Google offers rivals a place in e-books program

The search giant offers competitors an ability to resell e-books that Google alone could get rights to. But Amazon spurns the offer.

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Google offered an olive branch to rivals of its digital book efforts at a congressional hearing Thursday, but Amazon was having none of it.

David Drummond, Google's chief legal officer, testifies before Congress
David Drummond, Google's chief legal officer, testifies before Congress. Screenshot by Stephen Shankland/CNET

The move involves a major point of contention in Google's project to bring books to the Internet and in a proposed settlement of class-action suits that author and publisher groups brought against the project. Specifically, Google announced a reseller program that would let competitors get some measure of the rights--and revenue--that Google itself could get through the settlement.

"Any bookseller--Amazon, Barnes & Noble, Microsoft--would be able to sell the books covered by the settlement," said David C. Drummond, Google's chief legal officer. Under the proposed settlement, Google would get 37 percent of revenue from e-books sold through its service, and through the reseller program, the reseller would get "the significant majority" of that 37 percent, Drummond said.

He announced the offer during a House Judiciary Committee hearing on digital books issues raised by Google Books project. If the settlement is approved, Google would get the right to sell not just books for which it had explicit agreements with rights holders, but also for out-of-print books that still are in copyright for which Google doesn't have explicit permission.

That blanket permission has worried some, notably Amazon, which has scanned 3 million books with permission and opposes the settlement. Drummond explicitly said Amazon would be allowed to participate the revenue-sharing program.

Amazon: No thanks
But Amazon indicated it's not interested after Judiciary Committee Chairman John Conyers, a Democrat from Michigan, asked the company's reaction to this "thrilling new piece of information" from Google.

Paul Misener, Amazon's vice president of global policy
Paul Misener, Amazon's vice president of global policy Screenshot by Stephen Shankland/CNET

"The Internet has never been about intermediation," said Paul Misener, Amazon's vice president of global policy. "We're happy to work with rights holders without anybody else's help."

The hearing revealed some representatives, including the chairman, to be allies of Google. Also generally speaking in favor of Google's work were Zoe Lofgren and Brad Sherman, both Democrats from California.

"It is a good thing to provide millions of Americans access to published works that otherwise wouldn't be available to them," Conyers said. "A library available to every household with an Internet connection--this could be the greatest innovation in book publishing since the Gutenberg press."

But a high-profile opponent emerged in Marybeth Peters, the register of copyrights at the U.S. Copyright Office.

"By permitting Google to engage in an array of new uses, the settlement would alter the landscape of copyright law," in effect subjecting authors to "compulsory licenses" for their works, Peters said.

"Compulsory licenses are the domain of Congress, not the courts," she said, adding that the settlement could cause diplomatic stress for the United States because foreign authors' books are in U.S. library collections that Google is scanning.

Opting in or out
Google wants to be able to sell electronic books online and has scanned 10 million books since 2004 as part of the program. About 2 million are out of copyright, meaning Google and anyone else may do as they like with them; about 2 million are in copyright and in print, with Google establishing permission from rights holders; and about 6 million are in copyright and out of print. It's this last category that's so contentious--particularly in the case of "orphaned" books, whose rights holders can't be located.

Misener specifically objected to the way in which the class-action suit would give Google the right to sell access to the in-copyright, out-of-print books without obtaining permission first.

Google is the only entity in the world that could approach copyright as an opt-out mechanism," Misener said, meaning that authors and publishers are included in the Google project by default. "Everybody else faces the current legal regime, which is opt-in."

Marybeth Peters, the register of copyrights at the U.S. Copyright Office
Marybeth Peters, the register of copyrights at the U.S. Copyright Office Screenshot by Stephen Shankland/CNET

Sharing Misener's concerns was Rep. Hank Johnson, a Democrat from Georgia. "I'm troubled by the exclusive access Google will have to orphaned works. Why should Google be the only entity permitted to sell orphaned works?" he asked. And he believes the case in the courts could edge in on the job of his own branch of government.

Orphaned works rights-holders aren't completely ignored in the proposed settlement, though. It would create a nonprofit organization called the Books Rights Registry that would collect sales revenue--minus Google's cut--and use that money to locate missing rights holders of and compensate them and other rights holders.

Google argues its program will let millions of out-of-print books generate revenue once again, including orphaned works. Reinforcing Google's point, Sherman criticized Amazon for focusing on digitizing bestsellers but not bothering to bring other books to the electronic realm.

Misener stood by Amazon's position, though. "We are not scanning books for which rights holders cannot be found in advance. That's the way the law requires," he said.

Sherman countered by likening the orphan-works situation to that of unclaimed property. "We want unused property and unclaimed property to be made use of, and we want the ultimate owner to be compensated when found," he said. "To say all that knowledge should be locked up and unavailable to humankind doesn't seem to be in the interest of knowledge."

Congress or the courts?
Conyers indicated he doesn't see the orphaned-works issue as an issue that can't be resolved.

House Judiciary Committee Chairman John Conyers
House Judiciary Committee Chairman John Conyers Screenshot by Stephen Shankland/CNET

"My primary concern is because Google reached this settlement, they now have exclusive access to orphaned works," Conyer said. "This can be remedied by legislation."

Such legislation hasn't been easy to come by, though. The House and Senate have worked on it in recent years but have yet to pass any new law. Google's proposed settlement raises the issue that for one company at least, the orphan-works issue could be settled in the judicial branch of government rather than the legislative branch.

"The best protection of the prerogatives of the legislative branch is for us to legislate. Since we have haven't done very effectively the legislation on the orphaned works, it's hard for me to condemn the courts to have a case before it that determines what can be done and can't be done with orphaned works," said Rep. Mel Watt, a Democrat from North Carolina.

Johnson disagreed. "The settlement is coming very close to whittling away the powers of the U.S. Congress. The treatment of orphaned rights holders is a matter that should be determined by Congress," he said.

Things get even more complicated, too: the executive branch, in the form of the Justice Department, is investigating the proposed Google Books settlement.

For its part, Google has no objection to legislation--even if it grants competitors rights to the same books the proposed settlement would give it access to. "We support Congress going in and legislating around that," Drummond said.

Updated at 11:15 a.m. PDT with further detail from the hearing.