Bloomberg News

Google Reaches Digital-Book Deal With Publishers Group

October 04, 2012

Google Reaches Digital-Book Agreement with Publishers Group

Google Inc. announced a settlement agreement with the Association of American Publishers that will provide access to digital books and journals digitized as part of the Google Library Project. Photographer: SeongJoon Cho/Bloomberg

Google Inc. (GOOG:US), operator of the world’s biggest Internet search engine, announced a settlement of a lawsuit with five publishers over the digital scanning of books. The deal doesn’t resolve litigation by authors.

The agreement ends the publishers’ portion of a copyright infringement suit filed in federal court in New York in 2005, Google and the Association of American Publishers said today in a statement. U.S. publishers can now choose whether to make their books and articles available for scanning or have them removed, according to the statement.

Google disclosed a plan in 2004 to digitally scan millions of books from public and university libraries to provide snippets of text on its search engine. The Authors Guild, individual authors and publishing companies sued, claiming Google hadn’t sought authorization from the owners of the works. They accused Mountain View, California-based Google of infringing copyrights on a massive scale.

“We are pleased that this settlement addresses the issues that led to the litigation,” Tom Allen, chief executive officer of the publishers’ association, said. “It shows that digital services can provide innovative means to discover content while still respecting the rights of copyright-holders.”

The agreement is with The McGraw-Hill Cos., Pearson Education Inc., Penguin Group USA Inc., John Wiley & Sons Inc. (A:US) and Simon & Schuster Inc., which is owned by CBS Inc.

‘Private Settlement’

“The publishers’ private settlement, whatever its terms, does not resolve the authors’ copyright infringement claims against Google,” Paul Aiken, the executive director of the Authors Guild, said in an e-mailed statement. “Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights, and our class-action lawsuit on behalf of U.S. authors continues.”

Although the settlement is with the five publishers who filed the suit, it “provides that U.S. publishers who belong to associations will be able to take advantage of it,” Allen said in a phone interview.

“We have begun signing separate deals with some of our publishing partners,” Tom Turvey, the director of strategic partnerships for Google, said.

Earlier Settlement

In 2009, Google reached an initial settlement of the class, or group, lawsuit by the authors and publishers that was valued at $125 million. U.S. Circuit Judge Denny Chin, sitting as a trial judge in the case, rejected that agreement last year, saying it permitted a “forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners.”

While talks between Google and the authors on revising the proposed settlement collapsed, the publishers continued negotiating. The deal announced today doesn’t require court approval because it’s not an agreement with the class, Allen said.

“We couldn’t work out a satisfactory class-action settlement,” Allen said. “This is a private settlement.”

Its financial terms are confidential, he said.

“Many of our publishers have longstanding retail relationships with Google,” Turvey said in a phone interview. “The industry has changed so much. It just made sense to work out some of the practical issues of the litigation.”

Appeal Pending

In the continuing litigation by the authors, Google appealed a ruling by Chin that granted the class certification. The U.S. Court of Appeals in Manhattan granted Google’s request to put the lower-court case on hold until it rules on the class- action issue.

Google has scanned more than 20 million books, Turvey said. The project began with the digitizing of books from the libraries of the University of Michigan, Harvard University, Stanford University, Oxford University and the New York Public Library.

“By putting this litigation with the publishers behind us, we can stay focused on our core mission and work to increase the number of books available to educate, excite and entertain our users,” David Drummond, Google’s chief legal officer, said in the statement.

Google rose $4.18 to $766.68 at 1:06 p.m. New York time in Nasdaq Stock Market trading.

A related lawsuit was filed by several organizations representing visual artists.

The writers’ case is Authors Guild v. Google, 05-cv-08136, U.S. District Court, Southern District of New York (Manhattan). The visual artists’ case is The American Society of Media Photographers v. Google, 10-cv-02977, U.S. District Court, Southern District of New York (Manhattan). The appeals case is Authors Guild v. Google, 12-3200, U.S. Court of Appeals for the Second Circuit (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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