Many thanks to Cristina Mariottini, Senior Research Fellow, Max Planck Institute Luxembourg
After eight years of intense litigation, on November 14th, 2013 the U.S. District Court for the Southern District of New York granted Google’s motion to dismiss The Authors Guild, Inc., et al. v. Google Inc., also known as the Google Book Search Case. This litigation, which captured for such a long time the attention of publishers, authors, libraries and internet users, quite interestingly included in its different stages unusual procedural passages such as the court’s rejection of an amended settlement agreement and the uncertification of a class, and eventually it ended with a rather surprising departure from the SDNY’s earlier approach in this case to “fair use” in copyright.
I. Judicial History
In September 2005, the Authors Guild filed a class action lawsuit in the Southern District of New York against Google over Google’s scanning of over 20 million library books from several research libraries without the prior authorization of rightsholders. The following month, the Association of American Publishers filed another lawsuit against Google for copyright infringement, seeking injunctive relief. Google responded that its use was a “fair use” because they were only showing “snippets” for books where they did not have permission from a rightsholder. In the spring of 2006 the parties began settlement negotiations, and two years later, in October 2008, Google announced an agreement to pay $125 million to settle the lawsuit. The settlement agreement also included licensing provisions, allowing Google to sell personal and institutional subscriptions to its database of books. However, in November 2009, after the Department of Justice filed a brief suggesting that the initial agreement may violate U.S. anti-trust laws (in fact, as the Department of Justice observed, it “[gives] Google control over the digitizing of virtually all books covered by copyright in the United States”), the parties filed an Amended Settlement Agreement (ASA). Among the changes it encompassed, the ASA limited the scope to foreign books that are registered with the U.S. Copyright Office or published in the UK, Canada, or Australia; it granted the rightsholder the ability to renegotiate the revenue share and provided Google with added flexibility in discounting; and it created a fiduciary to hold payments due to orphan works: if the rightsholder was never ascertained, the funds would be distributed cy-près instead of redistributed among rightsholders.
However, severe criticism was raised against the ASA by authors, publishers and other stakeholders according to which, in spite of these “improvements”, the ASA continued to impose a de facto compulsory license with respect to worldwide digital book copyrights under the guise of an intellectual property class action. Such worldwide coverage was the result of the fact that – regardless of the wording in the agreement – the ASA was not simply limited to authors and publishers in the United States, Canada, the United Kingdom and Australia but, rather, it also extended to international authors who registered with the U.S. Copyright Office (in this regard cf. the Memorandum of law in opposition to the Amended Settlement Agreement on behalf of the Federal Republic of Germany of January 28th, 2010). Subsequently, on March 22nd, 2011 supervising Judge Chin issued a ruling rejecting the settlement, stating that the ASA was “an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court” and that it would “release Google (and others) from liability for certain future acts”. Eventually, Judge Chin urged that the settlement be revised from “opt-out” to “opt-in”. Despite a series of status conferences that were held throughout 2011, an amended “opt-in” settlement was not reached, and the ASA was simply rejected. In 2012 Judge Chin recertified the class represented by the Authors Guild, and the case was scheduled to go to court by July 2013. However, in July 2013, the Second Circuit overruled the class certification and remanded the case to the District Court for consideration of the “fair use” issues. In holding that it “believe[d] 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” the appellate court provided clear indication that it deemed that Google’s “fair use” defense was grounded and that, once the lower court addressed the Author Guild’s claim from a “fair use” perspective, it would find that no class needed to be certified as there was no claim to be brought.
II. Upholding the “Fair Use” Doctrine
The “fair use” doctrine is codified in § 107 of the Copyright Act (17 U.S.C. § 107), which provides that in order to assess the fair use of a copyrighted work certain factors must be considered, including:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(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) the effect of the use upon the potential market for or value of the copyrighted work.
Judge Chin’s analysis of the four factors in the Google Book Search decision may be summarized as follows:
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