Followers of the Google Books settlement will recall that one of the reasons Judge Chin gave in the Authors Guild opinion for rejecting the settlement was that it would “release Google (and others) from liability for certain future acts.” In yesterday’s Literary Works decision, the Second Circuit also considered what it called “future infringements.” Both settlements would have let the defendants sell access to complete copies of plaintiffs’ works. But while Judge Chin rejected the Google Books settlement on this basis, the Second Circuit would have allowed the Literary Works settlement (if not for the representation issues).
So what gives? How did these cases come to seemingly opposite results? It just so happens that I have been researching this precise issue — class-action settlements that include releases for the defendant’s future conduct — for over a year. Indeed, this past Thursday, I gave a presentation on the topic to the annual Intellectual Property Scholars Conference, a kind of works-in-progress speed-dating session for law professors. So, having thought about the matter for a good long while, I believe that the opinions are correct and consistent with each other.
Here is what Judge Chin said in Authors Guild:
This case was brought to challenge Google’s use of “snippets,” as plaintiffs alleged that Google’s scanning of books and display of snippets for online searching constituted copyright infringement. Google defended by arguing that it was permitted by the fair use doctrine to make available small portions of such works in response to search requests. There was no allegation that Google was making full books available online, and the case was not about full access to copyrighted works. The case was about the use of an indexing and searching tool, not the sale of complete copyrighted works. (emphasis added)
By contrast, the Literary Works court said:
Objectors’ first argument fails to recognize that the consolidated complaint seeks injunctive relief for future uses, and therefore contemplates these alleged future injuries. Put another way, a trial of this case would determine whether it is permissible for publishers to continue to sell and license the works. Accordingly, regardless of whether future infringements would be considered independent injuries, the Settlement’s release of claims regarding future infringements is not improper.
There is a common move here: compare the proposed settlement to what the underlying lawsuit was about. In the Google Books case, the underlying lawsuit was about scanning and searching, but the settlement went on to authorize the sale of complete books. In the Literary Works case, the underlying lawsuit was about exactly the same thing that the settlement authorized: including freelancers’ articles in commercial databases. There was a gap between lawsuit and settlement in the Google Books case, but not in the Literary Works case. That’s how similar settlement terms could be “a bridge too far” for books but permissible for articles.
There will be more — much more — to say about all of this in due course.