Approval of Google’s Amended Settlement Agreement Denied

by Janette Spencer-Davis, Legal Editor, CCH Copyright Law Reports   

A motion for final approval of the Amended Settlement Agreement (ASA) between Google and publisher and author groups to resolve a dispute over Google digitization of books was denied by the federal district court in New York City. The court reasoned that while the digitization of books and the creation of a universal digital library would benefit many, “the ASA would simply go too far.”

The parties original settlement agreement was met by significant objections from competitors, attorneys general, and the Justice Department. Their objections focusing mostly on so-called orphan works and unclaimed payments. The ASA narrowed the scope of the books involved in Google’s digitization plan and how much control Google would have to titles whose authors are unknown.

Seven major objections were discussed by the court: adequacy of class notice; adequacy of class representation; scope of relief under Rule 23; copyright concerns; antitrust concerns; privacy concerns; and international law concerns. The most troubling aspect of the Agreement was the opt-out provisions, in the court’s view. Rightholders with interests in out-of-print or unclaimed “orphan” works who did not wish to participate in the project would be required to “opt-out” rather than “opt-in.” Absent class members who failed to opt out would be deemed to have released their rights, even as to future infringing conduct. The establishment of a mechanism for exploiting unclaimed “orphan” works was a matter more suited for Congress, according to the court. Accordingly, the motion for final approval was denied without prejudice to renewal in the event the parties negotiate a revised settlement agreement. A motion for an award of attorneys’ fees and costs was also denied without prejudice (The Authors Guild v. Google, Inc., SDNY, ¶30,057).
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