n October 4, 2012, Google reached a settlement in the Google Books case with the publisher plaintiffs, which include The McGraw-Hill Companies, Inc., Pearson Education, Inc., Penguin Group (USA) Inc., John Wiley & Sons, Inc., and Simon & Schuster, Inc. The Association of American Publishers (AAP) represented the publishers in the settlement, resolving its seven-year copyright dispute over Google’s controversial book digitization project in The McGraw-Hill Cos. Inc, et al. v. Google Inc., 05-cv-08881 (S.D.N.Y.). In 2004, Google launched the Google Books Project and commenced scanning thousands of books from major public and academic libraries pursuant to agreements with the libraries. Through its Google Books service, Google makes the scanned books searchable and publicly displays fragments of the books in response to search queries. In October 2005, five AAP member Publishers and the Authors Guild, on behalf of a class of authors, sued Google in the United States District Court for the Southern District of New York, claiming Google did not seek authorization from the owners of the works and accusing Google of massive copyright infringement. Google countered that its scanning and display of the books was fair use because it displayed only small “snippets” of each book, and the scanning was conducted for that purpose.
The parties to the suit reached a settlement agreement framework in 2008 (and amended in 2010) that would allow Google to continue scanning and displaying fragments, and also to make the complete works available online to users for a fee, as well as make several other uses. Google would pay royalties for these new uses to a Registry to be established under the terms of the Settlement Agreement. Last year, the District Court rejected the proposed $125 million settlement based on its findings that it did not meet the “fair, adequate and reasonable” requirement for the settlement of class action lawsuits. The District Court was also concerned that the settlement would give Google an unfair monopoly over “orphan works” – works for which the copyright owner cannot be located. Following the court’s rejection of the settlement agreement, the publisher plaintiffs and the author class action plaintiffs agreed to split their cases, and the author class action plaintiffs separately filed an amended complaint. At a hearing last year, the publishers and Google indicated they were prepared to enter into a new settlement agreement, and the authors’ class indicated they were not.
The terms of the new settlement agreement between Google and the publishers do not need to be approved by the court, as the publishers lawsuit is not a class action. While the terms of this settlement are confidential, in press releases, Google and the AAP have stated that the settlement acknowledges copyright holders’ rights and interests and allows the Publishers to choose whether to make the works available or remove them from the digital archive. Those works that remain in the archive will remain available for users to browse up to twenty percent of the works and then purchase digital versions through Google Play.
The settlement does not affect the ongoing litigation with the Authors Guild and authors’ class. That case has been briefed on the merits of Google’s fair use defense but has been stayed pending Google’s recent appeal to the Second Circuit of the District Court’s decision to grant class action status to the authors’ class.