Another deadline for the parties in the Google Books settlement has passed without result, leaving Google languishing on the bench with ‘Freelance’ (Reed Elsevier v Muchnick) in the US battle over ‘opt-in vs opt-out’ copyright arrangements for authors and publishers.

Those eagerly awaiting the outcome of the Google Book Settlement will have to wait a little longer. July 19th was the scheduled date for representatives of Google, authors and publishers to announce their revised agreement in the long-running negotiations over the Google Books project.

The parties had agreed to develop a revised settlement rather than pursue further litigation after the US District Court decided against the proposed settlement earlier in 2011. A key component of the rejected settlement was that the Google Books Service would be an ‘opt-out’ rather than ‘opt-in’ service, in which works protected by copyright could be scanned and dealt with by Google unless the copyright owner specifically opted out of the program. This was a reversal of established copyright practice, in which permission is sought from the creator prior to copying.

Whilst the parties appeared in court on July 19th 2011, the revisions to the settlement did not. Both sides requested more time and presiding judge Denny Chin granted an extension until September 15th 2011.

Meanwhile a second high-profile litigation, Reed Elsevier v Muchnick (known as the “Freelance” case), is also wrestling over a proposed settlement that would require writers to ‘opt-out’ rather than ‘opt-in’. Reed Elsevier v Muchnick concerns the objection of a number of writers to a proposed settlement between publishers, author groups and database providers that would allow database providers to use freelance-created content without the direct permission of the writers, in exchange for a multi-tiered system of payment to the writers. The amount of the payment would be determined by factors such as whether or not the material copied was registered with the US Copyright Office.

This proposed settlement sprang from a 2001 US Supreme Court decision in favour of freelance authors in New York Times Co. v Tasini, which concerned the reproduction of online content created by freelancer writers for newspapers, magazines and journals, which had not been licensed for further electronic use.

The settlement was initially approved by the US District Court but subsequently challenged by a group of authors on several grounds, one of which was the ‘opt-out’ nature of the settlement and another, the perceived unfair treatment of unregistered works compared to registered works. The matter was heard in the US Second Circuit Court of Appeal, which reversed the District Court's prior approval of the settlement, effectively halting it. The matter then went to the US Supreme Court and, in March 2010, back to the Second Circuit Court of Appeal, which has yet to make a final decision.

Both settlements provide an interesting insight into some of the complexities of implementing distribution models for digitised content. Unfortunately for those awaiting a definitive outcome, legal limbo continues.

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A long-running conflict between Google and Belgian news publishing association Copiepresse flared again this month, with Copiepresse claiming Google was boycotting its publications in retaliation for a copyright infringement case.

Copiepresse commenced court proceedings against Google in 2006, objecting to the display of the titles and first sentence or two of its members’ newspaper articles on the news aggregation service Google News, and to the provision by Google of links to ‘cached’ versions of its articles. Importantly, Copiepresse did not object to the provision of hyperlinks to its members’ sites. In 2007 the court ruled that Google had violated Belgian copyright laws and ordered the corporation to pay a daily fine until it removed the Belgian news content (which it did).

Following an unsuccessful appeal against the Belgian court’s decision in May this year, Google began removing Copiepresse content from its search index, claiming that the court order required it to do so. This sparked an outcry from Copiepresse, which said the court order made no such requirement and that the action was a retaliation by Google.

On 18 July, Google reversed its position with the following statement: “We are delighted that Copiepresse has given us assurances that we can re-include their sites in our Google search index without court-ordered penalties…We never wanted to take their sites out of our index, but we needed to respect a court order until Copiepresse acted. We remain open to working with Copiepresse members in the future.” [1]

[1] PC MAG.COM at: http://www.pcmag.com/article2/0,2817,2388635,00.asp

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A District Court in the United States is soon to deliver a decision that will set a benchmark for what constitutes ‘fair use’ in the American educational sector.

The case of Cambridge University Press v. Becker [1] is about the extent to which Georgia State University may rely on ‘fair use’ provisions to copy and communicate texts in an online reading room for students. According to the District Senior Judge presiding over the dispute, "there is not a single case in the United States at any level that spells out what the standards are for fair use at a university like Georgia State". [2]

The action against the university was brought by Cambridge University Press, Oxford University Press and Sage Publications. The publishers claim the university is infringing copyright by electronically copying extracts of copyright works and making them available to students without permission. The publishers allege the copying is “systematic, widespread, and unauthorized”. [3]

The practice of copying and communicating excerpts of text through electronic reading rooms is reportedly widespread in US colleges and universities, despite the lack of clear guidance on whether, and to what level, fair use covers the practice. Rather than specifically defining fair use, the US Copyright Act lists certain factors to be considered in determining whether a particular use will qualify or not. These include: the purpose and character of the use (including whether it is for commercial, or for non-profit educational purposes), the nature of the work, the amount used, and the effect of the use on any potential market for, or the value of the work.

The university is arguing that its practice is justified because it is for the purpose of “teaching, scholarship, research or non-profit educational purposes”, which is one of the purposes contemplated by fair use. [4]

By contrast, educational institutions in Australia can rely on the statutory licence contained in Part VB of the Copyright Act 1968 to reproduce and communicate literary material to students. The licence is subject to prescribed limits and conditions, which gives teachers a level of certainty about what will and won’t be an acceptable use. A key feature of the statutory licence in Australia is that educational institutions pay a fee for the privilege, from which copyright creators and owners ultimately benefit. To the extent institutions in the US are able to rely on fair use, no payment is made to the copyright creators or owners.

On 30 September 2010, US District Senior Judge Orinda D. Evans stated that, “in order to show that Defendants are responsible for the copyright infringements alleged in this case, Plaintiffs must show that the 2009 Copyright Policy resulted in ongoing and continuous misuse of the fair use defense”. [5]. Closing arguments were heard on 7 June 2011 and a decision is expected soon.

[1] Cambridge University Press v. Becker, No. 1:08-cv-1425 (N.D. Ga.)

[2] R. Robin McDonald. “Copyright Suit Over University's Online Reading Room Could Set Academic Use Standards”. Fulton County Daily Report, Law.Com, 9 June 2011.

http://www.law.com/jsp/article.jsp?id=1202496783799&Copyright_Suit_Over_Univ&slreturn=1&hbxlogin=1

[3-5] Order dated 30 September 2010, Cambridge University Press v. Becker, No. 1:08-cv-1425 (N.D. Ga.)

http://scholar.google.com.au/scholar_case?case=4862571319777587292&hl=en&as_sdt=2&as_vis=1&oi=scholarr

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A coalition of film and television studios may be back in court on 12 August this year to seek special leave to appeal the recent Federal Court decision in the Roadshow Films Pty Limited v iiNet case.

The High Court has informed the parties that 12 August, and failing this, 2 September 2011, are the potential dates to hear the film and television studios’ arguments for special leave. The key issue in this case is whether an internet service provider (ISP), by not taking steps to stop the infringing conduct of its users, thereby authorises the copyright infringements.

The first instance decision in favour of iiNet was handed down in February 2010, and the case was subsequently appealed. In a 2-1 judgment handed down on 24th February this year, Justice Emmett and Justice Nicholas found in favor of dismissing the appeal.

The coalition of film and television studios, assisted by the Australian Federation Against Copyright Theft (AFACT), is hoping to be given the opportunity to appeal the Full Federal Court decision in the High Court.

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The Federal Court’s recent ruling on Dynamic Supplies v Tonnex International [1] focused on the recurring issue of how much intellectual effort is required for copyright to subsist in a database-related work.

Printer cartridge reseller Dynamic Supplies claimed that Tonnex copied a March 2008 CSV file containing a compatibility chart for printer and computer consumables. Dynamic’s file contained a range of product information organised in such a way as to facilitate comprehensive searches for ink products. Dynamic alleged that Tonnex had reproduced a substantial part of the file in three of its Price Lists; the court heard evidence that the compatibility charts in these lists were arranged similarly to Dynamic’s CSV file and contained almost identical wording and abbreviations to represent different colours and yield capabilities.

Dynamic Supplies argued that copyright subsisted in the CSV file as a literary compilation of words, figures and symbols. For its part Tonnex argued that it was not an ‘original’ literary work for the purposes of section 32 of the Copyright Act 1968.

In ruling on the matter, the Federal Court’s Justice Yates declared that he was satisfied copyright subsisted in the CSV file and that Tonnex’s charts reproduced a substantial part of that work: “Although the information in the file dealt with known facts about known products, it represented a collection of information brought together in a particular convenient arrangement by [Dynamic employee] Mr Campbell…Although the selection of information was from a single source (namely, from the Navision database), I am satisfied that skill and judgment – intellectual effort – was brought to bear by Mr Campbell in making the selections he did.” [2]

[1] Dynamic Supplies Pty Limited v Tonnex International Pty Limited [2011] FCA 362 (13 April 2011)

http://www.austlii.edu.au/au/cases/cth/FCA/2011/362.html

[2] ibid at 76-77

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The UK High Court handed down a decision on April 20th that allows the UK Government to continue to implement a ‘graduated response’ scheme to curb online copyright infringement.

Justice Kenneth Parker’s decision in British Telecommunications v The Secretary of State for Business, Innovation and Skills [1] rejected a challenge to the graduated response scheme brought by two of the UK’s largest internet service providers (ISPs), BT and TalkTalk. The scheme was introduced through the Digital Economy Act (DEA) in April 2010, and is administered by telecommunications regulator Ofcom.

As part of its DEA obligations, Ofcom released a draft code in May 2010, making the scheme applicable to those ISPs with over 400,000 customers, and splitting costs between rightsholders (75%) and ISPs (25%).

The two British ISPs challenged the legality of sections 3-18 of the DEA (referring to the implementation and operation of the graduated response scheme) and were granted a judicial review by the Administrative Division of the High Court in November 2010. The decision handed down by the High Court’s Justice Parker is a complex and thorough one, covering both domestic UK law and EU law, so the following is presented by way of summary only.

The ISPs argued five points in support of their challenge to the DEA:

1. That the provisions run afoul of several provisions in the EU E-Commerce Directive, including Article 12, which removes liability of intermediaries for material passing through their networks in certain circumstances, and also states, “This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States’ legal systems, of requiring the service provider to terminate or prevent an infringement”. [2] The court found that the contested provisions fell within the scope of this Article and rejected the claim.

2. That the provisions run afoul of the Privacy and Electronic Communications Directive because collection of IP addresses violates various privacy and data protection rules. Justice Parker rejected this claim, finding that the collection of such data was valid under various data protection statutes, including Article 8(2)(e) of the Data Protection Directive, which allows dealings with such material if necessary for the “establishment, exercise or defence of legal claims”. [3]

3. That the impact of the provisions on ISPs, consumers and other relevant groups would be a “disproportionate restriction on the free movement of services and/or the right to privacy and/or the right to free expression or to impart and receive information” under a variety of EU provisions, such as the Treaty for the Functioning of the European Union (TFEU) and the European Convention on Human Rights (ECHR). [4]

Justice Parker rejected this claim for a number of reasons, noting that in the case of the DEA: “Parliament has addressed a major problem of social and economic policy, where important and conflicting interests are in play…How these competing and conflicting interests should be accommodated and balanced appears to me to be a classic legislative task, and the court should be cautious indeed before striking down as disproportionate the specific balance that Parliament has legislated”. [5]

4. That the provisions run afoul of the EU Technical Standards Directive, as they constitute “technical regulations” (which have to be approved by the European Commission before being legally valid). The court rejected this claim, finding that the provisions have no legal effect for two reasons: firstly, a Code must be finalised before the initial obligations can operate (and there is no final Code yet) and secondly, “the initial obligations are not yet sufficiently particularised as to be enforceable”. [6]

5. That the provisions run afoul of the EU Authorisation Directive. This claim, relating to who should pay the costs of the DEA scheme, was the only one decided in the ISPs’ favour. This will mean reconsideration of the relevant DEA provisions.

In response to the High Court’s decision, the UK Government stated: “We are pleased that the Court has recognised these measures as both lawful and proportionate. The Government remains committed to tackling online piracy and so will set out the next steps for implementation of the Digital Economy Act shortly.” [7]

Read the full judgement at:

http://www.bailii.org/ew/cases/EWHC/Admin/2011/1021.html

[1] British Telecommunications Plc & Anor, R (on the application of) v The Secretary of State for Business, Innovation and Skills [2011] EWHC 1021 (Admin)

[2] [2011] EWHC 1021 (Admin) at [99]

[3] ibid. at [139]

[4] ibid. at [203]

[5] ibid. at [211]

[6] ibid. at [84]

[7] Department for Culture, Media & Sport (UK Government) Press Release – 20/4/2011 at: http://www.culture.gov.uk/news/news_stories/8060.aspx

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