In 2005, The Authors Guild brought a class action law suit and five large publishers sued Google for its systematic reproduction, without permission, of millions of copyrighted books in their entirety in the Southern District of New York. Copies of the books scanned by Google were obtained from research and other libraries. In return, each participating library received a digital copy of the books it allowed to be digitized. Google created an electronically searchable database of the digital files and one could search that database, which only allowed the display of “snippets,” several lines of texts of works still under copyright protection. Google’s stated defense was “fair use.”
In late October, 2008, a settlement agreement was announced and on November 17, 2008 provisionally approved. The agreement was broad and extremely complex. In October, 2009 Judge Chin agreed to Google’s request to allow Google to amend the settlement agreement to address some of the complaints it had received. A revised settlement was submitted and Judge Chin, who by then had become a Circuit Court Judge. On February, 28, 2010 he conducted the “fairness hearing.” On March 25, 2011, Judge Chin rejected the settlement stating that while the agreement contained many positive outcomes, it was not “fair, reasonable and adequate”—it simply went too far.
Following this, the Authors Guild continued its lawsuit, filing several amended complaints. In October, 2012 several major publishers settled their suit with Google. The contents of the settlement agreement are not public.
The Authors Guild and several individual authors continued the litigation as a class action. Google challenged the class action arguing that each copyright owner had to sue individually. In May, 2012 Judge Chin certified the class, which included “all persons residing in the US who hold a copyright interest in one or more books reproduced by Google as part of its Library Project, who are either (a) natural persons who are authors of such books or (b) natural persons, family trusts or sole proprietorships who are heirs, successors in interest or assigns of such authors.” Google sought an interlocutory appeal. On September 17, 2012, the Second Circuit issued an order staying Judge Chin’s proceedings until the appeal was decided. On July1, 2013 the Court of Appeals for the Second Circuit vacated the certification saying “resolution of Google’s fair use defense…will necessarily inform and perhaps moot our analysis of many class certification issues.” On remand, both parties moved for summary judgment. Oral arguments on the fair use issues were heard on September 23, 2013.
Decision on fair use
On November 14, 2013, Judge Chin, sitting as the district court judge, held that Google’s activities were “fair use.” Copyright owners are granted by law broad exclusive rights, including the rights to reproduce the work, create derivative works, distribute and publicly perform or display their works. The law, however, contains a number of exemptions and limitation. The rights are set out in Title 17, sections 106 and 106(A); the exceptions are set out in sections 107, the fair use section, through 122.
Section 107 says notwithstanding the rights granted in 106 and 106(A), the fair use of a copyrighted work, including such use by reproduction in copies….or by any other means specified in those sections, for purposes such as criticism, comment, … scholarship, or research, is not an infringement of copyright. This is followed by four factors, which must be considered. The court, however, may also consider other factors.
Judge Chin said he started the analysis with the presumption that Google had infringed the copyrights in the books by creating and posting digital copies without the authority of the copyright owner. From there he analyzed the four fair use factors.
The first and fourth factors are acknowledged to be the most important. The first factor requires examining the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. Typically the inquiry is whether the use is transformative, which Judge Leval has defined as productive and others say means adding something new to the original work or whether the work serves a purpose than the original.
There has been much litigation about the current meaning of transformative and whether in certain cases it conflicts with the right of the copyright owner to control the creation of derivative works. This is the first issue Judge Chin addressed. He determined that the search function and features were “highly transformative.” He wrote: “Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers and others find books.” He says that the use of book text to facilitate search through the display of snippets is transformative; he found the conversion of the text of books into data for purposes of data mining “highly transformative.”
The fourth factor is the effect of the use on the potential market or value of the copyrighted work. Judge Chin found Google Books generates new audiences, creates new sources of income for authors and publishers, preserves out of print and old books, and gives them life. He writes “Google provides convenient links to booksellers to make it easy for a reader to order a book.” He adds in this age of on-line shopping, there can be no doubt but that Google Books improves book sales. He concludes that the fourth factor “weighs strongly in favor of a finding of fair use.”
Judge Chin held that Google has no copyright liability and dismissed the complaint.
So is this the end? Maybe. The Authors Guild has indicated it will appeal. If it does, the Court of Appeals for the Second Circuit will have the opportunity to issue a very important opinion.