“Not really a settlement at all”

The hearings last week before the House Judiciary Committee about the proposed settlement in the copyright infringement lawsuit over the Google Books project once again showed the disparate opinions that the proposed settlement has generated.  There is a NY Times report on the hearings here.

One of the most interesting features of the hearing was the statement by Marybeth Peters, the US Registrar of Copyrights.  This was the first time the Copyright Office has really weighed in on the settlement, and I think many were surprised by the strong opposition Ms. Peters expressed.  I had to nod in agreement when I read her statement that the Copyright Office had come to realize that “the settlement was not really a settlement at all” but was, in fact, a mechanism to create a new and exclusive business model for Google.  A class-action settlement, as Peters points out, usually resolves claims over past acts and provides some remedy going forward.  An example would be a suit brought by consumers over a flaw in a car design; the usual remedy would be a financial penalty and a commitment to repair the flaw.  In the Google case, however, the alleged infringement will be allowed to continue, with the blessing and financial participation of some percentage (but not all by any means) of the rights holders whose rights have allegedly been infringed.

Perhaps the widely divergent interpretations of the settlement agreement are due to the fact that it does not so much settle past wrongs as project a new business model into the future.  This begs people to evaluate the predicted consequences and to base their judgments on those predictions, rather than on a clear view of how past actions will be remedied.  A recent blog post entitled “The Google Books Settlement — What Did You Choose? confirms this sense of an either/or choice to be made — either love it or hate it.  Balancing Registrar Peters’ negative opinion, in this worldview, is this editorial from The Economist endorsing the settlement.

If you read the two contrasting opinions, it seems like they are talking about complete different projects.  Is Google creating a universal library where the whole world can access the wisdom of the ages, or is it a massive power and money grab by an overly ambitious company willing to corrupt the US legal system to gain its ends?  The interesting thing about this stark choice, however, is that both opinions may well be true.

It is important to remember that there are limits on the judge’s power in assessing this settlement.  His role is to determine the fairness between the parties before him, not to decide if the settlement is good for society as a whole.  And, of course, there will not be any party to the lawsuit who will oppose the settlement or appeal its approval, since a major effect of the deal is to align the economic interests of plaintiff and defendant.  Only, I suspect, a negative report from the Department of Justice (on the anti-trust issue, which is possible) or a threat of Congressional intervention (which is apparently unlikely) might interfere with approval of the settlement, and then the question arises “what next?”

In her statement to the Judiciary Committee, Peters did go on to acknowledge some positive aspects of the settlement, specifically the creation of the books Rights Registry, access for people who are blind or print disabled, and the ability of libraries to offer “immediate, unfettered and risk-free” access to millions of copyrighted works.  Those aspects, she said, “should be encouraged under separate circumstances.”  But that, of course, is the $64,000 question.  Under what circumstances, short of a compulsory license, would these advantages be possible?  If a class action suit is not the way to create such a license (and I agree that it is not), how else could it be done?  I find myself wondering if Registrar Peters was really asking the Congress to consider addressing the orphan works probably in a new way — through a compulsory licensing mechanism rather than a remission of damages.  If we really want the benefits of the Google Books Settlement without the monopoly it would create, it would probably take such a legislative revolution to get it done.

UPDATE — shortly after this post was written, it was announced that the Justice Department has filed with the court recommending that the agreement NOT be approved as it stands.  See a story on the filing here.