[A2k] Wall Street Journal: Google, Authors, Publishers Offer Revised Book Pact

[Thiru Balasubramaniam]

     * TECHNOLOGY
     * NOVEMBER 14, 2009, 12:41 A.M. ET

Google, Authors, Publishers Offer Revised Book Pact

     *

By JESSICA E. VASCELLARO, SCOTT MORRISON and JEFFREY TRACHTENBERG

Google Inc. and two author and publisher groups submitted a narrower
version of a legal settlement that would allow Google to distribute
millions of digital books online, hoping to mollify the Justice
Department and other critics who blasted the original settlement as
overly broad and anticompetitive.

The revised settlement will only cover books that were either
registered with the U.S. Copyright Office or published in the U.K.,
Australia, or Canada.

The new agreement also addresses concerns about orphan works, or books
whose right holders are unknown, while keeping them in the settlement.
The fixes include limiting what is done with the revenue generated
from those works and appointing an independent fiduciary to look out
for the interests of those rights holders.

And it clarifies how Google's algorithm will work to establish
consumer purchase prices that simulate the prices in a competitive
market.

Google, the Authors Guild and the Association of American Publishers
filed the modified agreement with the U.S. District Court of the
Southern District of New York late Friday evening, minutes before the
midnight deadline the court gave them.

Paul Aiken, executive director of the Authors Guild, said late Friday
night that he believes the new settlement addresses the issues raised
by the Justice Department.

"There was a perception that there was a potential conflict between
the rights holders who claimed their works and rights holders who
hadn't yet claimed their works. Now the Book Rights Registry will
represent those who claim their works, and the independent fiduciary
will represent those who haven't claimed their rights," he said.

Mr. Aiken also noted that "authors in the four countries that remain
covered by the settlement will have access to the U.S. market for
their out of print books. They'll retain full control over their
works, and retain all of their opportunities to bring their works back
into traditional print."

The parties' struck their original pact in October 2008, aiming to
resolve copyright lawsuits the authors and publishers filed against
Google in 2005 for scanning their books and making them searchable
online.

That settlement gave Google permission to include the works it scanned
in its search engine and to sell access to some works to consumers and
libraries in exchange for a $125 million settlement fee and sharing
revenue back with the authors and publishers who owned the copyrights
to the books.

But groups ranging from the governments of France and Germany to
Amazon.com Inc. decried it as overly broad and anticompetitive. They
challenged the fact that the agreement roped in works whose rights
holders weren't represented by the Authors Guild and the Association
of American Publishers, such as foreign authors, and said that it
would make Google the exclusive provider of works whose rights holders
were unknown, so called "orphan works".

Whether the changes will prevent the U.S. Justice Department from
taking further steps to oppose it =96 and how the agreement will be
viewed by U.S. District Court judge Denny Chin, who is responsible for
approving it -- remains unclear. Judge Chin is now expected to set a
deadline for groups to object to the modifications and a date for a
fairness hearing.

People familiar with the matter say Justice Department representatives
and the parties expect to continue discussions about some of the
issues not addressed in the revised settlement. The agency is expected
to file reactions to the modifications around the end of this year or
early 2010, based on the timetable established by the court.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com, Scott
Morrison at scott.morrison@dowjones.com and Jeffrey Trachtenberg at jeffrey=
.trachtenberg@wsj.com

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997