Google Books: A Recent Case on Copyright Licensing and Class Certification

Eric Goldman pointed me to an interesting recent decision from the Southern District of New York—where the Google Books suits are being heard—about class certification and copyright licensing, Palmer Kane LLC v. Scholastic Corp.. It may well have some bearing on Google’s pending appeal, although, for reasons I’ll explain, I think it’s not exactly on point.

In a nutshell, Scholastic publishes an extensive series of books, workbooks, videos, and software called READ 180. It’s designed to help students at all levels from elementary school through high school improve their reading skills, although I have to say that the Scholastic site, which features very few words and glossy pictures of graph-heavy “Dashboards” on iPad-like computers, doesn’t exactly inspire confidence. READ 180 started in 1999, was updated in 2005 with an “Enterprise” edition, and again in 2011 with a “Next Generation” edition. (I’m curious about the trademark-law backstory here.)

Since READ 180 is a reading-focused curriculum, it naturally follows that Scholastic licenses thousands of images for it. It works with at least eight photo houses, and with numerous individual rightsholders. The invoices for the images set out a variety of payment terms, permissible print runs, start and end dates, reuse fees, product line restrictions, and so on.

The plaintiff owns the copyrights for three photographs taken by Gabe Palmer, with the stock-ariffic titles of “Paramedics,” “Troubled Students,” and “Speeding Ambulance,” which it believes were used without sufficient permission in READ 180. It sought to represent a class of similarly situated image copyright owners, with respect to two allegedly defective licensing practices:

The “overrun” class would include rights holders whose photographic works were used by Defendant in any READ 180 publication in excess of the licensed print run. The proposed “unauthorized use” class would include rights holders whose works were published in a READ 180 component without Scholastic having obtained the requisite license before the printing date.

Held, on the record provided, Scholastic’s licenses were too diverse to permit class treatment. Scholastic argued, and the court agreed, that to determine whether any given image was infringed would require an individual inquiry into not just the language but the surrounding circumstances of the license. Scholastic had extensive negotiations with the eight licensing houses, which resulted in Preferred Vendor Agreements that modified the terms of the invoices. Meanwhile, the scope of the licenses those houses offered were themselves shaped by the dealings and individual agreements between rightsholders and licensing house. Taking all of this together, the court concluded that the case for infringement was not susceptible to the kind of “generalized proof” that a class action requires.

There is an obvious parallel to the Google Books case, where Google has been arguing that the diversity of book licensing practices renders class treatment inappropriate. If I were Google, I would be planning to cite Palmer Kane in my brief on appeal to the Second Circuit. But I would also not push the analogy too far. In Palmer Kane, the licenses were utterly central to the lawsuit, because they defined what was and was not infringing. In the Google Books case, however, the licenses are more peripheral; the core of the case involves fair use. The licenses affect the weighing of a few of the fair use factors, and they can affect any individual plaintiff’s membership in the class, but they don’t preclude the possibility of a ruling on the merits of infringement-by-scanning one way or the other. Palmer Kane is interesting and relevant but not determinative.

Now for the O’Henry-esque twist. Scholastic’s lead attorney in Palmer Kane was Edward Rosenthal from Frankfurt Kurnit. Yes, the same Edward Rosenthal who is the Authors Guild’s lead attorney in its lawsuit against HathiTrust. Thus, in one of its two suits over Google Books, the Authors Guild is represented by the attorney who is most responsible for creating a piece of law that could complicate its other suit over Google Books. Hawkward.