The Department of Justice dealt a serious blow Thursday evening to the chances that the Google Book Search settlement will gain court approval later this month when it found that the revised agreement still raises class certification, copyright, and antitrust issues. The DoJ said that despite “good faith” efforts to modify the agreement, “the amended settlement agreement suffers from the same core problem as the original agreement: it is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation.” The revisions also did not go far enough in preventing Google from potentially developing a monopoly on digital editions of orphan works.
The Justice Department said it remains committed to working with all stakeholders to fashion a settlement it could support, but there is no chance that the parties—the AAP, Authors Guild, and Google—have the time or inclination to make changes before the final fairness hearing set for February 18, and there is no expectation that they will ask for another delay. A prepared statement from the AAP, Authors Guild, and Google tried to make the most of the opinion, saying that the filing “recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S.”
In a separate statement, Authors Guild executive director Paul Aiken also tried to salvage something from the DoJ's ruling, noting “that the Department recognizes the settlement's many benefits such as making out-of-print library books be made available through reasonable, market-based means to readers, students and scholars.” But he was also blunt in responding to the latest setback—“We disagree with the Justice Department's reading of the law”—and emphasized that Google's scanning of print works has continued and that the only way authors can control those scans is through a settlement.
Aiken also responded to calls from members asking why the guild didn't press forward with the original fair use/copyright infringement litigation rather than going for a settlement. Aiken said that “copyright litigation is uncertain. Fair use law is complex,” and he emphasized, “If we'd lost, it would then be open season on scanning of your out-of-print and in-print books.” In fact, even if the publishers and authors were to win the lawsuit, Aiken continued, “Copyright victories tend to be pyrrhic in the digital age.” He pointed to the RIAA and the music industry's complete failure to stop illegal music copying. “The RIAA won victory after victory, defeating Napster and Grokster with groundbreaking legal rulings,” Aiken said. “It didn't work.”
Despite the latest setback, there is some support for the settlement, outside of the parties to it, in its current form. David Balto, a senior fellow at the Center for American Progress, who specializes in competition policy and intellectual property law, said the DoJ is “simply wrong on the ability of a class action settlement to address forward-looking business arrangements. There are dozens of class-action settlements that have resolved future rights.” Balto challenged concerns that the agreement limits competition: “DoJ's view is clouded by taking a microscopic and static view of an incredibly dynamic marketplace”; he added that he thinks the settlement will be approved.
Nevertheless, critics of the settlement hailed the DoJ's ruling. Scott Gant, a class-action lawyer at Boies, Schiller & Flexner, who has criticized the complexity of the agreement and filed an objection to it with the court, said he was pleased by the DoJ's response to the settlement. “This settlement cannot and should not be approved,” Gant said, “and anything resembling the current agreement is not tenable.” He suggested that the litigation against Google could go forward with more classes of authors defined and more lawyers added to represent them. But while he said that it's “possible” Google could win the case on the basis of fair use, he doesn't really think that's likely: “Google doesn't have a good argument. It could be a close decision, but not that close.”
James Grimmelmann, a New York Law School professor who has also filed an objection to the settlement, called the DoJ's ruling “very significant. Approval of the settlement is now less likely.” He said the ruling showed the publishers “tipping their hand” and citing legal issues and prior cases in front of the DoJ that they have not cited to the public. Nevertheless, he was also struck by the DoJ's praise of many provisions of the settlement as well as the continued efforts to revise it. Grimmelmann said the DoJ's ruling suggested at least eight possible modifications to the agreement—including eliminating the out-of-print book provisions for at least two years and limiting author permissions to a range of five to 10 years rather than in perpetuity. He said that while “it's hard to believe that [the agreement] won't collapse,” he also said there's still the chance that Judge Denny Chin will approve it. “This puts it in the judge's lap. Chin has let the process go along and take its natural course,” Grimmelmann said, “but now he's got to either approve it or reject it. Either way, now he's got to commit.”