Terms of Digital Book Deal With Google Revised; New York Times, 11/14/09

Brad Stone and Miguel Helft, New York Times; Terms of Digital Book Deal With Google Revised:

"Google and groups representing book publishers and authors filed a modified version of their controversial books settlement with a federal court on Friday. The changes would pave the way for other companies to license Google’s vast digital collection of copyrighted out-of-print books, and might resolve Google’s conflicts with European governments.

The settlement, for a 2005 lawsuit over Google’s ambitious plan to digitize books from major American libraries, outlined a plan to create a comprehensive database of in-print and out-of-print works. But the original agreement, primarily between Google, the Authors Guild and the Association of American Publishers, drew much criticism.

The Justice Department and others said Google was potentially violating copyright law, setting itself up to unfairly control access to electronic versions of older books and depriving authors and their heirs of proper compensation.

The revisions to the settlement primarily address the handling of so-called orphan works, the millions of books whose rights holders are unknown or cannot be found. The changes call for the appointment of an independent fiduciary, or trustee, who will be solely responsible for decisions regarding orphan works.

The trustee, with Congressional approval, can grant licenses to other companies who also want to sell these books, and will oversee the pool of unclaimed funds that they generate. If the money goes unclaimed for 10 years, according to the revised settlement, it will go to philanthropy and to an effort to locate rights holders. In the original settlement, unclaimed funds reverted to known rights holders after five years.

The changes also restrict the Google catalog to books published in the United States, Britain, Australia or Canada. That move is intended to resolve objections from the French and German governments, which complained that the settlement did not abide by copyright law in those countries.

The revised settlement could make it easier for other companies to compete with Google in offering their own digitized versions of older library books because it drops a provision that was widely interpreted as ensuring that no other company could get a better deal with authors and publishers than the one Google had struck.

“We’re disappointed that we won’t be able to provide access to as many books from as many countries through the settlement as a result of our modifications, but we look forward to continuing to work with rightsholders from around the world to fulfill our longstanding mission of increasing access to all the world’s books,” the engineering director for Google Book Search, Dan Clancy, wrote in a blog post on the company’s Web site.

In the next week, Judge Denny Chin of the United States District Court for the Southern District of New York is expected to set a date for a fairness hearing, where arguments from both sides will be heard about whether or not to approve the settlement.

The changes have not placated all opponents of the original settlement. In a blog post on Friday night, the Open Book Alliance, a coalition whose members include Yahoo, Microsoft and Amazon, referred to the changes as a “sleight of hand” and said they did not address the “fundamental flaws” addressed by critics.

“This settlement remains a set-piece designed to serve the private commercial interests of Google and its partners,” wrote Peter Brantley, co-founder of the alliance.

But the parties are hoping they will placate the concerns raised by the Justice Department, which in September asked a federal judge to reject the original $125 million agreement. While the decision on whether to approve the deal will be in the hands of Judge Chin, the Justice Department’s opinion is an important factor.

Gina Talamona, a spokeswoman for the Justice Department, said that the department would review the filing, and that its investigation into possible anticompetitive practices involving the rights to digital books was continuing.

Google and its partners had hailed the original agreement, signed in October 2008, as a public good. They said it would allow Google to create an immense digital library that would expand access to millions of out-of-print books, while creating new ways for authors and publishers to profit from digital versions of their works.

Google’s library would be searchable online, and users would have free access to 20 percent of the text in each book. Google would also sell subscriptions to the entire collection to universities and other institutions. Every public library in the United States would be able to offer its patrons free access to the full collection at one terminal. Users would be able to buy access to full texts at home. Google, authors and publishers would split all revenue generated through the system.

As part of the settlement, Google would pay to establish a Books Rights Registry, to be run by representatives of authors and publishers, that would administer payments.

But earlier this year, academics, legal scholars and some librarians expressed concern that the settlement would grant Google a virtual monopoly over orphan works, making it nearly impossible for anyone else to build a comprehensive digital library. Some librarians feared that without competition, Google would be free to raise prices arbitrarily.

Other critics said the agreement turned copyright law on its head by granting Google the license to profit from works unless rights holders objected. Some argued that orphan works authors and foreign authors were not properly represented by the Authors Guild. The proposed settlement prompted several hundred filings with the court, the vast majority opposing all or parts of the deal.

In a Sept. 18 filling, the Justice Department echoed many of the concerns. While saying that the settlement provided many benefits, it urged Judge Chin to reject it, saying it raised antitrust, class-action and copyright issues. But the Justice Department also encouraged the parties to work to modify the agreement to salvage its benefits and overcome its problems.

The Justice Department filing prompted the parties to withdraw the original agreement and revise it."

http://www.nytimes.com/2009/11/14/technology/internet/14books.html?_r=1&hp