Should an Author, or Author's Heir, Opt Out of the Google Book Settlement?
August, 2009
The time to fish or cut bait regarding opting out of the proposed Google book settlement is fast approaching. This right of a copyright owner to be excluded from the Google class action settlement should be approached carefully and cautiously by authors and their heirs.
What is the Google class action settlement?
In 2005 several authors and publishers filed class action lawsuits against Google over the agreement that Google previously obtained with several libraries. That agreement allowed Google to digitize the libraries' collections and make them available in searchable format over the Internet. Authors and publishers objected to this unauthorized copying of their copyrighted work. In response to these lawsuits, Google entered into a tentative settlement agreement by which Google proposed to pay $125 million plus future royalties into a Books Rights Registry to be distributed to the rights holders pursuant to a formula. In exchange, Google will obtain the right to digitize and make millions of books available online. Rights owners have until September 4, 2009 to "opt out" of the settlement. The New York court's hearing on the fairness of the settlement is scheduled for October 7, 2009.
Why opt out?
Staying in the settlement may be financially beneficial to an author by increasing circulation of an author's work. But opting out of the Google settlement by an author or an author's heirs may make sense in certain instances. First, failure to opt out may void the protection from seizure of a copyrighted work. The Copyright Act prevents a government body (other than a bankruptcy trustee) from taking action to seize, expropriate, transfer or exercise ownership over a copyright interest that has not previously been transferred. If an author has not previously transferred an interest in the author's great American novel, song, or other work, then the IRS (plus any other government body, plus any general creditor) is prevented from seizing and exercising ownership over the work.
The protection from seizure only applies if the rights to the work have not been transferred voluntarily by the author. If the author fails to opt out of the Google book settlement, then it may be the case that the Court's approval of the book settlement is deemed to constitute a voluntary transfer of the author's distribution right to Google. In such an event, the protection from seizure may be lost. Is the IRS licking its chops right about now?
Secondly, the transfer of an author's distribution right to Google upon approval of the class action settlement can create an interesting impact on the right of termination under the Copyright Act. Any transfer of a copyright interest made by an author after 1977 can be terminated between the 35th and 40th year following the transfer. This absolute right to terminate transfers only applies to transfers made by the author. If the author of a work that is subject to the Google settlement is deceased, then the transfer of the distribution right to Google pursuant to the settlement may not be terminable. On the other hand, if an author of a work is not deceased when the settlement is approved, the author or the author's heirs may be able to exercise the right of termination in the future. Accordingly, the heir of a deceased author may want to carefully consider whether it makes sense to opt out.
What this means
The decision whether or not to opt out of the Google settlement is significant for at least these two reasons and perhaps more, depending on the nature of the author's rights. The Google settlement has been viewed very positively by some commentators for creating an opportunity to easily distribute large amounts of previously published knowledge at modest cost. This is particularly true for out-of-print publications and orphan works (copyrighted works without an apparent owner). The settlement has been criticized by some for its anti-trust effects and for potentially interfering with the exclusive distribution rights of a copyright owner. Care should be taken by both an author and an author's heirs in considering the impact of opting out. Failure to opt out by September 4th means that an author and publisher are included in the class action settlement.
A copy of the Settlement Agreement, information on the opt out procedure, and information on the financial benefits from the settlement are available here: www.bullivant.com/google-opt-out-downloads
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