U.S. SC won't hear appeal of Google's win against Authors Guild

By Hoang Tran | May 10, 2016

WASHINGTON (Legal Newsline) – Google achieved victory in April when the U.S. Supreme Court declined to review a case in which Google was being sued for copyright infringement. 

The lawsuit involved allegations made by the Authors Guild against Google when it was developing its Google Books search database. Initially, there were two suits brought against Google, one from the Association of American Publishers (AAP) and one from the Authors Guild.

The suits were consolidated and claimed that the tech company has no right to copy full text of books with copyrights and store them in its databases. Eventually, Google settled with AAP, but the Authors Guild pursued the case.

However, the Guild’s case was dismissed on Nov. 14, 2013, by the U.S. Court of Appeals for the Second Circuit, which stated that Google’s use of the work constituted fair usage under copyright laws. Judge Denny Chin authored the opinion.

The Guild filled a petition for certiorari on Dec. 31, 2015. It was denied on April 18. The Supreme Court didn’t issue a comment on why the cert was denied.

Marcus Peterson, a senior associate at Pillsbury Winthrop Shaw Pittman LLP who focuses on intellectual property, believes that the case tested the boundaries of fair use and that the decision was interesting because of the interpretation of one word: transformative.

“The interesting point is that even the Second Circuit agreed that [Google Books] tested the boundaries of fair use in the opinion,” he said to Legal Newsline.

“The plaintiffs had a good argument, especially for the proposition that there is a split among the circuits how the transformative portion of the fair use framework should be analyzed.

If you take the test that the Second Circuit and Ninth Circuit had used that it doesn’t have to transform the meaning or the message of the work, it only has to transform kind of the utility of the work or the purpose of the work, then you could see why Google won the case.”

However, as Peterson notes, the plaintiff sought another understanding of the word transformative used by the other courts. They hedged their arguments on that understanding.

“But on the other hand, if you take the test or understanding of 'transformative' that other circuits have used, where it has to be a new form of expression and not merely a digitization of the book or some other means of just basically copying, then you can see why the plaintiffs thought they had a good argument.”

Under the Copyright Act, and the Supreme Court’s Campbell v. Acuff-Rose Music decision, use of copyrighted material may be considered fair use if it is “transformative” and does not impair the potential value or market for the copyrighted work.

It all came down to the courts’ interpretation of “transformative,” Peterson said. 

“That’s how it seems to me,” he said. “If [the plaintiffs] had been in a different court that understood 'transformative' differently, then the case might have a different outcome.”

A different outcome would have meant Google would be liable for what the plaintiffs argued is a violation of their copyrighted material that is posted and digitized on Google Books and given to libraries. Peterson said that if Google were to be found liable, the plaintiffs would probably ask for statutory damages.

"I think if Google had been found liable, my guess is that the plaintiffs would have sought statutory damages. Of the 20 million or so books that Google digitized, about 4 million of them were still covered by copyright," he said.

"I’m not sure how many of those works actually belonged to the plaintiffs or could have been a part of the damages calculation. But I think statutory damages probably would have made the most sense here.”

Peterson noted that seeking statutory damages made sense because it would be extremely difficult for each individual plaintiff to prove a loss of income due to Google Books.

“Its going to be really tough for the individual plaintiffs to prove that they lost any sales because of the Google Books project and it’s going to be tough to show what sort of ill-gotten gains Google would have had because they weren’t charging for access to the Google Books and they weren’t charging the libraries for the digital copies of the books," he said.

"So it would be very difficult to try to establish that Google had made any profits that they shouldn’t have made. So I think statutory damages would have made the most sense."

The plaintiffs did argue that Google is a commercial enterprise and Google Books' intent was to benefit Google financially in some manner. But, as Peterson said, it would be difficult to quantify what financial benefit Google will gain.

What was gained, however, was a new perspective on the interpretation of the transformative clause.

“Well I think the biggest issue going forward from this case is the proper interpretation of the transformative prong,” Peterson said. “One of the things that the Author’s Guild argued in the cert petition is that the transformative prong of the fair use analysis dominated the Second Circuit’s analysis.

"Previously the fourth prong was considered the most important prong…the fourth prong is whether there was any impact on the value or the market for the copyrighted works."

Peterson said in the past, that was considered the most important prong.

“The question now is, or at least the question that the Author’s Guild raised, is whether the first prong, the nature of the use, becomes more important that the fourth prong,” Peterson said.

“Now with that said, I think there is a good way that you can reconcile the Second Circuit’s opinion with the idea that the fourth prong is still the most important because here, at least with the way the court analyzed it, Google was not offering anything that could be used as a replacement for going out and buying the book if you want to read the book.”

Google Books only gave readers partial morsels of a given book’s text. Even the plaintiff's own team could not parse a full book using Google’s service.

“The plaintiff's own expert tried to duplicate books using the Google service and could not replicate more than 16 percent of any book. And so someone looking to get a free copy of a book would not be able to do so from Google Books,” Peterson said.

Peterson believed that the fact that Google only allows a person to see a snippet of a book, three lines from each page and with a lot of parameters, is why the Second Circuit found that Google Books does not impact the market of value of the copyrighted work.

Peterson elaborated that this is the second major case the Authors Guild has lost and that this new case against Google was going on for 10 years. He believes that it’s time for the plaintiff to let go and find other ways to protect the copyrighted material.

“Move on and figure out what other ways they can to protect the rights of the authors who joined the guild,” he said.

Finding ways to protect the rights of the authors is imperative, according to Peterson. This is why he encourages everyone to pay attention to copyright challenges because it affects us all.

“The only other thing I will say is that anytime there is a case that kind of challenges or pushes the boundaries of intellectual property law and intellectual property rights, its something we should all pay attention to," he said.

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