Google Books Project Continues to Test the Boundaries of Fair Use Law

By Jordana Goodman. A member of our Patent Practice Group

February 2016 IP Update

The Google Books project, as we have come to learn, is a publicly available database consisting of over 25 million books that allows public users to search for “snippets of text,” typically 1/8th of a page or less.  Several major libraries have helped Google assemble this database.  On October 16, 2015, the Second Circuit Court of Appeals held that, under the fair use doctrine, Google may scan entire books and allow the public to search them without permission from the copyright holder.

Copyright law generally prohibits the copying of a protected work, such as a book, without the permission of the copyright holder.  The fair use doctrine, however, allows a person under certain circumstances to use elements of a copyrighted work without permission of the copyright holder.  The copyright statute outlines four factors courts should consider when determining whether the use of a work is fair use:

  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.

The Supreme Court explained how to apply these factors in Campbell v. Acuff-Rose Music, Inc., a 1994 case in which a parody of Roy Orbison’s “Oh Pretty Woman” was found to constitute fair use.  The Court said that the fair use doctrine requires a case-by-case analysis, that it should not be simplified with bright line rules, and that the four factors should not be treated in isolation from one another.  The Supreme Court found the parody of a popular song to be fair use, in part because the parody was “transformative”: it served a different function than the original work.

In 2005, before the Google Books project had limited public access to only snippets of books, both the Authors Guild of America and the Association of American Publishers sued Google for copyright infringement.  Settlement negotiations began in 2006.  They entered into an initial settlement agreement in 2008, which required Google to create a Book Rights Registry, cover court costs, and pay $125,000,000 in damages.   This agreement was amended in 2009 and 2010, and the parties submitted the amended agreement to the District Court for the Southern District of New York, where the suit had been filed, to evaluate whether the settlement was fair.

The settlement agreement proposed that Google continue the Google Books program (including providing public access to entire books), but be required to pay rights holders 63% of all revenue from Google Books.  Additionally, rights holders could exclude or remove the books from the database at any time (an “opt-out” provision) and would automatically be included in a database to receive revenue if they did not opt out.  Google would further compensate rights holders $45,000,000 in damages. Hundreds of objections were filed to this settlement agreement, most of which focused on antitrust, international law, and copyright concerns.

On March 22, 2011, Judge Chin rejected the amended settlement agreement for not being “fair, adequate, and reasonable.” He found that “the establishment of a mechanism for exploiting unclaimed books is a matter more suited for Congress than this Court.” Foreign countries, authors, and publishers asserted that the settlement agreement would violate international law, raising additional issues that Judge Chin felt should be addressed by Congress, not the courts.

Having rejected the proposed settlement, Judge Chin left open the question of whether the books project constituted fair use.  Meanwhile, Google had revised its practice regarding public access to books under copyright, providing only a search function that would return snippets of pages containing the search term. In 2013, in part because of the new Google policy regarding snippets, he decided that it did.

On appeal, the Second Circuit found that Google Books fell within the fair use exception, meaning that Google did not need permission of copyright holders to use their works in the publicly available database.

First, the Second Circuit examined the “purpose and character of the use” of the copyrighted works in the Google Books database.  The key aspect of this factor, in the court’s view, was the presence of a “transformative use,” one that is sufficiently distinct from the original purpose of the work so as to take it outside the realm of copyright infringement.

The Second Circuit reasoned that Google’s activity – making an inventory of books available for scholars to search electronically – was very different from the activity of any single author in writing and publishing a book. Google Books Project was transformative because it made knowledge about the plaintiffs’ books publicly available without providing the public with the entire works. This paralleled the Second Circuit’s decision in June of 2014, stating that “the creation of a full-text searchable database is quintessentially transformative use.”

The Second Circuit gave short shrift to the plaintiffs’ argument that Google, as a commercial enterprise, should be precluded from prevailing on the first prong of the fair use test.  The court concluded that Google’s status as a commercial enterprise is far less important than the transformative nature of its use.

The Second Circuit downplayed the importance of the second prong, “the nature of the copyrighted work.”  The Court said that the factor is generally “not dispositive” and that this factor hardly ever plays a large role in explaining a fair use decision when viewed in isolation.

The Court found that the third factor, “the amount and substantiality of the portion used in relation to the copyrighted work as a whole” also favored Google.  Though the Court did acknowledge that Google made a complete digital copy of each book on Google Books, the Court found that the copying was “reasonably appropriate to achieve the copier’s transformative purpose” because a search function requires the entire book in order to be effective.  Because Google offers to the public only a “snippet view,” it was found not to offer a competing substitute for the original work.

Finally, the Court looked to the effect Google’s copying has had on the potential market and the value of the copyrighted work. The Court stressed that the fourth factor, the most important in its view, is closely related to the first factor: The more transformative the use is, the less likely it is to compete and affect the market for the original work.

The search function, which revealed only snippets of a book, was not likely to harm the market for the book, said the court.  In instances where the market might be affected, the harm would be in making factual information available to researchers.  However, factual information is not protectable by copyright. The possibility of suffering some market harm is not enough to weight the fourth factor in Plaintiff’s favor. There needs to be a “meaningful or significant effect” upon the potential market for or value of the copyrighted work.  Finding no meaningful or significant effect in this case, the fourth factor favored Google.

The Authors Guild released a press release the day of the Second Circuit’s decision, stating its intention to appeal the case to the Supreme Court.  They wrote, “We trust that the Supreme Court will see fit to correct the Second Circuit’s reductive understanding of fair use, and to recognize Google’s seizure of property as a serious threat to writers and their livelihoods, one which will affect the depth, resilience and vitality of our intellectual culture.”

Many libraries who had contributed to Google Books applauded the decision, saying that “the digitization of these collections is a necessary foundation for 21st century scholarship, enabling richer discovery and engagement with the record of human thought found in books.”

According to the Second Circuit, the Authors Guild case “tests the boundaries of fair use.” Even so, Google’s practice of offering only snippets of books has been criticized.  According to Dan Cohen, the director of Digital Public Library of America, Google Books may be a non-infringing transformative tool, but Google has created “less a universal library than a tinted window into one.” He points out that, though Google does provide access to millions of books and articles, the public cannot access full copies of the work.  Instead, the public can  obtain only limited information through “snippets” that are publicly available and based on an online search.

As books become more available in a digital format, it is clear that these boundaries will continue to be tested, as it has in cases involving university course books.  Digital books can be distributed to anyone who has access to the internet. Soon, the courts will need to address how wide this dissemination can go before it infringes on copyright holder’s rights.