The grand settlement of the Google Book Search lawsuits this week may be one of those rare events when the parties who say they’ve all come out winners actually believe it to be true. On Tuesday, Oct. 28^th, more than three years after a group of publishers and authors filed suits against Google, contending that the company’s unauthorized scanning and storing of entire books, including books in copyright, violated the rights of the copyright holders. The three groups announced the terms of a settlement agreement to end their dispute and establish a business framework for the future to make books more available digitally and compensate rightsholders for their use.

Under the settlement, Google will pay 63% of revenues—including advertising revenue—it collects from the use of books in the program to a newly created Book Rights Repository for distribution to rightsholders. Publishers and authors will be encouraged to add their books to the program, which promises to expand the breadth of the collection, though rightsholders have the option of opting out of the program entirely or excluding their books from certain uses. For in-print books, rightsholders must affirmatively opt-in to the program. Google also will be able to make a greater percentage of in-copyright books available to users through previews, as well as institutional subscriptions and online sales to consumers, thus vastly expanding the short “snippet” views that have been a hallmark and handicap of the service. Significantly, libraries that actively participate in the program will be provided with digitized “preservation copies” of the books they contribute to the scanning effort.

Google will pay $125 million as part of the deal. Of that, $45 million will go to compensate publishers and authors whose books have already been digitized under the program. Nearly $35 million will help to pay for settlement administration and to set up the Book Rights Repository, which will manage a database of rights information about books and their rightsholders, distribute royalties to authors and publishers and provide other administrative functions on behalf of participating rightsholders.

The settlement leaves unresolved the nettlesome legal arguments—centering on Google’s Fair Use defense of its unauthorized copying of the works—that the three parties have argued over since the suits were filed in 2005. In essence, they agreed to disagree for the sake of getting the deal done.

The agreement still must be approved by the U.S. District Court, which could take several months. It also could run into opposition on anti-trust grounds or from other quarters. Still, at first glance the deal appears to represents a common-sense approach to a genuine business challenge that everyone involved had a stake in resolving.

Share This

Washington, DC — The rate that digital retailers like Apple’s iTunes must pay songwriters and music publishers will stay the same under a new decision handed down by the Copyright Royalty Board (CRB), which rejected the publishers’ petition for a 66% rate hike. The decision to freeze royalty rates at $0.09 a song came after revelations this week that Apple had threatened to shutter its iTunes store last year if rates rose and the business became unprofitable. The CRB also established for the first time a rate of $0.24 cents for each ringtone, and gave publishers the right to seek a 1.5% late fee, calculated monthly. “These events will bring clarity and order to an environment that for the past decade has been hampered by litigation and uncertainty on all sides,” said David Israelite, president and CEO of the National Music Publishers’ Association (NMPA). “During this challenging time for the music industry and digital stores and services, we are pleased with the CRB’s decision to keep royalty rates stable for the next five years,” said Jonathan Potter, executive director of the Digital Media Association (DiMA), which represents digital music retailers like Apple, Amazon and Best Buy.

Share This