Property Outlaws

How Squatters, Pirates and Protesters Improve the Law of Ownership

By Sonia Katyal & Eduardo M. Peñalver

[Available Here]

Fifty years ago, on Monday, February 1, 1960, Ezell Blair, Jr., Franklin McCain, Joe McNeil, and David Richmond, all freshmen at the North Carolina Agricultural and Technical University, walked into the cafeteria at the Woolworth's Store in downtown Greensboro, North Carolina. They sat down at the counter and quietly waited for service. They received none. Blair, McCain, McNeil, and Richmond were black, and Woolworth's, although not required to do so by law, followed the local "custom" of refusing to allow its black patrons to eat at its lunch counter. Though they received no service, the four men sat quietly and without incident. When the store closed at 5:30, they left. The next morning, the four young men returned, along with sixteen other students from North Carolina A&T. By Thursday morning, the ranks of the sit-in participants had swelled to over sixty. Within a month, similar sit-in protests were occurring at department stores throughout the South. The fight for civil rights would never be the same.

What had been, as one contemporary put it, a civil rights movement dominated by lawyers working quietly in courtrooms had become a mass phenomenon. The student-led sit-ins thrust the civil rights question to the forefront of the 1960 presidential elections, and there is a direct line between the students' activism and the passage of Title II of the Civil Rights Act of 1964. That landmark law, which prohibits racial discrimination in most privately-owned businesses, radically transformed rights of private ownership in the United States and has become one of our most successful civil rights statutes.

It's easy, in hindsight, to downplay the controversy that surrounded the students' tactics, but, at the time, the Greensboro protesters were maligned from all sides as threatening sacred rights of private property and the rule of law in pursuit of what many commentators considered to be a trivial interest in access to lunch counter service. Such criticism did not come just from conservatives and segregationists. According to one account, when Thurgood Marshall heard about the sit-ins, he proclaimed that "he was not going to represent a bunch of crazy colored students who violated the sacred property rights of white folks by going into their stores or lunch counters and refusing to leave when ordered to do so."

Whether the Greensboro students knew it or not, in violating property rights as they did, they tapped into a long tradition within the history of Anglo-American property law. For as long as there has been private ownership, it seems, there have been groups who have sought to challenge the prerogatives of ownership in search of a more just social order. Sometimes these movements have succeeded. More often, they have not. But the pervasive influence of these property outlaw tactics on the development of American property doctrine cannot be denied. In Property Outlaws, we explore the sit-in episode (along with scores of other examples of property lawbreaking) to try to extract broader lessons about the interaction between disobedience and ownership.

Today, forty years after the civil rights movement, we see this dialectic emerge time and time again in contemporary urban and rural environments, with respect to both tangible and intangible forms of property. The bike collective Critical Mass takes over the streets of metropolitan cities in order to reinvent the concept of public space; urban community gardeners take over vacant lots to beautify the city and create a sense of shared ecological responsibility; pirate microradio stations in the Bay Area and mashup artists interrupt everyday sonic worlds; cyberactivists like the Electronic Disturbance Theatre and others mount international electronic civil disobedience campaigns. The debates that frequently accompany these movements continue to unfold.

Drawing, in part upon the historical and contemporary context, our aim is to broaden the focus of property and intellectual property discussions beyond the common recognition of property's need for stability to include its need for dynamism, an ability to change and to fluctuate according to shifting norms, values, and social realities. We hope to rehabilitate, at least to a certain extent, the image of the intentional property outlaw, and to show how she has repeatedly played an integral role in producing our system of property and intellectual property. In doing so, we also hope to shed light on a complex and subtle tension: at the same time that property seems to be so stable and orderly, it also masks a latent instability that stems from the persistence of transgression. Far from universally undermining the value of property, however, this underlying instability is frequently constructive and indeed, necessary to prevent the entire edifice from becoming outdated.

The value of at least certain instances of disobedience is twofold. First, there may in certain situations be value in the outlaw's directly redistributive conduct. That is, there may be circumstances under which we assess that the lawbreaker's decision to take someone else's property, either for himself or to give to another, is itself valuable. We refer to this phenomenon as the lawbreaker's creation of "redistributive value." Second, in cases of persistent, widespread lawbreaking, citizen behavior may communicate useful information to property owners and to the state, indicating that some element of a property law, or some dimension of the owners' use of property, may be out of date or unjust in some respect. We refer to this signaling function provided by outlaw conduct as its "informational value." If property and intellectual property rights were perfectly enforced, either through draconian penalties or certain enforcement, each of these categories of potential value would be eliminated.

The implications of this insight differ somewhat for tangible and intellectual property. In the area of tangible property, our proposals are relatively modest, largely because the law of tangible property already contains within it a number of venerable doctrines that, in our view, acknowledge the value of a significant amount of lawbreaking. Doctrines such as adverse possession (often referred to as "squatters rights") and necessity (which permits people in emergency situations to take what they need in order to survive), provide mechanisms for nonconsensual transfers of property under certain constrained conditions. Although there have been some efforts in recent years to roll these doctrines back or limit their application, we favor preserving them and perhaps even expanding them in a number of respects. In the context of intellectual property, pervasive uncertainty as to the scope of the actual entitlement generates space for disobedience but also causes a great deal of productive behavior to labor under the threat of crippling statutory penalties.

Our aim, therefore, is to broaden the focus so that the discussion of disobedience is not just about property's need for stability, but also its need for dynamism, its ability to change and to fluctuate according to shifting norms, values, and social realities. In other words, we hope to rehabilitate, at least to a certain extent, the image of the property outlaw, and to show how she has repeatedly played an integral role in producing our system of property and intellectual property. Time and again, groups of people have intentionally violated property laws, and in a number of important cases, the law of property has responded by shifting to accommodate their demands, in the process bringing those groups back within the fold of the law-abiding community.

Wired's David Kravets notes a "landmark" federal court decision of last week that a string of torrent Web sites are unlawful, allowing for massive copyright infringements. Wired said the Dec. 21 decision, while not unexpected, is "the first in the United in which a federal judge found that" torrent or BitTorrent Web search engines are "an unlawful avenue to free movies, music, videogames and software."

The lawsuit was lodged by Motion Picture Association of America (MPAA), and resulted in a summary judgment ruling against www.isohunt.com, www.torrentbox.com, www.podtropolis.com and www.ed2k-it.com, all owned by Gary Fung. The plaintiffs, U.S. District Judge Stephen V. Wilson wrote, "asserted that, through his operation and promotion of the websites, Fung allows users to download infringing copies of popular movies, television shows, sound recordings, software programs, video games, and other copyrighted content free of charge. "

Judge Wilson dismissed Fung's arguments that his sites were distinguishable from other file-sharing sites that have been shuttered for copyright infringements, such as Napster.

The judge wrote in Columbia Pictures Industries, Inc., et al., v. Fung:

These technological details are, at their core, indistinguishable from previous technologies. In fact, Defendants' technologies appear to improve upon the previous technologies by permitting faster downloads are large files such as movies. Such an improvement quite obviously increases the potential for copyright infringement.

Fung told Wired that he was considering an appeal, maintaining that provisions in copyright law should protect Torrent sites that remove content when requested by rights-holders.

[Image via the Law Office of Lisa N. Kaufman.]

Moral Panics and the Copyright Wars

By William Patry

[Available Here]

I wrote Moral Panics and the Copyright Wars with the bold goal of changing the way we think about copyright. I set this goal not out of arrogance, but out of despair - despair over the way debates over the important social issues raised by the creation and use of works of authorship have degenerated into little more than election-year mudslinging. Language has been an important weapon in these tussles, as the warring parties attempt to demonize each other.

I examine the history and myths surrounding the copyright, as well as various origin stories that attempt to find in the past people's present ideologies. I assert that copyright is a set of social relations, intended to serve the important social goals of furthering knowledge and creativity. Approaching copyright this way avoids the "them versus us" dichotomy we currently face where copyright owners claim copyright is a form of Blackstonian private property over which they can exercise absolute dominion, and conversely, where those attacking what they regard as excessive copyright protection regard copyright as an evil monopoly to be repealed.

Instead, the book explains why copyright should be regarded as a government program, intended to provide incentives for socially useful purposes. As a set of social relations, we must accept that copyright should be regulated in order to ensure it is serving its valuable public purpose. This means that calls for stronger copyright, just like calls for weaker copyright miss the point entirely; we have need only of effective copyright laws, with "effective" being measured by whether our copyright laws are serving their intended purpose. I reject therefore the copyright equivalent of free market fundamentalism, in which it is asserted markets will always represent the most rational - and therefore best - outcome.

In Article I, section 8, clause 8 of the Constitution authorizes Congress to provide copyright, but the power is discretionary, and may be exercised only in order to promote the progress of science, with science being used in its 18th century sense of learning. Congress therefore has a constitutional obligation to ensure that copyright is serving in practice, and not just in theory, to promote learning. The book argues that this obligation has been seriously undermined through the deliberate creation of moral panics: existential threats to societal values and interests. Those who start moral panics, who supposedly threaten the social order, have been described as "folk devils." Corporate copyright owners have successfully used moral panics to obtain ever-expanding copyright, and in the process have made copyright less a vehicle for achieving desired social results and more a form of private property right. Copyright's effectiveness has accordingly suffered greatly. The book sets out to refocus our attention on making copyright effective.

In making this determination of effectiveness, we should use quantitative criteria, and where the data show the need for necessary adjustments, we should make them just as we do for other government programs: if there was a government program to increase low-income housing, and credits were given to developers for that purpose, we would want Congress, before the program was authorized to conduct a study to see if low-income housing would in fact been increased, and whether the amount of the credit provided was the right amount. Copyright should be treated the same way.

The book discusses how the efforts of copyright owners to recast the debates as moral panics, as clashes between property and trespassers or pirates represent a classical response to the creative disruption (to use economist Joseph Schumpeter's term) inherent in real innovation. Innovation, by its very nature, represents a threat to the status quo, but without such disruptions, economies slide into stagnation. In a free market, stagnating businesses fail; copyright, especially recent amendments in the Digital Millennium Copyright Act, has, however, given copyright owners formidable weapons to use laws to fight the creative disruption. The book characterizes the Copyright Wars as falling squarely within the natural operations of capitalism.

The Pavlovian reaction of copyright owners against new technologies is explained as the natural but dangerous response to changes in business models. In the final chapters of the book, I look at how innovation is treated in Japan and Korea and how these countries can act as exemplars. The United States is not even in the top 10 in technological innovation; if we want to avoid being a third rate country, we have to change, and copyright law has to change too.

Delays in finalizing the proposed Google Books settlement look highly probable according to experts following the class action lawsuit. The parties involved in the proposed settlement, which if approved could give Google expansive digital publishing rights, are now negotiating aspects of the settlement, according to The New York Times.

In a recent press statement, the Department of Justice urged Judge Denny Chin of the United States District Court for the Southern District of New York to decline the settlement, and said that the "parties should be encouraged to continue their productive discussions to address those concerns."

James Grimmelmann, an associate professor of the Institute for Information and Law at New York Law School and author of an ACS Issue Brief on the settlement, told The Times:

The news out of this is that there are frantic negotiations going on in back rooms right now. The parties are scared enough to be talking seriously about changes, with each other and the government. The government is being the stern parent making them do it.

Grimmelmann's Issue Brief explored some of the public interest concerns that have arisen from the settlement, such as who will control copyright ownership of "orphan works," which are books whose authors or rights holders cannot be found.

In its statement on the proposed settlement, the DOJ also expressed concern about several aspects of it and urged the parties to "consider a number of changes to the agreement that may help address the United States' 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, whatever the settlement's ultimate scope, providing some mechanism by which Google's competitors can gain comparable access."

In a guest ACSblog post, Center for American Progress Senior Fellow David Balto responded to critics of the settlement, calling it "good for consumers" and urging the federal court to accept it.

The deadline for most briefs regarding the Google Books settlement prompted a flurry of filings with the court. While Judge Denny Chin of the Southern District of New York began wading through the newly submitted reading material, the House Judiciary Committee held a hearing on the settlement. Among the most notable developments from the hearing was the Copyright Register's announcement that the U.S. Copyright Office opposes the settlement.

The Copyright Register told the House Judiciary Committee:

[T]he proposed settlement inappropriately creates something similar to a compulsory license for works, unfairly alters the property interests of millions of rights holders of out-of-print works without any Congressional oversight, and has the capacity to create diplomatic stress for the United States.

The next developments in the settlement's review are likely to be the Justice Department's brief, due on September 18, and Judge Chin's October 7 hearing on the matter. 

For further debate on the Google Books settlement's merits, see the ACS Issue Brief by Professor James Grimmelmann and David Balto's reply on ACSblog.

Debate continues to rage over the proposed Google Books settlement. The subject, which was the topic of an ACS Issue Brief by Prof. James Grimmelman and a ACSblog reply by David Balto, was taken up recently by Steve Pociask, president of the American Consumer Institute Center for Citizen Research.

The settlement would permit Google to give the public access to scores of "orphan works," or copyrighted material whose owners either are unknown or cannot be found.

Pociask takes issue with the settlement: 

[T]he current book search settlement gives the most dominant online firm a significant competitive advantage over its rivals, delays entry by would-be rivals and hands Google favorable pricing over other Web-centric competitors. The results would likely lead to market power that could permanently lockout competitors, thereby posing anticompetitive risks to the public. Furthermore, this would be accomplished by a single judge's decision, instead of through legislative means or public discourse, or market forces.

When surfing the Internet, consumers find most of their information using search engines, and mostly using Google. Through Web site rankings and ad placement, Google already influences how we find Web content. Google also tracks and retains your Web site browsing history for the purpose of "behavioral advertising." Now, if this court settlement is approved, Google will know exactly what you are reading.

For the complete op-ed, click here.

With a federal court contemplating a proposed settlement of a lawsuit challenging Google's book search technology, Professor James Grimmelmann examines the details. In his ACS Issue Brief, now available in the new edition of Advance: The Journal of the ACS Issues Groups, Grimmelmann writes:

For the past four years, Google has been systematically making digital copies of books in the collections of many major university libraries. It made the digital copies searchable through its web site--you couldn't read the books, but you could at least find out where the phrase you're looking for appears within them. This outraged copyright owners, who filed a class action lawsuit to make Google stop. Then, last fall, the parties to this large class action announced an even larger settlement: one that would give Google a license not only to scan books, but also to sell them.

Grimmelmann, an associate professor of the Institute for Information and Law at New York Law School, in The Google Book Search Settlement: Ends, Means, and the Future of Books, says several aspects of the proposed settlement deserve scrutiny.
Regarding the treatment of "orphan works," titles where the original copyright owner can no longer be located, Grimmelmann states:

The settlement tackles the orphan works problem, but through the judicial process. Laundering orphan works legislation through a class action lawsuit is both a brilliant response to legislative inaction and a dangerous use of the judicial power. Many of the public interest safeguards that would have been present in the political arena are attenuated in a seemingly private lawsuit; the lack of such safeguards is evident in the terms of the resulting settlement. The solution is to reinsert these missing public interest protections into the settlement.

The Google Book Search settlement continues to draw critics, The New York Times reports. The Times notes a new challenge to the class action lawsuit settlement, which if approved by a federal court, will grant Google expansive digital publishing rights.

James Grimmelmann, an associate professor of the Institute for Information and Law at New York Law School and author of an ACS Issue Brief on the settlement, told The Times that the new filing "may be the most fundamental challenge to the settlement yet."

Scott Grant, a partner at the law firm Boies Schiller & Flexner, is preparing to lodge the filing in federal court today. Grant, who is preparing the filing on his own behalf, told the newspaper, "This is a predominantly commercial transaction and one that should be undertaken through the normal commercial process, which is negotiation and informed consent." He added that Google and supporters of the settlement are "trying to ram this through so that millions of copyright holders will have no idea that this happening."

In his Issue Brief, The Google Book Search Settlement: Ends, Means, and the Future of Books, Grimmelmann examined public interest concerns that have arisen from the settlement, such as who will control copyright ownership of "orphan works," which are books whose authors or rights holders cannot be found.

Grimmelmann asserts in his brief that dealing with "orphan works" is best solved by legislation, not litigation.

The settlement tackles the orphan works problem, but through the judicial process. Laundering orphan works legislation through a class action lawsuit is both a brilliant response to legislative inaction and a dangerous use of the judicial power. Many of the public interest safeguards that would have been present in the political arena are attenuated in a seemingly private lawsuit; the lack of such safeguards is evident in the terms of the resulting settlement. The solution is to insert these missing public interest protections into the settlement.

David Balto's reply to my Issue Brief on the proposed Google Book Search settlement is careful and thoughtful. Unfortunately, it gets some of its analysis of the settlement's anticompetitive effects wrong. I'll respond to three of the points on which I believe he's mistaken.

First, Balto's discussion of barriers to entry makes an unwarranted leap. He writes, "First, Google will affirmatively not obtain a monopoly over orphan works because the settlement does nothing to make entry more difficult for a second entrant."

He's right about making things more difficult, but wrong about the monopoly. The settlement gives Google a monopoly not by raising barriers for other entrants, but by preferentially lowering them for Google. The barriers to entry for the large-scale market in selling orphan works are currently prohibitive; no one at all can legally compete in it. The settlement opens it up only to Google; and the result will be a monopoly. (I was sloppy about my phrasing in the Issue Brief here -- I said the settlement "creates" a barrier to entry, which may be the source of Balto's more substantive error.)

Here's an analogy to make this distinction clear. Imagine that it were generally illegal to buy or sell milk. A company -- call it Moogle -- obtains from the government a special authorization to start selling milk. Moogle hasn't done anything to raise entry barriers for its competitors; the barriers were forbiddingly high to start with. But as a result of this special dispensation, Moogle now has the milk market all to itself. That's a monopoly.

This leads into a second way in which Balto's argument is questionable. He believes that Google's success in obtaining this settlement means that other potential book-scanners will be similarly able to obtain settlements authorizing them to sell books. He focuses on class certification, which he argues would be readily achievable for a hypothetical second scanner (let's call it "Two-gle"), once Google's precedent is on the books.

I have my doubts. There are serious grounds to question whether Two- gle's motion for class certification would be as trivial as Balto suggests. The Google case is already pushing at the limits of class action law. The parties are spending tens of millions of dollars in legal fees getting this class certified -- and that's with cooperative plaintiffs. Two-gle could quite plausibly face plaintiffs who like the Google deal well enough not to welcome competition. They could sabotage Two-gle's efforts in all sorts of ways: drafting idiosyncratic and fact-specific complaints, fighting any motion to force a class on them, or flatly refusing to negotate for the kind of settlement Google got.

In any event, if, as Balto argues, future Two-gles would be able to obtain similar settlements so readily, then presumably there should be no objection to offering them the same deal now, without having to go through the expense and waste of a lawsuit. That's what the non- exclusivity I recommended in my Issue Brief would consist of. No one has convincingly explained why it would pose any sort of problem.

Third, Balto's analysis of the leading antitrust case, Broadcast Music, Inc. (BMI), is misleadingly incomplete. There, BMI (along with ASCAP) offered public performance licenses for copyrighted music. It had a huge catalog of songs licensed from copyright owners, and it would sell "blanket" licenses to television networks, giving them the right to broadcast any song in its catalog. CBS sued, arguing that blanket licensing was a form of price-fixing. In the well-known passage that Balto quotes, the Supreme Court held that BMI's decision to offer only blanket license was pro-rather than anti-competitive.

It's true that BMI blessed blanket licenses, but under the settlement only the library subscriptions will involve blanket licenses. The sales of individual books to readers are akin to traditional book sales by individual copyright owners. That's exactly the distinction the Court drew in a later section of the opinion, explaining that the blanket license "is "quite different from anything any individual owner could issue." Thus, BMI itself calls the individual purchase part of the settlement into question.

As for the Book Rights Registry the settlement will create, Balto is puzzled that I both criticize its monopoly position and want to expand its role. No mystery: I'm merely proposing to treat it as a regulated monopoly, a familiar beast from public utility law. The Court in BMI accepted this framing when it pointed to the "substantial restraints"
of the consent decree BMI operated under as a justification for allowing BMI a free hand.

Balto cites the Copyright Clearance Center (CCC) as a similar but harmless entity offering nonexclusive licenses to copyrighted works. Unlike the CCC, however, the Registry will have the rights to copyrights no copyright holder ever agreed to assign it. For orphan works, those rights are effectively exclusive. The Court in BMI pointed out that CBS had a "real choice" of where to obtain rights to individual songs; for orphan works under the settlement, there is no alternative licensor.

Balto's Columbus metaphor is an ironic choice. He writes, "Like 'the earth is flat' critics of Columbus' journey, these critics lack the vision to see the truly beneficial aspects of the settlement." But Columbus's critics weren't flat-earthers; they knew that the earth was roughly 25,000 miles around. Columbus was the mistaken one; a combination of calculation and translation errors apparently led him to believe that the true circumference was much smaller and the Indies much closer. He got lucky, though; there turned out to be a continent in the way of his badly planned circumnavigation. What Balto calls lack of vision, I prefer to think of as drawing sound conclusions on the basis of all available evidence.

In the end, Balto says that the settlement should "unquestionably" be approved. Beware all such absolute confidence. The settlement is immensely intricate and amazingly ambitious. It offers obvious and substantial public benefits, but also comes with subtle and wide-ranging risks. Questions, and plenty of them, are entirely appropriate.

Editor's Note: This substantial piece is a response to The Google Book Search Settlement: Ends, Means, and the Future of Books, an ACS Issue Brief by Professor James Grimmelmann. The complete reply is available below the fold. 

In 2004, Google began working with large research libraries to digitize their book collections and to make the content searchable online. Not long after the project was announced, a collection of authors and publishers sued Google for copyright infringement. After almost three years of negotiations, Google and the plaintiffs announced in October 2008 that they had agreed to a proposed settlement.

While some commentators have lauded the settlement, others have vociferously claimed that it poses competitive concerns and does not promote the public interest. As an advocate for consumer interests and a former antitrust enforcer, I took great interest in this debate early on and started to study the settlement. Over the last few months, I have learned much about Google Book Search, the ensuing litigation, the settlement, and the settlement's competitive implications. In doing so, I have come to the firm conclusion that the competition criticisms of the settlement are unfounded. The settlement is good for consumers and should be approved.

To a large extent I think the debate over the settlement misses the point. What Google has achieved the in truly remarkable, and potentially transforms the availability of vast amounts of knowledge - much akin to the development of search. Google has created a universally accessible, searchable, digital library of unprecedented dimensions. Although this is not a discovery of a "new world" akin to Christopher Columbus' achievement, it has the potential of substantially increasing access to a phenomenal amount of information for millions of consumers. The critics of this endeavor need to learn the lesson of Columbus' critics: the world is not flat.

The achievements of Google's project are remarkable. When Google started the project, book scanning technology was in its relative infancy and cost-prohibitive for operations at scale; the company thus had to develop its own scanning technology to move forward with the project (ii). At the same time, Google had to negotiate numerous agreements with libraries to gain access to their books and had to secure other rights directly from publishers and authors (iii). An additional deterrent was the great uncertainty surrounding the ownership of digital book rights. Indeed, it became abundantly clear that Google had undertaken considerable economic risk when its Book Search program became the subject of a class action lawsuit.
Antitrust appropriately recognizes the need to reward such risk taking endeavors. For decades the courts and antitrust enforcers have recognized the need not to intervene against innovations and new products developed based on superior skill, foresight and ingenuity. The creation of this new online library is precisely that, a risky endeavor that benefits society and consumers.

In settling the litigation, the publishers, authors, and Google have pursued a sound and necessary approach to resolving a number of rights sharing problems that, until now, have posed seemingly insurmountable hurdles to making books digitally available. For example, by creating a nonprofit organization, the Book Rights Registry ("BRR" or "Registry"), to represent the interests of authors and publishers and to locate rightsholders who have been separated from their works, the settlement will significantly enhance the ability of subsequent entities to commence book scanning initiatives. As such, the settlement should be viewed in light of what it provides for the general public- increased access to the world's written cultural heritage, particularly books that have long been out of print. The settlement is, in other words, output-enhancing and procompetitive.
In this article, I first describe the settlement's consumer benefits, and then examine the impact of the settlement on entry barriers. I explain how, rather than increasing entry barriers the settlement significantly decreases such barriers for other entities. I then focus on the criticisms posed by Professor James Grimmelmann (iv), and explain how the settlement is ultimately procompetitive and beneficial to the market. Like "the earth is flat" critics of Columbus' journey, these critics lack the vision to see the truly beneficial aspects of the settlement.

1. The Settlement Will Create Significant Consumer Benefits

The Library of Alexandria, which Grimmelmann mentions in his articles, was one of the largest libraries in the ancient world. Although it remains unclear to this day how the library was destroyed, the leading theory is that Julius Caesar set a fire that unintentionally burned the library down in 48 BC during the Alexandrian War. The ancient texts contained within the library were destroyed, and the knowledge contained within the books was lost forever.

This historical incident is noteworthy for two reasons: first, on a practical level, the creation of digital copies of the world's books ensures that this disaster of the ancient world will not be repeated in modern times. Indeed, it would be borderline negligent not to use the electronic advancements of our generation to preserve the history and knowledge contained in books that have typically existed only on flimsy decaying paper.

Second, despite the fact that there has been no fire or other calamity, a substantial percentage of the books in the United States (which Grimmelmann estimates is likely to be more than half of all books) (v) have been largely unavailable to the public, which amounts to a tragedy no less significant than the destruction of the Library of Alexandria. These are out-of-print books, which can be found in some public libraries and occasionally purchased second-hand, but which are otherwise inaccessible.

There are a number of complications surrounding these books that have prevented them from being made more accessible. For many works, it is unclear whether they have fallen into the public domain because the rightsholder did not renew their copyright, as required by prior iterations of the Copyright Act. For some works, there is uncertainty as to who presently owns the rights to a book because the rights somehow got lost or otherwise disappeared over time. There is also ambiguity as to whether the author or the publisher owns the digital rights to hundreds of thousands of books. The combined impact of the varying shades of rights uncertainty has been to create gridlock, (vi) which has prevented people from effectively accessing, and benefiting from, the knowledge encapsulated within an enormous number of books.
By settling their litigation, Google and the plaintiffs have ended the impasse. The settlement unleashes greater access to books, particularly to out-of-print books, which increases output in the marketplace of ideas (vii). Moreover, the settlement will serve as an equalizing force across socioeconomic, geographic and linguistic barriers. Scholars and historians at the smallest schools in remote corners of this country will obtain the same access to knowledge as those at large well funded universities in our biggest cities. Citizens in poor communities will likewise have similar access to knowledge as those in affluent communities. And language barriers will be diminished under the settlement as Google's translation technology enables digital works in one language to be instantly translated into others (viii).

In addition to tearing down socio-economic and linguistic access barriers, the settlement will provide considerable benefits to those who are blind or otherwise print-disabled. Under the terms of the settlement, Google can provide books to "users with print disabilities so that such users have a substantially similar user experience as users without print disabilities" (ix). The National Federation of the Blind, the nation's leading advocate for access to information by the blind, has stated that the settlement will have "a profound and positive impact on the ability of blind people to access the printed word" (x).

The settlement will also provide researchers with the ability to analyze books and language in ways that were previously impossible. They will, for example, be able to search the entire digital library corpus to compare language and cultural development, and to track literary developments across countries. The potential to unlock knowledge is seemingly unlimited.

Universities around the country have overwhelmingly acknowledged these benefits. According to Michael Keller, Stanford's university librarian and publisher of the Stanford University Press, "[t]he settlement promises to change profoundly the level of access that may be afforded to the printed cultural record, so much of which is presently available to those who are able to visit one of the world's great libraries." Paul Courant, the Dean of Libraries at the University of Michigan, has likewise observed that Google Book Search will provide:

ubiquitous online access to a collection unparalleled in size and scope, preservation of the scholarly and cultural record embodied in the collections of great research libraries, new lines of research, and greatly expanded access to the world's printed work for persons with print disabilities (xii).

For all these reasons, it is difficult to exaggerate the benefits that consumers will gain from the settlement - and important not to overlook the fact that these vast benefits will disappear if the settlement's detractors succeed in derailing its approval. Even some of the settlement's most vocal detractors, including Grimmelmann, acknowledge these fundamental facts (xiii).

2. The Settlement Substantially Decreases Entry Barriers

Grimmelmann argues that the settlement will create various significant, if not insurmountable, barriers to entry that will prevent other potential competitors from competing in book scanning and online book sales. He could not be more mistaken.

There is no doubt that book scanning is a difficult space to enter. Companies such as Microsoft and Yahoo have entered, seemingly determined that it would not be profitable, and exited (xiv). Despite the costs and challenges, however, there are a number of entities that have entered book scanning and sustained their efforts (xv). As Grimmelmann acknowledges, the non-profit Open Content Alliance currently scans public domain works, and Amazon.com has the institutional capacity to make books available digitally on a "huge scale" (xvi).

The capability of individual firms to enter is not, however, the question. The critical inquiry is whether the settlement increases or decreases entry barriers. The answer to that question is clear: there is no respect in which the settlement increases entry barriers. In fact, like Columbus' explorations, it will actually decrease entry barriers, by expanding the public domain and resolving uncertainty on rights. Moreover, the settlement does not create any additional obstacles to entry.

a. The Settlement Expands the Public Domain

Google has scanned approximately seven million works (xvii), one million of which come from the company's partner program (xviii) and another million of which were published prior to 1923 and therefore are clearly in the public domain (xix). The copyright status of segments of the remaining five million works are unclear. Many of the books will actually belong in the public domain because the rights owners did not renew their copyrights, as required under previous iterations of the Copyright Act. As Grimmelmann notes, more than 85% of works published between 1923 and 1978 were not renewed, as required by the Copyright Act, and therefore fell into the public domain (xx).

The catch here, because the Copyright Office did not keep effective records during this period, is identifying which works were not renewed. Carnegie Mellon, Project Gutenberg, the Distributed Proofreaders, and Google have, however, combined to scan, compile, correct, and disseminate these records (xxi). And Google is now using the records to determine the copyright status of books under the settlement.

Notably, the Copyright Office examined the feasibility of scanning these records and placing them online in 2006. They expressed reluctance to commit to such a project, however, because it would "involve a significant expenditure of resources" (xxii) as "preliminary figures estimated the costs to be about $35 million" (xxiii). Fortunately, however, government inaction has not impeded progress because Google and others have filled the void - without the expenditure of public funds.

Each time that Google determines a book belongs in the public domain, consumers benefit by being able to download an entire PDF version of the text. Potential book scanning entrants benefit by having fewer books with uncertain rights - and can thereby avoid incurring expenses that Google had to incur to navigate these uncertain rights. By facilitating the clarification of the public domain status of potentially millions of works, the settlement thus significantly expands access and facilitates entry.

b. The Settlement Will Lead to the Resolution of Uncertain Digital Rights

Another significant source of uncertainty surrounding the status of many out-of-print works is the ownership of the digital rights associated with particular books. Up until the 1990s, publishing agreements typically did not allocate digital rights to books, and publishers and authors have disagreed about who should retain these rights by default. The resulting standoff has harmed authors and publishers alike by denying them the possibility of gaining revenue from the sale of digital works. Consumers are likewise harmed by the loss of an effective option for accessing these publications. The settlement resolves this problem by creating a procedure for publishers and authors to determine who should own these digital rights.

In addition, while publishers or authors may not have had any incentive to assert their digital rights in the past because their books were out of print or otherwise no longer profitable, the settlement creates an incentive for authors or publishers to come forward to assert their rights. Specifically, individuals and institutions can purchase access to out-of-print works that are still under copyright and the revenues that will be derived from these sales, combined with various inclusion fees described in the settlement, create financial incentives for owners of out-of-print books to claim them.

To ensure that copyright holders worldwide are aware of these financial incentives, the settlement has established the most comprehensive class-action notification program ever. Specifically, Google has funded a large direct-mail effort, created a dedicated Web site about the settlement in 36 languages, and spent about $7 million on advertising in newspapers, magazines, and even poetry journals, with at least one ad in each country (xxiv).

By creating an entity to resolve disputed digital rights claims between authors and publishers, providing financial incentives for rights holders to claim their works, and funding the world's largest class-action notification program, the settlement generates substantial pro-competitive benefits and facilitates entry.

c. The ‘Orphanage' Post-Settlement

Grimmelmann alleges that the settlement will provide Google with "exclusive control" or a "monopoly" over "orphan works," which are works for which the current rightsholder is unknown. These claims lack economic substance.

First, Google will affirmatively not obtain a monopoly over orphan works because the settlement does nothing to make entry more difficult for a second entrant. Indeed, any company that chooses to begin scanning orphan works will face fewer obstacles - due to the settlement - than Google has confronted. In particular, by increasing the size of the public domain, clarifying uncertain rights, and addressing innumerable complex legal issues, the settlement simultaneously provides a map and blazes trails through previously unchartered territories than others will be able to use for their own explorations.

Second, we should remember that these works were orphaned because the rightsholders failed to keep track of their interests in the books. Thus, while it is obviously exciting that Google's scanning efforts could result in the (re)discovery of works of genius that have sat anonymously in the stacks of our nation's research libraries, we should also not forget that the true remaining orphans probably had indifferent parents and are likely of little value. As Roy Blount, President of the Authors Guild, noted, orphan works are books that "have been deemed unfit for continued commerce by traditional print publishers" (xxv).

Third, the number of true orphan works that will exist post-settlement warrants closer scrutiny. Contrary to the claims of Grimmelmann and others, the number of orphan works will be substantially reduced. Specifically, we know that:

• Over 85% of copyrighted works prior to 1964 were not renewed and belong in the public domain, which could amount to as many as 1.5 million works (xxvi);
• The settlement creates financial incentives for copyright owners to come forward and claim works, which will facilitate rights clarification (xxvii); and
• The Registry is obliged to locate authors under the settlement and, according to Roy Blount, studies on efforts to locate the rightsholder of out-of-print work have typically resulted in an 80-85% success rate (xxviii).

It is thus overwhelmingly apparent that the combined effect of these rights clarification efforts and financial incentives will be to clarify the copyright status of hundreds of thousands, if not millions of works, which will be an enormous improvement over the status quo.

Studies on the number of true orphan works in the United State have, moreover, found few fewer true orphans than critics of the settlement allege. Peter Hirtle, for example, concluded that there is a total of 12 million out-of-print works in the United States and that approximately 1.4 million could be true orphans (xxix). If Google has scanned about 5 million out-of-print but in-copyright works, this means its library might include about 580,000 orphan works.

According to Brewster Kahle (xx), the head of the Open Content Alliance, it costs Google about $10 to scan a book and costs the Internet Archive about $30 to scan a book with "superior quality" (xxxi). It thus would cost a rival to Google somewhere between $5.8 million and $17.4 million to scan the same body of orphan works-an expensive undertaking to be sure, but one that is certainly achievable. As such, it is entirely disingenuous to claim that the settlement increases entry barriers surrounding orphan works or that Google will obtain a monopoly over them.

d. The Class Action Nature of the Settlement

Grimmelmann contends that the settlement is a good deal only for Google because "[i]n a post-settlement world ... potential competitors [in book scanning] face one insurmountable hurdle: copyright law" (xxxii). This is absurd because the copyright law is no different in the "post-settlement world" than in the "pre-settlement world." Indeed, when Google started scanning these books, it was sued for alleged copyright violations. And as the settlement shows, copyright law is a surmountable hurdle and indeed, the settlement itself is a valuable guide for others seeking to surmount it.

Nonetheless, Grimmelmann posits that any subsequent entrant would be "sued into oblivion by a mob of angry copyright owners" (xxxiii). Conversely, he expresses concern that the class action nature of the settlement will serve as a "remarkably effective barrier to entry" because a subsequent entrant would not be sued by a class action, similarly to Google (xxiv).

These concerns are unfounded once one understands the requirements for class certification, which are found under Rule 23 of the Federal Rules of Civil Procedure. Rule 23 states that a class should be certified if it comprises numerous plaintiffs with common questions of law or fact that share typical claims and defenses and have interests that can be fairly and adequately protected by class representatives. Defendants usually bitterly contest certification because it can mean the difference between exposure to individual damage claims that might amount to hundreds or thousands of dollars and the nationwide aggregation of these claims that might amount to millions or even billions of dollars in damages. In the book scanning context, however, a defendant will benefit from, and therefore support, class certification because it enables the defendant to simultaneously resolve all its copyright issues. Without delving into the elements of this provision, I will simply note that any lawyer who fails to persuade a court that a class should be certified - given the combination of a "mob of angry copyright owners," a supportive defendant, and the Authors Guild v. Google, Inc. class certification precedent - might want to consider an alternative career.

e. Innovation and Transparency

Grimmelmann also worries about Google becoming a "chokepoint" for book distribution, and about the possibility of Google censoring information it does not want distributed. The irony of this argument is overwhelming. The Internet has facilitated an unprecedented explosion in the ability of individuals to publish content - regardless of how bizarre, tasteless, or offensive it may be - to the world at large. And Google, as the world's most successful search engine, facilitates greater access to published content than any other entity in history. Period. The suggestion that the company thus might find the need to censor the content of books obtained from its library partners while simultaneously providing search results to users on virtually any topic is seemingly fanciful.

In addition, Grimmelmann's argument appears to be premised on a Brave New World, where all other forms of distribution and access to literature have apparently become extinct. Even if Google were to decide not to distribute certain works through its system, one must remember that this settlement is non-exclusive, thus allowing copyright holders to freely negotiate with any potential competitors, and that these "censored" works could still be published, sold, and distributed through all the means of publication that exist today.

Furthermore, the settlement provides a mechanism to address this specific concern - if Google wishes to remove a book from its search results (which Grimmelmann notes is the company's First Amendment right), then it must inform the BRR and provide the BRR with a digitized copy of that work. No such mechanism would exist if Google were to have successfully litigated its case against the authors and the publishers, so the settlement actually provides greater transparency than the ‘but for' world.

For all of the above reasons, there simply is no merit to the contention that the settlement will raise entry barriers for other would-be providers of digital books. The settlement will result in an expansion of the public domain and in the resolution of disputes over digital rights that are currently impeding our ability to access to vast quantities of books. And while issues inherent in our current system of copyright law, including orphaned works, will continue to impede access, none of these problems is increased by the settlement. In the post-settlement world, it will be in no way harder and in many ways easier for companies other than Google to provide digital access to books.

3. Remaining Antitrust Concerns are Equally Unfounded

Grimmelmann raises a number of specific antitrust concerns about the settlement, including that it facilitates price-fixing, confers monopoly power on the Registry, and contains an anticompetitive most-favored nation (MFN) provision (xxxv). Although these are legitimate points to examine, a careful examination of the settlement and the underlying economics shows they are unfounded.

a. The Settlement Does Not Facilitate Price-Fixing

Grimmelmann contends that the settlement will foster price-fixing among publishers and authors by creating an e-book program for consumer sales that gives copyright holders the option of allowing Google to determine sales prices. He points to a settlement provision that sets out twelve possible bin prices ranging from $1.99 to $29.99 and excitedly observes that "[s]urely the sophisticated companies with expert lawyers who drafted this settlement agreement wouldn't use it to set up a system of naked price-fixing ... " (xxxvi).

When these consumer sales provisions are examined, it becomes readily apparent that the settlement does not establish a cartel. These provisions actually provide two ways by which prices for consumer book sales can be determined: (1) the individual author or publisher can specify price; or (2) Google can select a price based on its own algorithm (xxxvii).

For algorithmic pricing, which is the focal point of Grimmelmann's concern, the settlement states that "Google may change the price of an individual Book over time" and the "distribution of Books ... among the Pricing Bins may change over time" (xxxviii). These provisions also prevent the Registry, authors, or publishers from interfering with Google's pricing freedom. The settlement does not, in other words, create "a system of fixed prices." Grimmelmann is plainly wrong.

Unfortunately, Grimmelmann creates an unnecessary spectre of concern. He notes that the "ninth circle of antitrust hell is reserved for price-fixers," (xxxix) but this is of little relevance to this situation. He is, of course, correct - collusion among competitors, which includes price-fixing, is a per se violation, and as such, no scrutiny is given to the actual harm or benefit produced by a per se violation (xl). Given this, it is rather surprising that Grimmelmann also proclaims that Section 1 of the Sherman Act is designed to prevent "[l]egal agreements that cartelize an entire industry" and that "[p]rice-fixing among two copyright owners is harmless" (xli). To the contrary, Section 1 of the Sherman Act is not designed simply to prevent the cartelization of an entire industry, but rather prohibits price-fixing between any companies regardless of how much of an industry they represent. Price-fixing between two copyright owners is neither harmless nor in the public interest.

Grimmelmann fails to recognize that the court and antitrust authorities have recognized that in many environments collective price setting can be pro-competitive when intellectual property is involved. The Supreme Court has noted that, especially when dealing with copyright issues, price-fixing is "not a question simply of determining whether two or more potential competitors have literally ‘fixed' a ‘price'" (xlii). The Supreme Court ruled in Broadcast Music Inc. v. CBS ("BMI") that music copyright clearinghouses were not violating the antitrust laws per se, and in doing so, it expounded upon the purpose of copyright in general that aptly applies here:

Although the copyright laws confer no rights on copyright owners to fix prices among themselves or otherwise to violate the antitrust laws, we would not expect that any market arrangements reasonably necessary to effectuate the rights that are granted would be deemed a per se violation of the Sherman Act. Otherwise, the commerce anticipated by the Copyright Act and protected against restraint by the Sherman Act would not exist at all or would exist only as a pale reminder of what Congress envisioned. (xliii)

As in BMI, the Google settlement will not facilitate a per se cartel violation, but instead will accomplish "the integration of sales, monitoring, and enforcement against unauthorized copyright use" (xliv). This integrated facilitation of copyright enforcement and market enhancement in this manner is, as Grimmelmann himself noted, unabashedly procompetitive and beneficial.

b. The Registry Is Not a Potential Monopolist

Grimmelmann contends that the "Registry is also a potentially dangerous monopoly" because it "will speak on behalf of an entire industry" (xlv). At the same time, he argues that the "best way to make the Registry work well" is to expand its scope and powers (xlvi). This is a perplexing contradiction. No economist or antitrust lawyer would recommend expanding the powers of an entity to eliminate the monopolization concerns it poses. If the Registry were a "dangerous monopoly," it would be appropriate to curtail its powers. Period.

But his competitive concerns are simply misplaced. The Registry is no different than other collective rights management organizations that have been acknowledged as procompetitive under the antitrust laws. For example, the Department of Justice ("DOJ") previously examined a licensing program proposed by the Copyright Clearance Center, Inc. ("CCC"), a non-profit organization created by authors, publishers, and users of copyrighted material to facilitate copyright licensing and clearance (xlvii). The DOJ concluded that CCC's licensing arrangement, which authorizes users to make unlimited copies of any work in CCC's library for an annual fee, did not raise competitive issues in part because the copyright holders that are CCC members may continue to negotiate separate licensing arrangements with users and competing firms (xlviii). As part of its analysis, the DOJ also noted the procompetitive benefits of the blanket licensing agreement, such as encouraging use of copyrighted works among a wider range of users (xlix).

Similar to the CCC, the Registry will offer blanket licenses to digital book users on a nonexclusive basis. This is a key provision that Grimmelmann notes, but seemingly ignores its full implications (l). Non-exclusivity means that, as with the CCC, authors and publishers will have the ability to negotiate with the Registry or separately with digital book providers. And because authors and publishers will have the ability to negotiate with other entities, the DOJ's conclusion regarding this provision in the settlement should be the same as the DOJ's conclusion with respect to the CCC-that absent exclusivity, it is unlikely that the Registry could impose unreasonable license fees or otherwise restrict the availability of electronic books.

Just because the Registry is important does not mean it is a monopoly, but ultimately will provide significant benefits to consumers. Under the Settlement, the Registry will own and maintain a rights information database for books and their authors and publishers, locate rights holders, distribute payments from Google to rights owners, and assist in the resolution of disputes between those claiming to hold digital rights (li). The Registry thus has the potential to significantly increase the amount of information and the number of books available in digital form to consumers.

c. The Most-Favored Nation Clause Is Procompetitive

Grimmelmann also raises concerns about the settlement's so-called Most-Favored Nation clause ("MFN"), claiming that it is "[t]he most pressing problem" because it "explicitly guarantees Google a privileged position" (lii). I have written extensively and testified about the competitive implications of MFNs (liii). These clauses can promote consumer welfare by permitting first movers to recoup their investments in innovation. Conversely, MFNs can impede entry and adversely impact competition. The MFN clause in the settlement falls into the former category.

First, Grimmelmann's MFN analysis fails to give any consideration to Google's incentives to continue scanning books. As noted above, every other company that has attempted entry in this space has failed. We should thus be careful before making flippant arguments that would undermine Google's incentives to scan because the last thing that we, as consumers, want is to impede Google's scanning efforts.

Second, the MFN only applies in limited circumstances. Specifically, provision 3.8(a) states that the Registry will not license to third parties on terms that "disfavor or disadvantage Google" when such authorizations include rights granted from a "significant portion" of unclaimed works (liv). In other words, the Registry can license all the claimed works and some of the unclaimed works to third parties on terms that disfavor or disadvantage Google. The remainder of the works can moreover be licensed on identical terms to Google. It seems unlikely the MFN will hinder competition.

Conclusion

The universally accessible, searchable, digital library that will be realized by the Google Book Search settlement will provide unprecedented benefits to consumers worldwide. The settlement is an efficient and socially beneficial solution to the significant rights uncertainty that currently surrounds many books. Many of the leading critics of the settlement, such as James Grimmelmann, have failed to appreciate these procompetitive benefits while also dramatically overstating the antitrust risks. Like the critics of Columbus' journey their speculation of concern is unfounded: the earth is not flat. The Google Book Settlement should unquestionably be approved.

Notes

i. Mr. Balto is an antitrust lawyer in Washington and a Senior Fellow at the Center for American Progress. In the Clinton Administration he was the Policy Director of the Bureau of Competition of the Federal Trade Commission.
ii. Maureen Clements, The Secret Of Google's Book Scanning Machine Revealed, National Public Radio (April 30, 2009), available at www.npr.org/blogs/library/2009/04/the_granting_of_patent_7508978.html.
iii. In December 2004, Google entered agreements with the libraries at Harvard University, the University of Michigan, Stanford University, Oxford University, and the New York Public Library to scan parts of their collections of books and make the contents searchable online. Google received access to the collections, while the libraries received an electronic copy of the books that they provided to Google. Press Release, Google Checks Out Library Books, Dec. 14, 2004, available at www.google.com/press/pressrel/print_library.html.
iv. James Grimmelmann, The Google Book Search Settlement: Ends, Means, and the Future of Books, American Constitution Society (April 2009), available at http://www.acslaw.org/files/Grimmelmann%20Issue%20Brief.pdf [hereinafter Ends, Means, and the Future of Books]; James Grimmelmann, How to Fix the Google Book Search Settlement, Journal of Internet Law at 1 (April 2009), available at http://works.bepress.com/cgi/viewcontent.cgi?article=1022&context=james_grimmelmann [hereinafter How to Fix the Google Book Search Settlement].
v. Ends, Means, and the Future of Books, supra note 3 at 8.
vi. See generally, Michael Heller, The Gridlock Economy, New York, NY (2008).
vii. James Gleick, How to Publish Without Perishing, N.Y. Times (Nov. 29, 2008), available at, http://www.nytimes.com/2008/11/30/opinion/30gleick.html ("As a way through the impasse, the authors persuaded Google to do more than just scan the books for purposes of searching, but go further, by bringing them back to commercial life. Under the agreement these millions of out-of-print books return from limbo.... This means a new beginning - a vast trove of books restored to the marketplace.").
viii. See, e.g., CNET News, Google's Digital-Book Future Hangs in the Balance, http://news.cnet.com/8301-1023_3-10262203-93.html (June 15, 2009) (noting that Google "increasingly sophisticated translation technology ... could bulldoze literary language barriers").
ix. Press Release, Google Settlement with Authors, Publishers, eSight Community News, Nov. 23, 2008, available at www.tabinc.org/blog/archives/2008/11/google_settleme.html.
x. Id.
xi. Press Release, Major Universities See Promise in Google Book Search Settlement, University of Michigan News Service, Oct. 28, 2008, available at www.ns.umich.edu/htdocs/releases/story.php?id=6807.
xii. Paul Courant, Other Voices: Google Agreement Will Extend U-M Libraries' Accessibility, Mlive.com (June 24, 2009), available at www.mlive.com/opinion/ann-arbor/index.ssf/2009/06/other_voices_google _agreement.html.
xiii. See How to Fix the Google Book Search Settlement, supra note 3 at 12 ("Everyone is better off than they would be in a world without Google Book Search . . . .").
xiv. Ends, Means, and the Future of Books, supra note 3 at 10.
xv. See, e.g., Press Release, Emory Partnership Breaks New Ground in Print-On-Demand Books, June 6, 2007, available at www.emory.edu/news/Releases/KirtasPartnership1181162558.html (announcing partnership with Kirtas Technologies, Inc., a maker of digital scanning technology to apply automated scanning technology to thousands of rare, out-of-print books in its research collections).
xvi. Ends, Means, and the Future of Books, supra note 3 at 10.
xvii. Juan Carlos Perez, In Google Book Settlement Business Trumps Ideals, IDG News Service (Oct. 30, 2008), available at www.pcworld.com/businesscenter/article/153085/in_google_book_settlement_business_trumps_ideals.html.
xviii. Id.
xix. Id.
xx. Ends, Means, and the Future of Books, supra note 3 at 8.
xxi. Google Book Search Blog, U.S. Copyright Renewal Records Available for Download, http://booksearch.blogspot.com/2008/06/us-copyright-renewal-records-available.html.
xxii. United States Copyright Office, Report on Orphan Works, Jan. 2006, 29-30 n.46, available at www.copyright.gov/orphan/orphan-report.pdf.
xxiii. Id.
xxiv. Noam Cohen, A Google Search of a Distinctly Retro Kind, N.Y. Times (March 3, 2009), available at www.nytimes.com/2009/03/04/books/04google.html (noting that "200 advertisements have run in more than 70 languages: in highbrow periodicals like The New York Review of Books and The Poetry Review in Britain; in general-interest publications like Parade and USA Today; in obscure foreign trade journals like China Copyright and Svensk Bokhandel; and in newspapers in places like Fiji, Greenland, the Falkland Islands, and the Polynesian island of Niue (the name is roughly translated as Behold the Coconut!), which has one newspaper.").
xxv. See, e.g., Roy Blount, Let's Not Lose Our Heads Over a "Monopoly" of Orphans, The Authors Guild (June 24, 2009), available at www.authorsguild.org/advocacy/articles/roy-blount-on-google-orphans.html.
xxvi. Ends, Means, and the Future of Books, supra note 3 at 8; Peter Hirtle, Why the Google Books Settlement is Better Than Orphan Works Legislation, LawLibrary Blog (May 27, 2009), available at http://blog.librarylaw.com/librarylaw/2009/05/why-the-google-books-settlement-is-better-than-orphan-works-legislation.html.
xxvii. The minimum inclusion fee under the settlement is, for example, $60. Settlement Agreement, Authors Guild, Inc. v.Google, Inc., Case No. CV 8136-JES § 2.1(b) [hereinafter Settlement Agreement].
xxviii. Blount, supra note xxv; see also Hirtle, supra note xxvi, (citing Carneige Mellon University study that located 79% of rights holders).
xxix. Hirtle, supra note xxvi.
xxx. Along with James Grimmelmann, Brewster Kahle has been one of the most vocal - and illogical - critics of the settlement. In a single editorial, Brewster argued that the settlement should not be approved because Google would gain a monopoly over millions of orphan works yet also stated "[t]here are alternatives" to Google's scanning efforts and that entry at scale is "not that expensive." Brewster Kahle, A Book Grab By Google, Washington Post (May 19, 2009), available at www.washingtonpost.com/wp-dyn/content /article/2009/05/18/AR2009051802637.html. Kahle does not appear to appreciate that monopolies do not arise where alternatives exist and entry is viable.
xxxi. Brewster Kahle, Economics of Book Digitization, available at www.opencontentalliance.org/2009/03/22/economics-of-book-digitization.
xxxii. Ends, Means, and the Future of Books, supra note 3 at 10.
xxxiii. Id.
xxxiv. Id. at 11.
xxxv. E.g., id. at 1 (Google developing a "dominant platform with control over a huge catalog of books that no one else has access to").
xxxvi. Id. at 5; Settlement Agreement, § 4.2.
xxxvii. Besides the pricing options provided in the settlement, authors and publishers can also opt-out of the settlement and negotiate sales prices and other access provisions directly with Google. When seen in this broader context, it's even more difficult to contend that the consumer sale provisions will facilitate collusion.
xxxviii. Settlement Agreement at § 4.2.
xxxix. Ends, Means, and the Future of Books, supra note 3at 5.
xl. Broadcast Music, Inc. v. CBS, 441 U.S. 1, 9 (1979) (quoting United States v. Topco Assoc.'s, Inc., 405 U.S. 596, 607-08 (1972) ("It is only after considerable experience with certain business relationships that courts classify them as per se violations . . . .")).
Xli. Ends, Means, and the Future of Books, supra note 3 at 5.
xlii. BMI, 441 U.S. at 9 (further noting that "[l]iteralness is overly simplistic and often overbroad.").
xliii. Id. at 18 (emphasis added).
xliv. Id. at 20.
xlv. Ends, Means, and the Future of Books, supra note 3 at 6. He also noted that a "common theme" among his concerns "is that they all relate to, or are magnified by, centralized power." Id. at 7.
xlvi. Id. at 14.
xlvii. Department of Justice Business Review Letter, Copyright Clearance Center, Inc., Aug. 2, 1993, available at www.usdoj.gov/atr/public/busreview/211651.htm.
xlviii. Id.
xlilx. Id.
l. How to fix the Google Book Search Settlement, supra note 3 at 13.
li. Settlement Agreement at § 6.1.
lii. Id. at 6.
liii. See, e.g., David A. Balto, Networks and Exclusivity: Antitrust Analysis to Promote Network Competition, 7 George Mason Law Review 523, 537-43 (1999).
llv. Settlement Agreement at § 3.8(a).