Monday, September 21, 2009

Justice Department, States Object to Google Book Search Settlement

This posting was written by Janette Spencer-Davis, Editor of CCH Copyright Law Reporter, and Jeffrey May, Editor of CCH Trade Regulation Reporter.

The Department of Justice and five state attorneys general were among the hundreds of commenters objecting to the settlement agreement between Google and the Association of American Publishers and the Authors Guild.

Pursuant to the terms of the agreement, awaiting approval in the federal district court in New York City, Google would pay $125 million, while earning the right to continue to digitize books and inserts; sell subscriptions to an electronic books database; sell online access to individual books; sell advertising on pages from books; and make other uses described in the agreement.

The agreement also creates an independent Book Rights Registry that would ultimately keep licensing payments intended for copyright holders that cannot be located.

On September 18, the Justice Department proposed that the parties consider a number of changes to the agreement that might help address the government’s concerns, including:

 Imposing limitations on the most open-ended provisions for future licensing,

 Eliminating potential conflicts among class members,

 Providing additional protections for unknown rights holders,

 Addressing the concerns of foreign authors and publishers,

 Eliminating the joint-pricing mechanisms among publishers and authors, and

 Providing some mechanism by which Google’s competitors can gain comparable success.
A Friday, September 18, Department of Justice news release appears here. The statement of interest filed with the court appears here.

State Attorney General Objections

The objections of the attorneys general focused primarily on unclaimed payments. Several stated that the agreement’s proposed treatment of unclaimed payments would circumvent state unclaimed property laws and could “constitute a misdemeanor.”

Some states require that abandoned property, including unclaimed payments, be deposited with the state treasurer. The states might also be interested in the antitrust impact of the settlement.

Connecticut Attorney General Richard Blumenthal has been reported as saying that the settlement might raise antitrust and copyright issues. A press release on Blumenthal’s comments appears here.

The final “fairness hearing” on the settlement is scheduled to take place on October 7, 2009.

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