JUDGE CHIN RULES IN FAVOR OF GOOGLE IN AUTHORS GUILD CASE

November 15, 2013

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By Nancy Wolff, Esq., PACA Counsel

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In 2004 Google entered into an agreement with a number of libraries to scan their book collections and in return provide them with digital copies of the scanned versions. Since then, Google has scanned over 20 million books and has made “snippets” of those still under copyright available to the public via search. This wholesale scanning of books resulted in a class action lawsuit brought in 2005 by The Authors Guild, and a few named authors, asserting that verbatim copying of books in their entirety by Google infringed the authors’ copyright in the books. The case was assigned to Judge Chin in the Southern District of New York. Google ‘s defense was fair use, an exception under the Copyright Act that permits certain uses of works in copyright without consent from the owners.

Initially the Authors Guild, and a group of publishers, who had also brought copyright claims against Google, and Google entered into a settlement agreement in 2008 that would create a registry and a way to monetize works as well as exploit orphan works, both from past scanning and on a going forward basis. Judge Chin refused to approve the settlement as unfair.

In 2012, Judge Chin did certify the class action, and Google appealed. The Second Circuit stayed the action and in 2013 denied class certification and directed that the issue of fair use be addressed by the district court before class certification. Judge Chin had since moved from the District Court to the Second Circuit but retained the case.  The publishers were no longer in the case, and Google brought a motion to dismiss the case based on fair use; the Authors Guild moved for summary judgment as to infringement.

On November 14, 2013, eight years after first being assigned this case, Judge Chin ruled in Google’s favor finding fair use and against the Authors Guild and authors, dismissing the copyright claim in its entirety.  The court listed all the benefits of the book-scanning project, including search, data mining, preservation, and making works easier to find for scholars and for users to purchase and find books. Judge Chin found that the use of the copyright works by Google served the purpose of copyright, by advancing the progress of the sciences and useful arts.

As fair use must be determined on a case by case basis, Judge Chin went through the traditional fair use analysis, weighing the four factors as outlined in Section 107 of the Copyright Act.

(1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2) The nature of the copyrighted work;

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) The effect of the use upon the potential market for or value of the copyrighted work.

Over the years, courts have placed greater emphasis on the first and fourth factors. In looking in at the first factor, the purpose and character of the use, courts ask whether the second use is transformative, even though that term does not appear in the statutory language. It derives from a 1990 Harvard Law Review article written by Judge Pierre Leval on the nature of fair use and has been instructing courts ever since. The courts looks at whether the new work merely “supersedes” or “supplants” the original creation, or whether it:  “instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether to what extent the new work is “transformative.”(Quoting Leval)

According to Judge Chin  “Google’s use of the copyrighted works is highly transformative.  Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books.  Google Books has become an important tool for libraries and librarians and cite-checkers as it helps to identify and find books.  The use of book text to facilitate search through the display of snippets is transformative.”

Judge Chin relied in part on Bill Graham Archives v. Dorling Kindersley Ltd., which held that small-size reproductions of concert posters as part of a historic timeline in a book on the history of the Grateful Dead was transformative. “The display of snippets of text for search is similar to the display of thumbnail images of photographs for search or small images of concert posters for reference to past events, as the snippets help users locate books and determine whether they may be of interest.  Google Books thus uses words for a different purpose — it uses snippets of text to act as pointers directing users to a broad selection of books.

Further, Judge Chin found that the use was “transformative in the sense that it has transformed book text into data for purposes of substantive research, including data mining and text mining in new areas”.

Although Google is a for profit company which would disfavor fair use under the first factor, the fact that Google did not sell the copies to the libraries, no longer sells ads on book pages, nor sells the snippets or books, did not tip the balance against fair use on this factor.

The second factor, the nature of the work, which looks at whether the underlying work is factual and less deserving of fair use, or creative and favoring fair use, did not play a significant role in the analysis and in fact has not been given much weight by the courts. The court noted that 93% of the works were non- fiction.

The third factor, the amount and substantially of the portion used was also insignificant in the court’s analysis and only weighed slightly against fair use. Admittedly Google scanned the entire works but the court noted that full scanning was functionally necessary to provide search and that only snippets were made available of copyright works.

The fourth factor addresses market harm as a result of the unauthorized use. The Authors Guild argued that Google’s scanned works replaced the market for the books and users could obtain what they needed through numerous snippets searches of the same work. Judge Chin did not find this argument persuasive and stated  “To the contrary, a reasonable fact finder could only

find that Google Books enhances the sales of books to the benefit of copyright holders. ” He noted that it would be impossible to piece together an entire book by snippets as Google’s technology prohibits it and that the search tools and links to where you can purchase books assists in making online sales of books easier.

Overall Judge Chin found that the Google Book project provided a significant benefit to the public: “It advances the progress of the arts and sciences, while maintaining respectful consideration for the rights of authors and other creative individuals, and without adversely impacting the rights of copyright holders.”

In addition to dismissing the direct copyright claim, it dismissed the Authors Guild claim against Google for delivering the scans to libraries, citing the previous decision in the HathiTrust case finding that the libraries use of the works to be fair use, in part by assisting the visually impaired. If the library use was fair use, Google’s use was also fair use and it could not be liable for providing them with the digital scans.

This case is a significant win for Google and a substantial broadening of the fair use doctrine. It permits a for profit company to mass digitize works without permission and reap many benefits in terms of search advantage, driving traffic to its site and the fact that it possesses the corpus, copies of 20 million books. While this decision is still a district court decision and will likely be appealed, many will rely upon the language in this decision, regarding fair use. Having all works available is certainly a benefit to society but the Copyright Act is intended to balance this benefit with incentives to creators and to offer exclusive rights for a period of time with limited exceptions. The exceptions have been expanding and this case is such an example with a balance tipping in favor of users.

Associations representing visual artists were excluded from the Authors Guild case and they, led by ASMP, have a separate class action against Google for the use of images scanned in the book project. In particular, this action was commenced when the settlement created a registry that excluded any compensation for images.   PACA is one of the associations that joined the action. While there are clearly differences between the image case and the text based case (the search benefits, data mining and directing users to purchase books do not benefit visual artist in the same way), which will require a different fair use analysis, this expansive interpretation of fair use is troubling for this case as well as other matters.