Meet the Google Settlement

- by BlogMistress

Ninc member Kristine Smith wrote the following blog to enlighten us all on the Google Settlement.

In the February issue of Nink, Elaine English discussed the recent Google Settlement and the setting up of the Google Book Registry. On Thursday March 5th, I took part in a one hour call-in discussion of the settlement hosted by Authors Guild Executive Director Paul Aiken and General Counsel Jan Constantine. Later during the call, Director of Legal Services Anita Fore also phoned in.

For the first 20-25 minutes, some of the aspects of the settlement were discussed in greater detail. The rest of the time was set aside for questions. Mr. Aiken set out the general timeline of the Authors Guild and publisher lawsuits, then went on to discuss the resulting settlement.

This all started when Google made a deal with several university libraries to scan public domain books. Some of this was already set out in Ms. English’s article, but bear with me. At some point during this exercise, Google announced that they would scan all books, both in-print and out of print. After that, the following steps were taken by the Authors Guild and others:

* September 2005–Authors Guild filed suit
* 5 months later–5 publishers sued
* May 2006–first settlement conference. Authors Guild proposed core terms.

After 2.5 years of steady negotiation, a settlement was announced in October 2008. On 11 June 2009, a judge is scheduled to approve the final settlement.

Key points of the settlement

* In print and out of print works will be treated differently.
* For OOP works, the default setting is “in program”. It is up to an author to opt out.
* For in-print works, the default setting is “out of program.” It is up to the author to opt in.
* The terms of the settlement allows Google domestic uses of the works only. There will be safeguards in place to protect the database. It’s up to the author to decide whether they feel this is sufficient to protect their works.
* The settlement does not cover images. Photos, etc are blocked out. Childrens’ books are the exception to this since images are an integral part of the work.
* If the settlement is approved, a Book Rights Registry will be created containing upwards of 20 million volumes. It will serve as a way to track/log/confirm who holds rights to a work.
* Authors and publishers will run the Registry. They will license rights to Google and oversee settlement in general.
* Authors and publishers will have the right to audit Google and any participating libraries, who could be held liable for damages.
* Certain participating libraries can get portions of the stacks back from Google. They would face the same restrictions and penalties.

There will be four revenue-generating licenses

1. public access license–libraries will have one free online portal to the database. No printing possible without the paying of a fee. Revenue will be shared with rights holders.
2. preview license–equivalent of Amazon’s ‘search inside the book.’ Up to 20% of the book will be available for preview. On the bottom of page, Google will run ads. Revenue from the ads will be shared with rights holders, but rights holders can turn the ads off if they wish.
3. sale of consumer online editions. The viewer will pay to see an entire work online. They would be able to print only 20 pages at a time, or cut/paste 4 pages at a time. EXCEPT: No 20-page preview option for anthologies because multiple claims could be impacted. Rights holder can set the price, ranging from $1.99 to 20.99.
4. institutional subscriptions–these are expected to generate the most revenue. They will be sold to colleges and universities. Use of the database would be unlimited. A single terminal would reserved for Registry viewing. Walk-ins (non-student university library patrons) would be able to use the terminal, but remote viewing would not possible.

Flow of revenue

Google collects all revenues, and will pass on 63% to rights holders. An additional 10-20% administration fee will be subtracted from this 63%. This fee will fund the Registry.

Revenue distribution

1. If the work is OOP and rights have reverted to the author, 100% revenue (minus the administration fee) will go to the author;
2. If the work is OOP, but rights have not reverted, in most cases the revenue will be spilt 50/50 between the author and the publisher;
3. If the work is OOP, rights have not reverted, and it was published before 1987, revenue will be split 65/35 between the author and the publisher, with the larger share going to the author. This is to account for the coverage of electronic rights;
4. If the work is in print, in most cases 100% of the revenue will go to the publisher, who will then pay the author in accordance with their contract.

All this is discussed in greater detail in Attachment A of the Settlement, which can be found at www.googlebooksettlement.com/.

Disputes

If a dispute arises between an author and a publisher regarding revenue distribution or other issues, the author can take the publisher to arbitration. The limitations to this Right of Arbitration are set forth in Settlement Article VII. There is a cost associated with arbitration of $300 per title.

In the event of a dispute regarding the rights of a book, an Author can gain a “quasi-reversion” of rights. This reversion is an expedited process by which a book, for Registry purposes only, is deemed author-controlled. The author initiates this quasi-reversion by notifying the publisher and the Registry at same time, at which point they become the sole right holder of the book. This quasi-reversion only works inside the settlement. It is not a true rights reversion. Author cannot resell/republish book until the usual reversion process is completed.

Other claims details

* Publishers can claim in-print books as well as authors.
* A share of the settlement pool will range from $60-$300. This share will go up/down depending on number of claimants whose books were scanned without authorization. Google scans before 5 May 2009 are considered unauthorized scans. Google scans after 5 May 2009 are considered authorized, but authors do have recourse regarding display of works as well as digitization of those works. This is explained in much greater detail in the Settlement site FAQ.
* The Accounts Management screen at the Claims site will allow an author to see if the publisher is collecting income, and how much. The author will be able to see if publisher has authorized uses/displays under the settlement. An author can trump publisher options. I don’t know whether publisher can trump back. This may be where the arbitration option comes in. If there is a conflict with a claim, Registry withholds payment until the matter is settled.

In the future

* Going forward, it will be the task of the Registry to gather books published after the date of the settlement. An author can also claim books at a later date, but back payments are set aside for only 5 years. If you claim a book ten years from now, you will receive 5 years worth of back payments. Anything beyond that is forfeit.

* Groups other than Google have expressed interest in dealing with the Registry. Licensing of works to other third parties is being considered. Rights holders would need to authorize.
* Individual subscriptions to the database at some future date are also a possibility. These subscriptions would be handled by the Registry.

I hope this post has helped you understand the settlement a little better. I would encourage everyone with books to claim to visit the Settlement Claims website and read the FAQ, which provides a good deal of useful information in greater detail. If you’re a Ninc member with books to claim and think you might like a little help with the process, please visit the Member Services area of www.ninc.com to access a step-by-step instruction guide. If you have any comments or questions about the guide or the settlement, please email me at kris@kristine-smith.com.

The claims guide will be posted on the Ninc website in the next week or so. If you would like it sooner, please email me at kris@kristine-smith.com.

3 comments

  1. Thank you so much for this report, Kristine. It’s so helpful.

  2. You’re welcome. I would also suggest that folks read today’s post at Romancing the Blog by agent Kristin Nelson concerning the settlement.

  3. Will come back again – taking you feeds also, Thanks.