A Time for Action

A recent news story about a proposed settlement of a copyright infringement case involving Google in the United States has been creating concern with copyright holders around the world. Everyone relying on copyright in books or other print publications for their livelihood must take the time to consider the settlement carefully and take action by 4 September 2009 or risk loosing a great deal.

The settlement proposal concerns an American Federal Court action brought against Google for breaching the copyright owned by millions of authors and publishers around the world.  Since 2004 Google has been scanning and digitising the text of millions of in-print and out-of-print books on behalf of a number of American libraries.  Google has been displaying up to 20% of each of these books online to the public, and is looking at offering a subscription service to the public in order to view the entire text of the books it has digitised.

The issue of whether Google has the right to digitise and display copyrighted works without first obtaining the copyright holder's permission has not been ruled on by the court because a settlement has been reached between Google and the plaintiffs. The extraordinary effect of the settlement however, is that copyright holders outside the USA will also be bound by it unless they take the formal step of electing to opt-out.

Copyright holders around the world are in shock that copyright in their works can be appropriated by Google without their permission, and that they will be bound to the terms of a settlement in which they had no say.  It seems that by cleverly inducing a class action against them Google has manoeuvred the situation so that it can use the rules on class actions in the United States to get a settlement with all copyright owners regardless of where they are located.

This is due to the fact that under the Berne Convention anyone located in a convention country outside the USA automatically receives USA copyright for their works in addition to copyright in their own countries, and it is this USA copyright which is the subject of this settlement.

Essentially this leaves all copyright holders outside the USA who are not a party to the case three options which they must consider and act on by 4 September 2009 in relation to their USA copyright:

1. Opt-in by submitting a claim form.
2. Opt-out by notifying Google.
3. Do nothing.

Opting in will join the copyright holder to the case making them subject to the terms of the settlement. This includes giving them the ability to have a say on how Google will deal with their work in the future and also give them with the right to request Google to restrict different types of access to their copyrighted works.  If the copyright holder chooses to allow Google full use of their work under the settlement they will be entitled to 63% of the proceeds of any sale of their work that Google makes.

This option may be beneficial to many copyright holders by offering them a new income stream not previously available to them. However, it will also give Google an exclusive license to sell digital versions of their work in the United States, effectively giving Google a monopoly over the online sale of digital copies of the work.

If a copyright holder opts-in they will not be able to force Google to completely remove any of their copyrighted works from the database.  Even if a copyright holder requests Google to restrict access to their work to the maximum degree afforded by the settlement, their work will still be searchable on the Google database, and extracts of the work may still be displayed.  If a copyright holder does not want Google to hold a digital copy of their work, or if they do not want Google to digitise any of their works in the future the only option the copyright holder has is to opt-out of the settlement.

Opting-out of the settlement requires a copyright holder to notify Google that they do not wish to be included in the settlement.  This is the only way a copyright holder can maintain the right to bring a lawsuit against Google for breach of copyright in a separate case.  It is also the only way to require Google to delete all digitised copies of a work from their database, and require Google not to digitise future works.

It is likely that if the court approves of the settlement a new class action will be filed against Google by a number of the copyright holders who opted out.

The third option open to a copyright holder is to do nothing.  This option gives a copyright holder the least power to determine how their work will be dealt with.  If a copyright holder chooses to do nothing their works will be dealt with by Google in the same manner as if they had opted in except that Google will be afforded the maximum amount of use of the works that they are entitled to under the settlement. This includes making the full work available to be displayed, and may in the future include making the work downloadable as a PDF. A copyright holder will still be entitled to 63% of the proceeds of any sale of their work.

A copyright holder who does not seek to either opt in or out can still claim their work by notifying the Registry (which is the independent copyright holder's collective representative established to deal with Google under the settlement) and advising the Registry on how they wish their work to be dealt with at any time. However they will no longer have any right to bring a claim against Google for any of the claims made against Google covered by the settlement.

This settlement effectively allows Google to simply take all the copyrighted books in the world and make them available for their commercial gain. Not only that, it also raises deeper territorial issues as Google will only gain the right to display the USA copyright in the material.  It does not affect the copyright in the material granted by other jurisdictions.  This then leads to the interesting question of what will the effect be in New Zealand.  If a New Zealand work is subject to the settlement and a New Zealand user of the Google service accesses it in New Zealand? Which territorial copyright applies to the work being displayed?

There is much to be considered in a short amount of time. All copyright holders need to consider how they wish their works to be dealt with very carefully and act on their decision, either to opt in or out before September 4 2009.

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John Ferner
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Last updated: 28 August 2009

The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.