Intellectual Property Law

Death Knell for Google Books Settlement?

By Tim Armstrong, Derek Bambauer, and William McGeveran.

The class action lawsuit against the Google Books program has receded from its former prominence in news reports, but there has still been a lot of activity. The parties retreated into seclusion to negotiate a settlement last fall and then, faced with objections from the Department of Justice, negotiated some more and reached a new “Amended Settlement Agreement,” or ASA. (The Public Index at New York Law School is still the best online source for all the background on Google Books issues.)

Yesterday the Justice Department chimed in again (see news reports here and here), and it still does not like the settlement. In its court filing, the Department succinctly expresses its objections:

Although the United States believes the parties have approached this effort in good faith and the ASA is more circumscribed in its sweep than the original Proposed Settlement, the ASA suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation. As a consequence, the ASA purports to grant legal rights that are difficult to square with the core principle of the Copyright Act that copyright owners generally control whether and how to exploit their works during the term of copyright. Those rights, in turn, confer significant and possibly anticompetitive advantages on a single entity ? Google.

That said, the DOJ is careful to add that the parties are trying hard, that the problem they want to solve is real and important, and that DOJ “is committed to working constructively with all stakeholders on the scope and content of an appropriate settlement of this matter.”

The flaws DOJ identifies in the ASA, however, are so fundamental that I highly doubt the settlement can be preserved. New York Law School’s James Grimmelmann, who has been following this case as closely as anyone in the legal academy, essentially agrees in his blog post about the DOJ filing: “These issues will not be resolved with quick patches, even if the parties were in the mood to revise and resubmit a second time.”

Since I teach civil procedure (including the rules for class actions) as well as intellectual property, I’ve been focused a lot on the procedural problem identified by DOJ. Class actions can be great mechanisms for resolving complicated disputes where the number of individual parties who might be interested is too large to get them all together. But they can be abused if the interests of absent parties are not respected. Pam Samuelson has done a great public service in presenting a host of reasons why the settlement may be contrary to the interests of some authors it purports to protect, particularly academics (including a forthcoming symposium article in the Minnesota Law Review!). DOJ also points out many ways in which the ASA tries to route around the existing copyright regime.

The class action mechanism can’t be used to effectively rewrite the copyright statute (not to mention some antitrust law too), but that’s what the ASA undertakes. Even if the resulting proposal were good policy — and in some respects it isn’t — this is the wrong way to enact that policy. By pointing this out, DOJ’s letter may sound the death knell for the effort.

Maybe if the judge agrees and rejects the settlement later this month, the parties can turn their attention to Capitol Hill. Their combined efforts there might overcome the inertia that has stalled previous efforts to fix the “orphan works” problem and other barriers to the dream of a widely available and searchable digital library.

Full post as published by Info/Law on February 05, 2010 (boomark / email).