qualify under the § 108 exceptions. (Section 108 sets out exceptions, not a basis for a separate cause of action.) It is all the more peculiar in that § 108(f)(4) expressly states that nothing in § 108 "in any way affects the right of fair use as provided by section 107." Fair use, of course, is the defense the HathiTrust and participating libraries are relying upon (in addition to the fact they are each state entities and so protected from damages by sovereign immunity).

In the meantime, according to the Authors Guild, it, its members, and others have identified or found leads to the owners of the literary property rights to 50 of the 167 or so books that the Orphan Books Project had already identified as orphaned and was ready to be made available next month. In a statement (located at: released last Friday by the University of Michigan Library, the Library announced the temporary suspension of the Orphan Works project due to errors that had been discovered, stating: "The close and welcome scrutiny of the list of potential orphan works has revealed a number of errors, some of them serious. This tells us that our pilot process is flawed." Michigan promised to re-examine its procedures for identifying orphans, explaining that it has no intention to make available any works that are not in fact orphaned. In the statement, the library explained: "The widespread dissemination of the list [on the HathiTrust Orphan Candidates webpage] has had the intended effect: rights holders have been identified, which is in fact the project's primary goal. And as a result of the design of our process, our mistakes have not resulted in the exposure of even one page of in-copyright material."

Stay tuned...

*Submitted by Mary Rasenberger, Partner, Cowan DeBaets Abrahams and Sheppard.

**Any views expressed in this blog are personal views of the author and not of Cowan DeBaets or any client of the firm.

October 6, 2011

Authors Guild Press Release re Hathitrust


J.R. Salamanca, Author of "Orphaned" Book, Also Enters Lawsuit. Action Seeks to Impound Unauthorized Digital Scans of 7 Million Copyright-Protected Books, Pending Congressional Action.

NEW YORK - The U.K. Authors' Licensing and Collecting Society, the Norwegian Nonfiction Writers and Translators Association, the Swedish Writers Union, The Writers' Union of Canada, and four individual authors are among the new plaintiffs in an amended complaint filed today in Authors Guild v. HathiTrust. Individual authors joining the lawsuit include University of Oslo professor Helge Rønning, Swedish novelist Erik Grundström, and American novelist J. R. Salamanca. The Authors League Fund, a 94-year-old organization supported by Authors Guild members that provides charitable assistance to book authors and dramatists, is also now a plaintiff, as holder of rights of to an "orphaned" book by Gladys Malvern.

The defendant universities have pooled the unauthorized scans of an estimated 7 million copyright-protected books, the rights to which are held by authors worldwide, into an online repository called HathiTrust. In June, the University of Michigan, which oversees HathiTrust, announced plans to permit unlimited downloads by its students and faculty members of "orphaned" books (some consider works whose rights-owners cannot be found after a diligent search to be "orphans"). Michigan devised a set of procedures -- including a protocol for searching for an author and posting the names of "orphan work candidates" at the HathiTrust website for 90 days - to determine whether it would deem a work an "orphan." Several other schools joined the project in August.

Within days of the suit's filing on September 12th, the Authors Guild, its members, and others commenting on its blog had developed strong leads to dozens of authors and estates holding rights to the first 167 works listed as "orphan candidates" at HathiTrust's website. Four living authors were on HathiTrust's list. So were significant literary estates, such as those of Pulitzer Prize winners James Gould Cozzens and Walter Lippmann and the philosopher Sidney Hook. Foreign authors were also on the list, including André Missenard, who died in Paris in August. At least three of the works are still in print. Simple Google searches turned up most of the leads in minutes, including one that led to the author of "The Lost Country," J. R. Salamanca. Under Michigan's protocols, unlimited e-book downloads of Mr. Salamanca's book were scheduled to be made available to an estimated 250,000 students and faculty members on November 8th.

"How is it they couldn't find Jack Salamanca?" asked literary agent John White, who has represented the author for more than ten years. "He's a bestselling novelist, he's lived in suburban Maryland for decades, he's in the University of Maryland's current online catalog as an emeritus professor, and he signed an e-book agreement for "Lilith" four weeks ago. It boggles the mind."

Michigan announced on September 16th that it was suspending, but not ending, its "orphan works" program. Its online servers continue to host an estimated 7 million digitized, copyright-protected books. Millions of those books are believed to be in print, with e-book versions available for many of them.

"You don't just take someone's property," said Mats Söderlund, chairman of the Swedish Writers Union. "If they want a digital book, they should pay for it. If it's not yet available digitally, it probably will be soon. Things are moving very quickly."

"These are major, well-funded U.S. research institutions capable of great things," said Greg Hollingshead, chair of The Writers' Union of Canada. "They could have found most of these authors had they cared to, but it seems they didn't. They just wanted to release e-books for free. They don't take literary property rights seriously, so why should any of us trust their security measures? If they're hacked, and digital files of 40,000 Canadian books are released, how are Canadian authors ever again to receive significant revenues from those works?"

"I've been in this business for decades, but this is one of the craziest things I've ever seen," said Trond Andreassen, president of the Norwegian Nonfiction Writers and Translators Association. "These American universities, with Google's help, decide to digitize and put on their servers thousands of books that were published in Norway. Why didn't they ask? We can find the authors, but those authors have rights, and sometimes the answer might be no."

The Authors' Licensing and Collecting Society, based in London, has licensed secondary uses of its member-authors' works for more than 30 years. "We represent more than 50,000 book authors," said chief executive Owen Atkinson. "On behalf of our members, we negotiate agreements that enable legal access to hundreds of thousands of books, including at least 35,000 books that appear to be on HathiTrust's servers. It concerns us greatly that our members have neither consented to the digitization nor have they any say in how these works might be used in the future."

Although many U.S. universities, including Harvard, Princeton, and Stanford, have participated in Google's library digitization program, most allow Google to scan only books that are in the public domain. Only a few, principally defendants Michigan and California, have allowed Google to scan books protected by copyright. As state-run institutions, both schools are shielded by 11th Amendment sovereign immunity protections from paying damages for copyright infringement.

"Universities are important cultural bastions, valued by all of us," said Scott Turow, president of the Authors Guild, "but they need to play that role thoughtfully. In this case, university defendants are using their immunity from money damages to act as pirates, rather than custodians, of our literary heritage. The massive unauthorized digitization project in which they participated has now imperiled the literary property rights of millions of authors from all over the world. Many of those authors have devoted much of their careers to creating works they hope will have cultural or educational significance. Universities should be at the forefront of safeguarding authors' rights and livelihoods, so their libraries can continue to find many new books worth collecting."

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February 9, 2012

Google Challenges Class

From the American Society of Media Photographers' Website:

Google Asks Court to Rule Against ASMP

Google has filed court documents challenging the standing of ASMP and the other associations as plaintiffs in the 2010 class action copyright infringement lawsuit filed over Google's unauthorized and massive scanning of library books and its related actions. Google argues that because of the requirements of copyright claims, plaintiffs must be actual rightsholders rather than associations acting on their behalf. It has also challenged the standing of the Authors Guild in its related lawsuit filed against Google in 2005.

February 16, 2012

What Your Trade Association Can Do For You: The Issue of Associational Standing to be Addressed in American Society of Media Photographers v. Google and Authors Guild v. Google

By Mary Rasenberger and Joseph Gregory

Last week in the Google Books case, the Authors Guild (the "Authors Guild") and the American Society of Media Photographers ("ASMP") filed oppositions to Google's motions to dismiss the copyright infringement claims brought by the Authors Guild and ASMP on behalf of themselves and their members. In Google's motions, filed in December, it argues that the associations lack the requisite standing to bring infringement claims on behalf of their members. Google argues that, in order for ASMP and the Authors Guild to be eligible for "associational standing"--on which it presumes the Authors Guild and ASMP rely to sue on behalf of their members, it must be shown that participation of each association's individual members in the lawsuit is not necessary to the claim asserted or to the relief requested. In this case, Google contests, each individual work alleged to have been infringed must be separately analyzed, including as to the fair use defense; and, as such, the associations lack standing to assert copyright infringement on behalf of their members.

In their briefs in support of their oppositions to Google's motions to dismiss, both ASMP and the Authors Guild respond that the associational standing "requirement" is merely a prudential requirement aimed at administrative convenience and that district courts have discretion is deciding whether or not it must be satisfied for a party to attain associational standing. ASMP further argues that the Supreme Court has allowed associational standing in cases such as this, recognizing the benefits of the participation of the association. The Author's Guild also counters Google's contention that each work needs to be analyzed separately under the fair use defense.

ASMP's Response

In its brief, ASMP first points out that Google's position is "particularly incongruous, given that Google has copied and distributed plaintiffs' works en masse without performing the individualized analysis it now avers is required." ASMP explains that "Google's consistent position to date has been that its actions are categorically protected as fair use irrespective of the individual work at issue." Ironically, Google's argument to support its motion to dismiss undermines its defense on the merits.

ASMP sets forth multiple legal theories as to why the District Court for the Southern District of New York should deny Google's motion. First, ASMP argues that the issue of whether the associations have "association standing" is wholly unnecessary with regard to the overall standing issue. ASMP cites numerous cases in support of a "well settled" principle that where at least one plaintiff has satisfied the standing requirements to bring a claim, a court need not consider whether other named plaintiffs (i.e., the associations) also have standing. In this case, individual representative members of ASMP are indeed named as co-plaintiffs to the suit, and Google apparently concedes the fact that such individual member plaintiffs do have standing to bring their respective infringement claims. Therefore, the issue of associational standing should be moot and the case should be allowed to proceed with the associations as co-plaintiffs.

Benefits Provided by Associational Standing

ASMP also relies on Supreme Court precedent that emphasizes the importance of permitting associations to have standing, along with individual plaintiffs, in order to ensure that individual members' claims are properly litigated. Among the justifications that the Supreme Court has provided in favor of allowing associational standing include: (i) the ability of associations to draw upon a preexisting reservoir of expertise and capital; and (ii) the primary reason people join an organization is often to create an effective vehicle for vindicating interests that they share with others. (See Int'l Union, United Auto, Aerospace & Agricultural Implement Works of Am. V. Brock, 477 U.S. 274, 289-90 (1986).)

ASMP also addresses Google's argument that since one of the requirements for associational standing--namely, a requirement that that neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit--is lacking, the associations should be barred from proceeding as plaintiffs in the suit. ASMP cites Supreme Court case law, which indicates that this requirement is merely a matter of administrative convenience and efficiency, meaning, the requirement has no impact on constitutional standing and the district courts therefore have discretion in deciding whether or not to apply it. ASMP argues that practical obstacles prevent each and every individual association member concerned from instituting individual actions, and therefore any such prudential rationale regarding administrative convenience is outweighed. Thus, the district court should exercise its discretion and allow the association plaintiffs to proceed as parties to the suit.

The Authors Guild's Response

The Authors Guild similarly argues that no prudential considerations compel the dismissal of the Authors Guild as an associational plaintiff. Citing the fact that it has already actively participated in the case as an associational plaintiff for over six years, the Authors Guild argues that, not only will its continued participation present no administrative difficulties, but its participation furthers the interests of judicial economy. Like ASMP, the Authors Guild is quick to point out that Google did not make a book-by-book determination as to whether to include each book in its library; thus, to deny group relief to those collectively affected by Google's copying would be manifestly unjust.

The Authors Guild also deconstructs Google's fair use defense to determine whether, as Google claims, it must be analyzed on a case-by-case basis for each individual member of the Authors Guild. In analyzing fair use, courts consider the following factors: (i) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (ii) the nature of the copyrighted work; (iii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (iv) the effect of the use upon the potential market for or value of the original work. Google argues that the individualized participation of every Authors Guild member is necessary to assess the second and fourth fair use factors.

The Authors Guild counters that, although the scope of fair use may be greater with respect to some works as compared to others, the Court is not required to separately analyze every book. Specifically, courts need not require individualized proof directed toward the second fair use factor, the nature of the work, in cases where large groups of works were infringed. In the cases cited by the Authors Guild, the courts either analyzed the works at issue by dividing them into separate large categories, or reviewed a sampling of the works to analyze the second factor. Neither approach requires the analysis as to each and every individual work.

With respect to the fourth fair use factor, the Authors Guild argues that the relevant evidence will be common to all of its individual members. Specifically, the Authors Guild argues that the potential market for and value of all in-copyright books will be adversely affected in similar ways by Google's use, and that this factor therefore can be fairly analyzed by the Court without the participation of each individual Authors Guild member.

What does this mean for future copyright litigation?

The Court's decision with regard to the associational standing theory in copyright infringement cases may have a profound impact on the ability of trade associations such as the Authors Guild and ASMP to enforce rights on behalf of their members. As discussed above, the reason why many people choose to join these organizations is for that exact reason; members seek to pool their interests and resources so as to receive protection when they need it most - i.e. when their interests are being violated in such a manner that litigation remains the only method of recourse. Further, given the expense associated with instituting individual lawsuits, the ability of such associations to adjudicate claims on behalf of their members may be the only way certain members might ever see relief.

Mary Rasenberger, Partner, Cowan DeBaets, Abrahams & Sheppard
Joseph Gregory, Law Student, New York Law School

March 5, 2012

Google Books Case Developments: Google Responds to ASMP and Authors Guild

By Mary Rasenberger

In the Google Books case, Google filed its responses on February 17, 2012 to the American Society of Media Photographers' (ASMP) and the Authors Guild's oppositions to Google's motions to dismiss ASMP and the Authors Guild for lack of standing. (See What Your Trade Association Can Do For You, Google took issue with the Plaintiffs' assertions, in their oppositions, that the third prong of the Hunt test for association standing is merely a prudential consideration that the Southern District need not apply rigidly. See Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343 (1977). The Supreme Court in Hunt set out a three-part test for determining whether an association has standing to bring a claim on behalf of its members; the third prong at issue in Google's motions is a requirement that neither the claim asserted nor the relief requested requires the participation of the individual members in the lawsuit.

Google's Response

Google first argues that the requirements in Hunt are an important limitation on federal jurisdiction; whereas ASMP and the Authors Guild had argued that the third prong is instead a discretional consideration concerned with administrative convenience.
While Google concedes that the Supreme Court in United Food & Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 556-57 (1996), held that this third Hunt prong was not a "constitutional necessity," it argues that the Court still considers the prong to be an important limit on federal jurisdiction, rather than an optional inquiry for a court to simply disregard: "To see Hunt's third prong as resting on less than constitutional necessity is not, of course, to rob it of its value." 517 U.S. at 556. Thus, Google argues that, although the prong may be a prudential rule of self-governance susceptible to Congressional abrogation, the prong is nonetheless a rule that courts are not entitled to overlook.

The third prong of the Hunt test for associational standing requires that neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Under Google's strict reading of this prong, it argues that the associations' copyright claims, and Google's fair use defense, require the participation of each individual ASMP and Authors Guild member because the injuries suffered by each association member is particular to the individual, requiring individualized proof in analyzing the copyright claims and fair use defenses.

First, Google argues that the copyright claims need to be analyzed on a case-by-case basis, particularly the issue of copyright ownership, as there are factual issues surrounding copyright ownership of the works, including whether they were "works for hire." Additionally, Google maintains that individual inquiries are relevant in analyzing its fair use defense. Three of the four fair use factors set out in Section 107 of the Copyright Act require in an inquiry that will vary from book to book. These three factors are: (i) the nature of the copyrighted work; (ii) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (iii) the effect of the use upon the potential market for or value of the original work. (17 U.S.C. §107 (2)-(4).) Google argues that because the facts differ from book to book, these inquiries require analysis of individualized evidence. In other words, it states that its fair use defense cannot be assessed in a collective manner.

Google distinguishes the cases that the associations rely on in support of the proposition that association standing is permissible in copyright cases similar to the Google Books case, including Itar-Tass Russian News Agency v. Russian Kurier, No. 95 Civ. 2144 (JGK), 1997 WL 109481 (S.D.N.Y. Mar. 10, 1997), rev'd in part, 153 F.3d 82 (2d Cir. 1998). ASMP had argued that Itar-Tass in particular is "most pertinent to this Court's analysis." In Itar-Tass, the district court held that an association of Russian journalists had associational standing to bring copyright infringement claims on behalf of its members. Google distinguishes Itar-Tass on the grounds that the factual issues regarding ownership in that case did not vary among the works at issue, and the case did not involve fair use.

The Second Circuit's Decision may have Important Implications for Associational Standing

As discussed above, courts have in some cases found associational standing to be appropriate in the context of copyright litigation. Questions remain, however, regarding how broad a trade association's right is to adjudicate copyright claims involving issues of ownership and fair use on behalf of its members. Judge Chin's decision on these motions thus likely will set important precedent in determining what the limits are on a trade association's associational standing in fair use cases.

Putting the Motions in the Context of the Litigation on the Merits

The positions taken by Google in its motions and responses are also interesting for what they say about Google's strategy in the case on the merits. Will it continue to assert on the merits, as it claims here, that individualized inquiry need be made with respect to ownership of each work and fair use need be analyzed on a work by work basis? Will it request discovery on a case-by-case basis in an attempt to drag the case on indefinitely? There are millions of works at issue in the case. The idea of the court's analyzing each work on a case by case basis is, of course, absurd - all the more absurd given that Google claimed fair use for its scanning and fragment use on an across-the-board basis, with no consideration of individual factors.

Scheduling Dispute Regarding ASMP's Request to Brief Fair Use before Class Certification

ASMP and Google filed letters with the court on February 17th and 22nd, respectively, regarding an expedited discovery and briefing schedule on the issue of fair use. ASMP proposed that any motions for summary judgment as to infringement or fair use be filed on an expedited schedule, before a decision on class certification. Google states that this proposal "is both unworkable and unjust," and that resolving the merits before considering the question of class certification is appropriate only "where the merits of the plaintiffs' claims can be readily resolved on summary judgment, where the defendant seeks an early disposition of those claims, and where the plaintiffs are not prejudiced thereby."

June 1, 2012

Google Books Update

By Mary E. Rasenberger

Judge Chin issued his decisions today in the two motions in the Google Books case. He refused to dismiss the Authors Guild and ASMP for lack of associational standing, as predicted, and he certified the authors' class represented by the Authors Guild.

The case will go forward on the merits this summer.

Judge Chin called Google on the inconsistency of its arguments (as noted in the Authors Guild's and ASMP's briefs). Google scanned works indiscriminately claiming fair use - with no case-by-case analysis whatsoever - and here it is now arguing that fair use issues have to be analyzed on a case-by-case basis (and hence the right holders can't all be represented by an association).

Here's a quote from the decision:

Furthermore, given the sweeping and undiscriminating nature of Google's unauthorized copying, it would be unjust to require that each affected association member litigate his claim individually. When Google copied works, it did not conduct an inquiry into the copyright ownership of each work; nor did it conduct an individualized evaluation as to whether posting "snippets" of a particular work would constitute "fair use." It copied and made search results available en masse. Google cannot now turn the tables and ask the Court to require each copyright holder to come forward individually and assert rights in a separate action. Because Google treated the copyright holders as a group, the copyright holders should be able to litigate on a group basis.

The decision is availiable at:

August 14, 2012

New Development In Google Books Case

The 2nd Circuit has granted Google the right to appeal the class status of the plaintiff authors, overturning Judge Chin's May 31st grant to the authors to form a class and sue Google as a group.

There is no indication as to when the 2nd Circuit will hear the appeal.

October 5, 2012

Publishers And Google Reach Agreement

Press Release from the Authors Guild

Mountain View, CA and Washington, DC; October 4, 2012 - The Association of American Publishers (AAP) and Google today announced a settlement agreement that will provide access to publishers' in-copyright books and journals digitized by Google for its Google Library Project. The dismissal of the lawsuit will end seven years of litigation.

The agreement settles a copyright infringement lawsuit filed against Google on October 19, 2005 by five AAP member publishers. As the settlement is between the parties to the litigation, the court is not required to approve its terms.

The settlement acknowledges the rights and interests of copyright-holders. US publishers can choose to make available or choose to remove their books and journals digitized by Google for its Library Project. Those deciding not to remove their works will have the option to receive a digital copy for their use.

Apart from the settlement, US publishers can continue to make individual agreements with Google for use of their other digitally-scanned works.

"We are pleased that this settlement addresses the issues that led to the litigation," said Tom Allen, President and CEO, AAP. "It shows that digital services can provide innovative means to discover content while still respecting the rights of copyright-holders."

"Google is a company that puts innovation front and center with all that it does," said David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer, Google. "By putting this litigation with the publishers behind us, we can stay focused on our core mission and work to increase the number of books available to educate, excite and entertain our users via Google Play."

Google Books allows users to browse up to 20% of books and then purchase digital versions through Google Play. Under the agreement, books scanned by Google in the Library Project can now be included by publishers.

Further terms of the agreement are confidential.

This settlement does not affect Google's current litigation with the Authors Guild or otherwise address the underlying questions in that suit.

The publisher plaintiffs are The McGraw-Hill Companies, Inc.; Pearson Education, Inc. and Penguin Group (USA) Inc., both part of Pearson; John Wiley & Sons, Inc.; and Simon & Schuster, Inc. part of CBS Corporation.

October 22, 2012


By Barry Werbin

On the heels of Google's settlement of long-running claims by the Association of American Publishers concerning the Google Library Project, on Oct. 10th, Judge Harold Baer (SDNY) granted a motion for summary judgment that had been filed by defendants in The Authors Guild, Inc. et al v. Hathitrust et al. HathiTrust and other defendants had been sued by the Authors' Guild and others for copyright infringement based on the HathiTrust project's planned scanning of books owned by various universities, including the University of Michigan, University of California, University of Wisconsin, Indiana University and Cornell University, which were also named as defendants. In addition to the Author's Guild, the other plaintiffs included various individual authors and other U.S. and foreign authors' associational organizations. The National Federation of the Blind also was permitted to intervene.

In addition to the summary judgment motion concerning the substantive copyright claims and fair use defense, the court also ruled on the defendants' motion to dismiss asserting a lack of standing by the associational plaintiffs (to the extent they asserted rights of their members) and that claims concerning the Orphan Works Project (OWP) were not ripe for adjudication.


The university defendants had entered into agreements to allow Google to create digital copies of works in the universities' libraries, in exchange for which Google would provide digital copies to the universities (referred to as the Mass Digitization Project or MDP). According to the complaint, this digital repository at the time of filing the action held some 10 million digital volumes, of which approximately 73% were protected by copyright. Once digitized, Google also makes "snippets" of the books available for viewing online, and the universities also "contribute" their digital copies to the HathiTrust Digital Library (HDL), a partnership of the participating universities.

In addition, as described in the court's opinion, for works by known authors, such digitized works within the HDL are used in three ways: (1) full-text searches; (2) preservation; and (3) access for people with certified print disabilities, such as the blind. For works that are not in the public domain or for which the copyright owner has not authorized use, "the full-text search indicates only the page numbers on which a particular term is found and the number of times the term appears on each page."

The universities (except for Indiana) also had agreed to participate in the OWP, an initiative to "identify and make available to University students, faculty and library patrons full copies of so-called 'orphan works'--works that are protected by copyright but whose rights holders theoretically cannot be located..." If initial attempts to contact a copyright owner/author or an orphan work failed, the HathiTrust would then list bibliographical information for such works on an Orphan Candidates webpage for 90 days, after which the works, if not claimed, would be fully viewable to students, professors and other authorized users at participating universities. After the filing of the original complaint, however, the University of Michigan announced that it would temporarily suspend the program because the OWP procedures had allowed many works to be included on the Orphan Works Lists in error. On a side issue, because the OWP was being challenged based on what it would in the future create, Judge Baer held that such claims were not ripe for adjudication.


The defendants challenged both associational (constitutional) standing and statutory standing under the Copyright Act. The court found that the three-part test for associational standing established in Washington State Apple Advertising Commission v. Hunt, 432 U.S. 333, 343 (1977) were satisfied because individual members of the Authors Guild would otherwise have standing to sue, the interests involved were germane to the Authors Guild's purposes, and participation of the Authors Guild's individual members was not necessary, in accordance with the recent ruling in Author's Guild v. Google, Inc., 2012 WL 1951790, at *6 (S.D.N.Y. May 31, 2012) [currently on appeal].

With respect to statutory standing under the Copyright Act, however, Judge Baer held that the U.S. domestic associational plaintiffs, including the Authors Guild, lacked such standing because the Copyright Act's standing clause, 17 U.S.C. 501(b), expressly limits who may enforce copyright claims to "the legal or beneficial owner of an exclusive right under a copyright...." Looking for guidance outside the Second Circuit, Judge Baer concluded that statutory standing for U.S. associations is not permitted under the Copyright Act.

With respect to foreign associational plaintiffs, the court also had to assess the issue under the "national treatment" provisions of the Berne Convention and Universal Copyright Convention. Citing the Second Circuit's decision in Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 89 (2d Cir. 1998), which permitted a Russian reporters' organization to bring copyright claims in the U.S. where Russian law authorized the creation of such organizations "for the collective administration of the economic rights of authors," Judge Baer concluded that "whether a foreign association has satisfied the statutory standing requirements necessary to assert a claim is determined by foreign law." While four of the foreign associational plaintiffs asserted they had similar authority under their national laws, Judge Baer held that because the defendants "do not challenge the actual foreign law basis for the assertion of statutory standing by these three associations," he would not raise any objection to such standing.

Fair Use

Similar to the pending Authors Guild v. Google case now on appeal to the Second Circuit, the key issue was whether the book scanning and digitization project was subject to a fair use defense, which Judge Baer found was applicable after assessing each of the statutory fair use factors under 17 USC § 107, and also assessing the limited library exception in Section 108 of the Copyright Act (which allows libraries to make a limited number of copies of certain works for specified purposes, but without affecting any separate fair use right under Section 107). Judge Bear initially rejected the defendants' argument that Section 108 limited any fair use defense.

With respect to the first fair use factor, the "purpose and character of the use," the court found that the intended purpose here -- "scholarship and research" --met this first prong. In addition, Judge Baer held that the use of the works within the HDL was "transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material." Such use also was deemed "transformative" because it facilitated "access for print-disabled persons."

As for the second factor, the "nature of the copyrighted works," Judge Baer found that because the use is transformative -- "intended to facilitate key-word searches or access for print-disabled individuals" -- this second factor was not dispositive and he essentially ignored it.

The third factor, the amount of the work copied, was found not to be a bar either because making complete "[i]ntermediate" copies of entire works "may not be infringing when that copying is necessary for fair use," concluding that making entire copies were necessary in order to facilitate searches and provide access for print-disabled individuals.

As for the final factor, the effect on the market for the copyrighted works, drawing on the "Betamax" case, Judge Baer held that where a challenged use is non-commercial, "the plaintiff must show 'by a preponderance of the evidence that some meaningful likelihood of future harm exists,'" under Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 455 n.40 (1984). He concluded that the plaintiffs failed this test as well, based on the alleged facts. Even if the defendants had purchased additional copies of the books, "purchase of an additional copy would not have allowed either full-text searches or access for the print-disabled individuals, two transformative uses that are central to the MDP." Finally, he found that defense arguments concerning potential loss of existing and potential licensing opportunities was "conjecture" and hypothetical, making the interesting comment that "[a] copyright holder cannot preempt a transformative market."

One significant take-away from the decision, which will be appealed, is the overriding impact of a "transformative use" finding under the first statutory factor, and how it carried the day in the court's assessment of the other three factors in the case. Despite "transformative use" being a judicially created doctrine not found expressly in Section 107, we have seen this trend evolve in this direction in recent years across federal jurisdictions. Regardless of how the Second Circuit ultimately will assess "transformative" use and the fair use factors in this case, and perhaps the pending Authors Guild v. Google case if it ever gets to that substantive stage, will be one of the seminal copyright rulings of the modern era.

January 17, 2013

Condé Nast's New Boilerplate Freelancer Agreement Contains Company's Exclusive Right to Option Film and TV Rights in its Magazine Articles

By Joan Faier

A January 14th New York Times article reports that Condé Nast's new boilerplate contract for its freelance magazine writers gives the company the exclusive right for a limited time period to option film and television rights to its writers' articles. On the same day, a posting on the Authors Guild (AG) website entitled Condé Nast Moves to Seize, Lowball Freelancers' Film/TV Rights describes this provision of the new contract, which was introduced last year, as "breaking longstanding industry practice." The AG's posting says the new contract provides the company with a "free, exclusive 12-month right to option dramatic and multimedia rights" to articles as well as the right to extend the period, at Condé Nast's sole choice, for up to 24 months for a "modest sum." According to the AG posting, if Condé Nast exercises its option for film or television rights to an article, then the writer, in accordance with the new standard terms, would be paid below-the-industry norm for such rights -- only 1% of the film or television production budget as opposed to the typical industry- negotiated compensation of 2.5% or more of the production budget.

The New York Times article points out that the plans to secure these rights which previously belonged to the writers began in late 2011, when Condé Nast formed an entertainment group because it wanted a share of potential profits from film and television projects based on its writers' works. The Times quotes a Condé Nast spokesperson as saying, "As we expand into digital, film and television entertainment, we are excited to bring the extraordinary work of our writers and photographers to these platforms, showcase their content in new ways, and create expanded opportunities for their work to be enjoyed by new audiences."

The article also states that some writers and agents are still "skeptical" about how many such entertainment projects Condé Nast will be able to bring to fruition. The AG's posting notes that some authors, those "with significant negotiating clout," have reportedly been able to "substantially alter or eliminate the option terms of the new boilerplate agreement." Condé Nast publishes 18 consumer magazines in the U.S., including The New Yorker, Vanity Fair, GQ, Vogue, Glamour and Self.

February 12, 2013

Macmillan Settles Antitrust Action

By Joel L. Hecker

As you probably know by now, the U.S. Justice Department commenced a civil antitrust action against five of the six major book publishers in the United States as well as Apple, Inc. This action arose out of allegations that the defendants conspired to raise the price of e-books over a period of time in response to the practice by of selling e-books for $9.99.

The parties had extensive negotiations prior to the filing of the action and the government reached a settlement with Hachett Book Group, Inc., HarperCollins Publishers, LLC, and Simon & Schuster, Inc., three of the publishers. As a result, simultaneously with the filing of that complaint, the government also filed a Stipulation of Settlement and Consent Decree along with a Competitive Impact Statement. That settlement was approved by Judge Cote of the Southern District of New York on September 5, 2012, at which time she granted the government's motion for a final judgment against these three publishing defendants. (Please see my article in the Fall/Winter 2012 Edition of the EASL Journal for a detailed description of the terms of that settlement.)

In December 2012, the fourth publishing defendant, the Penguin Group (Penguin), a division of Pearson PLC, Penguin Group (USA) Inc. abandoned its defense and also agreed to settle on the same terms as previously approved by Judge Cote. The public comment period on that settlement runs through March 5, 2013, after which Judge Cote will hold a hearing on the government's motion to approve that Consent Decree and whether to grant the government's motion for a final judgment against Penguin.

As a result, Macmillan (actually Verlagsgruppe Georg Von Holtzbrinck GMBH, Holtzbrinck Publishers, LLC d/b/a Macmillan) was left as the only remaining publishing defendant in the action (along, of course, with Apple). On February 8, 2013, Macmillan gave in and agreed to settle on the same terms previously agreed to by the other four publishing defendants. The reasons given for abandoning its defense were spelled out, in a letter by Macmillan's CEO, John Sargent, that Macmillan "settled because the potential penalties became too high to risk even the possibility of an unfavorable outcome." Sargent also wrote that, "I had an old-fashioned belief that you should not settle if you had done no wrong. As it turns out, that is indeed old-fashioned." Aside from being old-fashioned, the government obviously takes issue that Macmillan had done no wrong!

Another reason that Macmillan reached the settlement was that the market for e-books seems to have not led to any noticeable drop in e-book prices, which was the great fear of the publishers. Therefore, Macmillan had been out of step in the marketplace.

Macmillan will now go through the same process of having the government file a Stipulation of Settlement and Consent Decree along with a Competitive Impact Statement. There will then be a period for public comment, followed by a motion by the government before Judge Cote for approval and for a final judgment.

This leaves Apple as the only defendant in the action with a trial date currently set for June 2013.

August 19, 2013

Faulkner Literary Rights, LLC v. Sony Pictures Classics Inc., et al

By Barry Werbin

The decision in Faulkner Literary Rights, LLC v. Sony Pictures Classics Inc., et al., (N.D. Miss. July 18, 2013) dealt a quick Rule 12(b)(6) dismissal death-knell to a widely criticized claim by the Faulkner folks who alleged that Sony infringed the copyright in Faulkner's book Requiem for a Nun, where, in Woody Allen's film Midnight in Paris, Owen Wilson's character (Gil Pender) at one point misquotes a line from that book (with attribution credit). The misquoted and original lines are:

Original: "The past is never dead. It's not even past."

Misquote: "The past is not dead! Actually, it's not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party."

The District Court had no trouble finding this was fair use. The court in particular cited to Fifth and Second Circuit precedents for the contention that "the substantiality of the similarity is measured by considering the qualitative and quantitative significance of the copied portion in relation to the plaintiff's work as a whole." Qualitative and quantitative significance of course are one of the four core fair use factors under Section 117 of the Copyright Act.

The court also referenced the de minimis copying doctrine, which has been recognized in the Fifth Circuit but without having "specifically enunciated its proper place in the infringement analysis." The doctrine "is part of the initial inquiry of whether or not the use is infringement in the first instance, as opposed to the fair use inquiry, which is an affirmative defense." Either way, the court deemed "both the substantial similarity and de minimis analyses in this case to be fundamentally related, and wholly encompassed within the fair use affirmative defense." As the de minimis doctrine is "largely undeveloped" the court was "reluctant to address it, except within the context of Sony's affirmative defense, fair use."

With respect to the first fair use factor, the court found that "[t]he speaker, time, place, and purpose of the quote in these two works are diametrically dissimilar... It is difficult to fathom that Sony somehow sought some substantial commercial benefit by infringing on copyrighted material for no more than eight seconds in a ninety minute film." Other factors included the comedic context of the film and that the "minuscule" nine words in issue "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message." (quoting Campbell) Thus, the court readily found "heavy [in] favor of transformative use that... diminishes the significance of considerations such as commercial use that would tip to the detriment of fair use."

The second factor (nature of the copyrighted work) was found to be "neutral" - the court was not prepared to characterize the film as a parody, but nevertheless did say it was "highly transformative under the first factor, whether parody or not."

Under the third "substantiality" factor, Falkner argued that the quote described the "essence" of Requiem for a Nun, that "there is no such thing as past." Yet the court deemed this to refer to the qualitative theme of Requiem itself, not the "not the qualitative importance of the quote itself." The ideas embodied in Requiem for a Nun cannot be protected, only its expression, which here "constitutes only a small portion of the expression of this idea throughout the novel." The quote itself in the film "is a fragment of the idea's expression."

Interestingly, the court on this factor also held that "the quote at issue is of minuscule quantitative importance to the work as a whole. Thus, the court considers both the qualitative and quantitative analyses to tip in favor of fair use. The court concludes that no substantial similarity exists between the copyrighted work and the allegedly infringing work." [Emphasis added]Query in light of this finding of no "substantial similarity" why fair use even had to be addressed as fair use presupposes there is infringement.

On the last potential market effect factor, the record in the case was silent. In any event, the court considered this factor "to be essentially a non-issue in light of the stark balance of the first factors weighing in favor of Sony..." Nevertheless, the court did not see any relevant market harm resulting from Sony's use of the quote. If anything, the use in the film helped Faulkner's legacy.

Finally, the court expressed its frustration at the entire lawsuit: "How Hollywood's flattering and artful use of literary allusion is a point of litigation, not celebration, is beyond this court's comprehension."

A copy of the decision is available here: Faulkner decision (ND Miss ) (2).pdf

September 26, 2013

A Copyright Claim Cannot Bar Use of Briefs and Pleadings in a Pending Litigation

By Joel L. Hecker

All attorneys who litigate at one time or another create new material as part of pleadings and briefs. To some extent this original work may be considered to be copyrighted material, with the copyright owned by the author/attorney. In a case of first impression, the United States Court of Appeals for the Second Circuit was called upon to rule on an appeal from the Eastern District's dismissal of such a copyright infringement claim. The case is Unclaimed Property Recovery Service, Inc. and Bernard Gelb v. Norman Alan Kaplan (Docket No. 12-4030, decided August 20, 2013).

The Circuit Court phrased the facts as follows: "this case concerns a novel attempt to use Copyright Law in furtherance of sharp litigation practices". The plaintiffs were two of the named plaintiffs in a class action and Kaplan was the class action plaintiffs' attorney. The plaintiffs alleged that Gelb wrote the Amended Class Action Complaint and compiled 305 pages of accompanying exhibits (the "First Exhibits"). The plaintiffs claimed that they owned the copyrights in these documents.

Kaplan signed and filed the First Amended Complaint and the First Exhibits on behalf of the class action plaintiffs, including UPRS and Gelb. The District Court dismissed the class action as time-barred, and Kaplan appealed on behalf of all the class plaintiffs. While the appeal was pending, Kaplan and Gelb (who is not an attorney) had a falling out and Kaplan informed Gelb that he would no longer represent Gelb and UPRS. Gelb and UPRS thereupon retained new attorneys to represent them in the class action, but Kaplan remained the attorney of record. New counsel for UPRS and Gelb then moved to withdraw the pending appeal in its entirety. However, the court only granted the motion with respect to them and the appeal proceeded without them. The Second Circuit vacated the District Court dismissal of the class action and on remand Kaplan filed a Second Amended Class Action Complaint and accompanying exhibits (the "Second Exhibits") on behalf of the class plaintiffs. The key component of this case was that significant portions of the Second Amended Complaint and Second Exhibits were identical to portions of the First Amended Complaint and First Exhibits in which Gelb and UPRS claimed copyright ownership.

Thereafter, Gelb and UPRS brought suit against Kaplan, alleging that Kaplan had infringed their copyrights when he incorporated portions of the First Amended Complaint and First Exhibits into the Second Amended Complaint and Second Exhibits. The District Court dismissed the action for failure to state a claim upon which relief can be granted, holding that they had granted Kaplan an irrevocable implied license to file the amended documents. The District Court did not reach the issue of whether they had valid copyright interests because this decision was dispositive.

The issue on appeal, as framed by the Circuit Court, was "whether the holder of a copyright in a litigation document who has authorized the party to a litigation to use the document in the litigation may withdraw the authorization after the document has already been introduced into the litigation and then claim infringement when subsequent use is made of the document in the litigation."

The Circuit Court affirmed the District Court in dismissing the case but on different grounds. It held that "such an authorization necessarily conveys, not only to the authorized party but to all present and future attorneys and to the court, an irrevocable authorization to use the document in the litigation thereafter". (The court in a footnote stated that it does not suggest that permission of the copyright holder is needed for use of a copyrighted document in litigation since the ruling only concerns the grant of authorization for use in litigation which the holder then purports to withdraw.)

The Second Circuit, in what seems to be an obvious conclusion, held that litigation could not be conducted successfully unless the parties to litigation and their attorneys are free to use documents that are a part of the litigation since the parties rely on such documents as a means of establishing the nature of dispute and the facts and legal arguments that have been put forward by each party.

In addition, the Court found that a court's ability to perform its function depends on the ability of the parties and their attorneys to submit copies of documents in contention and to serve one another with copies of such documents. Finally the Court said that courts could not thoroughly and fairly adjudicate a matter if suddenly in the midst of litigation the parties lost the right to give the court copies of documents already used in the litigation that support their argument.

Accordingly, held the Circuit Court, the copyright holder's authorization will be construed to encompass the authorization, irrevocable throughout the duration of the litigation, not only to the expressly authorized party, but to all parties to the litigation and to the court, to use the document for appropriate purposes in the conduct of the litigation.

The Circuit Court severely criticized the conduct of the plaintiffs and their questionable litigation practices, stating that they attempted to influence the class action litigation by means of this novel use of copyright law after the Circuit Court, in its earlier decision, had refused to allow them to withdraw the class action appeal on behalf of all of the named plaintiffs.

In what the Circuit Court described as particularly troubling, the plaintiffs' theory, if successful, would permit the replaced attorney to use copyright law to hamper the former client's ability to select his own new counsel - a right that is one of the foundations of our systems of justice.

Finally, the theory put forth by the plaintiffs would allow the author of a legal pleading to also bar the district court from exercising its discretion with respect to the management of the case, as courts often permit a party to amend a pleading in part but not in full. That would obviously require that an amended pleading retain a portion of the original pleading.

All in all, the Circuit Court rejected all of the plaintiffs' claims in what was a very sound and well-reasoned decision, leaving litigation attorneys wondering why this issue ever reached the Circuit Court of Appeals in the first place!

November 19, 2013

Google Books copyright infringement lawsuit dismissed

By Michael Furlano

In a landmark decision JudgeChinSJdecision-c.pdf, Federal District Court Judge Denny Chin dismissed copyright infringement claims against Google's Google Books project. The decision caps an eight-year legal battle brought by the Authors Guild and other individual copyright holders. The plaintiffs alleged that Google's reproduction, distribution, and display of millions of copyrighted books infringed their copyrights, while Google has always claimed that the project was fair use. The court held that Google's searchable book index that scanned, copied, and displayed copyrighted text is fair use under § 107 of the Copyright Act.

In making its decision, the court analyzed four fair use pillars:

1. The purpose and character of the use;
2. The nature of the copyrighted work;
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. How the use affected the potential market or value of the copyrighted work

The court's decision rested on two main factors: (1) the purpose and character of the infringing use, and (2) the infringing use's effect on the copyrighted work's potential market or value.

Purpose and Character

The main consideration of purpose and character is whether the infringing use is transformative. Here, the court held that Google's use was highly transformative, because it used the copyrighted text to create a searchable book index, similar to how using thumbnail images as a search tool is fair use. This is different than using the material solely for consumption purposes. The court also found that the index opened up new research possibilities by facilitating word usage data mining. Finally, the court stated that Google's commercial nature did not outweigh Google Books' "important educational purposes."

Nature of Copyrighted Work

Analyzing the nature of copyrighted works requires examining how much of the work's market and value is foreclosed by the infringing use. The court rejected the plaintiff's argument that Google Books would replace the market for physical and digital books. It noted that Google restricts access to full books, except for libraries that provided the originals to scan, and it is not possible to circumvent those restrictions. Instead, Google Books actually enhances book sales by facilitating book discovery and providing links to purchase those books.

The court summarized its analysis by stating that Google Books provides "significant public benefits" and "advances the progress of the arts and sciences." This is good news for Google, who would have faced damages of up to $150,000 per infringement. This is also good news for fair use advocates, as it further clarifies the Copyright Act's fair use doctrine. The plaintiffs, however, plan to immediately appeal.

Authors Guild Inc., et al v. Google Inc. (The Google Books case)

By Michael Cataliotti

"Fair Use" is arguably one of the most powerful aspects of the U.S. Copyright Act of '76, as it has been a fundamental basis to argue that, even though permission to use the original work was never obtained, the owner's rights have not been infringed upon. While fair use is generally accepted as proper when utilized by scholarly individuals and entities, the question of whether a clearly for-profit entity has the right to argue fair use is one that has not been as hotly contested as it has in light of Google's "Google Books", a digital gateway of works of authorship made available to the public either through a few sentences or in sum. Of particular concern to The Authors Guild was Google's use of any portion of those works for which authorization had not been obtained. Additionally, The Authors Guild appeared concerned with the fact that Google could be profiting from this venture without remitting any form of royalties to copyright owners.

Despite Google not obtaining permission to reprint certain works online for public consumption, after weighing the elements of fair use, it was the opinion of Judge Denny Chin that "Google Books provides significant public benefits", and went on in great detail to explain why this is so. Ultimately, the decision holds firmly that Google Books does not in fact infringe upon an author's rights. Though some may see this as detrimental all around, a quick search of the decision demonstrates that the world at large appears to favor this decision in order to reinvigorate public interest in works that would never otherwise see the light of day. Time will tell whether Google Books's virtuousness will be eroded in favor of profits causing a hindrance to writers, but in the meantime, it appears that relatively unknown works can be enjoyed or brought to life once again. While doing so, we must wait for the appeal that is inevitable to be filed and see how this situation will progress.

The decision: JudgeChinSJdecision-c.pdf

November 22, 2013


By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

The highly publicized, now eight year old, "Google Books" class action case came to a close at the district court level on November 14th, with Southern District Judge Denny Chin granting Google summary judgment on its copyright fair use defense. The Authors Guild, Inc., et al. v. Google Inc., 05 Civ. 8136 (S.D.N.Y. Nov.14, 2013). In the process, Judge Chin revealed that he is among those who believe that Google has changed the world for the better. Retaining the action at the district court level despite his recent appointment to the Second Circuit Court of Appeals, Judge Chin found that Google Books is "transformative" and benefits "all society."

As the backdrop to the unusual trajectory of the case, in 2004 Google turned its attention to the mass digitalization of books by starting an ambitious project called "Google Books." Under the program, Google entered into agreements with various major research libraries to digitally scan their entire collections with optical technology that would permit full text searching. The digital copies would then be made available to participating libraries and Google would permit public online searches of the content. In response to search queries, only portions, or "snippets," of a book's content would be displayed to anyone having Internet access and a computer. As of today, over 20 million books have been scanned for the project.

The Authors Guild and three authors/copyright holders, the plaintiffs in the Google Books case, filed a class action, alleging that Google was committing mass infringement of authors' copyrighted material by digitally scanning and storing the entire contents of the books and displaying the snippets without their permission. The case was assigned to Judge Chin, who was then a District Court judge. After initial extensive litigation and several years of intense negotiation, all the parties reached a complex class action settlement agreement that would have granted broader rights to Google in exchange for a $125 million settlement payment. However, when the settlement was presented to Judge Chin -- who by then had been appointed to the Second Circuit -- for approval in 2011 (as class action settlements require judicial approval), he rejected it in response to many objections filed by interested parties, including the Justice Department, which voiced potential antitrust concerns.

Judge Chin then certified the plaintiff class before addressing any of the substantive copyright issues and Google's fair use defense. Google appealed the class certification to the Second Circuit, which issued an unusual ruling earlier this year in which it reversed the class certification as being premature and remanded the case to Judge Chin for a decision on Google's fair use defense, on the grounds that "the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues...." Authors Guild v. Google Inc., 721 F.3d 132, 134 (2d Cir. 2013).

After the case was remanded and discovery completed, both plaintiffs and Google moved for summary judgment with respect to the "fair use" defense. Following the judicial trend of focusing on whether the alleged infringement was "transformative," Judge Chin has now held that Google's use of the copyrighted books constitutes "fair use" under Section 107 of the Copyright Act.

The statutory "fair use" defense is derived from the Constitution's directive in Article I, Section 8, that the purpose of copyright, along with patents, is "[t]o promote the Progress of Science and useful Arts." The "fair use" doctrine is codified in Section 107 of the Copyright Act, which requires courts to asses at least four delineated factors, namely: (1) the purpose of the use (i.e., is the use for commercial or nonprofit educational purposes), (2) the nature of the copyrighted work, (3) the amount and substantiality of the infringed portion used compared to the copyrighted work as a whole, and (4) the effect of the infringement upon the potential market for or value of the copyrighted work. While a court must consider these four factors in evaluating a fair use defense, the court is free to consider any other relevant factors, a point also noted by Judge Chin.

Judge Chin cited to Judge Pierre Leval's notable 1990 Harvard Law Review article entitled Toward a Fair Use Standard, where the "transformative use" theory was first articulated. Judge Leval there opined that the use of a copyrighted work should be deemed a "fair use" if it is "transformative" (i.e., "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message ...") 103 Harv. L. Rev. 1105, 1111 (1990). Following Judge Leval's lead, in 1994 the Supreme Court ruled in the context of a commercial parody that under the first fair use factor, "the enquiry focuses on whether the new work merely supersedes the objects of the original creation, or whether and to what extent it is 'transformative,' altering the original with new expression, meaning, or message. The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994). Since then, courts have increasingly decided "fair use" defenses by analyzing whether the alleged use was "transformative."

In finding that Google Books' use of the copyrighted works was "transformative" and protected as "fair use," Judge Chin considered each of the four factors enumerated by Section 107.

First, with respect to the purpose and character of Google Books' use, Judge Chin found that, while Google's "principle motivation is profit, the fact is that Google Books serves several important educational purposes." In particular, Judge Chin found that Google Books (i) "transforms expressive text into a comprehensive word index that helps readers, scholars, researchers and other find books," (ii) serves as "an important tool for libraries and librarians and cite-checkers as it helps to identify and find books," (iii) helps "users locate books and determine whether they may of interest" and (iv) transforms "book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research."

Judge Chin also found that Google did not directly profit from the use of the copyrighted material because it did not sell its scans of the copyrighted works, did not sell the snippets that it displays and did not run ads on the "About the Book" pages that contain the snippets. Accordingly, Judge Chin found that the first factor concerning the use of the copyrighted material "strongly favor[ed] a finding of fair use."

Second, with respect to the nature of the copyrighted works, Judge Chin found that the vast majority of books found in Google Books are non-fiction, published and available to the public. As non-fiction books that can be found in the public domain are afforded less protection, Judge Chin found that the second factor concerning the nature of the copyrighted material favored a finding of fair use.

Third, with respect to amount and substantiality of the copyrighted material used, Judge Chin found that while Google scans the full text of the books verbatim, "it limits the amount of text that it displays in response to each search." However, despite his approval of Google's limitation on the amount of text displayed, Judge Chin concluded that the third factor "slightly" favored a finding against fair use.

Fourth, with respect to the effect of the use upon the potential market or value of the copyrighted works, Judge Chin rejected the plaintiffs' argument that Google Books negatively impacted the market for the books and served as a "market replacement." To the contrary, Judge Chin found that "a reasonable factfinder could only find that Google Books enhances the sales of books to the benefit of copyright holders." In particular, he found that Google Books promotes the authors' works and improves their book sales. Accordingly, Judge Chin found that the fourth factor concerning the effect of the use of the copyrighted material weighed strongly in favor of a finding of fair use.

Weighing these factors and considering what he perceived to be Google Books' other public benefits, such as its ability to preserve old books and enable disabled and underserved populations to actually have access to the books, Judge Chin found that Google Books is "transformative" and its alleged infringement of the copyrighted works is protected by the "fair use" doctrine. He further found that Google could provide its partner libraries with digital copies of the books they already owned because such actions (by both Google and the libraries) also constitute "fair use."

Based on these findings, Judge Chin granted Google's motion for summary judgment in its entirety. In doing so, he further solidified Judge Leval's "transformative" use doctrine.

The case is clearly headed back to the Second Circuit. As that Court previously punted the class certification issue to allow Judge Chin to decide the "fair use" question because it could "moot" the certification issue, many practitioners believe that it is likely that the Second Circuit will affirm Judge Chin's decision.

June 13, 2014

HathiTrust Racks Up Fair Use Victory But Heads Back to the Stacks on Preservation Copies

By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

In a much-awaited decision, the Second Circuit held on June 10, 2014, that university libraries are permitted to electronically scan their copyrighted books to (i) create a full-text searchable database, and (ii) provide print-disabled people with access to the copyrighted works. In Authors Guild, Inc. v. HathiTrust, the Court found such uses by the HathiTrust Digital Library (HDL), set up by the HathiTrust -- an organization comprised of colleges, universities and other nonprofit organizations that contributed their book collections to create a massive digital database of over 10 million works -- were protected by the copyright fair use doctrine. The Court remanded on the issue of whether HathiTrust's "preservation" copies were protected as fair use.

As a threshold matter, the Court found that the U.S. association and union plaintiffs lacked standing under §501 of the Copyright Act to bring copyright claims on behalf of their member authors. That section prohibits a copyright holder from choosing a third party to bring suit on his or her behalf. On the other hand, the Court found that the foreign association and union plaintiffs had standing to bring suit on behalf of their members because foreign laws provided them with exclusive rights to enforce the copyrights of their foreign members.

The Court then proceeded to apply the fair use doctrine to the plaintiffs' claims. The Court noted that the Copyright Act "'is designed [] to stimulate activity and progress in the arts for the intellectual enrichment of the public.'" Based on this intention, the fair use doctrine "allows the public to draw upon copyrighted materials without the permission of the copyright holder in certain circumstances."

In assessing a fair use defense under §107 of the Copyright Act, courts are required to consider the following four nonexclusive factors: (1) the purpose and character of the use (e.g., for a commercial or educational purpose); (2) the nature of the copyrighted work; (3) the amount of the copyrighted portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. With respect to the first factor, it has become de rigueur for courts to assess whether the purpose of an allegedly infringing use is "transformative" or not, that is, "whether the work 'adds something new, with a further purpose or different character, altering the first with new expression, meaning or message...'" (Quoting Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569, 579 (1994).)

As for the HDL's full-text searchable database, the Court found that such use is protected by the fair use doctrine because (i) it constitutes a "transformative" use that adds something new "with a different purpose and a different character" from the copyrighted material (emphasizing, however, that contrary to the District Court's opinion, "a use does not become transformative by making an 'invaluable contribution to the progress of science and cultivation of the arts...." but by serving "a new and different function from the original work"); (ii) while there is no dispute the plaintiffs' works are protected by copyright, the second factor is of "'limited usefulness where,' as here, 'the creative work . . . is being used for a transformative purpose,'" (citing to the Court's own opinions in Cariou v. Prince and Bill Graham Archives v. Dorling Kindersley Ltd.); (iii) the extent of the libraries' copying of the copyrighted material is not excessive and is reasonably necessary to enable the full-text search function (which by its nature required copying of the entire texts of the books); and (iv) because the full-text search does not serve as a "substitute" for the books being searched, the plaintiffs will not suffer any non-speculative harm (the Court emphasizing that the only type of economic injury to be considered under the fourth fair use factor is that which results from the secondary use serving "as a substitute for the original work"). Based on these findings, the Court held that while the works were the type that would otherwise be protected by the Copyright Act, the full-text searchable database constituted a fair use of the works.

Of particular interest is the Court's observation that its finding of a transformative use here was even more compelling than the transformative uses the Court had approved in Cariou and Bill Graham Archives because "full‐text search adds a great deal more to the copyrighted works" (a likely portent of how the Court will soon rule in the pending Google Books appeal).

Of great concern to the plaintiff author groups under the fourth factor was an alleged security risk posed by the existence of the HDL that "might impose irreparable damage on the Authors and their works" if, hypothetically, "hackers were able to obtain unauthorized access to the books stored at the HDL" and then freely disseminate globally those digital copies, thereby decimating the traditional market for those works. However the Court rejected this theory, finding that the record on appeal documented "the extensive security measures the Libraries have undertaken to safeguard against the risk of a data breach."

Similarly, the Court also found that providing access to the blind and print-disabled is a fair use of the copyrighted material. While the Court found that such use is not "transformative" (as was the full-text searchable database) and appears to create "derivative works over which the author ordinarily maintains control," it found that "transformative" use is not "absolutely necessary" for a finding of fair use. In particular, the legislature and Supreme Court have both stated that making copyrighted materials accessible for the use of blind people is protected by the fair use doctrine. The Court further found that in the "unique circumstances presented by print‐disabled readers," (i) the extent of the libraries' retention of the works is reasonable, and (ii) that the market for books accessible to the handicapped is so insignificant that the value of the copyrighted material would not suffer. Accordingly, the Court held that "the doctrine of fair use allows the Libraries to provide full digital access to copyrighted works to their print-disabled patrons."

The Court also considered whether the HDL could preserve digital copies of the scanned books and permit its member libraries to replace their copies if (i) the member already owned an original,(ii) the member's original copy was lost, destroyed or stolen, and (iii) a replacement copy was not available at a fair price. The Court found that this issue was not ripe for its determination primarily because the district court record had not established whether any of the plaintiffs' copyrighted materials were irreplaceable at a fair price and, "thus, would be potentially subject to being copied by the Libraries in case of the loss or destruction of an original." If the plaintiffs' works could be replaced at a fair price, then the works would not be replaced by the HDL. Accordingly, the Court held this claim did not "present a live controversy for adjudication," vacated the district court's judgment "insofar as it adjudicated this issue without first considering whether plaintiffs have standing to challenge the preservation use of the HDL", and remanded for the district court to make that determination.

Finally, the Court held that the plaintiffs' claims against defendant the University of Michigan regarding its project known as the "Orphan Works Project" or "OWP" was not ripe for adjudication, because the program had been suspended after the case commenced, and it was unclear whether the University would reinstitute the OWP in a manner that would infringe the plaintiffs' copyrights and cause them harm.

The trajectory of the Second Circuit's application of the "transformative" use doctrine continues its climb in HathiTrust, following on the heels of the Courts' expansive application of fair use in Cariou v. Prince. With the Google Books case coming up next, and other Circuits having already adopted the transformative use test, the copyright bar is readying itself for transformative use as the fair use paradigm of the 21st century, particularly as digital technologies continue to push the envelope of an aging Copyright Act.

June 20, 2014

Klinger v. Conan Doyle Estate Appeal

By Joseph Perry

Oral Argument and Holding

The Seventh Circuit of Appeals heard oral arguments from the parties on May 22nd, in which the Conan Doyle Estate challenged the district court's judgment in two ways: 1) the district court had no subject matter jurisdiction because there was no actual legal controversy, and 2) the copyrights of round, complex characters like Sherlock Holmes remain protected under copyright law until the last Conan Doyle story falls into the public domain. On June 16th, the Seventh Circuit affirmed the district court's motion for summary judgment and declaratory judgment in favor of Klinger, which stated that materials in 50 pre-1923 Sherlock Holmes novels and stories are in the public domain, but materials in post-1923 Sherlock Holmes stories are protected under copyright law.


The Seventh Circuit held that the district court had federal subject matter jurisdiction over Klinger's lawsuit because the Conan Doyle Estate's threat to sue Pegasus Books for copyright infringement and to block distribution of In the Company of Sherlock Holmes created a sufficient threat to constitute an actual controversy. The Conan Doyle Estate argued that Klinger's suit was unripe because In the Company of Sherlock Holmes was not complete, and thus, copyright infringement could not be decided until the book was finished. The court rejected the Conan Doyle Estate's argument because the only issue was whether Klinger could "copy the characters of Holmes and Watson as they are depicted in the stories and novels of Arthur Conan Doyle that are in the public domain," which could be determined without knowing the contents of the book. Thus, the Seventh Circuit held that the district court had federal subject matter jurisdiction over Klinger's lawsuit.

Copyright Infringement

The Seventh Circuit held that the pre-1923 Sherlock Holmes and Dr. Watson characters were in the public domain. The court rejected the Conan Doyle Estate's argument that a "'complex' character in a story, such as Sherlock Holmes or Dr. Watson, whose full complexity is not revealed until a later story, remains under copyright until the later story falls into the public domain." Essentially, the Conan Doyle Estate sought "135 years (1887-2022) of copyright protection for the character of Sherlock Holmes as depicted in the first Sherlock Holmes story," and the court stated that "we cannot find any basis in statute or case law for extending a copyright beyond its expiration. Thus, the Seventh Circuit held that the pre-1923 Sherlock Holmes and Dr. Watson characters are in the public domain.


The Seventh Circuit of Appeals affirmed the district court's motion for summary judgment and declaratory judgment in favor of Klinger, which stated that materials in 50 pre-1923 Sherlock Holmes novels and stories are in the public domain, but materials in post-1923 stories are protected under copyright law.

The Seventh Circuit's opinion is here: doyle.pdf

July 10, 2014

Judge Rakoff Finally Explains His Fair Use Rationale Respecting Lawyers' Briefs Filed With Courts

By Barry Werbin

Over a year ago in White v. West Pub. et al (S.D.N.Y.), Judge Jed Rakoff granted summary judgment, but deferred issuing an opinion, in favor of West Publishing and Reed Elsevier (LexisNexis) in a copyright infringement class action suit brought by several lawyers, who alleged that West and Lexis/Nexis had infringed copyrights in their electronically filed court briefs by aggregating them in a key-word tabbed and text-based searchable database that was made accessible for a fee. On July 3, 2014 (17 months later), Judge Rakoff finally issued his opinion explaining the reasoning for finding fair use. [The decision can be accessed here:]

After assessing each of the four Section 107 factors, Judge Rakoff initially concluded that under the first factor this was a transformative use, for two reasons: "First, while White created the briefs solely for the purpose of providing legal services to his clients and securing specific legal outcomes in the Beer litigation, the defendants used the brief toward the end of creating an interactive legal research tool.... Second [notwithstanding the commercial aspect of defendants' use], West and Lexis's processes of reviewing, selecting, converting, coding, linking, and identifying the documents 'add[] something new, with a further purpose or different character' than the original briefs."

With respect to the second factor, he noted that the nature of the underlying copyright-protected [arguably] briefs "are functional presentations of fact and law, and this cuts towards finding in favor of fair use."

On the third factor, Judge Rakoff opined: "Although defendants here copied the entirety of White's briefs, such copying was necessary to make the briefs comprehensively text searchable. Thus the Court finds that defendants only copied what was reasonably necessary for their transformative use, and that the third factor is therefore neutral."

Finally, on the fourth factor, he found there was no impact on the potential market for the works. In particular, Judge Rakoff emphasized that "West's and Lexis's usage of the briefs is in no way economically a substitute for the use of the briefs in their original market: the provision of legal advice for an attorney's clients. White himself admits that he lost no clients as a result of West's and Lexis's usage....Furthermore, no secondary market exists in which White could license or sell the briefs to other attorneys, as no one has offered to license any of White's motions, nor has White sought to license or sell them." The reason there is no secondary market for licensing or selling the briefs, said Judge Rakoff, is "because the transactions costs in licensing attorney works would be prohibitively high."

So in the interest of transformative use, all us litigators should keep our fees high!

September 18, 2014

Photographers Action Against The Google Book Project Is Settled

By Joel L. Hecker

This suit, American Society of Media Photographers, Inc. et al v. Google, Inc., Case No. 10-CV-02977 (DC) in the Southern District of New York, arose out of the 2005 Authors Guild and Association of American Publishers class action lawsuit against Google (the Authors Guild Litigation) in connection with Google's scanning of books from university libraries, without the consent of the copyright owners of the books scanned, which became known as the Google Book Search Project litigation. The Authors Guild Litigation alleged that Google's acts, as part of the Google Book Search Project, constituted copyright infringement.

The Authors Guild Litigation eventually reached the point where a proposed settlement was submitted to the court for approval. However, the Amended Proposed Settlement specifically excluded almost all photography and graphic art works. As a result, the American Society of Media Photographers (ASMP), Graphic Artists Guild (GAG), Picture Archive Council of America (now known as Digital Media Licensing Association (PACA)), North American Nature Photography Association (NANPA), and various other organizations and individual photographers attempted to intervene in the Authors Guild Litigation and thereby have such organizations and the visual artists they represented be included in any resulting settlement.

On November 4, 2009, Judge Denny Chin, who was assigned to the case, denied the motion and refused to permit such intervention, concluding that these visual artists had acted too late (the case was then four years old), and in his view, the Google Book Search Project primarily involved textual content and not visual works. Judge Chin stated in his denial of the motion that: "Frankly, in the context of an online database that is searchable using keywords, it makes sense to prioritize the rights of word-based material." [It should be noted that these words, written in 2009, have basically been made obsolete by technology and circumstances, as searchable pictorial content is very much an everyday occurrence in 2014.]

ASMP and the others disagreed and filed their own class action lawsuit against Google on April 7, 2010, alleging copyright infringement by Google of visual artwork arising out of the Google Book Search Project.

The ASMP Complaint

The 21 page complaint alleged that it was "designed to redress the most widespread, well-publicized and uncompensated infringement of exclusive rights in images in the history of book and periodical publishing." That "evil" was, of course, the Google Book Search Project, under which Google was essentially scanning entire library collections and thereby creating digital archives of what eventually was intended to be an online database of all of the world's books.

All in all, the complaint can be summarized as alleging that Google was committing massive copyright infringements of visual works similar to its infringements of text-based works (as alleged in the Author's Guild Litigation) and that the visual artists must be included in the process.

Dismissal of the Authors Guild Litigation

Judge Chin, now an appellate judge sitting on the Second Circuit Court of Appeals, initially approved class action status in the Authors Guild Litigation, which decision was reversed by the Second Circuit as premature since he had not first ruled on the Fair Use defense raised by Google. On remand, Judge Chin found that Google's acts did indeed constitute fair use and accordingly dismissed the Authors Guild complaint. That decision is now on appeal.

The Photographers Action Settlement

The parties to the photographers' case issued a press release on September 10, 2014 indicating that they are "pleased to have reached a settlement that benefits everyone and includes funding for the PLUS Coalition, a non-profit organization dedicated to helping rights holders and users communicate clearly and efficiently about rights in works."

Further terms of the agreement are apparently confidential. The parties pointed out that since the settlement is only between the parties to the litigation, court approval of the terms of the settlement is not required. This is so because, although the action was commenced as a class action on behalf of photographers and other visual artists similarly situated, no motion had yet been made to confirm a class or classes in the litigation, and therefore this settlement will not be binding on any party other than the parties to the action.

The settlement also does not affect the current appeal in the Authors Guild Litigation from Judge Chin's dismissal of their class action against Google on the grounds that Google's Book Project constituted fair use.

October 8, 2014

Kirby/Marvel Settle - Law Surrounding "Work for Hire" Remains Unsettled

By Jacob Reiser

Last week, the Estate of Jack Kirby (the Kirby Estate) and Marvel Entertainment (Marvel) announced a settlement agreement, bringing to resolution a lawsuit that had been ongoing since 2009. The settlement came only days before the United States Supreme Court was scheduled to decide whether to accept the Kirby Estate's Petition for Writ of Certiorari (the Petition) and was a shock to those following the progress of the case. The settlement brings an end to the Kirby dispute but leaves in place bad precedent for independent contractors who want to reclaim copyrights to work they sold prior to 1978, the effective date when the Copyright Act of 1976 took effect.
Although the settlement renders the Petition moot, it is still worth discussing the issues it raised because many of those issues will likely be challenged again soon.

The Amazing Jack Kirby and The Quest To Reclaim His Works

If you are a comic book fan, you have probably heard of Jack Kirby; but if you're a human being living on planet Earth, you have definitely heard of the characters he helped create. Jack Kirby was a legendary comic book artist who played a major role in creating such enduring and popular superhero characters as Spiderman, Thor, Ironman, Hulk, The X-Men, Captain America, The Avengers and The Fantastic Four (the characters). The characters have dominated pop culture and the box office in the past decade, with no signs of slowing down, and grossed enormous sums of money for Marvel and its parent, The Walt Disney Company.

The case began when the Kirby Estate served various Marvel entities with Termination Notices, purporting to exercise its statutory termination rights under Section 304(c)(2) of the Copyright Act of 1976, for over 262 works created by Jack Kirby and published by Marvel between 1958 and 1963. The Copyright Act of 1976 grants an author, or the children of a deceased author, the right to recover an author's copyrights granted or transferred to another party by statutorily terminating the prior grant or transfer. However, this termination right does not apply to works made for hire.

In response to the Termination Notice, Marvel immediately filed suit and moved for Summary Judgment, seeking a declaration that the Kirby Estate had no termination rights because the characters were created as works made for hire, and thus never belonged to Kirby. The District Court ruled in favor of Marvel and found that the works at issue were made for hire, because they were made at Marvel's "instance and expense." Therefore, the court ruled that the Kirby Estate could not wrest back ownership of the characters because Marvel was considered under law as the statutory author. In August 2013, the Second Circuit Court of Appeals affirmed the lower court's ruling. The Kirby Estate then petitioned the Supreme Court for Certiorari. Although the Court was scheduled to hold a conference on September 29th to decide whether to hear the case, the case was settled several days before.

The Dastardly "Instance and Expense Test"

To understand the significance of the issues disputed in this case, it is necessary to briefly summarize the history of work made for hire under the Copyright Act of 1909.

Under present copyright law, the Copyright Act of 1976, an author is deemed to hold the copyright for his or her work by default unless the parties expressly agree in a written instrument that the work shall be considered a work made for hire. Yet under the old Copyright Act of 1909, the rights of a commissioned artist were less clear. Regarding works made for hire, the 1909 Act stated simply: "[t]he word author shall include an employer in the case of works made for hire" but the statute fails to define the phrase "works made for hire".

Initially, courts gave the word "employer" its common law meaning and ruled that only works made for an employer by a traditional employee were deemed works made for hire. However, the courts were soon faced with an issue - what about work made by freelancers for a commissioning party? How could the commissioning party feel secure in hiring a freelancer if the freelancer could turn around and sell the work to someone else? To solve this problem, the court, as articulated in Yardley v. Houghton Mifflin Co, 108 F.2d 28, 30 (2d Cir. 1939), created a default rule that, unless expressly stated otherwise, an independent contractor is deemed to have impliedly assigned his or her copyright to the commissioning party for the first copyright term (i.e. 28 years under the 1909 Act). To be clear - the independent contractor still owned the copyright. He or she was merely deemed to have assigned it to the commissioning party for the first copyright term. Accordingly, when the term expired 28 years later, the independent contractor was free to reclaim the copyright as his or her own.

However, the Second Circuit, in a string of cases beginning in 1972 with its decision in Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1216 (2d Cir. 1972), retroactively re-interpreted the established work for hire precedent and created a new doctrine called the "instance and expense" test. Under the instance and expense test, a work is made at the hiring party's instance and expense when the employer induces the creation of the work and has the right to direct and supervise the manner in which the work is carried out. In practice, the instance and expense test creates what the Second Circuit called in Estate of Burne Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149, 166 (2d Cir. 2003), "an almost irrebuttable presumption that any person who paid an another to create a copyrightable work was the statutory 'author' under the work for hire doctrine."

The phrase "instance and expense" first appeared in a case called Brattleboro Pub. Co. v. Winmill Pub. Corp., 369 F.2d 565, 567 (2d Cir. 1966). In Brattleboro, in a short and otherwise unremarkable decision, the Court found an implied assignment of an independent contractor's advertisement to a publisher of a newspaper. In support of its conclusion, the Court reasoned that where an independent contractor is solicited by a commissioning party to execute a commission for pay, fairness demands a presumption that the hiring party desires to control the publication and the artist consents. The court termed this analysis "instance and expense."

Nowhere in the decision, however, did the Brattleboro Court grant ownership of the copyright to the hiring party or demonstrate an intention to depart from the implied assignment precedent. Yet the instance and expense analysis soon took on a life of its own.

In the 1972 case of Picture Music, the Second Circuit, formally recognized the instance and expense test as the only consideration in determining the ownership of an independent contractor's copyright. Citing a combination of Yardley and Brattleboro as support for its ruling, the court retroactively re-interpreted established precedent to imply that an automatic assignment of a copyright while retaining the right of renewal actually meant that the commissioned material is in fact work made for hire i.e. the property of the commissioning party, if it was made at the "instance and expense" of the commissioning party. Relying on its decision in Picture Music, the Court erroneously continued with this new analysis in a string of cases, thus entrenching the doctrine of instance and expense as the law.

The 2nd Circuit Thwarts The Supreme Court

The United States Supreme Court, in Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), criticized the Second Circuit's use of the instance and expense test to grant copyrights for work created by an independent contractor to a commissioning party. In dicta, the Court made the following three points: First, the instance and expense analysis gave a different meaning to the plain language of the word "employer" in the 1909 Act, which by its established common law meaning excludes independent contractor. Second, the factors used in the instance and expense test were vague, subjective and overbroad. Third, the instance and expense test was contrary to decades of established precedent in the Second Circuit. (The Petition filed by the Kirby Estate urging the Supreme Court to hear the Kirby case largely mirrored all three of these points.)

The Second Circuit, for its part, is well aware of its re-interpretation of the law and has admitted as much. In Hogarth, the Court engaged in a thorough discussion of the history of work for hire case law and conceded that Picture Music misconstrued Yardley and Brattleboro to re-interpret established precedent. Furthermore, the Court acknowledged the Supreme Court's criticisms, and that the "content of a Supreme Court opinion . . . permits us to reject a precedent of this Court without the need for in banc reconsideration." Still, in what can only be described as a bizarre decision, the Court declined to overrule Picture Music and other subsequent cases and dismissed the Supreme Court's criticisms as non-binding dictum and "an insufficient basis to warrant a panel's disregard of two clear holdings of this Court".

A Hero Must Rise

The Kirby case may have been settled, but we will almost certainly see the issue of an independent contractor's work for hire status challenged again. As those following news about the termination right provision are aware, the music industry has been deluged with Termination Notices in the past two years and issues like the exact nature of work for hire are almost inevitably lurking in the background. (See the EASL Blog entry on the topic

According to the Amici Curiae Brief by the Screen Actors Guild and other unions representing creative artists, over 200 of the songs on Rolling Stone's top 500 list of all time were released before 1978. As record labels' copyrights terms on those songs expire, the Brief argued, the artists who sold their rights will be unable to reclaim them under the so-called instance and expense test.

There is no way to know for sure if the Supreme Court might have picked up the Kirby case for review; but in the months leading up to scheduled conference on September 29th, there were growing signs it might indeed have done so. The Petition for Certiorari had received significant support from various artist organizations and unions and five Amicus Curiae briefs were filed by influential individuals, urging the Supreme Court to hear the case. Marvel, for its part, was sufficiently concerned by this possibility that it settled a case it had just won on Summary Judgment at the Second Circuit Court of Appeals.

For now, we must wait for another copyright crusader to bring the evil instance and expense doctrine to justice. However one can be sure, with the termination rights for many works just now becoming ripe, we likely won't have to wait too long.

November 15, 2014

Amazon and Hachette Shake Hands on Distribution Deal; Hachette Authors No Longer in Limbo

The Author's Guild reported on Thursday, November 13th:

"This morning, after a nasty and very public corporate stalemate, Amazon and Hachette jointly announced they have come to terms. Their new multiyear contract will allow Hachette to set its own e-book prices, but that arrangement will be tempered by 'financial incentives' for Hachette to keep those prices low, according to the companies' joint statement."

More at

December 10, 2014

Oral Argument in Authors Guild v. Google, 13-4829-cv, U.S. Court of Appeals for the Second Circuit, December 3, 2014

By Robert J. Bernstein

Robert J. Bernstein practices law in New York City in The Law Office of Robert J. Bernstein. He is a frequent author and lecturer on copyright law and litigation, an Honorary Trustee and past President of the Copyright Society of the U.S.A., a member of the Copyright and Literary Property Committee of the New York City Bar Association, and formerly served as Chairman of the Copyright Law Committee of the American Intellectual Property Law Association and as a member of its Board of Directors. Mr. Bernstein has been co-author of the New York Law Journal bi-monthly "Copyright Law" column for 28 years.

For those of you who could not attend last Wednesday's oral argument in Authors Guild v. Google and do not want to await the transcript/CD, or who have neither the time nor inclination to read or listen to the recording of the 75 minute proceeding, here is a summary of how the argument unfolded in chronological order:

Disclaimer: Your author represents as co-counsel, along with fellow co-counsel Peter Jaszi and lead counsel Daniel F. Goldstein, the National Federation of the Blind and four print-disabled individuals (collectively, the "NFB") in the case of Authors Guild, et al. v. Hathitrust, et al., 902 F. Supp.2d 445 (S.D.N.Y. 2012), affirmed 755 F.3d 87 (2014) ("HathiTrust"). In HathiTrust, although Google was not a party and its liability/fair use was not adjudicated, the Second Circuit held that the digitization by Google of the entire contents of several major university libraries for the purpose of enabling university students and scholars to conduct research, in particular searching for books containing the searched terms without displaying any text from the books, constituted a transformative fair use. The NFB had intervened in the district court proceedings in order to obtain full access to the digitized collections for print-disabled students and scholars under both the fair use doctrine and the Americans with Disabilities Act ("ADA"). The Second Circuit rejected the argument that such full text reading of the digitized text was a transformative use, viewing reading as reading whether via print or digitized text-to-speech software. Nevertheless, applying general fair use principles, and relying in part on the U.S. Supreme Court discussion of fair use for blind individuals in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 455 n.40 (1984), as well as Congressional recognition in the ADA of the public policy benefits of equal access for those with disabilities, the Second Circuit held that the NFB uses constitute fair use. The Second Circuit remanded certain issues relating to preservation uses to the district court, where the case now resides. The remanded issues do not impact the Second Circuit holding with respect to the NFB.

Comment on Disclaimer: Your author recognizes, both as a lawyer and legal commentator, the obligations to disclose any connection that could reasonably be considered to influence the contents of a published writing. However, the readers should also keep in mind that, in this posting, the author will be attempting to report on the unfolding of the oral argument as it happened, in real time, without editorializing. The transcript/CD will appear in due course, so the readers will be able to judge for themselves whether my attempt to report objectively has succeeded.


The Panel: The Second Circuit panel hearing the appeal consisted of the Honorable José A. Cabranes, the Honorable Pierre N. Leval, and the Honorable Barrington D. Parker. Judge Cabranes, as the only active judge on the panel, would normally have presided, but as he was appearing via video from his chambers in Connecticut, the longest-serving senior appellate judge present, Judge Leval, presided. This may be viewed as fitting in view of the fact that Judge Leval introduced the concept of "transformative use" into the fair use lexicon in his 1990 Harvard Law Review article, "Toward A Fair Use Standard," 103 Harv. L. Rev. 1105, which the Supreme Court adopted four years later in its still-governing, but pre-digitization era, fair use decision in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

This same panel had also considered the earlier appeal of the class certification issue in Author's Guild v. Google (hereafter the case will be referred to as "Google," and non-italicized "Google" will refer to the defendant-appellee). In its Order remanding the case to the district court for a determination of the fair use defense, the panel, per curiam, directed the Clerk of the Court to assign any subsequent appeal of the case to the same panel. 721 F.3d 132 (2d Cir. 2013).

Two members of the panel, Judges Cabranes and Parker, were also members of the Second Circuit panel that decided HathiTrust, wherein, in an opinion by the Honorable Barrington D. Parker, the court held, inter alia, that the digitization of the entire contents of the university libraries for the purpose of search and without displaying any text constitutes a transformative fair use.

Prior Proceedings: The long-and-winding road leading to Courtroom 1703 of the Thurgood Marshall U.S. Courthouse is beyond the scope of this report. The only issue before the Court concerned the appeal of the grant of summary judgment to Google on its fair use defense. In his summary judgment opinion, the Honorable Denny Chin (who retained the case in the district court after his appointment to the Second Circuit) held that Google's digitization of the university libraries collections, and its own use of that corpus for purposes of enabling users of Google Books to search the database for books containing the searched terms (search function) and for reading "snippets" displayed on the Google Books website (display function), both constitute fair uses; and that Google's provision to the university libraries of copies of the digitized databases from each library's own collection, alleged by the Authors Guild to infringement the distribution right, also constitutes a fair use because it enabled the libraries to engage in the fair uses approved by the Second Circuit in Hathitrust. Google, ___ F.Supp.2d ___ , 2013 WL 6017130 (S.D.N.Y. Nov. 14, 2013).

Further Background: Readers interested in articles summarizing the decisions referred to above may find the following New York Law Journal (NYLJ) "Copyright Law" columns of interest: R. Bernstein and R. Clarida, "Fair Uses of Hathitrust Digital Library," June 18, 2014, p. 3; R. Bernstein and R. Clarida, "Google Granted Summary Judgment on Fair Use Defense," NYLJ, December 20, 2013, p.3; and D. Goldberg and R. Bernstein, "The Supreme Court Balances the Act," NYLJ, March 18, 1994, p. 3.


Judge Leval prefaced the proceedings by stating that due to the complexity and importance of the issues presented, the Court would disregard the 15-minute posted limits and instead allow each side 30 minutes, with the possibility of additional time if needed. As it turned out, the total time elapsed was close to 75 minutes. No other cases were on the docket at this 2:00 p.m. sitting.

The author will now report on the arguments, questions, comments and rebuttals as they unfolded chronologically. The names of the participants are boldfaced to indicate who is speaking. Quotation marks are only used when I am reasonably confident that I was able to capture the actual words in my notes Generally, but with many exceptions, each new paragraph starts when a different speaker enters the dialogue.

For Appellant the Authors Guild (Paul M. Smith, Jenner & Block, LLP [arguing]; and Edward R. Rosenthal, Frankfurt Kurnit Klein & Selz, PC):

Mr. Smith opened with the necessary acknowledgment that HathiTrust is the law of the Second Circuit, while reserving the right to challenge the holding in other circumstance (referring, sub silentio, to the possibility of a request for Supreme Court review). He then immediately introduced the reasons why the Authors Guild ("AG") contended that Google's uses were qualitatively different from those in HathiTrust, and why those differences mandated a holding of infringement rather than fair use. He stated that Google's uses are "quintessentially commercial," engaged in by a for-profit company to preserve its key asset - maximizing visits to its website in order to increase advertising revenues.

Judge Leval commented that, in his view, notwithstanding a distinction between commercial and noncommercial uses, classic holdings of fair use have involved commercial uses (that is, the user was at least significantly motivated by potential profit), and that he "would be surprised if [AG] win[s] on that basis."

Mr. Smith rejoined by stating that this case was different due to the enormity of the commercial use, leading Judge Leval to ask whether his proferred distinction was between "big profits" and "little profits," followed by this query: "If Google does not cause any harm" to the copyrighted works, what difference does it make how much profit it derives from the use?

Mr. Smith then turned to what he argued is the second determinative difference from the uses in HathiTrust: Google displays text (referred to as "snippets" to indicate their brevity), whereas no text was displayed in the libraries' uses. He stated that such displays harm an existing and emerging market to license books for digitization and related uses, which he characterized as "derivative uses" [referring to the copyright holder's exclusive right to create derivative works based on the copyrighted work]. Here, he cited a 1992 decision by then-district-court Judge Leval holding that photocopying of scientific articles by Texaco scientists was not a fair use. American Geophysical Union v. Texaco, Inc., 802 F.Supp. 1 (S.D.N.Y. 1992), aff'd, 60 F.3d 913 (2d Cir. 1994).

Judge Leval stated that he did not consider his opinion in Texaco to be of guidance here due to "big differences" between Texaco's and Google's uses, noting that, in Texaco, 80 in-house scientists made multiple copies of entire articles in order to have convenient access to them rather than purchasing additional journal subscriptions. In reply, Mr. Smith asserted that the test applied in Texaco - whether the use is one for which a license exists or is likely to emerge - is relevant to the emerging digitization marketplace.

Judge Leval responded that whether a market for the use is likely to emerge "is not a very useful test" with respect to transformative works because, no matter how transformative the use, someone at some price would be willing to license it to avoid the cost of litigation. Mr. Smith averred that a distinction should be made between uses that a copyright owner might never license, such as parody or criticism, and uses that the owner would be prepared to license for the right price, a proposition as to which Judge Leval asked if Mr. Smith had any case authority.

Mr. Smith also argued that it should be a policy decision for Congress whether "new derivative uses," which, in his view, include digitization, should be free of a license.

At this point, Judge Leval introduced two issues that he stated were of concern to him: (i) what limitations, if any, are there on what the libraries can do with the digitized collections provided to them by Google; and (ii) what vulnerabilities do libraries have to hacking and piracy? In this regard, Judge Leval asked: Even if we decide that Google's use is fair use, "if the upshot is the multiplication of copies and greater potential for hacking," how does that impact the analysis? He further asked whether this could be a particular concern with respect to "hot properties", such as a new Harry Potter book.

Rather than respond commenting immediately on these concerns, Mr. Smith initially directed his response to their predicate ("even if we decide Google's use is fair"). Thus, Mr. Smith argued that Google's use was not fair, inter alia, because, in providing copies of the digitized collections to the libraries, Google was using those copies as "currency" - a form of barter in lieu of monetary compensate in exchange for Google's access to and use of the books for digitization. Judge Leval stated that he "was not following" that point.

Mr. Smith than turned to another reason why he contends that Judge Leval's predicate ("assuming that we find fair use") to his stated concerns was faulty, arguing that in evaluating fair use, only the conduct and purpose of the initial user/defendant is relevant, but not those of downstream users or third parties (such as, in Mr. Smith's characterization, the libraries). For that reason, he contended, Google should not be entitled to rely on the fair use holding in HathiTrust to justify its own use.

Mr. Smith then addressed Judge Leval's stated concern about the vulnerability of digitized collections within library databases to hacking and piracy - arguing that in Google's agreement with the Stanford Library (which is not part of the consortium of university libraries constituting Hathitrust and was not a party in HathiTrust), students are not restricted from simultaneously reading entire texts online).

Judge Leval asked: "Is it Google's responsibility to be sure that Stanford's use is fair?" To which Mr. Smith replied: "Google assumed responsibility" for the library uses of the digital databases it provided to them. Judge Leval asked: "What do you mean?," and Mr. Smith responded: "If Google tries to ride on the libraries' uses," they should be responsible for the consequences.

Judge Parker then turned to a different issue, asking: "Are there any provisions in the documents that restrict the contours of what Google is doing? What keeps them from changing?"

Mr. Smith stated that nothing in the arrangements would prevent Google from expanding or otherwise changing its practices, and posited a multiplier effect: "What if everyone could do this? Isn't this a policy decision for Congress?"

Judge Leval observed that displaying 8 pages rather than snippets would be a different case, and Judge Parker posed his own rhetorical question: "You aren't seriously suggesting that we wait for Congress to Act?"

At which point Mr. Smith changed direction to focus on the "limited" remedies the AG was seeking. He articulated a bifurcated approach to Google's past and future conduct. He assured the court that AG was only seeking monetary damages for past alleged infringements, and was not requesting that the already existing database be undone. As to future digitization and related uses, AG seeks the imposition of a licensing requirement, but not injunctive relief.

Judge Leval then asked whether the present arrangements preclude digitization of a hot new book. Mr. Smith replied that most new books are already licensed in Google's Partners Program with publishers, which led Judge Leval to ask: "Are you saying that hot new books aren't part of the case?"]. Mr. Smith then clarified his position by responding that, "on the contrary," because not all publishers are part of Google's Partners Program and because authors can opt out of Google Books, many hot new books could be affected.

Judge Parker then asked: "What precisely is the mechanism" for an author to opt out? Mr. Smith stated that when an author opts out, the work is no longer displayed in snippets, but he understood that the work would still remain in the database, and may (he was not certain) still be available for search.

Mr. Smith then turned to AG's argument that the display of snippets itself causes harm, explaining, by way of example, that certain types of books are often referred to only for limited purposes and discrete information, and that snippet display could satisfy those readers' needs, resulting in the loss of a sale. Yet Judge Leval observed that dictionaries, for example, were excluded from snippet use. Mr. Smith rejoined by stating that other types of books, for example history books, may be used for short bits of information that could be obtained by viewing a series of snippets rather than purchase.

Mr. Smith then turned to an evidentiary point, contending that Judge Chin articulated no evidentiary basis for his rejection of the AG's argument that snippet displays cause market harm. [Questions of the proper allocation of burden of proof on this point were not addressed in any detail at the argument, but merely averted to].

Judge Cabranes posed a procedural question concerning the reasons why certain portions of the appendix were redacted. Mr. Smith referred to the protective order entered in the district court which required confidential treatment, but in response to further queries by Judge Cabranes and Leval, the parties agreed to advise the court whether there was any portion of the redacted materials which the parties still requested be redacted from any published opinion.

At this point, Google's counsel presented his case.

For the Appellee Google, (Seth P. Waxman, Wilmer Cutler, Pickering, Hale and Dorr LLP [arguing]; and Joseph C. Gratz, Durie, Tangri LLP):

Mr. Waxman commenced by enumerating what he characterized as three fundamental points: (i) Google's and the libraries' uses "quintessentially" promote progress in the arts in furtherance of copyright's constitutional purpose; (ii) all of these uses are products of a collaboration between Google and the libraries which allow each to engage in transformational uses that neither one could accomplish alone; and (iii) there is no evidence in the record of any market harm to authors.

Judge Leval immediately asked whether, even if there is no evidence of harm to any particular books, there is harm to a market for licensing digitization rights? In response, Mr. Waxman made two points: (i) HathiTrust, which is Second Circuit law, rejected that argument; and (ii) in any event, there is no evidence that any such market exists or is emerging.

Judge Leval then asked about record evidence of licensing digitization rights in Europe, to which Mr. Waxman replied: the European licenses grant the right to reproduce and display the entire book which is a materially different type of market.

Judge Parker asked how much Google has spent on the project, to which Mr. Waxman replied, over $120,000,000. In further colloquy it was stated that there is nothing in the record demonstrating the extent to which Google may have derived profits (direct or indirect) from the uses.

Judge Cabranes then asked a series of questions about the commerciality (or not) of the uses: "Is this only a charitable enterprise by Google? Is it solely designed for eleemosynary purposes?" "Is any part of the Google project for profit?" Judge Leval supplemented this inquiry by asking whether advertising is displayed in connection with the uses?

In response, Mr. Waxman noted that no ads are displayed on pages responding to search requests or on pages displaying snippets, and that Google makes no money from referring sales to third parties.

Judge Parker asked: "What keeps Google from changing the way it operates," such as by lengthening its display of text? Mr. Waxman replied that [presumably significant] changes would have to be evaluated separately under the fair use factors.

In further response, Mr. Waxman argued that if Google derives profit from the use, it would not distinguish this case from numerous fair use cases. He continued: "If Google didn't expect to make some return on this, it may never have engaged in this incredibly transformative use."

Judge Parker noted that in the class certification appeal, Google argued that fair use must be evaluated as to each individual book, but that on this appeal Google argues that fair use may be considered as to the entire corpus of digitized works, suggesting an apparent inconsistency between these two positions. Mr. Waxman replied that there was no inconsistency because in the class certification appeal Google did argue that the entire Google Book Project should be found to be fair use, but that, if the court did not conclude fair use as to the entire project, then questions of infringement would have to be evaluated one book at a time.

On the subject of the libraries' uses, Mr. Waxman noted that Google's agreements with each library required that any use by the library be consistent with copyright law. Judge Leval queried whether, even if the libraries complied with copyright law, weren't the digital copies stored on the libraries' databases vulnerable to hacking and the resulting infringing conduct of others?

In response, Mr. Waxman noted again that HathiTrust is Second Circuit law and that it determined that AG's security concerns did not make the uses unfair. Judge Leval stated that the finding in HathiTrust was merely that, on the record there, the possibility of a security breach was speculative.

Mr. Waxman replied that there is no evidence in the Google record to support AG's security risk argument. He asserted that there is no record of any instance of hacking into the libraries' digitized collections in the years since they were created. He further argued that there is good reason for a record devoid of hacking into the library corpus - digital copies of more recent and commercially popular books are already available on the Internet through, for example, Amazon. He asserted that, in contrast to Google's agreements with HathiTrust member libraries, the standard Amazon contract with publishers does not require Amazon to take security measures.

Judge Leval then asked: Are you saying that digital copies are more easily available elsewhere than from within the libraries' digital corpus? Mr. Waxman replied that, as a matter of policy, Google does not digitize books for search and snippet display until two years after their initial publication, which further reduces any possible substitutive effect.

Returning to a point raised earlier by Judge Parker, Judge Leval asked whether that policy could change? Mr. Waxman did not, at that point, address the possibility of change, but instead emphasized that the point of the Google Books is to allow users to find books, "and nothing else."

Judge Leval then asked: "Is the two-year blackout in the record as a characteristic that the court can base its fair use analysis on," and, if so, requested a record cite. Judge Leval later repeated this query, and Mr. Waxman undertook to reply "anon" (the archaic form of "soon").

Judge Leval then returned to his question regarding the impact of Google's agreement with Stanford, which contains no restrictions on the Stanford library's full text display of digital copies which could be read by students simultaneously. Mr. Waxman replied that under that agreement, Stanford is still obligated to only make such uses as are consistent with copyright law, and, in any event, even if Stanford were to breach its agreement with Google, that would not render Google's own use unfair.

Mr. Waxman then focused on the "copy-shop" cases relied on by AG, in which commercial copy shops created and sold coursepacks to students. He argued that this use was the polar opposite of Google's transformative use because the copy shops packaged and sold the coursepacks to students as substitutes for their purchase.

Judge Cabranes then stated: "Let us follow the dollars (even if ultimately it may not matter)". Toward that end, he engaged in an extended colloquy with Mr. Waxman that ended with this stipulation: Mr. Waxman: "I will stipulate, arguendo, that Google had [has] a profit motive because [the Google Books Project] would bring more eyes to Google." However, he qualified this stipulation in two ways, stating that (i) there is no evidence in the record that Google provided digital copies to the libraries to avoid paying for access to the libraries' hard copies; and (ii) that, on its most fundamental level, Google and the libraries were engaged in a collaborative project designed to make millions of books available for search by the public. With respect to the latter point, Mr. Waxman quoted from the agreement between Google and the University of Michigan which is prefaced with a statement of their joint purpose.

The Authors Guild Rebuttal (by Mr. Smith):

In a brief rebuttal argument, Mr. Smith made the following points:

(i) this case was decided by the district court on summary judgment, and therefore a holding of fair use cannot be based on any genuinely disputed material facts;

(ii) Google has the burden of proof on its fair use defense, and therefore, where proof is absent or insufficient, inferences must be taken in AG's favor;

(iii) the court should weigh in the balance the allegedly anti-competitive conduct of Google in allegedly using the digitization of library collections to maintain and increase its dominant market position in book digitization vis-à-vis Amazon and others; and

(iv) it would be inappropriate to impose on AG an impossible burden of proving that the display of particular snippets led to lost sales of particular books.

At this point in the rebuttal, Judge Cabranes interjected with this question: "What is the decree of court that you are seeking from us?" He observed that, in its brief, AG's requests broad relief, but that, in the oral argument, it appears that AG is seeking less.

In response, Mr. Smith repeated the remedies he outlined during his main argument, while elaborating by citation to the Supreme Court opinion in eBay, Inc. v. Mercexhange, L.L.C., 547 U.S. 388 (2006). [There, the court held that before issuing injunctive relief, a court must make findings of fact on four separate factors, rather than merely apply presumptions. For an excellent discussion of the impact of eBay in fair use cases, see R. Dannay, "Copyright Injunctions and Fair Use: Enter eBay -- Four-Factor Fatigue or Four-Factor Freedom?" 37th Annual Brace Memorial Lecture, Journal of the Copyright Society of the U.S.A.,Vol. 55, No. 4 (Summer 2008), p. 449-468)].

Summarizing, Mr. Smith stated that in light of (i) eBay; (ii) the passage of time; and (iii) the value of the database, "we do not request an injunction but monetization and licensing for future scanning."

Judge Cabranes then asked: "Do you think the case could be resolved by a sum certain?" Mr. Smith replied; "Yes," suggesting that the numbers could be worked out with the aid of expert testimony and computer software, and proffering the example of the recent settlement between Viacom, et al. and YouTube, in which he represented the plaintiffs against Google's YouTube subsidiary.

Judge Cabranes asked whether discovery is over, to which Mr. Smith replied "yes."

As a final point, Mr. Smith revisited the alleged risk of a security breach, citing by way of example the massive hacking of the JSTOR database of scholarly articles and journals by a proponent of the "research-must-be-free" point of view.

Judge Leval then declared the case submitted for resolution by the panel and adjourned the proceedings.

April 19, 2016

Google Books Update

The Supreme Court denied cert in the Google Book case.

Authors Guild response:

March 30, 2017

Horizon Comics Productions, Inc. v. Marvel Entertainment, LLC et al

By Mike Steger

In this case, brought by Horizon Comics, Horizon claims that the armored suits used in Marvel's "Iron Man" and "Avengers" movies infringe on Horizon's copyrights in armor displayed in its "Radix" comic book series. On Marvel's motion to dismiss the complaint, the court ruled that (1) issues of fact exist as to similarities between the armor used in a promotional poster for "Iron Man 3" and promotional art for the "Radix" series, and (2) the mechanized body armor in the films was not substantially similar to that in the "Radix" series.


"Warm Kitty"

In Ellen Newlin Chase and Margaret Chase Perry v. Warner Bros. Entertainment, Inc., et al, Judge Buchwald of the Southern District dismissed the copyright action brought by daughters of a poet for failure to state a claim against "The Big Bang Theory" for the song "Warm Kitty".


About Literary Works

This page contains an archive of all entries posted to The Entertainment, Arts and Sports Law Blog in the Literary Works category. They are listed from oldest to newest.

Fine Arts is the previous category.

Many more can be found on the main index page or by looking through the archives.