Saturday, November 14, 2009

The Book Rights Registry Unclaimed Works Fiduciary: Powerful Regent or Powerless Figurehead?

In college, I did physics problem sets with a study group that called themselves the "Fish Heads" after a song frequently played on the radio by Dr. Demento. We would start work after dinner on the night before the problem set was due, and we'd work till we were done, which was seldom before midnight and more usually like 3 or 4 AM.

I thought of the Fish Heads late last night while racing through the newly revised settlement agreement of the Google Book Search lawsuit. The parties to the lawsuit had already asked for, and received, a four-day extension, and you just knew they were going to stretch out their work to meet the midnight deadline with not much room to spare. Sure enough, at 11:45 PM EST came word that the revised agreement had been filed. A few minutes after midnight, I was racing through the document to find out what the changes were, tweeting along the way. James Grimmelmann and Ken Crews were doing the same thing in our different ways. It was really nerdy. Danny Sullivan was reporting on the Conference call with Dan Clancey, Paul Aiken and Richard Sarnoff.

Here's your basic reading list for Google Book Search Settlement Agreement 2.0:
  1. Start with the New York Times summary (Brad Stone and Miguel Helft)
  2. Then read Danny Sullivan's report on the Conference call.
  3. Having gotten the big picture, read James Grimmelmann's instant analysis of the revised agreement.
  4. Then graze through the coverage overview at Gary Price's Resource Shelf.
Having slept on it and having had some time to think it through, I have a bunch of questions, and they mostly focus on the one demon that has not been exorcised from the agreement, orphan works.

The revised agreement attempts to address the peculiar situation of orphan works by introducing a new entity, the Unclaimed Works Fiduciary (UWF) which, as part of the Book Rights Registry, is to act as a spokesman for the rightsholders of the unclaimed works. The key question for your problem set is this: is this new regime a powerful Regency over Orphandom, or is it a powerless Figurehead masking a Google Autocracy of Zombies?

Here is how the revised agreement defines the UWF
Unclaimed Works Fiduciary. The Charter will provide that the Registry’s power to act with respect to the exploitation of unclaimed Books and Inserts under the Amended Settlement will be delegated to an independent fiduciary (the “Unclaimed Works Fiduciary”) as set forth in [other sections of the Agreement] and otherwise as the Board of Directors of the Registry deems appropriate. The Unclaimed Works Fiduciary will be a person or entity that is not a published book author or book publisher (or an officer, director or employee of a book publisher). The Unclaimed Works Fiduciary (and any successor) will be chosen by a supermajority vote of the Board of Directors of the Registry and will be subject to Court approval.
The section about the Registry Charter provides that
in the case of unclaimed Books and Inserts, the Unclaimed Works Fiduciary may license to third parties the Copyright Interests of Rightsholders of unclaimed Books and Inserts to the extent permitted by law.
James Grimmelmann calls that that last sentence "words of equivocation". The reason is that he and other commentators think there is almost nothing that the law, absent an act of Congress, would allow the UWF to license to a third party. The rule of "Nemo dat" should apply- you can't give something away that isn't yours to give.

The Open Book Alliance goes even further. In a post somehow released earlier than the revised agreement, it calls the revised agreement a "sleight of hand" meant to distract people from Google's monopoly grab, its usurpation of Congress, its shredding of contracts, its destruction of libraries, its bioterror weapons stockpile and its threatening the sanctity of marriage.

Michael Healy, who has been named Executive Director of the Book Rights Registry, which would be the home of the UWF, seems to have a different perspective. In a post on the Publishing Point website, Healy notes
  • The Registry will now include a Court-approved fiduciary who will represent rightsholders of unclaimed books, act to protect their interests, and license their works to third parties, to the extent permitted by law.
  • The new version of the settlement removes the “most favored nation” clause contained in the previous version. The Registry will now be able to license unclaimed works to other parties without ever extending the same terms to Google.
"Extent permitted by law" is a hard phrase to argue with. How could a settlement go any further? Grimmelmann's theory is that the phrase is meant to be an enticement to Congress to pass a narrow law aimed at neutralizing Google's exclusive access to orphan works exploitation.

A closer look at the UWF suggests that its other powers may be less constrained. Here's what it will be able to do, as enumerated by the revised agreement:
  1. UWF may direct Google to change the classification of a Book to a Display Book or to a No Display Book or to include in, or exclude any or all Unclaimed Works from, one or more of the Display Uses (note added- see comments).
  2. UWF may allow Google to
    • alter the text of a Book or Insert when displayed to users;
    • add hyperlinks to any content within a page of a Book or facilitate the sharing of Book Annotations
    and may exclude from Advertising Uses one or more unclaimed Books if Google displays animated, audio or video advertisements in conjunction with those Books.
  3. UWF may approve the use of additional or different Pricing Bins for unclaimed Books
  4. UWF may:
    • dispute Google’s categorization of a Book as Fiction
    • allow Google to offer to users copy/paste, print or Book Annotation functionalities as part of Preview Uses; allow Google to conduct tests to determine if another Preview Use category increases sales and revenues of such Books
    • adjust the Preview Use setting for a particular Book in exceptional circumstances for good cause shown.
  5. UWF may authorize Google to make special offers of Books available through Consumer Purchases at reduced prices from the List Price.
  6. the Unclaimed Works Fiduciary and Google may agree to one or more of the following additional Revenue Models for unclaimed works:
    • Print on Demand (“POD”) - This service would permit purchasers to obtain a print copy of a non- Commercially Available Book distributed by third parties. A Book’s availability through such POD program would not, in and of itself, result in the Book being classified as Commercially Available.
    • File Download. This service would permit purchasers of Consumer Purchase for a Book to download a copy of such Book in an appropriate file format such as PDF, EPUB or other format for use on electronic book reading devices, mobile phones, portable media players and other electronic devices (“File Download”).
    • Consumer Subscription Models – This service would permit the purchase of individual access to the Institutional Subscription Database or to a designated subset thereof (“Consumer Subscription”).
  7. UWF may license to third parties the Copyright Interests of Rightsholders of unclaimed Books and Inserts to the extent permitted by law. (discussed above.)
  8. allow the Registry to use up to twenty-five percent (25%) of Unclaimed Funds earned in any one year that have remained unclaimed for least five (5) years for the purpose of attempting to locate the Rightsholders of unclaimed Books.
  9. UWF can challenge the classification of its Book or a group of its Books as In-Print or as Out-of-Print
All in all, it seems to me that the most significant power of the UWF is not the theoretical power to deal with third parties, but rather the power to control the display status of unclaimed works. (note added- see comments).

Under what circumstances might the UWF turn off display uses? Since the UWF is subject to the approval of the court, the court could, in principle, direct UWF to manage the unclaimed works to minimize antitrust issues. If that happened, Google's monopoly would not go much further than a release of liability for uses that might be considered fair use. Or, the UWF could use its leverage to force Google to open its unclaimed works scans to competitors.

On the other hand, the UWF, being selected by the Registry Board, and being dependent on the Registry for support, would have built-in incentives to enable revenue generating use by Google, not to mention its responsibilities to the orphan rights-holders.

In the end, whether the Unclaimed Works Fiduciary becomes a powerful Regent or a powerless Figurehead depends to a great extent on the Court's willingness to wield power. Good Luck, Denny Chin!
Ask a fish head anything you want to
they won't answer they can't talk.
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  1. I don't believe that the Court has the power to dictate the UWF's responsibilities as part of its power to approve who the UWF actually is. I think this provision only really allows it to police for conflicts of interest. But I will reread these passages.

  2. No, wait. The section that gives the UWF to change Display/No Display classifications is 3.2(e)(i). The exact wording is "For all Books, the Registered Rightsholder of the Book or for unclaimed Books, the Unclaimed Works Fiduciary (subject to the last sentence of this Section 3.2(e)(i) (Change Requests by Rightsholders)) may direct Google or the Registry to change the classification of a Book or group of Books to a Display Book or Display Books or to a No Display Book or No Display Books ..." But the last sentence of that section reads, "A direction to change the classification of a Book to a No Display Book or a group of Books to No Display Books, however, must be initiated by the Rightsholder of the Book or Books." The UWF doesn't appear to have the power to change a book from Display to No Display, as it's not itself a Rightsholder. Similarly, Section 3.5 (which actually sets the rules for exclusion from particular Revenue Models) speaks only of Rightsholders, not of the UWF.

  3. Yep, looks like UWF can only change a book from No Display to Display. And that applies only to Unclaimed, Commercially Available Books. My head is hurting! Why bother? Could this have been an 11th hour revision that got plopped in?