Thursday’s fairness hearing was fascinating. Very little happened to substantively change where the case is going, but as a snapshot of the players and their positions, it was very revealing.
I was at the courthouse from 8:30 onwards, with the team of New York Law School students who’ve been working on the Public Index. We didn’t want to take any chances that we might not make it in. (Last time, we were among the very last people seated.) No worries there; we got great seats in the overflow room, and in the afternoon, in the courtroom itself. I’m very glad I had the student team along with me. Their observations and insights about the arguments and the lawyers were invaluable in helping me write up this post. Other than my conversation with them, I’ve avoided reading the press coverage; I wanted to provide a direct account of how I saw the day’s events, without being influenced by others’ takes.
At 10:10, the “All rise!” came through. I rose, even though I was seated in the overflow room. Call it conditioned reflex, or call it the proper reaction to having the darsan of the judge, which was no less real for being conveyed through the video link.
Judge Chin began by referencing the “voluminous materials” filed in the case, noting “We are working our way through them.” His questions illustrated familiarity with at least some of the filings, so my guess is that either his remarks referred to working out all of the issues in the filings rather than just to reading them, or that his chambers has carefully triaged the order in which they’re reading the various submissions.
He then announced that he wouldn’t be issuing a ruling at the hearing. This was completely unsurprising. None of the lawyers in the room expected a ruling then and there; judges essentially always take cases of this sort under advisement. No one will die if he waits. And given that he also announced he’ll issue a written opinion (again, wholly expected in a case this complicated), of course he’ll wait to draft it until he’s had the benefit of oral argument. After announcing that he had an “open mind,” Judge Chin then asked the speakers not to be repetitious in their remarks—advice not all of them heeded.
First up was Professor Lateef Mtima from Howard University. He began with a stirring oration to the importance of education for society—an oration he then revealed was taken from Brown v. Board of Education. Observing that the first copyright act in the United States described itself as “an act for the encouragement of learning,” he argued that the educational goal of copyright requires broad access to copyrighted works—access that the digital divide renders “separate and decidedly” unequal for many communities. He therefore endorsed the settlement as a way of vastly expanding the knowledge available at every library, accessible to even the most disadvantaged members of society. It was an explicitly policy-based argument, more stirring oration than a set of legal claims. Other than an initial request to slow down for the sake of the poor court reporter, he drew no questions from Judge Chin.
Second, Janet Cullum from Cooley Godward argued on behalf of Sony, in favor of the settlement. Her arguments, which largely echoed the antitrust arguments made by Einer Elhauge and by the parties, were that the settlement made books more available than they would be otherwise, and would actually foster competition in the books market. There wasn’t much new in here, except for a well-delivered elbow to Amazon’s ribs: Google has made public-domain books available for download on Sony and other readers using EPUB, rather than locking them to one device. (The Kindle doesn’t speak EPUB natively; Amazon is the one making the lock-in play in that market.)
Judge Chin came alive during Cullum’s argument. He first asked why Sony, as a Google competitor, was arguing in favor of the settlement. Her reply was to point to the settlement’s overall nonexclusivity. What about orphan owners who don’t come forward, Judge Chin asked? Sony, she replied, saw that pool as shrinking over time. A couple questions down this line, he said that he was reading in some of the opposing briefs that competitors would need to invite and settle a similar lawsuit in order to get access to the orphan books. She replied that their path was made clearer by the lawsuit and by the “precedent” it would set.
That last word is potentially controversial. Pam Samuelson would later argue that one of the dangers of the settlement is precisely that it would set a precedent for future overreaching copyright class actions. In his defense of the settlement, Michael Boni would even emphasize that the present case is one-of-a-kind. While Elhauge and David Balto have used the possibility of me-too settlements to defuse any anticompetitive dangers of this one, it’s not clear that using the p-word in court actually does the settlement any favors.
National Federation of the Blind
Third, Marc Maurer of the NFB argued in favor of the settlement’s provisions for access by the disabled. His presentation was a distilled and cogent version of the NFB’s very well-argued brief. He started by noting that the NFB has 50,000 members, which led Judge Chin to crack the first joke of the day, “Many of whom are here today.” (And they were; there was also a substantial contingent of blind members of the audience in the overflow room.)
Maurer noted that there are perhaps 10 million books meaningfully out there that would be made available to the blind through the settlement’s extensive accessibility provisions. Currently, even though the blind spend a great deal of time and money trying to obtain books in accessible versions, at most 1 million are available to them at all. While digital formats would seem to solve many of these issues—with text-to-speech, large print, and assistive devices—most manufacturers have refused to help, and some publishers have refused to provide accessible formats. Google will. Like Mtima, Maurer delivered a strong policy argument strongly.
Fourth, Paul Courant from the University of Michigan library system spoke in favor of the settlement. He’s a member of the author sub-class, and he said that most of his books are out of print, hard to find, and never profitable anyway. Scanning is vital to preservation, he continued, with books falling apart into cornflakes. But while preservation scans were previously proceeding at a pace of tens of thousands a year, Google is scanning at a rate of tens of thousands a week, making the Google Books project part of the solution to the preservation problem.
The alternative to the settlement, he argued, is not a utopia of access but the status quo. And while that status quo would provide UM with competitive advantages, he explained that UM was happy to forego those advantages in order to expand access for all. (He also explained, at the start, that he had conferred with the librarians at the rest of the Big Ten, who were in substantial agreement with his remarks.) His closing line was that the settlement was “a great bargain, in the best sense of the word.”
Center for Democracy and Technology
John Morris gave the fifth and final pro-settlement argument. His presentation was an interesting transition to the opponents, though, because while CDT strongly supports the settlement’s increases in access, it’s also concerned about privacy issues that he said “must” be addressed as part of the settlement. He emphasized the American Library Association code of ethics and state library privacy laws, and was starting to argue that privacy was indeed centrally related to the settlement when Judge Chin broken in to ask what the privacy concern actually was. As Morris then explained, he could go to the New York Public Library, pull a book on a controversial topic from the stacks, read it anonymously, then leave. Google can then used that information for targeted behavioral advertising. (I’m not sure that advertising was tactically the right example to lead with; Cindy Cohn from EFF would later make a different, arguably more effective choice in a similar spot.)
The remainder of Morris’ argument dealt with his right to raise these issues at all. The parties have repeatedly argued that the only issue for the judge right now is whether the settlement is fair, reasonable, and adequate to class members. Morris, however, claimed that the legal standard requires the rights of third parties to be taken into account as well; a settlement couldn’t deal with toxic waste by ordering it to be dumped into a local river.
Sarah Canzoneri is a lawyer—a member of the District of Columbia bar—who has entered the world of children’s books instead. She thought the settlement was wonderful at first, but now thinks it creates a “library with no children’s room.” The exact meaning of this metaphor remains slightly obscure to me. My best guess is that it means the settlement will—due to its exclusion of illustrations—lead to a corpus of books that have text but no pictures, which is all but useless for illustrated children’s books. Canzoneri illustrated this point with a visual aid: a copy of The True Story of the Three Little Pigs. (Canzoneri: “Are you familiar with it?” Judge Chin: “I haven’t read it in a while.”) Some of the pages have illustrated text—taking out the illustrations removes the words, as well.
Chin, however, asked a very good question, one that recalls the odd situation with the American Society of Media Photographers request to intervene in the case, which Judge Chin denied. He asked why Canzoneri was objecting to being excluded from the settlement? Her reply, “This isn’t the way to get a great library!” didn’t really give Judge Chin a legal foothold to work with. The sharper version of her argument may have been that slicing text from pictures destroys the value in children’s books, so that the division makes the settlement unfair as to the authors of children’s books. My students and I weren’t sure whether that was what she was saying in court, or merely our guess at a way of turning her argument into a Rule 23-acceptable objection.
The day’s second objector—and its first flop—was Scott Gant. He’s a law-firm partner who specializes in antitrust and class-action law, and he spent over 200 hours on the settlement. We know all of this because he used his time to say so, leading Judge Chin to interrupt—twice—to ask Gant why he was actually objecting. (My students calculated that although they don’t bill at partner rates, they’ve each spent upwards of 500 hours on work related to the settlement.)
Turning to the substance, Gant decided to focus on the notice issue. Reaching into the parties’ filings from last week, he pulled out Dan Clancy’s declaration that Google’s analysis of the metadata shows 174 million unique books. In contrast, Gant said, the parties have sent direct notice to only one million class members, and only a million and change have viewed the settlement website. Thus, he told Judge Chin, the court should consider allowing discovery over the notice program, or even appoint a special master to look into the notice.
This idea—a mini-trial on notice—strikes me as unlikely and unnecessary. The burden is on the plaintiffs’ lawyers to show that they’ve provided adequate notice. What they actually did is decently documented in their declarations. If Gant believes the evidence so far shows they haven’t provided sufficient notice, he can air that point perfectly well by saying that the plaintiffs’ lawyers have failed to prove adequate notice. All of the relevant damaging facts about notice are sitting out in public: so-and-so got a badly translated notice, so-and-so didn’t get one at all. I don’t see adversarial discovery telling us all that much of use.
In any event, Gant pushed on to say that many class members didn’t receive notice they should have. He, for example, has a book published by Simon & Schuster, which is one of the publishers listed as having given its list of authors’ contacts to the parties. Judge Chin broke in to ask the obvious question, “You’re here, though?” Gant replied that he was unusual; most other class members wouldn’t have been as well-informed as him. It was a misplay, I think, because it set Gant apart from the other class members he was claiming to be looking out for. Better to have said that he was lucky.
Gant clearly had more he could have said, but his time was up. He concluded that he believed the settlement was wrong “in every fiber of my being.”
Tom Rubin from Microsoft then argued against the settlement, calling it “radical.” He started by waving at the Constitution, citing Sony and Eldred to say that only the legislative branch has the authority to rewrite copyright in this way. Then, he turned to the class action issues, specifically the contentious question of whether the settlement goes too far beyond the original lawsuit. He started trying to argue that the lawsuit was only about snippets, citing the settlement FAQ, but Judge Chin cut him off, pointing to the plaintiffs’ supplemental memorandum in favor of the settlement, which quoted extensively from the broader allegations in the class complaint. Rubin responded that Google never tried to display whole books without permission, only snippets—true, and important, but note quite on point with the question.
Moving on to his next main point, antitrust, he started arguing that the Registry can’t license unclaimed books, which so far comprise 173 million out of 174 million (again with the Clancy numbers). Judge Chin, however, threw a curveball, asking how Rubin would respond to Sony’s arguments about competition. The substance of the question was squarely in line with the issues Rubin was arguing, but I think the unexpected form it took, like the Stay-Puft Marshmallow Man, caught him off guard. Audibly flustered, he said the settlement doesn’t in any way facilitate competition, and that he’d defer here to the Department of Justice and the other antitrust experts. It was a notably weak response.
Rubin recovered a bit in his conclusion, however. He took on the so-called “sour grapes” argument—emphasized in Google’s papers in support of the settlement—that opposition to the settlement is being spearheaded by Google’s competitors for purely selfish reasons. Rubin’s response was that Microsoft and other competitors sought permission for their issues. Google, however, was like a trucking company that told its drivers to go 90, then tells the court that its competitors should speed, too. My students all agreed that it was a great choice of metaphor (notice how it makes the scanning competition into a kind of race) and that Rubin played his hand well by using it as his conclusion, where it would linger memorably.
Fourth, copyright titan David Nimmer, of leading copyright treatise Nimmer on Copyright, argued for Amazon. He was the day’s first real standout; he had a gift for stringing together small, eminently clear points that seemed to lead inexorably to the conclusion that the settlement was utterly and wholly illegal. He did all of it with a tone of straightforward, confident authority—unsurprising given his stature and encyclopedic knowledge of copyright.
The first half of his argument was the copyright half. You can’t make or sell copyrighted works without permission. An order letting Google do just that would be in derogation of law. The parties, of course, have argued that the class action settlement is acceptable because each class member is “deemed” to have agreed. So, Nimmer argued, the settlement was unlawful on its face. The “permission” needed under copyright to make the settlement permissible comes from the settlement itself. So, in his words, “The settlement agreement is lawful because the settlement agreement says it is,” a claim of “complete sophistry.”
Since May 31, 1790, he continued, Congress has created a policy that gives the copyright owner complete choice of whether to grant permission or not. In 1932, the Supreme Court recognized, “The owner of the copyright, if he pleases, may refrain from vending or licensing and content himself with simply exercising the right to exclude others from using his property.” This unbroken history of copyright law would all be “set at naught” by the settlement. Judge Chin even gave him a hand here, asking if Nimmer meant that if copyright owners sit back and don’t respond to the settlement, they’re losing their rights. Nimmer gladly agreed with this characterization, saying the Supreme Court didn’t say a party given notice could be held to have granted permission,
I don’t buy Nimmer’s copyright argument, not at least in this generality. The parties later on would give various explanations of why they disagreed. I would personally say that class actions, in general, stand in the shoes of class members, and can give legal valid consent to anything the class members could consent to (subject to the usual legal constraints on class actions). Copyright is no different; there’s nothing in the Copyright Act that would specifically override Rule 23. But it was incredibly well presented, and hard not find persuasive as he thundered along.
The second, shorter part of Nimmer’s argument was a bit of class-action analysis, focusing on the issue of whether the present settlement is impermissibly unrelated to the original lawsuit. He agreed that a settlement may contain extra releases, but only where they’re based on the “identical factual predicate” as the original lawsuit.
Judge Chin broke in here, asking about the difference between the “identical factual predicate” language, which comes from Second Circuit caselaw (directly binding on Judge Chin, since that’s the Circuit that includes New York) and the cases, like Firefighters, that talk instead about the court’s authority to enter a consensual judgment providing greater relief than the plaintiffs could have obtained at trial. (Firefighters is a Supreme Court case, and thus even more binding on Judge Chin—if it’s on point .) Nimmer responded that the parties had raised Firefighters only the previous week, so that Amazon would like to file briefing responding to it and similar cases cited by the parties. Judge Chin didn’t say “no,” but he did say “I have enough paper already.”
Returning to the substance of the judge’s question, Nimmer raised a point that would recur: Firefighters was a case about discrimination. He cited a Sixth Circuit case, Williams v. Vukovich, which held that consent decrees purporting to release a defendant from liability for future acts of discrimination are invalid. The same, he said, held true for copyright: the settlement was “absolutely against copyright law.”
Nimmer then switched back to the identical-factual-predicate line of cases, arguing that the factual predicate here was the display of snippets, whereas the settlement is “unlimited,” for the display of full books. There would have been no possible fair use argument for selling full books, and Google has never treated unlicensed display of full books as a fair use. If Google had, it would have been “the largest criminal copyright violator in the history of the Republic.” While some might say that Google really is exactly that, Nimmer’s implicit point was that this was such an absurd possibility that it showed the equal absurdity of treating this settlement as a natural extension of the original lawsuit. It was a strong end to a strong argument.
Ron Lazebnik, backed up by the students of the newly-founded Samuelson-Glushko Intellectual Property and Information Law Clinic at Fordham, next spoke on behalf of three writers groups opposed to the settlement: the SFWA, the ASJA, and the NWU. He highlighted an issue from the numbers in last week’s filings. 1,100,000 books have been claimed, but there are only 44,000 claimants, suggesting that most claims are by publishers. Since 620,000 of the claimed books are out of print, Lazebnik concluded that a great many books are being claimed by publishers who aren’t bothering to support the books in print.
This matters, he argued, because under their contracts, authors are the sole rightsholders for most e-books. The settlement lets publishers profit from books they have no right to. It puts a burden on authors to prove that they’re the sole rightsholder. For Insert authors, the situation is even worse, since the settlement destroys licensing potential. It was somewhere around this point in the day that Judge Chin started to show his first signs of general impatience (rather than a request that a particular attorney get to the point). I’m hearing the same points over and over, he said.
Next up—the sixth speaker in opposition—was Pamela Samuelson, speaking on behalf of the academic authors who signed her letter objecting to the amended settlement. The majority of books in the libraries Google is visiting, she noted, are by scholars; many of these are out of print. The Institutional Subscription will be, in large part, by scholars and for scholars. Her colleagues, however, are mystified by the details of the settlement. The one point they have all—to a one—agreed on, however, is that they want their own books available on open access terms. Since orphan books, per the Financial Times, comprise 2.8 to 5.0 million books, a default of open access would better suit academic authors’ desires.
The plaintiffs, however, have referred to open access as “parochial self-interests” and “inimical to the class.” To Samuelson, this claim is itself proof that the Authors Guild hasn’t fairly represented the class. Academics wouldn’t have sued Google in the first place, and if the case goes forward, they’ll be writing briefs on behalf of Google. I would add that the plaintiffs’ emphasis, in their supplemental briefing, that open access advocates’ views shouldn’t be allowed to interfere with the exclusively economic interests of class members doesn’t help their case for adequate representation. Samuelson’s argument is precisely that many copyright owners have strong non-economic interests in their works. As she put it later, the plaintiffs treat books as commodities; for academics, books are a slow form of dialogue.
On the orphan works issues, Samuelson emphasized that the Copyright Office’s proposed model endorsed free use for works for which no owner could be found, not an escrow model. Similarly, the legislation that Congress considered would have adopted a free use model.
Finally, as a legal scholar, Samuelson explained that she was wary about precedent. Consider other kinds of copyrighted works, not just books. Who’s next to be targeted by this “let’s make a deal” attitude? This settlement will encourage other lawsuits that will try to reshape class-wide copyrights.
Privacy Authors and Publishers
After a ten-minute recess, arguments resumed at about 11:45. Cindy Cohn from the EFF argued on behalf of her group of 28 authors and publishers worried about privacy. How is that a class concern? Well, if readers don’t have good privacy protections, they’ll be subject to a chilling effect. Reduced readership means reduced money for authors. The settlement creates a library-bookstore combination; it can track not just what books you read, but which pages, and what you scribble in the margins. No one has ever had this before. What’s more, she explained in a very clever twist, the plaintiffs agree with us; they say in their briefing that they support efforts to improve privacy for users.
Here, Judge Chin interrupted with a question. If I order a book on Amazon, how is this different? Cohn gave the second-best answer to a question all day: unlike Amazon, Google will be able to track what you read after you buy. Chin followed up by asking she thought the problem should be fixed. Cohn then have the first-best answer to a question all day. Two reasons, she said. First, Google should be required to require a warrant or court order before turning over information to law enforcement. Google says that requiring a court order isn’t the law yet—but if were the law already, she noted, we wouldn’t have to worry about this here, they’d just need to follow the law. Second, Google should mitigate the privacy risks by keeping the data for 30 days or less. They already delete health data within two weeks.
As some of my students observed, the judge was clearly looking for practical solutions; Cohn gave him them, rather than just complaining about the settlement. What’s more, she had clear, specific examples already in mind, and her point about Google Health positioned her request as in line with something Google was already doing. Because she was able to make these points in response to a question, they were already more persuasive than they would have been as a straightforward presentation. Her whole presentation was highly effective: precise and clear, but also conversational and responsive. It was, for the ritualized and formal world of oral appellate-style advocacy, a comfortable, down-home presentation, and we all thought that it worked.
Chin then raised his repetition issue, asking how similar her requests were to CDT’s. Cohn said that their lists were similar, which showed what a strong consensus there was, that both supporters and objectors agreed on these privacy provisions.
Japan P.E.N. Club
Yasuhiro Saito next argued on behalf of objectors from the Japan P.E.N. Club. Its members are still concerned—so concerned in fact that they sent a representative to attend. First, even though the settlement has been narrowed, many of its remembers remain in it. Second, the settlement contravenes fundamental values of freedom of expression and preservation of diversity by creating a single point of control. And third, it will impose continuing harm. The approval process itself has been a huge burden in time and money for class members to understand. There’s still been no Japanese translation, the scanning continues. Even with the extraordinary number of objections, they’re still a diluted view of the views of the class. Countless copyright owners remained without the time, money, or knowledge of law needed to speak up to object.
It was a decently well-presented argument, but I’m not sure there was much point to it. It didn’t add much to the P.E.N. club’s filings in the case, Saito didn’t give Judge Chin any new legal arguments to work with, and there was little he said that wasn’t said by someone else sometime during the day. The day saw a fair number of these me-too objectors. As the day wore on, Judge Chin displayed increasing impatience with them.
Irene Pakuscher, the head of the unit on copyright law in the German Federal Ministry of Justice, presented Germany’s objections. (Judge Chin thanked her for coming from Germany to the hearing.) She started by emphasizing Germany’s commitment to digital libraries, but also emphasized that Germany insists on respect for existing copyright. The settlement still impacts German rights; many books were registered “because of the history of copyright legislation in the Untied States.” (That is, it was previously necessary to avoid forfeiture of copyright, but later amendments to the law eliminated the necessity of registration, and hence, the importance of paying close attention to registration for foreign copyright owners.) The search options remain poor. Even though Google has digitize the registration recors, there are OCR errors, and no link to the digitized books.
And third, Pakuscher went on, German authors weren’t represented in the negotiations by the AG and AAP, which they’re not eligible to join. Judge Chin then asked what she would have wanted out of the settlement had they been represented. Pakuscher should have had a ready answer to the question, and didn’t. Instead, she said that European collecting societies must admit members from other countries, because it’s essential to be involved in the process. I doubt that point had much weight with Chin, whose questions showed a strong pragmatic streak.
Pakuscher turned to orphan works and the settlement’s exclusive license for them. Under German law, she said, a compulsory license of this sort would require action by the equivalent of Congress. Moreover, the settlement was contrary to the Berne Convention and the World Copyright Treaty: it imposes a formality and switches to an opt-out status. Judge Chin didn’t seem especially interested. Throughout the day, he paid more attention when the lawyers raised issues that weren’t in their filings, or when they found a way to compress a complicated filing into a focused and more compelling form. He had less patience with arguments that repeated the conclusions from briefs, rather than the reasons.
Michael Guzman gave a me-too argument on behalf of objector AT&T. He claimed that AT&T is a class member, a competitor of Google (because AT&T is in the search market with its yellow-page listings!), and a customer. Really, though, the fact is that AT&T and Google truly hate each other to a genuinely irrational degree. What’s bad for Google is good for America, AT&T would say, and I really can’t think of another reason why AT&T is filing in this case.
That said, Guzman gave a competent, reasonably clear antitrust argument against the settlement. He emphasized that the settlement confers an “unjustified searchable-work monopoly.” And while it doesn’t erect any new barriers to entry, competitors are already precluded by copyright law. Nor, he said, is there a “public interest” exception to the copyright or antitrust laws.
Carl Hanser Verlag et al.
Cynthia Arato argued on behalf of an international array of writers’ groups and publishing trade associations. The wonderfully-named lead objector Harrassowitz is gone, but this is the same general coalition that filed the absolutely devastating first-round objections on international notice problems, including a stinging series of declarations on the poor translations of the notice. It’s hard to tell from outside, but they may single-handedly have been responsible for narrowing international scope of the amended settlement.
They’re still unhappy; Arato’s argument focused on the copyright-treaty issues. First, while the parties have argued that these treaties aren’t self-executing, that’s not the end of the matter. Yes, a claim for violation of Berne or TRIPS couldn’t be brought in a U.S. court, but that wouldn’t be the end of the matter. The USA will be called to task over the settlement if it’s approved; the court should consider our international obligations. The WTO dispute resolution procedures could be used against the United States, leading to sanctions and what Register Peters called “diplomatic stress.” (Some of my students thought this wasn’t the best way to frame the argument; it sounded a bit too much like threatening the judge. Better perhaps to tell him why Rule 23 requires taking these larger issues into account.) Judge Chin wanted to know what treaty provisions were at stake. Arato named four: that exclusive rights be honored, that formalities are prohibited, that the US can’t favor its nationals over foreigners, and that it can’t favor one foreign nation over another.
Arato took issue with the parties’ argument that the settlement isn’t a “formality” because a formality only applies when one could lose a copyright for non-compliance. She replied, instead, that Berne article 5.2 prohibits encumbering either the “enjoyment” or the “exercise” of a copyright with a formality. While the caselaw holds that a class-action claim form isn’t burdensome, those cases are, for example, insurance matters where each class member holds one or two policies. Here, however, to evaluate your rights, you need to look at all your books from 1922 on—and a publisher, agent, or collecting society may have to consult files on the rights to many thousands of books.
Her other argument took on the parties’ claim that the settlement is a permissible law of general applicability, rather than being copyright-specific. The position that rules of general applicability can’t be copyright-treaty issues, however, is based on one law review article, which gives a single example: the “formality” is the filing fee to file any lawsuit at all.
The twelfth argument against came from Daniel Fetterman on behalf of non-profit Consumer Watchdog. It was a me-too argument from start to finish, long on policy arguments about Congress’s role, and short on legal specifics. The one useful card Fetterman held, he misplayed. He started by trying to address the sour-grapes argument. Consumer Watchdog, he pointed out, wasn’t a competitor to Google. Its only agenda was the public interest. It had no stake in the outcome. And so on, until Judge Chin broke into complain that so many of the parties were spending so much of their time telling him who they were. What could have been a decent rebuttal to the sour-grapes point from the organization best-positioned to make it wound up going nowhere.
Marc Rotenberg from the Electronic Privacy Information Center said he had previously believed the privacy issues in the settlement were solvable, but had concluded (unlike EFF and CDT) that they weren’t curable. After repeating previous points about library ethics, state library privacy laws, and the potential for detailed user tracking, he concluded that he didn’t see how it was possible to transfer this much information to a private corporation that already knows so much and can track users so well.
That struck me as an argument highly unlikely to make any headway with Judge Chin. To accept it is to hold not only that this settlement is flawed, but also that Google Books could never legally be offered, even on a wholly voluntary basis, under any possible set of privacy-protective laws, with perfect notice and consent. I understand the rhetorical value of saying the settlement is unfixably bad, but I doubt that Rotenberg and EPIC really want to bar Google from the online book business completely.
Open Book Alliance
Gary Reback, for the Open Book Alliance, started with a good reply to Sony’s earlier pro-competition arguments. Sony, he observed, sells devices, not books. It’s not a competitor in the market at risk from the settlement.
Things went downhill from there, though. Consistent with the OBA briefs, Reback tried to reorient the antitrust discussion away from the economics and towards a broader Google/publisher conspiracy. As one of my students observed, Reback’s frequent use of words like “conspiracy,” “secret side deal,” and “concealment” didn’t come across well. It made him sound like a conspiracy theorist, seeing Masons and Martians in every corner of the settlement.
Reback’s law-and-economics argument was devoted to telling Judge Chin not to look only at output. (Einer Elhauge’s article and brief, on which the parties’ latest briefs draw, are heavily directed to showing that the settlement increases the output of books reaching consumers.) Instead, explained Reback, the goal is try to fix a price, and then work to make sure competitors can’t drive it down. That didn’t make sense to me; the lower prices competitors would offer would draw in more buyers, which would … increase output. So the cartel is output-restricting, after all. Perhaps I misunderstood Reback’s argument, but if I am, than I doubt that Judge Chin understood it, either.
Finally, Reback argued, “We didn’t get a single seller by chance.” He pointed to the secrecy of the negotiations and to the parties’ rejection of other companies, such as Microsoft, even as they were negotiating a settlement in Google’s favor. Reback gave the timeline in substantial detail, leading Judge Chin to say, “I don’t find this terribly helpful; let’s finish up.” Ouch.
Hadrian Katz, speaking for the Internet Archive, then gave, hands-down, the best argument of the day. He spoke without notes, resting on the podium, and succeeded in doing what no one else before or after had or would: transcending the narrow specifics of the many legal areas at stake to give a compelling encapsulation of the case. Plenty of others spoke in outraged generalities; Katz linked his clear vision to the issues actually facing Judge Chin.
A single condition, Katz argued, would realize all the benefits of the settlement and resolve virtually all the problems. Approve it as is, but on an opt-in basis. Nothing in the parties’ submissions explains why the settlement would need to be opt-out. He pointed to footnote 8 of Google’s brief, in which Google argued that going to opt-in would “eviscerate” the settlement. “This is about the orphans,” Katz concluded. Look at page 8 of Google’s brief, in which they argue that opt-out is vital because it makes the market for these out-of-print works possible. “They knew they couldn’t find the rightsholders,” he argued: that’s why they need an opt-out settlement.
In an opt-in world, according to Katz, notice would be dramatically better because the parties would genuinely have a full incentive to locate copyright owners. They’d get all the benefits to the class they keep talking about; the Registry would become the place all of Google’s competitors would also want to go to. The reason the defendants don’t like opt-in is that they want access to the orphan works. And that’s what’s unfair about the settlement. It gives Google these rights into the 22nd century. It doesn’t just violate Rule 23, it violates the Rule Against Perpetuities! (It’s a clever line, but it’s hyperbole—under the settlement, there aren’t any property interests that vest that far into the future.)
And as for the Firefighters case, Katz quoted the language immediately following the test quoted by the parties: “This is not to say that the parties may agree to take action that conflicts with or violates the statute upon which the complaint was based.” And he finished with a real zinger: on privacy, why has nothing been said so far today about Google Buzz, which raises some questions about how seriously Google takes privacy? It was, from start to finish, an absolutely masterful piece of oral advocacy.
Arlo Guthrie et al.
Next up was Andrew DeVore on behalf of a group of authors concerned about economic unfairness. He started with the scope of the releases of non-copyright claims, including trademark claims. He went through some of the Firefighters analysis, using his client’s trademark on PAY IT FORWARD as an example. I have to say that I don’t buy this argument—or rather, I don’t yet set quite how it would work. I read the settlement as authorizing Google to engage in certain kinds of book-sales programs, with releases of all claims against it, copyright or not, for engaging in such programs. If (big if) the core copyright claims can be released in this way, it would be absurd to block the whole thing because the trademark claims for, say, series titles can’t also be released in connection.
The same largely goes for DeVore’s argument about non-display uses. He and Judge Chin got into a colloquy over sponsored links that didn’t seem to lead anywhere in particular. I, for one, am just not worked up over the fact that Google could use the books it has scanned to improve its search algorithms; to me, that is a very strong case for a fair use. DeVore also gave a hypothetical about Google using a how-to book to create its own how-to book that never displayed expression from the original. Neither I nor my students could follow the details.
DeVore’s third issue was unfairness to Insert owners. He was running low on time, but managed his close brilliantly. I have four reasons the settlement is unfair to Insert owners, he announced, then ticked them off in a sentence each. It’s an inadequate one-time compensation. Insert owners don’t participate in advertising revenue. They can’t exclude their works from particular uses. And they can’t something something something (I’m unable to read my handwriting from his fourth point.). This clean, structured list kept Judge Chin listening, letting DeVore get in a few extra licks.
I believe that Paul Rothstein spoke for objector Darlene Marshall. He echoed the opt-in sentiment, and advised Judge Chin to lok at the Fair Labor Standards Act, particularly as applied in a recent Wal-Mart case. According to Rothstein, it mandates opt-in. Judge Chin replied—evidently based on some familiarity with the FLSA—that he didn’t see it as an appropriate analogy. Rothstein, having made his one point, thanked Judge Chin and sat down.
The final speaker of a very long morning was Veronica Mullally (I think) on behalf of VG WORT, Germany’s only Reprographic Rights Association. It represents some 400,000 authors; its CEO was in attendance at the hearing. Her argument was largely a me-too, given the presentations from the German government and the international coalition represented by Cynthia Arato. Two points that Mullally made, however, stuck out. First, surely Google is picking which books it wishes to scan; can’t it send out requests with similar precision? The onus should be on Google to seek out permissions. (The problems aren’t of similar difficulty; books don’t change as much after publication as their authors and owners do. But it was cleverly put.) And second, VG WORT doesn’t want to impede progress. It would be happy to be included under the accepted principles of copyright law.
And that was it for the morning; the session ended at about 12:50 for lunch.
Norman Marden from the Pennsylvania Attorney General’s office was the first afternoon speaker. I missed most of his comments because we were informed that there were spare seats available in the main courtroom, so we left the overflow room and went upstairs. If he said anything to refute the very effective Hanna v. Plumer analysis in the plaintiffs’ supplemental memorandum (which argued that Judge Chin’s power under the Federal Rules takes precedence over state law), I missed it.
Lynn Chu has been an outspoken opponent of the settlement. Her blogging, tweeting, and op-ed-ing have been tenacious and detailed. As a law-school graduate, a veteran literary agent, and a brilliantly caustic wordsmith, she ought to be well-positioned to execute a scathing attack on the settlement. But her argument to Judge Chin, much like her filing, was rambling and ineffective, as though her overriding anger was thwarting her ability to frame a convincing argument. Even the full version conveys little more than a tone of outrage. Judge Chin was visibly bored; he cut her off mid-thought when her time expired.
The final presentation of the day came from another literary agent, Stuart Bernstein, and what a contrast! Wearing what appeared to be a tracksuit, this non-lawyer spoke clearly, simply, and effectively. Using his perspective as an agent who’s negotiated who knows how many contracts, he started by directly attacking Paul Aiken’s characterization of Insert contracts as standard and simple. Each Insert, Bernstein said, requires a license that restricts the duration, format, and many other aspects of the use. What’s more, these licenses are paper files: finding and claiming all of these uses will be an onerous task. Also, tellingly, in the business, these licenses are called “permissions.”
Next, Bernstein noted the irony of Google, the leading search engine, saying that it’s too hard to search for owners. He can’t think of a better entity to carry out that work. He contrasted the claims that the parties had given thorough notice with their claims that it would be too hard to negotiate individual permissions.
His third point was the difficulty of understanding the release for non-display uses. As an agent, you look for contracts your authors can understand. He can’t explain non-display uses in those terms. Someday, perhaps, we’ll have books beamed directly into our brains. That would be a non-display use. Understanding all of the complexities of the settlement, of which this is one, is just too much for authors. As a non-attorney agent, he’s done lots of research, but he needs to leave it up to his clients to decide—and for many of them, it’s hard to tell. One client has opted in; a man with many out-of-print books he’s looking to sell via the online program. But they don’t need the settlement to do this; Google already has a way to make these offers to authors. It was, on the whole, a great presentation; he played to his strengths, particularly his clear and comfortable manner and his knowledge of the book trade.
This post continues with Part II, which covers the arguments made by the United States and the parties to the settlement.