The last week has seen two important decisions in copyright cases with significant interest for higher education. The first, of course, is the rejection of the amended settlement in the Google Books case; that decision has gotten lots of attention, so instead of rehashing it I want to suggest what I think the future holds in that dispute. Much less attention was paid to an order in the Georgia State case over alleged copyright infringement in providing digital readings to students, about which more in a bit.
The rejection of the Google Books settlement is pretty comprehensive. To my mind, the core of Judge Denny Chin’s reasoning is that the massive licensing mechanism that would be created to allow Google to proceed with marketing a digital books database is simply beyond the power of the courts. He argues both that it is outside the scope of the issue originally presented in the case, and thus inappropriate for a settlement ruling, and that the mechanism itself is something that Congress, not the courts, has the prerogative to create.
Given the sweep of the rejection, and especially its finding that the “forwarding looking business model” is outside of the authority of the federal courts, this seems like a difficult decision to appeal. Nevertheless, I believe that it will be appealed, because I think the parties have very little choice. The other key part of Judge Chin’s decision, to me, is his strong suggestion that the settlement be converted to an opt-in agreement rather than an opt-out one. This would destroy its attraction to both sides, I believe, since it would exclude the ability to exploit orphan works. Without that huge financial opportunity, I don’t think settlement is worth it to either party.
Aside from reforming the settlement agreement in this way so that it could be approved by Judge Chin, the parties have two other options — continue the original litigation or appeal the rejection of the settlement as it stands. The first option seems unattractive to both parties at this point. Both would risk losing, of course, but more to the point, neither would have much to gain, at least not in comparison to the huge profit opportunity they think they have found in settlement. So I believe both sides will resist either returning to the original issue or reformulating the agreement in the way the Judge suggests and will instead appeal his decision, hoping to preserve that agreement more or less as it stands.
One interesting area of speculation is about what impact Judge Chin’s elevation to the Second Circuit Court of Appeals will have on the case as it proceeds. If the parties went back to the district court for trial, a new judge would presumably be assigned. If they appeal, as I expect, a panel of the Second Circuit that does not include Judge Chin will hear the case. But will an appellate panel by less willing to overturn a decision made by their new colleague? Personally, I don’t think that would be a significant factor, since I would expect this clear and carefully reasoned decision to be upheld on its own merits.
If more litigation is in the future for Google Books, that is even more certainly the case in the Georgia State dispute. Last Thursday Judge Orinda Evans issued an order denying the motion to dismiss made by GSU on sovereign immunity grounds and setting a date — May 16 — for a trial.
The motion to dismiss made by Georgia State raised the issue that federal courts (which are courts of limited jurisdiction; they can hear only certain types of cases) usually are not allowed to hear cases against state governmental entities. This case is based on a “loophole” in that rule that allows a plaintiff to sue a government official in his or her official capacity in order to stop an ongoing violation of federal law. This loophole has generally been applied to prevent state violations of civil rights, but here the issue is copyright infringement. The issue GSU raised was the degree of control that the named officials, who include all of the Georgia Board of Regents and the President of GSU, actually have over the actions that are alleged to be infringing.
One of the established principles in the type of case I have been describing is that there must be a “nexus of control” such that an injunction in the case (damages are not allowed) can actually lead to an effective remedy. Courts hate to issue ineffective orders, so they will not allow me, for example, to sue the Governor of North Carolina if the DMV suspends my drivers license because the Governor has limited influence over day-to-day decisions at DMV. This issue of whether or not the defendants are close enough to the alleged illegality to actually control it is normally considered a purely legal matter that can be decided by a judge without trial. But in this case, Judge Evans has essentially postponed her decision about sovereign immunity until she hears all the facts at trial; in legalese, she is treating the question as a “mixed” issue of law and fact. She will thus decide at trial if that nexus of control exists. If it does not, she will dismiss the case on the grounds that she was never authorized to hear it. If there is sufficient control for her to decide the case, however, she will then rule on whether or not the alleged infringements were, in fact fair use. If she finds for fair use, she will not issue an injunction because there would be no reasonable suspicion of ongoing infringements that she would need to remedy.
It is clear that Judge Evans is ready for a trial after almost three years of maneuvering in this case; she has set a trial date less than 60 days from now. There has been extensive discovery, so the parties ought to also be ready for trial. All that remains open to question is whether both parties actually want a trial, or if the imminent prospect of one will push them to seek a settlement. Since I have already indulged in so much speculation this morning, I will add my personal observation that neither side has shown much interest in a settlement of the case thus far, and I think both will opt to go to trial. Both sides, I think, believe strongly in the principles they each think they are defending, and it is difficult to imagine what the middle ground would be upon which they could agree. So I will set aside May 16, fully expecting to hear news from the long-awaited trial of Cambridge University Press v. Patton, et al.