[A2k] My Summary of Judge Chin Decision re Google

Manon Ress manon.ress at keionline.org
Thu Mar 24 05:40:45 PDT 2011

On March 22, 2011, Judge Chin made a decision on the Settlement
Agreement between Google and the Authors Guild.  The question
presented to him was "whether the ASA [the Amended Settlement
Agreement] is fair, adequate, and reasonable".  He concluded that it
is not.  He decided that while it would have been great to have a
universal digital library, "the ASA would simply go too far".

Judge Chin continues his introduction by stating that "ASA would give
a significant advantage" to Google "over competitors" and worse maybe
it would be "rewarding it for engaging in wholesale copying of
copyrighted works without permission." For this reasons and others
"more fully explained" in the 48 pages decision, the Google settlement
is for now denied.

1) Background and prior proceedings (pp2-5):

2004.  Google announces that with an agreement with major research
libraries it has scanned more than 12 million books and delivered to
some libraries an electronic database of books.  Users can do online
search and find "snippets".  Everyone is super excited.  Everyone can
get access, conversion into accessible formats for people with
disabilities will be easier... and older books that are out of print
can be found!  But Gooogle had reversed the default copyright
arrangement--Google did not ask for permission-- and shifted the
burden of asserting their rights to the rights holders.

2005. Some authors and publishers brought a class action charging
Google for copyright infringement.  They asked for damages and
injunctive relief.  Google's defence in faire use (17 U.S.C. 107)

2008.  Proposed settlement approved but triggered mass objections.

2) The ASA (pp5-10)

The ASA is 166 pages long (and with attachments).  It includes 162
Definitions.  I am summarising his summary:

The Class includes all persons (and heirs, successors and assigns) who
as of January 5, 2009 owns a US copyright interest in one or more
books (incl. foreword, prologue or essay).  The Publishers are a

Under the ASA Google is authorized to continue digitization, sell
subscription to database, sell online access to individual books, sell
advertising and other uses.

The rights are not exclusive and rightholders retain the rights to
authorize others.

Google will pay 63% of revenues from these uses to rightholders.  The
distribution will be done "in accordance with a Plan of Allocation and
Author Publisher Procedures"p.7

The ASA will establish a Book Rights Registry that will maintain a
database of Rightsholders and administer distribution of revevenues

Google will fund the initial operations of the Registry with $34.5 million.

The Registry Board consist of at least four Author sub-class and four
Publisher sub-class.

The ASA will also create an independent Unclaimed Works Fiduciary to
make decisions on pricing and classification of these unclaimed works.

Rightsholders can exclude their books and remove them from the
database.  Google is to use "reasonable efforts" to stop any
digitization when a book is removed.

For works digitized before May 5, 2009 Google will pay $45 million
into a settlement Fund to make cash payment to Rightsholders.  At
least $60 per principal work, $15 for entire insert and $5 for partial
insert for which there has been a valid claim on or before and agreed
upon deadline.  Google may have to pay more or less than $45 million
and if less will distribute up to $300 per principal work, $75 for
insert and $25 for partial insert.

Moving forward, Google will pay to the Registry on behalf of
Rightholders %70 of net revenues for sale.  Revenue splits can be
renegotiated by individuals.

The Registry must use "commercially reasonable efforts" to locate
rightsholders.  Funds unclaimed after five years may be used in part
to cover the expense of locating owners of unclaimed works.  After 10
years unclaimed funds may be distributed to literary-based charity.

The ASA distinguishes between in-print and out-of-print books.  Google
may not display in-print books at all unless it receives express
authorization.  Google has the right to make a non-display uses of
in-print books.  Google may display ou-of-print books without prior
authorization but must stop if the rightsholders directs Google to do

The Objections (pp 10- 13)
500 submissions were filed.  The majority objected.  6800 class
members opted out.  The major objections are as follows:
1. Inadequacy of class notice.  Science Fiction and Fantasy Writers of
America, the American Society of Journalists and Authors and some
foreign publishers and authors objected.

2. Inadequacy of class representation.  Interests of academic authors,
insert authors and others are at odds with the represented plaintiffs.
3. Scope of relief under rule 23:  Some as well as the US argue that
the ASA will “improperly use rule 23” and that the ASA would  “release
claims regarding the display and sale of entire books” but the case
should really be about scanning books and displaying snippets before
the court.
4. Amazon and Microsoft object to the ASA on the grounds that it would
violate copyright law. Judicial approval of the ASA would infringe on
Congress authority over copyright law.  Furthermore they contend that
provisions re orphan works would result in transfer of copyrights and
would be a violation of the copyright Act since works would be
licensed without the owners' consent.
5. Antitrust concerns. Certain pricing mechanisms would violate the
Sherman Act.  The ASA would grant Google a monopoly over digital books
and orphan books.  It would re enforce Google's dominant position in
the online search business.
6. Privacy concerns. CDT and EPIC contend that Google could amass a
huge collection of information including private information about
users and no adequate protection regarding uses of such information.
7. International law concerns.  The ASA would violate international
law by requiring foreign rightsholders to “determine whether they are
covered and therefore must “op out,”” and would also favor
rightsholders from certain nations.
The parties have submitted detailed responses to all the objections.

Discussion (pp14-45)
a. Applicable law
Under Rule 23(e) a settlement of a class action requires approval of
the court to be binding.  It must determine if it is “fair, adequate,
and reasonable and not a product of collusion.”  Rule 23 (e) does not
set forth the factors a court is to consider.  Traditionally, courts
consider the “Grinnell factors”:
the complexity, expense and duration of the litigation
the reaction of the classification the stage of the proceedings and
amount of discovery
the liability risks
the risks of maintaining a class action  through trial
the ability of defendants to withstand greater judgement
the range of reasonableness of the settlement fund.

B. Application
“As a preliminary matter, I conclude that most of the Grinnell factors
favor approval of the settlement” writes Judge Chin but still two
factors weigh against approval:  the reaction of the class and
Google's ability to withstand judgment.   Since there is no risk that
a judgement would render Google insolvent, it is not an issue.    Very
important to the Judge is the “number and vociferousness of the

Regarding the 7 objections:
1) Adequacy of notice:  The Judge was satisfied that the class
received adequate notice
2) Adequacy of class representation:  the Judge is confident that the
representation was qualified and experienced.  But there is a
substantial question as to the existence of “antagosnistic interest
between Google and some members of the class.
3) Scope of relief under Rule 23:  there are two parts.  The first is
a settlement for past conduct and would release Google from liability
for past copyright infringement.  The second would transfer to Google
some rights in exchange for future arrangements and would release
Google and others for “future” acts. This part exceed what the court
may permit under Rule 23.

While the Judge was persuaded that the parties were acting in good
faith to use this class action to create an effective and beneficial
market place for digital books, he was troubled.

For the Jduge, the establishment of a mechanism for exploiting
unclaimed books is a matter more suited for Congress than the court.
The orphan books “guardianship” should be decided by Congress and not
by private and self interested parties.

Secondly, “the ASA would release claims well beyond those contemplated
by the pleadings.”  This was brought to challenge Google's use of
snippets constituted copyright infringement.

The interests of class members.  At least some class members have not
been adequately represented.  Academics (see Samuelson Letter 3) for
example have interests at odds with the Authors Guild and the
Publishers.  Same reasoning for the rightsholders who do not come
forward to register.

The Judge comes back at length to the most important copyright
concerns and states that it is Congress' power to make decision on
copyright matters.  (pp30-36).

The US, Amazon and Microsoft among others also raised a number  of
antitrust concerns presented by the ASA.  Since only Google has copied
million of books without permission, “The ASA would give Google a de
facto monopoly over unclaimed works.”

The Judge recognizes that the privacy concerns expressed by Consumer
Watchdog, and others are “real” but he does not “believe that they are
a basis in themselves to reject the proposed settlement.”  Certain
additional “privacy protections” could be incorporated.

The last concern is about international law.  While Google narrowed
down the non us works to those affirmatively registered in Washington
DC or published in Canada, the UK or Australia on or before January 5,
2009, foreign rightsholders remained concerned.  Many are registered
to ensure coverage under US law and there were many objections, mostly
from France and Germany but also Austria, Belgium, India, Israel,
Italy, Japan, New Zealand, Spain, Sweden, Switzerland and the UK.
Many are concerned that the ASA would violate international law
including the Berne Convention.   The Judge recognized that he did not
need to decide whether the ASA would violate international law but it
is significant that foreign authors raised the issue.  Certain foreign
objectors also mentioned that the problem of orphan works is a global
issue and that there are now national laws being elaborated in many
countries.  Again, for the Judge, this is thus best left tot Congress.

Conclusion (pp45-46)
Concerns raised in the objections would be ameliorated if the ASA were
converted from an opt-out to an opt-in (see Internet Archives).  The
ASA is denied without prejudice to renewal if there is a revised
settlement agreement.
Status conference New York 4:30 April 25, 2011.

Manon Anne Ress
Knowledge Ecology International
1621 Connecticut Ave, NW, Suite 500
Washington, DC 20009 USA
manon.ress at keionline.org

More information about the A2k mailing list