The amended Google settlement submitted to the court on November 13 and given preliminary approval last Thursday by Judge Denny Chin dramatically scales back the number of titles covered by the agreement, broadens access to the scanned database of titles, and creates a more powerful advocate for dealing with unclaimed works. By limiting the settlement to the U.S., U.K., Australia, Canada, and books registered with the U.S. Copyright Office, about 95% of foreign-language works have been removed from the deal, Authors Guild executive director Paul Aiken estimated in a conference call discussing the revised agreement. Under the new agreement, Google has also officially put in writing a verbal offer it made in September to let any retailer sell consumer online access to the out-of-print and unclaimed works included in Google's database. Resellers will receive a majority of Google's portion of the sale (which remains 37% with rights holders getting 67%). A completely new feature in the revised agreement is the appointment of an independent fiduciary who will have the sole responsibility for unclaimed works. The fiduciary, who will be appointed by the board of the Book Rights Registry with the approval of the court, will oversee deals and direct the search for rights holders of unclaimed works. To fund searches, up to 25% of the revenue generated from unclaimed works, after five years, will be used to locate rights holders. If works remain unclaimed after 10 years, funds, with the permission of the court, will be donated to a literary-related charity.
To no one's surprise, the revised settlement didn't satisfy all critics. Bertelsmann co-chairman Richard Sarnoff noted the parties took into account suggestions and criticism from many sources, including the Department of Justice, and incorporated recommendations where they could. The amended settlement, he added, addresses many of the concerns of the DoJ.
The heart of much of the criticism is that the deal gives too much control over orphan and unclaimed works to Google. Allowing other retailers to sell access to the database doesn't alleviate their concerns about Google's power. All the retailers are doing is using their own branded stores to sell a Google service, argues James Grimmelmann, a professor at New York Law School. “Google provides the servers, delivers the books, will set most of the terms—and takes a cut. It will control the platform and the conditions under which the others do business. Google gets the license; everyone is—as the settlement calls them—a 'reseller.' They're living under Google's umbrella, not competing with it.” (For Grimmelmann's take on the entire agreement, see page 20.)
Proponents believe there are enough safeguards in place to prevent Google from having a monopoly over orphaned works. One of the revisions removes the so-called “most favored nation” clause, which would have prevented the Book Rights Registry from making licensing deals with others on terms more favorable than deals with Google. With its removal, the BRR can do deals with any parties on any terms it wants. The revised agreement also limits additional revenue models—besides the institutional subscription model—to three: print-on-demand, digital downloads, and consumer subscription. The limitations were put in place to remove concerns that Google could become involved with the creation of derivative works from the database, and to prevent Google from exploiting the database by using a technology not yet invented.
Judge Chin has set January 28 as the deadline for objections on the revised portions of the agreement to be submitted; a final fairness hearing is scheduled for February 18.
