Is The Authors Guild Going To Get Screw-gled?

On December 3, 2014, a three-judge panel of the Second Circuit Court of Appeals heard oral arguments in Authors Guild v. Google. (A detailed summary of the oral arguments is available here). The issue before the Court was whether Google’s mass digitization initiative (Google Books), in which Google scanned and digitized millions of literary works, including copyrighted works, constituted fair use. The lower court had found that Google’s uses were “highly transformative” and, therefore, a fair use. The Authors Guild appealed and, although the Second Circuit’s ruling isn’t expected until early next year, it appears the Court is poised to affirm the lower court’s holding. If it does, yet another blow would be dealt to creator rights by digitization and Congress should consider intervening with a legislative response.

At the December 3, 2014, hearing, the Authors Guild made two notable arguments to refute the lower court’s fair use finding. First, that Google’s status as a for-profit entity distinguished its use from the one made in HathiTrust, an earlier digitization case that the Court determined to be fair use. Second, that Google’s digitization project undercut the potential market for a digital licensing database from which authors could participate and profit.

The Second Circuit panel included Judge Pierre Leval, whose 1990 law review article in the Harvard Law Review, “Toward a Fair Use Standard” (available here), spurred the modern emphasis on transformativeness in fair use analysis. And true to his background, at the hearing Judge Leval made several comments that indicated he was not particularly inclined to reverse the lower court’s holding on the non-transformative grounds raised by the Authors Guild.

As to Google’s status as a commercial entity, Judge Leval replied, “The classic fair use cases are commercial. . . I would be surprised if you’re going to win this case by pleading that Google, like the New York Times, is profit [oriented].” Nor did Judge Leval appear convinced that Google Books impaired any value copyright owners could derive from a digital licensing market. Judge Leval remarked that the Guild’s position did not create “a very useful test” since there is always the possibility that someone may be willing to license the work to avoid potential litigation.

For those who have read my views on Fox News v. TVEyes, it should come as no surprise that I believe Judge Leval may have lost sight of the forest for the trees. True, the New York Times is a profit orientated entity, like Google, but the uses made by each stand in stark contrast. The New York Times does not simply repackage a work, or portion thereof, but instead adds its own criticism or news commentary, a practice that clearly falls within the fair uses contemplated by Section 107 of the Copyright Act. To that end, the New York Times limits the amount of a copyrighted work it uses to achieve that aim.

Google Books, to its credit, displays only a “snippet” of content to prevent third parties from easily accessing a full work. But the snippet is not tailored to achieve the third party’s fair use objective (assuming a fair use is being made at all). Because Google’s numerous users will make vastly different uses of the work, Google “needs” to copy an entire work and have the ability to disseminate any portions thereof to satisfy its users’ needs. The problem is that, in any individual case, a particular downstream user may need more or less of the work to achieve their fair use. The fair use analysis in these cases, however, creates a one-size fits all determination and forgoes any case-by-case analysis. Many recognize the burden authors bear in monitoring one’s works against infringing uses, but imagine how difficult the task becomes when the world’s largest database offers access to it for free. The sheer size and scope of potential users utilizing the work is so vast that the task of evaluating which uses are appropriate becomes sisyphean.

Additionally, Judge Leval’s portrayal of the Authors Guild’s market argument creates a red herring. The Guild’s proposed test was never precipitated on the existence of a single “willing licensee.” Rather, it sought to focus on the viability of a digital licensing market that is preempted by Google Books. The degeneration of the discussion was quite disappointing as there are comparable digital licensing schemes abroad, such as Google’s agreements with the French Publishers Association and publishers Hachette Livre and La Martiniere to license their out-of-print works for such a database, that demonstrate the viability of a similar market domestically.

So why hasn’t Congress acted yet to address digitization? Well, it may surprise you to learn that Congress has contemplated doing so for quite some time. As Terry Hart recently highlighted, legislators actually began to consider the broader issue of how copyright law and the use of copyrighted works with computers interact with one another in 1964. The 1964 Copyright Law Revision bill included the right “to reproduce [the copyrighted work] in any form in the programming and operation of an information storage and retrieval system” as one of several exclusive rights conferred to a copyright owner. However, that language was deleted when the 1965 Copyright Law Revision bill was presented to Congress and ultimately omitted from the final version of the Copyright Act of 1976.

According to the then-Register of Copyrights, the provision was deleted because the burgeoning field of computer technology was too new. The Copyright Office believed “it would be a mistake for the statute . . . to include an explicit provision that could later turn out to be too broad or too narrow.” Supplementary Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law: 1965 Revision Bill, 89th Cong., 1st sess., 1965, p. 18. However, the Copyright Office warned,

unless the doctrine of “fair use” is applicable in a particular case, the bill contemplates that certain computer uses would come within the copyright owner’s exclusive rights. It seems clear, for example, that the actual copying of entire works (or substantial portions of them) for “input” or storage in a computer would constitute a “reproduction” under [the Copyright Act], whatever form the “copies” take: punchcards, punched or magnetic tape, electronic storage units, etc. Similarly, at the “output” end of the process, the “retrieval” or “print-out” of an entire work (or a substantial part of it) in tangible copies would also come under copyright control.


Almost forty years later, Google began to digitize library collections and allow users to search its books database, which led to the current dispute. The Authors Guild and Google have litigated the matter since 2005, and in 2009 it appeared the parties had resolved the matter after reaching a tentative settlement agreement. The proposed settlement would have created an opt-out collective licensing system whereby Google (and only Google) could utilize copyrighted and orphan works and rightsholders would be compensated through a collective registry.

As required, Google and the Authors Guild filed the proposed settlement with the Southern District of New York for final approval. The court, however, denied the proposed settlement in an order authored by Judge Chin. Judge Chin acknowledged that although the digitization project would serve several publicly beneficial goals, it would also fundamentally redefine the relationship of copyright law and technology and alter the exclusive rights conferred by copyright law. In the view of the court, Congress would be the appropriate authority to implement such a profound change to the copyright scheme. No. 05-8136 (S.D.N.Y. March 22, 2011) (order denying motion for final approval of the amended settlement agreement), available here.

The Copyright Office lauded Judge Chin’s decision. It too agreed that digitization could convey appreciable public benefits, but “copyright law may not be usurped as a matter of convenience[.]” Letter on Digitization from James H. Billington, The Librarian of Congress, and Maria A. Pallante, Then-Acting Register of Copyrights, to the Honorable Mr. Patrick Leahy and Mr. Charles Grassey (April 1, 2011).

Later that year, the Copyright Office released its preliminary analysis on mass digitization. In its report, the Copyright Office noted how mass digitization and dissemination would be “difficult to square with fair use.” However, in the three years since the Copyright Office expressed that sentiment, there are now three separate decisions that hold (and presumably will uphold) otherwise: HathiTrust, Fox News v. TVEyes, and Authors Guild v. Google (with varying degrees of persuasiveness).

Although the Second Circuit’s opinion in Authors Guild v. Google is not expected until early 2015, the writing on the wall is clear – the Second Circuit considers digitization to be a transformative use. And, worse, the Court’s earlier decisions are being used to justify digital repackaging for commercial uses. What initially began as a narrow finding to permit a non-commercial digitization venture that offered limited, if any, dissemination of out-of-print works (Hathi Trust) has morphed to allow wholesale copying and reproduction by commercial entities of readily available works (TVEyes). Given these decisions, the prospects of a voluntary licensing market developing are slim.

Even more alarming is that the Second Circuit has essentially created its own mandatory licensing regime. And, unlike the proposed settlement between the Authors Guild and Google, rightsholders are receiving no compensation for the use of their works and are unable to opt-out (or opt-in, for that matter) from participating. Admittedly, the Second Circuit’s regime addresses concerns that the 2009 proposed settlement would have granted Google monopoly power, but the Court has ignored that such a fundamental policy change to a creator’s exclusive rights is best addressed by Congress, not the courts.

At this point, Congressional action is needed now more than ever. Congress should make clear that technological convenience cannot justify the erosion of creator rights. That being said, I do not believe digitization should be outright prohibited. There are very compelling reasons as to why digitization can benefit the public and authors – new audiences, new markets, new sources of income – but, quite simply, there need to be established guidelines and boundaries. To that end, I believe Section 108 should be updated to reflect the current norm of digital consumption. A comprehensive revision of Section 108 could include a clear delineation of what entities can digitize and disseminate copyrighted works to balance the public benefits of digitization with the rights of creators.

In addition, Congress should consider whether to implement a licensing regime for digitizations and the conditions for doing so. For example, should non-commercial, educational uses not require any license? Should commercial uses only be permitted when the parties agree to do so? Further, any discussion of digitization should also include revisiting the issue of orphan works as it would impact any voluntary or opt-in digitization project. It benefits neither the public nor the author to have unidentifiable authors that make a voluntary license impossible to attain. The Copyright Office would be able to offer Congress much guidance as it issued a major report on orphan works in 2006 and continues to study the issue with respect to mass digitization. In addition, with the UK’s recent launch of its orphan works registry, there are a number of models in Europe from which to gather empirical data for Congress to review. In truth, now may be a more ripe time than ever to undertake these various issues and hopefully Congress will.

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