By Mary Anne Reid
Australian Copyright Council
The question of what constitutes ‘fair use’ is likely to be at the centre of a new case springing from the seven-year quest by Google and a group of American universities to digitise, and make available online, the universities’ massive book collections.
On September 12 this year, the Authors Guild in the USA, the Australian Society of Authors, the Quebec Union of Writers and a number of individual authors filed suit against a partnership of five American universities and research libraries (the same universities involved in the Google Books case), over what the plaintiffs described as “one of the largest copyright infringements in history”. 
According to the Complaint : “The Universities have directly caused millions of works that are protected by copyright holders to be scanned, stored in digital format, repeatedly copied and made available online for various uses. These actions not only violate the exclusive rights of copyright holders…but, by creating at least two databases connected to the Internet that store millions of digital copies of copyrighted books, the Universities risk the widespread, unauthorised and irreparable dissemination of these works.”
The back story
The dispute springs out of book scanning originally undertaken by Google in partnership with the universities, which precipitated the high-profile Google Books lawsuit (brought by publisher and author groups, including the Authors Guild) and the subsequent Google Books settlement, which was overturned this year by Justice Denny Chin.
So the timing of the authors’ new suit against the universities is particularly interesting given that it was filed just days before a status hearing on the Google Books settlement on September 15. Google and the other participants at the status hearing in New York reported that while “significant progress” had been made, no amended settlement had been reached. Justice Chin agreed to an extension (until July 2012) for the parties to reach agreement. 
Also in the mix is the rejection in August this year of another high-profile settlement – the Literary Works in Electronic Databases Copyright Litigation (the so-called Freelance case). The settlement was negotiated following the consolidation of multiple class actions brought by freelance authors against several large publishers (including the New York Times) and database providers, over use of the authors’ works in electronic databases without permission. It was initially approved by the US District Court, then overturned in a class action by a sub-set of authors. As with the Google Books settlement, one major sticking point was that authors were required to ‘opt-out-of’ rather than ‘opt-into’ the settlement on use of their works.
So how do we join the dots on these developments in the background to this most recent action by the authors? One legal expert who has been prepared to share his speculations online is New York Law School academic James Grimmelman. In his blog The Laboraturium,  he surmises that:
• The Freelance case “scotched any possibility of settlement on Google Books, even on much narrower terms”;
• The Google Books talks have “broken down irreparably”; and
• The authors now have nothing to lose by alienating the libraries they were until recently working with as part of the Google Books talks.
The authors’ complaint
According to the authors involved in the new suit, the copying of protected works without permission has been undertaken not only by Google (whose sophisticated scanning technologies and plentiful staff facilitated the initial and most costly part of the mass digitisation project) but also the universities and HathiTrust (which have created digital copies of works using their own equipment and personnel).
The five universities named in the suit – led by the University of Michigan, with one of the largest university libraries in the US – have created and joined a partnership of 50 research institutions called HathiTrust, which has begun combining the digital libraries of the members into a shared repository. The HathiTrust Digital Library already contains close to 10 million digital volumes, with an estimated 73 per cent being protected by copyright. 
The plaintiffs assert that the HathiTrust Digital Library is capable of providing access to the full content of every digital object in the database and that while access is restricted according to settings in the HathiTrust’s rights database – e.g. full view access is available for works in the public domain – works may become fully accessible and downloadable to the general public if mis-identified in the database, in case of malfunction, or if an unauthorised user obtains access.
There is also an orphan works issue at play, with four of the universities having announced their participation in HathiTrust’s Orphan Works Project, an initiative to identify and make available online to students, faculty and library patrons full copies of so-called ‘orphan works’. The first set of HathiTrust orphans is scheduled to become available in full text in mid-October. 
The plaintiffs say that the universities have chosen to ignore the finding by Justice Chin against the Google Books Amended Settlement Agreement: “The proposed settlement, if approved, would have created a legal framework to display out-of-print books, including so-called orphan works, to the public through a procedure approved by court after due process of law, with commercial-grade security guarantees. The Court concluded, however, that it did not have the power to create such prospective licenses to use orphan works.
“Rather than heeding the Court’s words, and allowing Congress, acting in the interest of all communities, to determine the requirements and safeguards that will govern the use of digital libraries and orphan works, Defendants have instead proceeded on their own authority, ignoring the interests of copyright holders.” 
The authors and their representatives are asking that the books be taken off the universities’ servers and held by a trustee. They are not seeking damages.
The nub of the dispute
The Association of Research Libraries has released a “resource packet” claiming that the action brought by the authors objects, in particular, to the orphan works issue: “The suit targets the Orphan Works Project participants who are also library partners in the Google Books project, leaving out institutions that participated in only one of the two projects.” 
In a memorandum prepared for the ARC and included in the resource packet, Jonathan Band (principal, Policybandwidth PLLC) concludes that the proposed uses by HathiTrust of the orphan works in question are likely to be covered by limitations set out in Section 108 of the US Copyright Act, which allows libraries to make and distribute copies of out-of-print works for requesting users, and Section 107, the general privilege of fair use. 
“Even if a court ultimately concludes that section 108(e) does not permit either viewing or downloading under the Proposed Use, the fair use privilege would nonetheless provide the court with a compelling basis for allowing both forms of access,” writes Band. “Fair use is available to libraries and other users even where specific limitations such as Section 108 do not apply.” 
The authors, however, claim that Section 108, rather than 107 should be the focus: “Section 108 of the Copyright Act explicitly regulates the extent to which libraries may lawfully reproduce copyrighted works without authorisation, the circumstances under which digital copies may be created and displayed by library patrons and when copies of orphan works may be released to the public. In short, the systematic digital copying and distribution of copyrighted works by the University and HathiTrust libraries far exceeds limitations in Section 108, which cannot be excused by fair use under Section 107.” 
Grimmelman  also believes that the orphan works aspect of the case is the most substantial: “The complaint doesn’t clearly distinguish between copyright violations from scanning books and making database copies, and copyright violations from showing books to users. The authors have a comparatively better case for the full-text Orphan Works Project than for scanning and indexing.”
The Australian connection
The suit is particularly interesting from an Australian perspective as both the Australian Society of Authors (ASA) and Angelo Loukakis – author of the award-winning fiction For the Patriarch and executive director of the ASA – are amongst the plaintiffs. Loukakis is in good company, with individual plaintiffs including novelist Fay Weldon and Pulitzer Prize-winning historian T.J. Stiles.
According to the complaint: “Mr. Loukakis owns the copyright in the book specified in Exhibit A [Vernacular Dreams, University of Queensland Press] that was, upon information and belief, unlawfully reproduced, digitised and distributed by Defendants.” 
We will keep you posted as the case unfolds.
[1-2] Complaint, US District Court, Southern District of New York, 12/9/2011, p.4.
 e-Week.com at: http://www.eweek.com/c/a/Search-Engines/Google-Books-Talks-Show-Substantial-Progress-No-Deal-818448/
 James Grimmelman at: http://laboratorium.net/archive/2011/09/12/the_orphan_wars
[5-7] Complaint, as above, p.3, p4, p7.
[8-9] Association of Research Libraries’ Resource Packet on Orphan Works at p.1: http://www.arl.org/news/pr/orphanworks_13sept11.shtml
[9-10] Jonathan Band, Ibid, p. 5
 James Grimmelman, as above.