COMPETITION AND COMMERCE IN 

DIGITAL BOOKS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 10, 2009 

Serial No. 111–31 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
COMPETITION AND COMMERCE IN DIGITAL BOOKS 
U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

51–994 PDF 2009

COMPETITION AND COMMERCE IN 

DIGITAL BOOKS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 10, 2009 

Serial No. 111–31 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

TAMMY BALDWIN, Wisconsin 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

DANIEL MAFFEI, New York 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM ROONEY, Florida 

GREGG HARPER, Mississippi 

PERRY APELBAUM, Majority Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 
(III) 

C O N T E N T S 

SEPTEMBER 10, 2009 

Page 

OPENING STATEMENTS 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Chairman, Committee on the Judiciary ..................... 1 

The Honorable Zoe Lofgren, a Representative in Congress from the State 

of California, and Member, Committee on the Judiciary ................................. 1 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Ranking Member, Committee on the Judiciary ......................... 2 

WITNESSES 

Mr. David C. Drummond, Senior Vice President of Corporate Development 

and Chief Legal Officer, Google Inc. 

Oral Testimony ..................................................................................................... 4 

Prepared Statement ............................................................................................. 7 

Mr. Paul Misener, Vice President of Global Policy, Amazon.com 

Oral Testimony ..................................................................................................... 15 

Prepared Statement ............................................................................................. 17 

Mr. Marc Maurer, JD, President, National Federation of the Blind 

Oral Testimony ..................................................................................................... 22 

Prepared Statement ............................................................................................. 23 

Mr. John M. Simpson, Consumer Advocate, Consumer Watchdog 

Oral Testimony ..................................................................................................... 26 

Prepared Statement ............................................................................................. 28 

Mr. Paul Aiken, Executive Director, Authors Guild 

Oral Testimony ..................................................................................................... 32 

Prepared Statement ............................................................................................. 34 

Ms. Marybeth Peters, Register of Copyrights, U.S. Copyright Office 

Oral Testimony ..................................................................................................... 64 

Prepared Statement ............................................................................................. 66 

Mr. Randal C. Picker, Paul H. and Theo Leffmann Professor of Commercial 

Law, University of Chicago Law School 

Oral Testimony ..................................................................................................... 76 

Prepared Statement ............................................................................................. 79 

Mr. David Balto, Senior Fellow, Center for American Progress 

Oral Testimony ..................................................................................................... 111 

Prepared Statement ............................................................................................. 113 

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 163 

(1) 

COMPETITION AND COMMERCE IN 

DIGITAL BOOKS 

THURSDAY, SEPTEMBER 10, 2009 

HOUSE OF REPRESENTATIVES, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Committee met, pursuant to notice, at 10 a.m., in room 

2141, Rayburn House Office Building, the Honorable John Conyers, 

Jr. (Chairman of the Committee) presiding. 

Present: Representatives Conyers, Watt, Lofgren, Jackson Lee, 

Waters, Cohen, Johnson, Quigley, Sherman, Gonzalez, Schiff, 

Smith, Coble, Goodlatte, Lungren, and King. 

Staff Present: (Majority) Perry Apelbaum, Staff Director and 

Chief Counsel; Christal Sheppard, Counsel; Brandon Johns, Staff 

Assistant; (Minority) Sean McLaughlin, Chief of Staff and General 

Counsel; and Stewart Jeffries, Counsel. 

Mr. CONYERS. Good morning, ladies and gentlemen. We are going 

to start some opening statements. Time is of essence here. 

We come here to discuss among ourselves ‘‘Competition and Commerce in Digital Books.’’ The Google Books settlement represents, 

without exaggeration, one of the most innovative developments 

since the press. 

I am going to start off by asking Zoe Lofgren, also from Silicon 

Valley, to just take a couple of minutes to get us off. And then I 

will turn to the distinguished Ranking Member. The Chair recognizes Zoe Lofgren. 

Ms. LOFGREN. Thank you, Mr. Chairman. And I thank you for 

holding this hearing today. 

The future of literacy does, I think, indeed rely a great deal on 

how we get right digitizing written material. And, in fact, we probably wouldn’t be here today if the Congress had been successful in 

dealing with the orphan works measure. 

As you know, Mr. Chairman, I was a coauthor in working with 

Howard Berman. We made a very grand effort to do something in 

that regard. It was brought to our attention by Justice Breyer in 

the Eldred case. And it seemed to me the fact that potentially a 

majority of the written works in this country are unavailable to the 

culture is a problem—is a problem. And that is why we worked so 

hard to try and come up with a solution. And we failed. We failed. 

We could not get parties—you know, the fact that orphan works 

are not being exploited tells us some things, which is: The rights 

holder, whoever he or she was, decided they couldn’t make money 

on it. But as soon as the prospect of money was in the air, no one 
2 

wanted to do a deal. And so I think we are here today because 

somebody in the private sector decided to seek forgiveness rather 

than permission. And that, in a way, is what this settlement is. It 

is a resolution of the rights that we, the Congress, could not accomplish—could not accomplish. 

And so I think that there are legitimate issues that we need to 

look at. I think this hearing is important because of that. But I am 

also mindful that, as with all antitrust and copyright issues, there 

are competitors who sometimes try and seek a business advantage 

out of a dispute. It is important for us—you know, and that is fair. 

This is America; people can do that—but to separate out that kind 

of squabbling from the actual legal issues that are before us. 

Now, I did want to mention one thing because it is something 

that has been overlooked, but I am a believer in the utility, at 

times, of class action lawsuits. I have been a critic of coupon settlements, but there are times when the class is so big that you have 

to actually group them together. And I am very disturbed by any 

criticism that would eliminate rule 23, which is an undercurrent in 

some of this. That is not on the table, as far as I am concerned, 

Mr. Chairman. And I know that you have felt that way in the past. 

So I just wanted to state that. 

And in this final matter, I just want to say, I am quite distressed 

that we only received testimony from the Copyright Office this 

morning. There is a rule that the testimony has to be here at least 

24 hours in advance. I can recall when Mr. Sensenbrenner was 

Chairman that he refused witnesses to testify if their testimony 

was not here. I had looked forward to reviewing the testimony, and 

I didn’t have the opportunity to do that. So I just think, you know, 

the office is not some newbie. It is not, you know, some volunteer. 

And it is just scandalous, really, outrageous. And I am ashamed 

that the government did that. 

With that, Mr. Chairman, I am not going to speak further because we have a lot of witnesses and we want to get through them 

this morning. I appreciate your hearing, and I appreciate all those 

who are here as witnesses. Thank you. 

Mr. CONYERS. Yes, only eight witnesses. 

The Chair is now pleased to recognize the distinguished gentleman from Texas, the Ranking Member, Lamar Smith. 

Mr. SMITH. Thank you, Mr. Chairman. 

Today’s hearing allows the Committee to explore the intersection 

of two areas of the Committee’s jurisdiction, antitrust and copyright. 

In September 2008, copyright owners and Google reached a settlement agreement in a class action lawsuit concerning Google’s 

digitization and use of millions of books in the Google Book Search 

program. The District Court for the Southern District of New York 

has scheduled a hearing for October 7, 2009, to review and possibly 

approve the terms of this settlement agreement. 

Under this settlement, copyright infringement claims against 

Google for the unauthorized digitization of millions of books would 

be dropped and Google would be allowed to make commercial use 

of books it has scanned that were published prior to January 5, 

2009. This includes offering individual books for sale and subscriptions to the entire digital collection of scanned books. 
3 

In return, Google will share proceeds from use of the works with 

copyright owners. To facilitate the distribution of these royalties, 

the settlement calls for the creation of a Book Rights Registry that 

will serve as a collecting society for affected copyright holders. 

Google Book Search is a novel and innovative way for people to 

acquire knowledge. Google has made accessible literally millions of 

books that were out of print or otherwise largely unavailable to 

readers and researchers. 

The Google Books settlement also anticipates the creation of a 

Book Rights Registry that may be useful in resolving the so-called 

orphan works program. In the past, the absence of such a registry 

has been considered a stumbling block to the ultimate resolution 

of this matter. 

But there are countervailing concerns. Some complain that 

Google was able to negotiate this agreement only after they allegedly infringed the rights of tens of thousands of copyright holders. 

Without that action and the litigation that led to the subsequent 

certification of a class, we would not be here today. 

The class action system, by its very nature, can only address 

Google’s actions. Thus, the benefits that Google would obtain 

through this settlement are not readily available to any of their actual or potential competitors in book search and sales. As a practical matter, the only way a competitor would be positioned to benefit from a similar arrangement would be to follow the same course 

of action pursued by Google: in other words, divest risk liability by 

digitizing massive amounts of copyright protected works without 

first receiving the express permission of the authors or other rights 

holders. Even then, there is a question as to whether the competitor would receive the same settlement terms as Google. 

From a public policy perception, it is unclear whether the Google 

Book Search settlement is the ideal way to address the orphan 

works issue. Congress had been wrestling with this issue for years, 

and the settlement agreement at issue today is but one, and not 

necessarily the right, solution. 

There is also the question of whether the Book Rights Registry 

between the publishers and authors would facilitate price-fixing of 

works not just to Google but to all book resellers. This would undoubtedly be a bad deal not just for Google and its competitors but 

for consumers as well. 

Mr. Chairman, these are a few of the questions raised by this 

settlement, and I think it is very helpful today to have such a balanced panel of experts address these concerns. And I thank you for 

holding the hearing. 

I will yield back. 

Mr. CONYERS. Thank you for your thoughtful introductory set of 

comments. 

For my part, I would welcome this hearing and the eight participants by observing that it is a good thing to provide millions of 

Americans access to published works that otherwise wouldn’t be 

available to them. A library will be available in every household 

with an Internet connection. This could be the greatest innovation 

in book publishing since the Gutenberg Press. 

The heart of the matter is that my primary concern is that, because Google reached this settlement, they now have exclusive ac-
4 

cess to orphan works. However, this can be remedied by legislation 

that would include others. And I have indications from that organization that they would support such a remedy. 

The fact is that Google is in this position, in my view, not because they have engaged in predatory or anticompetitive behavior 

but because they have, to date, built a better mousetrap in the eyes 

of mousetrap purchasers. 

The settlement has, in my view, been fair with copyright owners. 

It explicitly gives copyright owners the ability to determine the 

type and cost of access for consumers. As copyrighted books become 

part of the Internet, we need to be careful. It is important that others who wish to compete with Google Books adhere to the same 

type of copyright protections that Google has agreed to. 

For some books, the rights holder cannot be found. These are ‘‘orphan works.’’ For other works, the rights holder can be found but 

it requires some effort. We must ensure that the law continues to 

create incentives to make best efforts to find the rights holders of 

these books. 

We also should make sure that access is provided to the sightimpaired and others with disabilities, as this settlement does. 

Now, are there any other Members in the Judiciary Committee 

that have a burning desire to make a 1-minute statement? 

None. And so we will now turn to our list of witnesses. And what 

a group we have. 

We welcome senior fellow from the Center for American Progress 

David Balto. We welcome Mr. Randal Picker, the Paul H. and Theo 

Leffmann professor of commercial law, University of Chicago. And 

of course the register of copyrights for the United States Copyright 

Office, we welcome back again Ms. Marybeth Peters. We have also 

the executive director of the Authors Guild, Mr. Paul Aiken. And 

then we have John Simpson, consumer advocate, Consumer Watchdog; from the National Federation of the Blind, its president, Dr. 

Marc Maurer; the vice president of global public policy, Amazon.com, Mr. Paul Misener. 

And we begin with David Drummond, who will be our first witness. He is the senior vice president of Google’s corporate development and its chief legal officer. He has been with Google since 

2002, worked as outside counsel, and is no stranger to the Judiciary Committee. 

We will accept into the record all the witnesses’ statements, including yours, Mr. Drummond. And we welcome you to begin our 

discussion this morning. 

TESTIMONY OF DAVID C. DRUMMOND, SENIOR VICE PRESIDENT OF CORPORATE DEVELOPMENT AND CHIEF LEGAL 

OFFICER, GOOGLE INC. 

Mr. DRUMMOND. Well, thanks so much, Chairman Conyers. It is 

indeed an honor to be back. Ranking Member Smith, Committee 

Members, thanks for having me here to discuss how the Google 

Books settlement will benefit the reading public and spur competition in the emerging electronic book industry. 

Imagine if a student living in a rural area or inner-city could go 

to a local public library and read from millions of books in the combined collections of some of our Nation’s greatest universities and 
5 

libraries—the University of Michigan, University of Texas, Stanford, the New York Public Library—or if a blind student suddenly 

could access millions of digital books to unlock knowledge foreclosed from the visually impaired today. Then consider the author, 

whose life’s work, a book no longer in publication, suddenly becomes available online so anyone could find it, buy it, and read it. 

That is why I am excited to be here: Because these and other opportunities will be created by the settlement of a lawsuit brought 

against Google by authors and publishers. 

Now, this settlement is the result of 3 years of painstaking negotiation, but I am proud of what we have achieved. The settlement 

will create an educational, cultural, and commercial platform to expand access to millions of long-forgotten books for anyone in the 

United States. It will enrich our country’s cultural heritage and intellectual strength. 

As I will explain, the product we provide today is fully compliant 

with copyright law. The settlement will let us improve our product 

in ways that will expand access for the public, provide rights holders choice and compensation, lower barriers to entry in the electronic book market, complement orphan works legislation, and preserve Congress’s role in setting copyright policy. 

Now, there has been a lot of talk that our scanning efforts originally violated copyright law. I reject that, and I reject it wholeheartedly. We strongly believe that we would have won the case on 

the basis that copying for the purpose of indexing, which is the 

same thing we do on the Internet, is a fair use under existing 

precedent. 

And let me be clear about one thing, because there is some confusion. It is an important point. Although we have scanned books, if 

it is an in-copyright book, we are not displaying any more than a 

few lines of text around the search term. We call this a snippet 

view. And we believe that just like Web search, indexing and showing snippets does not violate anyone’s copyrights. 

Now, if you are on Google Books today and you see more than 

a short snippet, you are looking at a book that is directly licensed 

to us from one of our 30,000 publishing partners or you are looking 

at a book that is in the public domain. 

Now, since 2004, Google has scanned more than 10 million books: 

2 million public domain books and 2 million from our partners. The 

other 6 million are still subject to copyright protection but largely 

out of print, meaning that there is no current market or easy access to these books. 

The settlement dramatically expands access to these out-of-print 

books, and it’s this new access that makes the settlement a far better outcome for the parties and for society than if either of us had 

won the lawsuit. 

First, rather than showing just snippets, we will now be able to 

show a preview of up to 20 percent of the book. This will let users 

browse books and read a few pages, as they do in bookstores today. 

Second, Google can offer for sale a digital version of the book, 

with 63 percent of the revenue going to the rights holder. We don’t 

sell books today, so we are entering this with absolutely zero market share. 
6 

Third, we can provide an institutional subscription for colleges, 

libraries, and other organizations. Small colleges are eager to use 

the subscription to attract faculty and students and level the playing field with larger institutions. And we will give every public library across the country free access to our database at one on-site 

computer. 

Now, at any time, a rights holder can direct Google to turn these 

displays off, set the purchase price itself, or make other granular 

choices. 

Out-of-print books stopped generating revenue for authors and 

publishers long ago, so no incentive exists to resolve the complicated question of who owns the digital rights. And it is not simply a matter of locating the author. Decades-old contracts may or 

may not have included digital rights. Long ago, communications 

may have been disputed, and clearing the rights often costs more 

than the economic value of the out-of-print work. The settlement 

will change that. It creates a registry to locate rights holders, distribute revenue, resolve disputes, and license works to other providers besides Google. 

Some claim that the settlement will harm competition, but the 

agreement is nonexclusive in every possible respect and actually 

lowers barriers. Let’s be clear about this: Any search engine that 

wants to scan and index in-copyright books to compete with us can 

already do that as a fair use. And any book retailer who wants to 

scan books can make deals with our library partners and do what 

we did. 

So, many of the critics confuse orphan works with the real problem, which is rights clearing. It is not that the book is orphaned; 

it is that the two parents, sort of, can’t work out who owns it, and 

it is not really cost-effective to try. The settlement doesn’t make it 

any harder for anybody to do this. It actually makes it easier. 

Now, there might be a small portion of books that are truly abandoned, and here the settlement complements orphan works legislation. Past measures didn’t really address the rights-clearance 

issues, which really are the lion’s share of the problem. Years ago 

we called for effective orphan works legislation, as the Chairman 

alluded to. We will continue to support these efforts. And we believe that the settlement makes this legislative task easier, as we 

have funded a private-sector initiative and a mechanism to clear 

rights that actually reduces the scope of the problem. 

Now, let me clarify one last thing. The settlement of private litigation does not take away Congress’s power to set copyright policy. 

Critics may dislike the use of class actions in copyright cases, but 

it is the judge’s role to apply rule 23 to assure a fair process for 

the class members. And as a means to redress private litigation in 

the U.S., the settlement is consistent with all of our international 

treaty obligations, which is a view that is confirmed by the leading 

scholars. 

While much time and energy has been spent on the settlement, 

it is not really Google’s vision for the future of digital books. It is 

kind of the past. We are partnering with bookstores, publishers, 

and device-makers to develop an open platform that allows readers 

to find and purchase digital books from any device. It is this open 

platform and the availability of the newest titles that is going to 
7 

drive competition and commerce with digital books, not the out-ofprint books. 

Thanks very much, Mr. Chairman. 

[The prepared statement of Mr. Drummond follows:] 

PREPARED STATEMENT OF DAVID DRUMMOND
8 
9 
10 
11 
12 
13 
14 

Mr. CONYERS. Thank you. 

Now, sitting amicably next to Mr. Drummond is the vice president of Amazon.com’s global public policy. And for nearly 10 years, 

he has been doing that work and is responsible for formulating and 

representing the company’s public policy positions worldwide. 

We are glad that you are here, Mr. Misener. You may proceed. 
15 

TESTIMONY OF PAUL MISENER, VICE PRESIDENT OF 

GLOBAL POLICY, AMAZON.com 

Mr. MISENER. Thank you very much, Mr. Chairman. I am also 

very happy to be here. And I appreciate you and Mr. Smith holding 

this hearing and inviting me to testify. 

I was going to read my written statement, but since that is already part of the record, I think it probably is more important that 

I take on one particular issue in my 5 minutes. 

First of all, we fully appreciate the value of scanning books and 

making them more widely available. We began scanning books before Google did. And, to date, we have scanned 3 million books. 

Three million books we have scanned. 

The difference is, and probably the only significant difference between their book-scanning project and ours, is we first sought permission from the rights holders. We went to the rights holders and, 

one by one, negotiated deals with the rights holders to be allowed 

legally to scan these books. 

It has been said repeatedly that this is a nonexclusive arrangement, that the proposed settlement would somehow not be exclusive, would not give Google exclusive rights over competitors. That 

simply is not true. The proposed settlement, if approved, would 

give Google exclusive liability, free monopoly rights over millions of 

works—exclusive. 

Now, this exclusivity has two principal components, and I 

thought it would be most helpful if I explained how this exclusivity 

arises. 

One is the release from liability. Now, clearly, as any settlement 

of a class action would do, it releases Google for past actions. But 

this settlement goes much further. It releases Google prospectively 

for future infringement. It even, as Mr. Drummond outlined, releases Google for future infringement using business models that 

they haven’t even used yet. This is remarkable for a class action 

settlement, to say the least. 

The other aspect of exclusivity is the composition of the corpus, 

what body of works are available to Google with this exclusive release of infringement liability. 

Well, first, the corpus initially available to Google is essentially 

everything, right? It is U.S. books in copyright published before 

January of this year. It is all that, everything minus a few optouts. There are opportunities for rights holders to either opt out of 

the proposed settlement, so they can pull their works out that way. 

And there are also exclusion and removal procedures where rights 

holders can opt out their works out of the Google corpus. 

But what does a competitor get? Nothing, except what is opted 

in by rights holders. 

Rights holders can opt in to have a competing distributor of digital books in two ways. One is the traditional, the time-honored 

way, going out, negotiating one on one with rights holders. This is 

what Amazon has done for its 3 million books. We have done this, 

and the rights holders clearly have opted in to this. 

The other way arises within the proposed settlement, if approved. This other way would be through the registry that has 

been discussed by Mr. Drummond and others. The registry has its 
16 

own problems because it would combine erstwhile competitors in 

agreement, which would allow them to fix prices for books. 

But setting aside that, we have to ask, what is the corpus available to the registry? The corpus available to the registry is, again, 

limited only to the rights holders who have opted in their works. 

So what does this mean overall? Google gets everything, minus 

some opt-outs. Competitors get nothing, plus some opt-ins. Well, 

what do orphans do? By definition, orphans don’t do any opting. 

They won’t be opting out. They are not to be found. They are not 

potentially findable. They won’t be opting in to the competitor. So, 

by this mechanism, Google has exclusive, liability-free monopoly 

rights over millions of works which are orphans. 

They also have, in addition to the orphans, the same circumstance applies to rights holders who could be found with a diligent search, as would have been required by the orphan works legislation. But they are just not interested, they are busy with other 

things, they have moved on in their lives, whatever. But they don’t 

out opt of the Google corpus, and they don’t opt in to the competitor’s corpus. 

Again, the proposed settlement would set up a monopoly for 

Google for liability-free treatment of millions of works. 

And I look forward to your questions. My time is out. 

[The prepared statement of Mr. Misener follows:] 
17 

PREPARED STATEMENT OF PAUL MISENER
18 
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Mr. CONYERS. Thank you very much. 

We now are pleased to hear from Dr. Marc Maurer, president of 

the National Federation of the Blind. As its president, he is leading 

the organization, I think boldly, in its expansion of the National 

Center of the Blind. 

And, sir, we welcome you here this morning. 

TESTIMONY OF MARC MAURER, JD, PRESIDENT, 

NATIONAL FEDERATION OF THE BLIND 

Mr. MAURER. Thank you, Chairman Conyers and Members of the 

Committee. I am Marc Maurer, and I do serve as president of the 

National Federation of the Blind, which is the largest organization 

of the blind in the United States, with over 50,000 members. 

Approximately 1.3 million blind people live in the United States. 

Thirty million people in the United States, approximately, have 

print disabilities. We favor the Google settlement because it provides electronic books in accessible formats to individuals with 

print disabilities. 

Electronic books are the trend in education and reading. A number of State governments are seeking to change from print textbooks in the public schools to electronic books. Many universities 

are using an increasing number of electronic books. And several 

large companies are distributing these books. So far, Google is the 

only company that has planned to make millions of these books 

available to the public in ways that can be used by individuals with 

print disabilities. 

In the National Federation of the Blind, we have urged governments, universities, and commercial entities to make electronic information accessible to the blind. The technology exists to do this 

with only a minimum of difficulty. Most of the time, the response 

we get is either a delaying tactic, a refusal to accept the importance of our proposals, or an ignorant assertion that access to information for these disenfranchised individuals is of minimal importance. 

We spend our lives trying to get at information that others take 

for granted. One of the real disadvantages of blindness is that access to readily available information is either frequently denied or 

made more difficult than it needs to be. Google is trying to change 

part of this, and I applaud them for it. 

Some of their competitors have stiff-armed us. We have talked to 

them, but they have ignored the reality that we represent a market 

for their products. We want the right to buy books, to pay for intellectual property. We understand that some people think of the 

blind as objects of charity who should be given only what they 

think we need. However, we want access to the commercial marketplace, and we want to pay for the access by buying the books we 

need. We want to spend the same number of dollars to get the 

same books at the same time and at the same price that other people pay to get them. 

Now the opponents of this settlement would like to close the 

market for us that Google is planning to make available. We regard 

this as reprehensible. We wholeheartedly support the Google settlement, and we urge you to join in this support. 

Thank you, Mr. Chairman. 
23 

[The prepared statement of Mr. Maurer follows:] 

PREPARED STATEMENT OF MARC MAURER
24 
25 

Mr. CONYERS. Thank you very much, Mr. President. 

Well, in every hearing, there has got to be a consumer watchdog. 

And, in this case, the consumer watchdog is a group called ‘‘Consumer Watchdog,’’ in the person of Mr. John Simpson. He started 

off as a nice fellow a long time ago as a journalist. Then he became 

a veteran journalist and held top editing positions at newspapers, 

international and national. And now he is where he is today. 

So we welcome you for your testimony, sir. 
26 

TESTIMONY OF JOHN M. SIMPSON, CONSUMER ADVOCATE, 

CONSUMER WATCHDOG 

Mr. SIMPSON. Thank you, Mr. Chairman. I am delighted to be 

where I am today, which is here in front of your Committee. Good 

morning to you, sir, and to the Ranking Committee Member Smith 

and other Committee Members. Thank you for considering my testimony. 

Established in 1985, Consumer Watchdog is a nationally recognized, nonpartisan, nonprofit organization representing the interests of taxpayers and consumers. Over the past year, our Privacy 

Project focused on Google, funded by the Rose Foundation, a charitable, nonprofit organization. During that project, we became 

aware of the proposed book settlement. In April, we called upon the 

Department of Justice to intervene in the proposed settlement because of its antitrust concerns. And Justice has since announced it 

is investigating. 

Let me be absolutely clear: We do not oppose the concept of digital libraries. Done correctly, they would greatly enhance public access to books. Everyone should be in favor of that. 

The problem is Google’s monopolistic digital library and how it 

would be implemented. The proposed class action settlement is 

monumentally overbroad and invites the court to overstep its legal 

jurisdiction to the detriment of consumers, the public. The proposed 

settlement would strip rights from millions of absent class members worldwide in violation of national and international copyright 

law for the sole benefit of Google. The deal simply furthers the relatively narrow agenda of Google, the Authors Guild, and the Association of American Publishers. 

The settlement provides a mechanism for Google to deal with orphan works. It protects Google from such potentially damaging exposure but provides no protection for others. This effectively is an 

insurmountable barrier for potential competitors who wish to enter 

the digital book business. 

In our brief, filed on our behalf by Kasowitz and Benson in U.S. 

District Court, we made four specific arguments against the settlement. It is not fair, adequate, or reasonable because it far exceeds 

the actual controversy before the court and abuses the class action 

process. It is an unauthorized attempt to revise the rights and remedies of U.S. copyright law, which are exclusively left to Congress. 

I would expect that this body would be very concerned about that 

usurpation. It conflicts with international law, specifically the 

Berne Convention for the Protection of Literary and Artistic Works. 

And finally, as I mentioned, it is an unlawful and anticompetitive 

monopoly. We are also very concerned about the privacy aspects. 

So, what is to be done? The unfair competitive advantage Google 

receives under the settlement comes from its attempt to pull an 

end-run around the appropriate legislative solution to the orphan 

books problem. This is not an issue for a court and certainly one 

that cannot be settled by solving the problem for one large corporation and no one else. Congress must resolve the orphan rights 

issue. It could also step in with legislation about what exactly constitutes fair use in the digital age. Privacy guarantees are another 

area appropriate for legislative action. 
27 

Finally, Consumer Watchdog supports digitization and digital libraries in a robust, competitive market open to all organizations, 

both for-profit and nonprofit, that offer fundamental privacy guarantees to users. But a single entity cannot be allowed to build a 

digital library based on an unprecedented monopolistic advantage 

when its answer to serious questions from responsible critics boils 

down to, ‘‘Trust us. Our motto is ‘Don’t be evil.’ ’’ 

Thank you very much. I look forward to your questions. 

[The prepared statement of Mr. Simpson follows:] 
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PREPARED STATEMENT OF JOHN M. SIMPSON
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Mr. CONYERS. Thank you very much, sir. You didn’t disappoint 

me. 

Mr. SIMPSON. Thank you. 

Mr. CONYERS. Mr. Paul Aiken is the executive director of the Authors Guild, the largest society of published book authors and freelance journalists in the United States. He has testified before the 

White House Task Force on Copyright and the Internet and has 

testified before Congress. 
32 

We are pleased to welcome you again to the Judiciary Committee. 

TESTIMONY OF PAUL AIKEN, EXECUTIVE DIRECTOR, 

AUTHORS GUILD 

Mr. AIKEN. Good morning, Chairman Conyers, Ranking Member 

Smith, and the other distinguished Members of this Committee. 

Today we stand at the threshold of a landmark achievement, an 

achievement that promises to have a profound effect on the educational and cultural life of our country. I am deeply proud that the 

Authors Guild played a role in bringing us to this threshold. 

The point of copyright is to create markets for creative works. It 

has worked brilliantly. It has filled our homes and classrooms with 

countless informative and entertaining works. It has helped turn 

our great academic and public libraries into vast and valuable 

storehouses of intellectual and cultural capital. 

But in spite of the best efforts of our librarians and the fondest 

hopes of our Nation’s authors, only a small part of that value is 

being realized. Books aren’t getting to all the people who would like 

to read them because they have disappeared from the market. 

Those tens of millions of out-of-print books represent a market failure, one of the oldest market failures in our economy. 

It is a market failure that my organization has tried to address 

in a small way for years, going back a quarter of a century to the 

initiative of our member, the late William F. Buckley. Mr. Buckley 

worked with us to develop a catalog of out-of-print books that authors were making available by mail order. That effort evolved into 

backinprint.com, which now offers more than 1,400 books in on-demand form, generating a modest but respectable $100,000 in annual royalties. Backinprint.com demonstrates on a small scale that 

out-of-print books have ongoing commercial value. 

In the course of negotiating a settlement with Google, we found 

a way to address that same market failure on a much larger scale, 

in a manner similar to the way copyright systems around the world 

have addressed other market failures. In Germany, for example, at 

this moment, works by U.S. and other authors are being copied 

without the authors’ permission. Everything can be photocopied— 

in-print, out-of-print, even orphaned or unclaimed works. There is 

no getting out of it, I am told; there is no way to exclude your work 

from the system. 

Nearly every advanced economy has such a system, a license by 

default for photocopying. It is a practical solution to a knotty problem. The transaction costs of clearing photocopy rights often exceed 

the value of the copy itself. These systems address a market failure, and they abide by international copyright law. 

In our settlement, we are creating commercial markets where 

there are none. To get the necessary scale to create a viable market, out-of-print works will automatically be in the system, but, as 

in the photocopy systems of the U.K. and in Canada, rights holders 

will be able to exclude them. 

Our settlement, besides creating new markets, provides another 

important benefit: It will shrink the orphan works problem. The 

new Book Rights Registry will have as a duty the duty of finding 

authors for whom it has money. 
33 

This is not nearly as daunting as many assume. The Authors’ Licensing and Collecting Society in the U.K., for example, reports a 

success rate of upwards of 90 percent in finding authors of out-ofprint books. We would still like to address the orphan work problem in the U.S., but we would like to cut it down to size, at least 

for books. 

In Brussels this week, there were hearings on this settlement. 

The copyright wars are playing out over there as they are here, so 

we heard the usual debating points. We also detected something 

new: a subplot of envy. Europeans are starting to size up what we 

have achieved, and they like it. They think we are getting a significant advantage, that we have found a way to more fully deploy the 

intellectual and cultural capital stored in our great libraries. They 

are right. No doubt they will be working hard to catch up. 

In the meantime, here, we are at the threshold. We can recognize 

what we have, the transformational result of a rare and productive 

truce in the copyright wars, negotiated by pragmatic representatives of the author, publisher, and library communities and a sophisticated technology partner, and we can cross the threshold. Or 

we can let the fight consume us. If that should happen, then perhaps someday when everyone is worn out we will arrive at another 

solution. I fear, however, that it may not be nearly as good for everyone as the deal before us and that it almost certainly won’t be 

worth the wait. 

Thank you for inviting me to testify today. I look forward to your 

questions. 

[The prepared statement of Mr. Aiken follows:] 
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PREPARED STATEMENT OF PAUL AIKEN
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Mr. CONYERS. Thank you so very much. 

We are now happy to have with us again the leader of the United 

States Copyright Office, Ms. Marybeth Peters. She has been a frequent speaker and writer on this and other related subjects and is 

the author of the ‘‘General Guide to the Copyright Act of 1976.’’ 

And we welcome you at this time, ma’am. 

TESTIMONY OF MARYBETH PETERS, REGISTER OF 

COPYRIGHTS, U.S. COPYRIGHT OFFICE 

Ms. PETERS. Thank you. Chairman Conyers, Ranking Member 

Smith, and Members of the Committee, I appreciate the opportunity to testify before you today about the potential impact of the 

proposed Google Books settlement on United States copyright law 

and policy. 

I am familiar with the terms of the settlement. Indeed, my office 

has thoroughly reviewed the entire settlement agreement. While 

aspects of the settlement have merit—for example, the creation of 

a registry which facilitates licensing of books for online uses and 

certain provisions to benefit the blind and visually impaired—key 

parts of the settlement are fundamentally at odds with the law. 

They impinge on exclusive rights granted to authors and other 

rights holders. 

My written testimony fully describes my concerns. And I apologize for not submitting the testimony within the time limits provided by the Committee, thereby basically making it not available 

for Members to read before this hearing. 

In my oral testimony I am going to focus on only two points. One 

is, the settlement agreement creates what is, in effect, a compulsory license that allows Google to continue to scan millions of books 

into the future and permits Google to engage in a number of activities that were not actually part of the lawsuit and that are indisputably acts of copyright infringement: for example, offering fulltext displays and the sale of downloads. 

Compulsory licenses are the domain of Congress, not the courts. 

When such licenses are created, it is usually the result of marketplace failure. You have heard that there is marketplace failure 

from some today. But it is after full public debate. Moreover, they 

are narrowly tailored and apply to all users who meet the terms 

and conditions of the license. 

By permitting Google to engage in a wide array of new uses of 

most books in existence, the settlement would alter the landscape 

of copyright law—which is also the role of Congress and not the 

courts—for millions and millions of rights holders of out-of-print 

books. The out-of-print default rules would flip copyright on its 

head by allowing Google to engage in extensive new uses without 

the consent of the copyright owner, in my view making a mockery 

of Article 1 of the Constitution that anticipates that authors shall 

be granted exclusive rights. 

Moreover, the settlement would jeopardize the efforts of Congress 

to enact comprehensive orphan works legislation that would benefit 

all users. Courts have acknowledged that, when dealing with new 

technology, only Congress has the authority and the institutional 

ability to accommodate the competing interests that are implicated. 

This Committee has spent considerable time and given consider-
65 

able thought as to how to resolve the orphan works problem. The 

settlement undermines Congress’s ability to determine how to address this issue and is at odds with the approach that you have 

been considering up to now. 

The agreement also has serious international implications. Foreign governments, as well as many foreign authors and publishers, 

have objected to the settlement and suggested that the settlement 

may violate certain international obligations of the United States. 

It is troubling that many foreign works that have never been made 

available by their authors or publishers in the United States would 

be swept into a class action simply because one copy was located 

in a library and that library permitted Google to scan its books. 

In conclusion, Congress frames and defines the scope of the 

rights and the remedies of copyright owners. I do believe that the 

proposed settlement agreement seeks to usurp that role by addressing policy issues that go well beyond the case or controversy identified by the plaintiffs in litigation. 

I look forward to your questions. And, as always, the office 

stands ready to assist the Committee as it considers the issues 

posed by the settlement agreement. Thank you. 

[The prepared statement of Ms. Peters follows:] 
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PREPARED STATEMENT OF MARYBETH PETERS
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Mr. CONYERS. Thank you very much. 

We are now pleased to hear from Randal Picker, the Leffmann 

professor of commercial law at the University of Chicago. His expertise is in laws relating to intellectual property, competition policy, and regulated industries. 

We welcome you. 

TESTIMONY OF RANDAL C. PICKER, PAUL H. AND THEO LEFFMANN PROFESSOR OF COMMERCIAL LAW, UNIVERSITY OF 

CHICAGO LAW SCHOOL 

Mr. PICKER. Thank you, Mr. Chairman, Ranking Member Smith, 

and Members of the Committee. 

I am, Mr. Chairman, I think as you put it, the only professional 

mousetrap user on the panel. So, that is what I do for a living. My 

office at the law school is in the library. Faculty offices surround 

the library. I literally walk from my office into the stack, sometimes quite literally. 

So these kinds of tools are the things that make my job a wonderful job. And notwithstanding having access to one of the great 

university libraries, I regard Google Book Search as a wonder. It 

is a fabulous product. I have an unnatural liking for it. I am doing 

some research into some business practices in the early 1900’s, and 

it is amazing what you can do with it. So, the points that Mr. 

Drummond makes and that Dr. Maurer makes about how it expands access—absolutely right. It is fabulous. And I applaud the 

product. 

Notwithstanding that, I think the role that I am trying to play 

here, and the paper I wrote is, is to figure out how to improve the 

product. The fact that it is a great product doesn’t mean it might 

not have problems. The fact that it is a great product doesn’t mean 

it might not engage in behavior which is anticompetitive. And it is 

the job of antitrust regulators to sort through that and to make improvements. 

Indeed, Google thinks of itself as a learning company. They are 

constantly running experiments to change their search algorithm to 

improve it. The agreement we were given is that it is a beta, and 

it is something we now need to take and turn into a full-blown 

product and figure out how to improve it. Indeed, to not do so— 

I don’t see the clock running—to not do so would be almost positively—thank you—un-Googlish. So I hope that is what we will do 

today. I hope we will figure out how to improve the product. 

Okay. So I wrote a paper; that paper makes a number of points. 

I think those points are directed toward different government actors. 

I make a point about antitrust immunities, which is sort of a 

technical point. I think there is some risk that if the settlement is 

approved, that will make it hard for the Department of Justice to 

inquire into it afterwards. That is something called the Noerr-Pennington doctrine, antitrust immunity. It comes out of some Supreme Court cases. I don’t think that would be the right analysis, 

but I think under the case law there is a risk of that. I think Judge 

Chin should address that if he approves the settlement. I think he 

should say, ‘‘No, Noerr-Pennington immunity doesn’t attach.’’ So 

that is a point for Judge Chin. He should address that. 
77 

I make a second point in the paper, and that is a point about the 

consumer purchase model. So there are sort of two core models for 

selling access to the work. One is the institutional subscriptions. 

My library will buy an institutional subscription, and I will use it 

every day. The other is individual sales and individual access to 

consumers. 

The consumer purchase model has a pricing rule that I find surprising, and it involves sort of putting Google in the middle and engaging in a centralized, coordinated pricing. I am surprised they 

did that. The Department of Justice, as has been mentioned, will 

be making a filing in the case by September 18. It is my expectation that they will either say something about that or not say 

something about it—I expect that they will—and that Judge Chin 

will take that very seriously. 

I think the pricing mechanism, which we can talk about in greater detail in questions if you want—I think it is complicated. I don’t 

think it is simple. When I say it is complicated, that is not a shock. 

The whole agreement is extraordinarily complicated. But the pricing mechanism is complicated, as well. But I do think there are 

some issues there, possible issues under section 1 of the Sherman 

Act. But, again, not an issue for Congress. Really an issue for, first 

and foremost, the Department of Justice and Judge Chin. 

Then I would make a third point, and the third point is about 

the orphan works. And the orphan works, obviously we have heard 

a lot of discussion of those, as well. Bringing those online is something to be greatly desired. And I will, as a mousetrap user, take 

full advantage of them when they are there. But the question is 

how to do that. 

And the critical thing to recognize on the orphan works is that 

only the government can create a license to use those works. That 

is where we are. No one else can do it. And so then the question 

is, how is the government going to do that? And is the government 

going to create a license in favor of only one company or create a 

broad license in favor of everyone? And I can’t imagine, if someone 

came before this body and said, ‘‘Give only us a license,’’ that you 

would do that. I just find that inconceivable. The orphan works legislation that you put on the table before obviously would apply 

broadly. The great problem with the settlement agreement is that 

it only applies, really, in favor of Google. 

So I would urge Judge Chin, as I do in paper, to expand the settlement agreement out, to expand licenses. And, obviously, I would 

urge this body to pass orphan works legislation. That is easy to 

say. 

Now, I think it is very important to recognize the critical differences between the settlement agreement and the orphan works 

legislation that emerged from the Copyright Office’s orphan works 

report and then also the legislation that has been proposed in the 

past. 

One critical difference is this question of whether or not you need 

to engage in a reasonable search to use the material. That search, 

if you have to do that search, you are almost certainly taking lots 

of orphan works off the table. If you have to have a human being 

go look, go examine the copyright records, many of which are not 
78 

online, it is pretty unlikely those are going to come on. The settlement agreement does not require Google to search. 

So the gap between past proposals of orphan works legislation 

and what is currently in the settlement agreement is quite dramatic. And if Congress moves forward on orphan works legislation 

to really bring meaningful competition in this space, to grant a 

broad license to everybody—and Google seems to support this, to 

their great credit—you are going to have to do something different 

than you have talked about doing in the past. 

Thank you. 

[The prepared statement of Mr. Picker follows:] 
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PREPARED STATEMENT OF RANDAL C. PICKER
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Mr. CONYERS. Thank you very much, Mr. Picker. 

Well, we have had mousetrap builders, mousetrap users, and I 

think our last witness is a mousetrap watcher. Mr. Balto, senior 

fellow at the Center for American Progress, focusing on competition 

policy, intellectual property law, and health care. For more than 

two decades, he has had experience as an antitrust attorney: in the 

private sector, in the Antitrust Division of the Department of Justice, and in the Federal Trade Commission. 

So I think you have appropriately been placed in this position of 

eighth to present your views now. And we are happy to have you 

here. 

TESTIMONY OF DAVID BALTO, SENIOR FELLOW, 

CENTER FOR AMERICAN PROGRESS 

Mr. BALTO. Thank you, Mr. Chairman, Ranking Member Smith, 

and other Members of the Committee, for giving me the privilege 

of testifying today. And it is a privilege. 

For the indigent student in a barrio in Los Angeles, for the child 

growing up on an Indian reservation in New Mexico, for the child 

living in a low-income area in Washington, DC, this settlement will 

potentially transform their lives. 

One of the great things that Google has done is democratize information and level the playing field to make information generally 

available to millions of consumers. And that is the promise of the 

Google Books project. And that is why I am pleased to be able to 

testify before you today and explain why the settlement is procompetitive. 

You know, it is easy, I know from my 25 years as a government 

enforcer, to use labels and to throw labels around, but labels can 

be deceptive. A monopolist is a firm that has the ability to exploit 

consumers by raising prices. 

Mr. Drummond, I know monopolists, I have sued monopolists, 

but I am sorry to tell you, Google is no monopolist. 

A monopolist has—when you determine whether or not a firm 

has the ability to exercise monopoly power, you have to look at its 

incentive and ability to exercise monopoly power. Look at what 

Google does in search. Google doesn’t charge consumers. It would 

be foolish for it to do it because it would lose eyeballs, its search 

product would function less effectively, and it would be less attractive to advertisers. It also probably doesn’t have the ability to because there are many rivals in the market. It lacks the incentive 

and ability to go and exploit consumers. And that is why it would 

lack the—for the same reason, it would lack the ability to harm 

consumers in its Google Books project. 

I understand the concerns that the professor has raised about 

the pricing model used, but I am an antitrust enforcer, and frequently you have to go and find a second best for a competitive 

market. And the algorithm in the consent decree is not all that unusual considering the kinds of models that government enforcers 

frequently have to use. 

Now, the paper I have submitted goes through each of the claims 

that Google somehow is going to exploit consumers in one fashion 

or another. The key question here is, does the settlement raise bar-
112 

riers to entry? Does it make it more difficult for somebody to step 

in Google’s shoes? The answer is unequivocally ‘‘no.’’ 

But you don’t have to take my word for it. A group of 30 antitrust professors filed an amicus brief, and this is what they said: 

‘‘The settlement overcomes barriers to entry for Google without 

raising them for any rival because every right of the settlement 

that is given to Google is expressly nonexclusive.’’ ‘‘Nonexclusive,’’ 

anybody can step in the shoes of Google. 

There are two specific concerns the critics have raised. First, the 

question of orphan books. My paper goes and tries to discuss how 

limited the number of orphan books are, and I think they are limited, but let me make this simple. One is greater than zero. The 

problems that have been identified about orphan books would exist 

for anybody else. And only this solution goes to solve this problem. 

Mr. Aiken articulately pointed out to you the market failure that 

exists on more orphan books. And unless this problem is solved— 

and the settlement does go extensively to solving the problem— 

these orphan books are just generally going to be unavailable unless we give that poor child in Los Angeles a ticket to go visit Harvard. 

Second, the settlement goes and limits the problem of orphan 

books and helps solve the problem by clarifying these intellectual 

property rights. And for that Google should be applauded. 

Now, there is a lot of criticism about another clause, called the 

‘‘most favored nations clause.’’ This clause is extremely limited, and 

it is appropriate for Google to make sure that people can’t free-ride 

on its effort. Google went to tremendous expense and should be applauded for their efforts in going and trying to scan all these books. 

Judge Learned Hand said over a half century ago, ‘‘The antitrust 

laws are not intended to punish superior skills, insight, and industry.’’ That is Google, and that is what the settlement does. At its 

own risk, Google developed its own scanning technology, negotiated 

agreements, and navigated the uncertainty around complex copyright issues. People may not like where that line is drawn, but they 

deserve credit for trying to clarify this area, to the benefit of millions of us consumers. 

The purpose of the antitrust laws is to open access and opportunities—open access and opportunities. And that is precisely what 

Google has done and what the Book Rights Registry will do. The 

Google Books settlement is in the public interest, and I hope it is 

approved. 

[The prepared statement of Mr. Balto follows:] 
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PREPARED STATEMENT OF DAVID A. BALTO
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Mr. CONYERS. This has been an extremely beneficial discussion 

among the eight of you. 

I want to do something—I won’t say that I haven’t ever done it 

before. But, Mr. Drummond, I would like to give you an oppor-
140 

tunity to try to clarify any comments that you have heard from 

your other seven panelists before the more precise questioning begins. Is there anything you would like to clear up here? 

Mr. DRUMMOND. Sure. Quite a few things, but I will limit myself 

with these comments to a couple. 

You know, this idea of the exclusivity that Google will have 

around orphan works, I think the orphan works problem, I think, 

is being exaggerated. I think one of the things that you have heard 

others say, we believe that the number of works that are truly orphaned will be small. The settlement goes a long way toward helping this by, A, clarifying rights issues between authors and publishers and, B, creating the financial incentive, for the first time 

really, for folks to come forward. 

So we think that this will actually be a small number of works. 

The registry will have the ability to license to all comers, and has 

every incentive to license to all comers, all of the works that have 

come forward. So we think this problem is going to be very limited. 

But let me just say this: We actually don’t believe we are getting 

any competitive advantage here, but we want to make this very 

clear, and, quite frankly, we are willing to put our money where 

our mouth is. So here is something you are going to hear for the 

first time. 

We believe, Google, in an open books platform. We are entering 

the e-book market, and we want to do this in an open way. So this 

summer we announced a program where we are going to work with 

publishers to take their in-print books and sell them anywhere, 

through any book seller, on any device—totally open platform. We 

are prepared and willing to commit to extending this program to 

the out-of-print books that are covered by the settlement, whether 

they are claimed or whether they are unclaimed. And what this 

means is that any book seller—anybody, whether it is Amazon, 

whether it is Barnes and Noble, whether it is Microsoft, should 

they ever decide to get into this market—would be able to sell access to the books that are covered by the settlement. 

We have a—essentially, think of this as sort of a reseller program. We have a 37 percent revenue share that we get under the 

settlement. We will share that with any reseller who comes 

along—— 

Mr. CONYERS. Well, that is very generous of you. I appreciate 

that. 

Mr. DRUMMOND. And, quite frankly, we will share the vast—the 

significant majority of that. We don’t have a number quite yet, but 

most of the revenue will go to the reseller, which seems like a pretty good deal—— 

Mr. CONYERS. Sure. 

Mr. Misener, don’t you find that a thrilling new piece of information to come your way? 

Mr. MISENER. The Internet has never been about intermediation. 

We are happy to work directly with rights holders without anyone 

else’s help. 

Mr. DRUMMOND. So, in any event, what we have here is—there 

have been complaints that people don’t have access. We will provide access. 
141 

Mr. CONYERS. Mr. Misener is now going to review. Is there anything you heard here that you would like to clear the air on before 

I move on? 

Mr. MISENER. Yes, sir. I really appreciate that opportunity. 

Thank you, Mr. Chairman. 

The settlement is an enormously complex document, this proposed settlement is. And the reason why, of course, is it is much 

more like a joint venture agreement than it is a settlement of past 

claims. 

But there have been a couple times when I have heard today 

that the settlement terms are nonexclusive, and that is just untrue. 

And I can point to exactly where it is. It says that, ‘‘The registry’’— 

which would be the clearinghouse for competitors to Google to come 

and negotiate—‘‘The registry will represent the interest of rights 

holders, both in connection with the settlement as well as in other 

commercial arrangements, including with companies other than 

Google, subject to the express approval of the rights holders of the 

books involved in such other commercial arrangements.’’ 

‘‘Express approval.’’ Orphans can’t get express approval. 

Mr. CONYERS. Mr. Consumer Watchdog, are you feeling any better now that you have heard all of the fellow panelists here this 

morning? 

Mr. SIMPSON. I listened with concern to both of the representatives of the large corporate entities. And I am never quite sure 

what to make of what either of them are saying, and have to think 

about it just a little bit. 

I was intrigued by Google’s offer, and I am not quite sure what 

it means. I would have to think about it quite a bit more. I guess, 

though, that it is another one of these, sort of, pledges that are 

made. It doesn’t seem to be part of the agreement. I am not sure 

they could be held to it. 

It does seem to be indicative of the fact that they are finally coming around to the notion that there are serious people with serious 

questions that need to be taken into account. So I thank the Committee for providing that forum and some opportunity to get these 

issues on the table. But the process of the class action suit was the 

wrong place to negotiate what the other corporate colleague said 

was a joint venture. 

So I think there were things being done here to pull an end-run 

around the appropriate legislative process, and further discussion 

and study is needed. And I would commend the Members of the 

Committee for helping to foster that. 

Mr. CONYERS. Uh-huh. 

Lamar Smith is coming up next. But let me just ask, would it 

be okay, Google, to expand the settlement to competitors through 

congressional action? 

Mr. DRUMMOND. We have no problem whatsoever with Congress 

expanding or providing a similar structure legislatively that would 

apply to everyone, no problem at all. 

Mr. CONYERS. Lamar Smith? 

Mr. SMITH. Thank you, Mr. Chairman. 

My first question is for Mr. Drummond and Ms. Peters, and it 

is this: Much concern has been expressed about the possible impact 

of the settlement, if any, on the enactment of so-called orphan 
142 

works legislation. Can you comment on whether there is anything 

in the proposed agreement that limits Congress’s ability to enact 

as broad or as narrow an orphan works law as we determine appropriate? 

Mr. Drummond first. 

Mr. DRUMMOND. Sure. There is absolutely nothing in the settlement that would impede orphan works legislation of any flavor 

that Congress ultimately deems is most appropriate. 

If anything, as Mr. Aiken and Mr. Balto pointed out, by providing a financial incentive for folks to come forward and have 

more people claiming these works, our sense is that the settlement 

will actually reduce the scope of the problem for books. 

But there is certainly nothing that prevents Congress—— 

Mr. SMITH. Okay. You would argue that it addresses some of the 

problem but not all of the problem. 

Mr. DRUMMOND. But not all—again, this is only books. Orphan 

works—— 

Mr. SMITH. Right, goes far beyond books. 

Mr. DRUMMOND [continuing]. Is more than just books. 

Mr. SMITH. Ms. Peters? 

Ms. PETERS. My concern, we almost got to orphan works, and everybody would be treated the same. I guess the question that I 

have with that legislation for orphan works, whatever it was, apply 

to Google as well. Or are you basically saying that there is no 

search, that everybody then basically can copy every work. 

And if you are saying that and you are going to put that in legislation, you do have concerns that you are creating a compulsory license and that you would have to go through international obligations and make sure that it met the treaty obligations that the 

United States has. 

So I can’t really answer. It depends on what happens. 

Mr. SMITH. Okay. Thank you. 

Mr. Misener, in your written testimony, you claim that, quote, ‘‘It 

is nonsense to claim that potential Google competitors would have 

access to the same deal as Google.’’ 

Why couldn’t Amazon use their registry to locate orphan works 

authors and then cherry-pick the most sought-after works to license for their own Web site? For that matter, why couldn’t Amazon initiate Google’s strategy of digitizing all books? 

Mr. MISENER. Thank you very much. 

Mr. SMITH. And you touched part of that in your oral testimony, 

that you had started the process, but—— 

Mr. MISENER. Yes, sir. Thank you, Mr. Smith. 

If the proposed settlement were approved, Google would be the 

only entity in the world that could treat copyright on an opt-out 

basis. They would be able to copy first, ask permission later. This 

is completely turning copyright law on its head. And competitors 

to Google, like Amazon, would still have to operate under current 

copyright law, where we would need permission in advance. 

Mr. SMITH. Do you feel you have been disadvantaged by trying 

to play by the rules and get permission first? 

Mr. MISENER. We have just complied with your laws. 

Mr. SMITH. Yeah. 
143 

Mr. MISENER. These are the laws of Congress; we have complied. 

Three million works we have been able to copy, complying with the 

law. 

Mr. SMITH. Okay. Thank you. 

Mr. Aiken, let me address my last question to you. Some have 

suggested that the Book Rights Registry will enable authors and 

publishers to collude to set the price of books that are charged not 

just to Google but to all book retailers. 

A couple of questions. What safety mechanisms does the settlement have built in, if any, to ensure that this does not happen? 

And, second, would the Authors Guild be open to ongoing court or 

Department of Justice oversight to guarantee that the Book Rights 

Registry is not misused and used for price-setting? 

Mr. AIKEN. Thank you, Ranking Member Smith. 

The agreement, really, is about out-of-print books. So I think a 

lot of the confusion that has been played out in the press and elsewhere is the thought that somehow this involves in-print books. 

For the most part, we don’t expect in-print books to be actively 

used through the settlement, for several good reasons. 

First, for an in-print book, you don’t want to license it en masse 

with 10 million or 20 million out-of-print books. It is just not the 

way to maximize revenues. 

Second, there is an attachment to the settlement called Attachment A. One of the reasons this thing took 30 months to negotiate 

was that we weren’t just negotiating with Google. It was authors 

negotiating with publishers, and we rarely see eye to eye. So we 

had months and months and months of negotiations, trying to work 

out our differences. 

In the course of that, we were able to build in all sorts of protections for authors that authors don’t usually get—rights to arbitration, inexpensive arbitration; rights to an expedited reversion-ofrights process within the confines of the settlement—all sorts of 

good things for authors that we have a feeling publishers are not 

going to want to avail themselves of, so they are going to take 

every opportunity not to be covered by the settlement and to have 

things work outside of the settlement, to work through the Google 

partner program and through Amazon’s program to make their inprint books available and leave this for the out-of-print books. 

So we are talking about a small part of the market. Out-of-print 

books are always—always—going to be a tiny part of the market 

compared to in-print books. There is a good reason that many outof-print books are out of print. 

Mr. SMITH. Okay. Thank you, Mr. Aiken. 

Thank you, Mr. Chairman. 

Mr. CONYERS. Thank you very much. 

Senior Member Mel Watt of North Carolina is now recognized. 

Mr. WATT. Thank you, Mr. Chairman. 

Let me say first how informative and instructive I think this 

hearing has been. And I thank the Chair for convening the hearing. 

Having said that, there is always a catch. I want to raise questions 

about the prematurity of the hearing. 

And this is an amazing system in which we operate. We have an 

executive branch, a legislative branch, and a judicial branch. And, 

in this case, we have a case obviously before the courts. Quite 
144 

often—at least the Supreme Court quite often, maybe not the lower 

courts—but quite often the Supreme Court will say to us, ‘‘We invite you to legislate in this area, and there is really nothing that 

I can do here.’’ And that right is also available. It seems to me that 

a lot of what we are talking about today is appropriately before the 

judicial branch of our government. 

And I never second-guess the Chair about having a hearing. We 

can have a hearing about anything that we want to have a hearing 

about. And one of those things always is to protect the prerogatives 

of the legislative branch. But the best protection to the prerogatives of the legislative branch is for us to legislate. Since we 

haven’t done very aggressively and effectively the legislation on orphan works, it is kind of hard for me to condemn the courts for 

having a case before it that questions what can be done and what 

can’t be done with orphan works. 

We have an existing law, which, obviously, all of us agree needs 

to be updated. But until we update it, the court is going to apply 

the law as it is currently written. But the court needs to do that, 

it seems to me, unless we are prepared to come before the court 

makes a decision and pass legislation updating the orphan works 

or updating the copyright laws or updating whatever is in our prerogative. 

Now, I feel a lot more informed about this issue when we get to 

it, if we ever get to it. But at the same time, I am a great respecter 

of this division of powers that we have here. And I feel a little awkward being in a position of having a hearing on a case that is before the judicial branch, awaiting some disposition by the court, 

crying out, as at least one or two of the witnesses has said, for 

intervention and expression of opinion by the Justice Department, 

which is in the executive branch, who has a role to protect our legislative product and prerogatives. 

So we are dibbling and dabbling in all three branches of government today. And, I mean, am I missing something here? 

Okay. All right. I didn’t want anybody to think that I was just 

imagining this. And Mr. Picker said it pretty well. 

Is there anything other than updating the copyright law or updating the orphan works law that we ought to be doing right now 

with respect to this particular case? I guess that is my general 

question. If somebody can tell me that, then—— 

Mr. PICKER. No, I think that is exactly right. I think you have 

hit it exactly right. I think we have a number of things going on 

here simultaneously. 

I will say I think what is tricky about the situation is precisely— 

I will go back to what I said, which is, only the government can 

create a license to use the orphan works. 

Mr. WATT. But won’t the court say that to us or say it to Google? 

And if they say it, if the court says that, or if the court says otherwise, it doesn’t change our constitutional prerogative, does it? 

Mr. PICKER. No, I don’t think it changes your constitutional prerogative. I think, as a matter of how you make policy, I think that 

the discussion in the two different settings would be quite different. 

As I tried to say before, I think it is inconceivable that someone 

would come before Congress and say, one firm should be granted 

this sole license. I think that is inconceivable. Google wouldn’t do 
145 

that. Google has been very good about this. Google has said everyone should have a license. 

Mr. WATT. As I have read the general parts of the proposed settlement, it doesn’t even propose to do that, does it? 

Mr. PICKER. No, no. Right now the only firm that will get a license in the settlement is Google. 

Mr. WATT. Isn’t that because they are the only firm out there 

that is trying to get a license? 

Let me just ask one informational question, Mr. Chairman. Amazon has licensed 3 million books. How many is it estimated that 

are out there that haven’t been licensed by Amazon? 

Mr. MISENER. Oh, goodness. There is a factor of four, five more? 

Mr. WATT. And so your argument is that we should somehow deprive all of those other folks of the opportunity to—or deprive the 

public of the opportunity to get access to that information, waiting 

on Amazon to go out and find that 3 million, multiplied times five? 

Is that the essence of your argument? 

Mr. MISENER. We are following the law, Mr. Watt. We are going 

out and getting the opt-in permission from the rights holders. 

Mr. WATT. And I take it, the corollary to that is that Google is 

not following the law. 

Mr. MISENER. We think it was an extremely risky and irresponsible thing for Google to do. 

Mr. WATT. I didn’t ask that. People do extremely risky and irresponsible and cost-ineffective and costly things all the time that 

don’t necessarily violate the law. Are you saying that Google has 

done something that violates the law? 

Mr. MISENER. Sir, we looked at this very carefully. As I mentioned, we have been scanning—— 

Mr. WATT. Don’t rope-a-dope me, Mr. Misener. Just answer the 

question. You are saying that they did something that violates the 

law? 

Mr. MISENER. That was the consensus. The Authors Guild said 

it was ‘‘massive copyright infringement.’’ This is the Authors Guild, 

now the partner of Google. ‘‘Massive copyright infringement’’ is 

what they said. 

Mr. WATT. And the court, I take it, has the jurisdiction to determine that, too, right? 

Mr. MISENER. Yes, sir. 

Mr. WATT. Okay. All right. I am back to where I started then. 

The court can resolve this, and, in the meantime, hopefully we will 

do something on orphan works and whatever else we need to do in 

the copyright area, and maybe we will clarify the role of the court 

here. 

Mr. SIMPSON. Mr. Scott, may I respond to that, as well? 

Mr. WATT. I am not Mr. Scott. And—— 

Mr. SIMPSON. I mean Mr. Watt. 

Mr. WATT [continuing]. Actually, we have been called for votes, 

and my time has long since expired. And I know Zoe wants to go 

before we go to a vote. So I am going to stop. 

Mr. CONYERS. But I would like to get a brief response. 

Mr. SIMPSON. My answer is simply to the question of whether 

Google broke the law. We would simply say the settlement violates 
146 

the law. We have faith that the judge will reach that conclusion 

and the settlement will not go through. 

Mr. WATT. But we can’t reach that conclusion, can we? That is 

the question. I mean, Congress can’t reach that conclusion. 

Mr. SIMPSON. I am suggesting that you will be faced with the orphan works issue, and we would hope you would take it up, and 

this is the appropriate place for it to come up. 

Thank you. 

Mr. CONYERS. Howard Coble, senior Member from—wait a 

minute. Wait a minute. We have Bob Goodlatte, more senior Member. 

Okay. All right. Now that we have resolved that, Howard Coble, 

senior Member of the—— 

Mr. COBLE. Mr. Goodlatte, the gentleman from Virginia, is yielding to advanced age, I think, Mr. Chairman. 

Mr. Chairman, thank you, and thank the very well-informed 

panel. 

Mr. Aiken, what alternatives exist for copyright holders who opt 

out of the settlement, A? And, B, are they disadvantaged in any 

way? 

Mr. AIKEN. The copyright holders who opt out of the settlement 

are free to do whatever they want. They can make agreements with 

Amazon, with—they can make their independent agreement with 

Google, with anyone. In fact, people who stay in the settlement can 

make independent agreements with Amazon and with Google. They 

are free to do so. 

If I may, just because I think there has been a fundamental misconception here about the role of the Book Rights Registry. The 

Book Rights Registry, unlike ASCAP and unlike BMI, works on a 

completely nonexclusive basis. So if you are in the Book Rights 

Registry, you are still free to license elsewhere. 

The Book Rights Registry has every incentive to find as many 

outlets as possible for these works. So it is the intention of those 

who were negotiating—the registry would be licensing to Amazon, 

to Microsoft, to all comers. We want as much competition out there. 

We want the works out there broadly in the public. We want to facilitate commerce and competition in the industry. 

Mr. COBLE. Thank you, Mr. Aiken. 

Madam Register, good to see you again. 

Ms. PETERS. Good to see you. 

Mr. COBLE. Two questions. And I think the answer to the first 

one is ‘‘yes.’’ Is this settlement the equivalent of creating compulsory license, A? And, B, will your office have any role overseeing 

the settlement if it is approved? 

Ms. PETERS. I think the answer to the first one is that we do perceive that this is compulsory license like, and the problem is that 

it only applies to one organization and that there has been no public debate. 

And then I pointed out that with regard to new technology, because of the various pros and cons and so many players, that courts 

have said that Congress should be the one who is basically—if you 

are going to have a statutory license, that that is the way to deal 

with it, not through—not class action. No, the Copyright Office 

would have no role with regard to overseeing the settlement. 
147 

Mr. COBLE. Professor, if the settlement is approved and copyright 

holders do not opt out, will they have any control over Google’s use 

of their work or their rights? And could they be assigned to third 

parties or other entities? 

Mr. PICKER. Well, I heard what Mr. Aiken just said; and I guess 

I am a little confused. I think the agreement is not clear on what 

rights the Book Registry will have to license the work to use others. So we start with the orphan works. I assume they will have 

no rights to license the orphan works. And as to the nonorphan 

works I think the answer to that is, if the rights holder gives them 

rights, then they will have rights. 

Mr. Aiken can address that directly, obviously. 

Mr. AIKEN. I would like the opportunity to do that. 

Mr. COBLE. All right. I still have time. 

Mr. AIKEN. This sort of thing works in the music industry all the 

time. You never hear about orphan works in the music industry for 

good reason. There are well-established collection societies. People 

come forward and licenses happen. 

What you do is when people come forward or you find them—and 

it is going to be the Registry’s obligation to go out and find rights 

holders—when you find them, you ask them if the Registry can 

have permission to cut similar deals with other entities. You get 

this sort of blanket approval to cut new deals. 

Then you have a body of work that you can then go to third parties. You go to Amazon and you say, look, we have the 100,000 

most-used books, out-of-print books. We have got the rights here. 

Would you like to make use of them? We have the prior approval 

of these rights holders. 

Then you cut the deal. You inform the rights holders. You tell 

them, this is how it is going to work. You have 60 days to tell us 

whether or not you are going to exclude yourself from it, but then 

you have another competitor in the field. 

Mr. PICKER. But not the orphan works which are at the heart of 

the institutional subscriptions. 

Mr. AIKEN. No, they are not at the heart of institutional subscriptions, because the orphan works problem is greatly exaggerated for books. For books, you always have a rights holder identified in the book. It is not photographs, which is the classic orphan 

works problem. The problem with photographs is the photograph 

gets separated from the rights holder information. With books 

there is always an author and a publisher listed right in the book. 

That is why in the real world people looking for rights holders find 

90 percent of them. We can solve this problem for books. It is a different problem for photographs and other things. 

Mr. COBLE. I had a photographer question, but I think I need to 

yield back. I will do that for another day, Mr. Chairman. I yield 

back. 

Mr. CONYERS. That is extremely generous of you. 

Zoe Lofgren. 

Ms. LOFGREN. Thank you, Mr. Chairman. 

I think Mr. Watt is right. We really at this point don’t have a 

role to play, but this has been a useful hearing in outlining what 

the issues are. I remember back a number of years ago trying to 

get ahead of this program legislatively, and we just utterly failed. 
148 

And what I look at in the settlement is really the private sector 

achieving what we failed to achieve. 

I mean, when I look at the book registry proposal it is like 

ASCAP and BMI for books, except it is not exclusive. Rights holders could use somebody else. 

I remember in the copyright report back in 2006, the Copyright 

Office pointed out that privately operated registries would be much 

more efficient and nimble, able to change. And one of the frustrations we had—and it wasn’t just the Congress; I think it was the 

Copyright Office itself—you don’t have the technology to do this, 

and you are never going to get the technology to do this. And so 

it was always going to have to be a private-sector effort to do this 

search in this registry, and now we have one. 

I will just say I own a Kindle, and I use it all the time. But one 

of the things that we are going to see here is for the first time some 

competition to Amazon. Because if we have an open-source effort 

and a clearance of rights, you are going to have for the first time 

some real heavy duty competition which I know is sometimes a 

mixed blessing. But competition is good for us and for all technology companies so I think in the end it is going to make you a 

stronger company as well. 

Finally, I want to say that we could solve the orphan works problem by repealing the Sonny Bono Copyright Extension Act. I don’t 

think that is going to happen because then Mickey Mouse would 

then be in the public domain. But we helped create this problem, 

and now we have seen a solution to some of these problems. 

I tried in vain for many years to put together an orphan works 

bill and even outside of this, Stanford University in my county. I 

worked with Stanford and the publishers association to see if they 

could work something out at the very early beginnings. I don’t 

think Google even knew that. But it wasn’t possible because it was 

too complicated to do. 

So I think we ought to respect the fact, as Mr. Watt said, that 

we value our roles to play. And certainly the judicial branch has 

a role to play in—there is a way to settle rights and to directly attack Rule 23, that somehow the notice that is good enough for 

every other class action lawsuit is deficient here, I don’t welcome 

that type of rhetoric without any evidence to that effect. And to say 

that somehow it is impermissible to use litigation and the settlement of litigation to settle rights and to distrust the judiciary for 

sorting through, that is not appropriate—for us as Members of 

Congress or I think for citizens who have to have confidence in our 

judicial system, which I do. 

So I would just like to say—I mean, the one thing that would 

make this exclusive would be if Google had arranged with the libraries who possess these old books an exclusive arrangement. And 

I know I was thinking I grew up in the Bay area and I remember 

I use to be able to go to what was then the graduate business 

school and check out books. And when I was in high school, they 

were old books I would read. And they are not available. 

Now, did Stanford do an exclusive deal with Google? Because if 

they did that, then Amazon or Microsoft or anybody else would not 

be able to replicate what Google has done. 

Can you let us know what the answer is to that, Mr. Drummond? 
149 

Mr. DRUMMOND. All of our deals with library partners are nonexclusive. They can and, in many cases, are actively digitizing their 

materials with other partners. 

Ms. LOFGREN. I just think—I know we have votes—but this is a 

major step forward for literacy and for the culture. I am glad to see 

it. 

And sometimes I am sure that the library—I haven’t had a 

chance to read the testimony. I am sure there is some regret that 

we failed. But we should instead take satisfaction that we have advanced. The goal that we hoped to achieve has been achieved here. 

So I appreciate this hearing, Mr. Chairman; and I thank you for 

allowing me to speak. 

Mr. CONYERS. Thank you Ms. Lofgren. 

We stand in recess for two quick votes. 

[Recess.] 

Mr. CONYERS. The Committee will come to order. 

Before recognizing Bob Goodlatte from Virginia, senior Member 

of Judiciary, I would like to allow Mr. Misener 60 seconds. 

Mr. MISENER. Thank you, Mr. Chairman. 

Just before we broke, there were some statements made about 

Amazon’s willingness to have competition in the e-book or the book 

selling market. And we certainly welcome it. That is not the problem. We certainly—I think it is probably a misconception about the 

size of Amazon. We actually sell only less than 10 percent of the 

books sold in the United States, and so it already a highly competitive market. 

We would welcome Google as a competitor. We just want to be 

able to compete on a level playing field where we have the same 

access to orphan works and other works of rights holders who do 

not choose to participate in the process. If we had that same access, 

we would be fine to compete with Google. 

Thank you. 

Mr. CONYERS. The Chair recognizes Bob Goodlatte from Virginia, 

a senior Member of the House Judiciary Committee. 

Mr. GOODLATTE. Mr. Chairman, thank you; and thank you for 

holding this excellent hearing. All of these witnesses are very well 

qualified to speak on various aspects of this subject, and it has 

been a very enlightening hearing. 

I, like others, would say that the effort to digitize books is a very, 

very important thing; and I commend Google and Amazon and others who are about the business of doing that. But I do have some 

questions about this process and this lawsuit. 

I agree with the gentleman from North Carolina, Mr. Watt, that 

most of the questions we have here today need to be addressed and 

hopefully will be addressed in the legal proceeding; and it would 

be inappropriate for the Congress to consider any action until we 

see what action the courts are going to do on this. But I would like 

to direct to Ms. Peters and then to Mr. Drummond and Mr. 

Misener a question about the nature of this lawsuit and settlement. 

The suit was originally filed by rights holders who had been 

harmed. Their books had been scanned by Google. Yet the settlement is much broader and includes authors whose books have 

never been scanned. As I understand it, approximately 10 million 
150 

books have been scanned by Google; and there are approximately 

30 million books in the United States. 

Is it fair for the court to approve a settlement that will limit all 

authors’ exclusive rights to their intellectual property when one 

could argue that two-thirds of the authors included in the settlement have not even been harmed by Google yet and when these authors are presumed to be part of the class only due to the special 

opt-out procedures in class action cases? 

Ms. Peters, would you like to comment on that. 

Ms. PETERS. I am not an expert in class action lawsuits, but I 

do understand—I think I understand that the scanning was a piece 

of the alleged infringement and that I think in our testimony we 

basically say that it may be appropriate in a settlement to allow 

some continued scanning. But we do make a point of the fact that 

to allow scanning to go on with no deadline, no cutoff date, we believe that that goes too far. 

Mr. GOODLATTE. Mr. Drummond, yesterday you and I had a good 

conversation about this; and you indicated, because injunctive relief 

was sought and can be awarded in these actions, that it was appropriate to include authors whose books have never been scanned. 

And I would note that, while that is certainly the case, ordinarily, 

injunctive relief would be offered to somebody under quite different 

circumstances than this; and essentially it brings into this lawsuit 

people who really have had no rights taken away from them. 

Is that a basis for granting some of the exclusive rights that are, 

as Ms. Peters and others have called it, effectively a compulsory license that has not been granted by Congress but is sought as a 

part of a settlement of a lawsuit? 

Mr. DRUMMOND. Well, I would love to address the compulsory license part of your question in a second, but the meat of your question regarding sort of folks whose works haven’t been scanned 

being included, it is absolutely appropriate. The settlement is coextensive with the remedy that was actually sought by the plaintiffs in the class action. They asked the court to stop us from scanning. And the class always included not just folks whose works had 

been scanned but folks whose works could be scanned. And the law 

on this is pretty clear. 

If you look at the Second Circuit law as to when a judge can adjudicate this question—— 

Mr. GOODLATTE. I understand that. But, jumping ahead, the settlement doesn’t stop you from scanning, does it? 

Mr. DRUMMOND. No, it doesn’t. But the question is whether or 

not it is appropriate for the court in the context of the settlement 

to allow the settlement to cover the entire class, which was the 

class that sued us in the first place; and, in fact, it is. So you treat 

people whose works have been scanned and people whose works 

haven’t been scanned differently, but you can include all of them 

in the settlement. 

Mr. GOODLATTE. Let me ask Mr. Misener and Mr. Picker to address that, and we will come back to your compulsory license comment. 

Mr. MISENER. First of all, I would note that Google contested the 

class from the start. So their initial gambit was that the Authors 

Guild didn’t represent the class. 
151 

But the real problem here is the going-forward nature of the release given to Google. This is not only covering the past acts of alleged infringement but also future acts, ones that—business models 

that Google has not yet participated in. And it has given Google 

this exclusive liability free monopoly over the orphan works because of the opt-out provisions that apply only to Google and the 

opt-in that would apply to everyone else. 

Mr. GOODLATTE. Mr. Picker, do you have any comments? Mr. 

Picker? 

Mr. PICKER. My paper really doesn’t address the class action 

issue, so I can say I have looked at those in some contexts, and we 

often use class actions to do extremely broad remedies. I am not 

sure that this particular one is different in style and size than 

many we have seen. 

Mr. GOODLATTE. Are you familiar with class actions in general? 

Mr. PICKER. Yes. But not an expert, so I’d be very careful. 

Mr. GOODLATTE. Why is the opt-out process for class actions appropriate in most cases and why do you believe that that is not the 

case in this particular class action? 

Mr. PICKER. Well, I think the idea behind the opt-out nature of 

the class action is precisely the ability to deal with the rights of 

people that you can’t get at very easily. And then the question is, 

are you better off suited to, as it were, leave those people out? And 

if you leave those people out, then they don’t get any of the benefits 

of the agreement at all; and they are left with their original rights, 

which is the right to bring a lawsuit against Google. And I think 

that is the judgment that the class action law is making in embracing the opt-out idea. 

Mr. GOODLATTE. Mr. Chairman, my time has expired, but I did 

tell Mr. Drummond that he could come back and address the compulsory license. 

Mr. DRUMMOND. I just wanted to address this notion that this is 

a compulsory license. The problem with that is that a compulsory 

license, in order to be one, has to be compulsory. That is simply not 

the case here. So not only can the rights holder opt out of the class 

action which they could do up to the deadline, at any time in the 

future any rights holder can say to Google, we don’t want you to 

sell this product or we want you to sell it at our price or we want 

to take it out of the settlement and sell it with Google through 

some other model. So it is completely nonexclusive and not compulsory. 

Mr. GOODLATTE. Thank you, Mr. Chairman. I have many more 

questions, but this has been a good hearing. 

Mr. CONYERS. Thanks so much, Mr. Goodlatte. 

Sheila Jackson Lee, Houston, Texas, senior Member of the Committee. 

Ms. JACKSON LEE. Mr. Chairman, thank you very much; and I 

add my accolades that other Members have know given. This has 

been instructive and informative. 

And there is no doubt that I want to acknowledge that the presence of the National Federation of the Blind both impact and impress me primarily because I have worked with visually impaired 

soldiers. But I also see their presence here as an overall statement, 

if you will, about access that is so crucial in this discussion. 
152 

And I take a different perspective. We may have acted too slowly, 

but I think going forward I hope that, gentleman and lady, that we 

don’t view this hearing as a hearing for hearing’s sake. I think 

there are some opportunities here and some opportunities to be 

both proactive and responsive. So let me try to pose some snippet 

questions. Because I see there are some snippets here. Let me try 

to be snippet with you as well. 

Mr. Drummond, I look forward to some more extended conversations, if we might be able to do that. I have interest in the digital 

divide, as many of us do—when I say ‘‘interest’’, interest in closing 

it—and will be holding a summit on that question for some of our 

inner-city youth and rural youth. 

But what can you say about the settlement that you believe responds to the concerns—public settlement now—of the other side? 

What do you think—how do you think Google has come halfway? 

What do you think is in this settlement that responds to the other 

side? 

Mr. DRUMMOND. When you say the ‘‘other side’’, do you mean the 

plaintiffs who sued us or—— 

Ms. JACKSON LEE. Yes. 

Mr. DRUMMOND. Well, I think the settlement reflects absolutely 

a compromise and a middle ground. 

Ms. JACKSON LEE. Give me the chief components of that. 

Mr. DRUMMOND. I think at issue was that we were digitizing 

books but not making them available, and the plaintiffs didn’t want 

us to do that. What we settled—we wound up settling those differences and actually creating something that works better for all 

the parties, which is that we continue to scan, make these books 

searchable but also make them available for purchase so that we 

reinvigorate the market for these out-of-print works and also provide broad access. 

So I think if you look at the concerns—so one of the concerns of 

the rights holders here, publishers and authors, was that these 

books be made accessible. 

Another one of the concerns is that there be some security in the 

digital copies that we had and that the library—our library partners had, and we negotiated a full set of sort of security protections 

to address those concerns. 

So I think, on a whole range of issues, the settlement reflects a 

compromise and, quite frankly, a landmark compromise that I 

think ought to be a model for the future between technology companies and the Internet companies and rights holders. 

Ms. JACKSON LEE. But it also lays the opportunity for to you to 

go forward and continue the work of expanding this type of access 

to books; is that correct? 

Mr. DRUMMOND. That is right. 

Ms. JACKSON LEE. But it provides security, and it provides some 

framework. 

Let me ask Mr. Maurer very briefly, who heads the Federation 

of the Blind, is this a question for you for access and a level playing 

field for your constituency? 

Mr. MAURER. The Google book settlement is the first and so far 

the only settlement that puts millions of books into accessible format. The largest collection of books that is accessible readily now 
153 

is in the Library of Congress, and it depends how you look at it. 

Those are not available for purchase but only to be borrowed. And 

those books, 70,000 of them, circulate on a regular basis. From the 

time of the beginning of the program in 1931, the program has put 

together about half a million books. It has been a great effort. We 

applaud the effort, but this is vastly better. 

Ms. JACKSON LEE. Thank you. It is a question of access. 

Ms. Peters and Mr. Misener, if you could, I am still troubled by 

the people not reaching the offering holders or book owners who 

couldn’t found. What are we doing about the value of someone’s 

copyright? We are in the midst of copyright discussion now on one 

of our H.R. 848 issues that we have been dealing with. 

And comment on the idea of a public interest fee that addresses 

the question of closing the digital divide. Google might want to 

comment on this. In terms of giving you this privilege of accessing 

all of these books, we still have a digital divide. What about helping with that as you help those who are now challenged? 

But if you would go ahead, Ms. Peters, on this question of who 

is left out. 

Ms. PETERS. Let me start by saying that the Constitution anticipates exclusive rights and the law grants exclusive rights. You are 

talking about crafting exceptions, and those are usually what Congress does. And things like there are a variety of exceptions that 

deal with education, including on-line education. It would be appropriate, if you wanted to, to revisit those to see if where we are 

today we have the appropriate balance. 

In fact, that is sort of my theme here. Congress has a role with 

regard to setting what the rights are and what the limitations are, 

including a compulsory license. But it is you who listen to all parties and then crafts what you believe is the appropriate balance. 

Ms. JACKSON LEE. Both of you, Mr. Misener and Mr. Drummond. 

Mr. MISENER. Yes, ma’am. 

We believe that a competitive market is the best way to achieve 

that accessibility. Our principal concern here today in this discussion is that under the proposed settlement Google would be the 

only entity that could treat copyright as an opt-out mechanism. Everyone else would have to treat it as an opt-in. If we all had a level 

playing field on which to play, that kind of competition could drive 

accessibility out to the market. 

We are very proud of the e-mails we consistently get from our 

customers about the accessibility of Kindle. That device has 

changed the lives literally of millions of our customers who write 

us and tell us how now they are able to adjust the font size of 

books. They are able to have, through text-to-speech, have books 

read to them. This kind of text-to-speech function is a real life 

changer, and the Authors Guild has actually opposed the use of 

text-to-speech. We are very proud of what we have done, but we 

have a long way to go. We acknowledge that. 

Ms. JACKSON LEE. Repeat that one sentence again. Google can 

opt—— 

Mr. MISENER. Google would be the only entity in the world that 

could approach copyright as an opt-out mechanism where rights 

holders would opt out of Google’s use of copyrighted works. Everyone else would face the current legal regime, which is opt-in. 
154 

Ms. JACKSON LEE. I have got you. 

Mr. Drummond, on this issue of closing the digital device and 

public interest assessment fee, that would even enhance your equal 

playing field. 

Mr. DRUMMOND. I think that is an interesting idea to explore 

should Congress legislate in this area making some clear rules for 

everybody around digitization and the copyright issues associated 

with it. I think it would be a very good idea to perhaps impose 

some obligations to do some things to close the digital divide and 

create accessibility. 

We tried to—in the settlement, we tried to do some of those 

things. I think you are aware we have a free terminal for every 

public library in the United States. Well, it could be the case in 

some communities where libraries are closing and don’t have the 

same capability. I think there is a lot of ways that could be refined 

and this concept built into legislation to make sure that the providers—both content owners and booksellers—are doing something 

to provide more access. 

Ms. JACKSON LEE. I thank you. 

The gentleman from the Federation of the Blind wanted to comment? 

Mr. MAURER. I was startled to hear that access is Amazon’s mode 

of operation, for the blind can’t use its books. That is one of the 

things that has brought me to this support for the settlement. We 

have been trying to get other companies to take a lead from this 

book, and we intend to pursue it. And for the man who sits here 

to tell me that this is an access issue is startling to me who has 

tried to use it without success. I am glad to hear that Amazon is 

planning to change its method. 

Ms. JACKSON LEE. Mr. Chairman, I think we have got the crux 

of some very ticklish issues that I think this Committee has the 

talent and the leadership to really look at. 

There is a settlement, of course, and all parties did the best they 

could with the settlement, but I am hearing a lot of voices that we 

might add to this by clarifying how everybody could work in this 

arena. And particularly, Mr. Chairman, though I know that there 

are some other Committees that will be listening to my voice, I do 

think that Judiciary has as much concern about the digital divide 

as any other Committee; and I think some aspects of our work here 

could encourage us to participate in that effort. 

So I thank the Chairman for I know he will not comment, but 

I hope we will get into the cross hairs, if you will, because I think 

our insight will be very helpful in this arena. And I yield back to 

the Chairman. 

Mr. CONYERS. Thank the gentlelady. 

Judge Charles Gonzalez of Texas. 

Mr. AIKEN. Mr. Conyers, I apologize. Paul Aiken from the Authors Guild. 

An allegation was just made about the Authors Guild which I 

would like to respond to from Amazon. If this is inappropriate, my 

apologies. I don’t know the rules. 

Mr. CONYERS. You may. 

Mr. AIKEN. The position of the Authors Guild with respect to 

text-to-speech with Amazon’s Kindle was that we wanted to make 
155 

it available to all the visually impaired. We thought there was a 

rule and copyright law in contracts that authors sign where we 

give away the rights all the time for blind people to be able to use 

text-to-speech and Braille and other things. We thought we could 

use that exception in copyright law to make text-to-speech available for every blind person in America, and that was our position. 

Mr. Misener always says that Amazon has a small market share. 

It has a huge market share of the on-line market. It has 75 percent 

of the trade book market on-line and 90 percent of the book market—of the e-book market on-line. It has genuine market power. 

And to have Amazon throw allegations about monopoly when they 

are the ones we fear in this market seems a little crazy to us. 

Thank you for the time. 

Mr. CONYERS. Judge Gonzalez. 

Mr. GONZALEZ. Thank you, Mr. Chairman. 

First, an observation. I was a big proponent of mediation when 

I was a trial judge in Texas, and we had this incredibly successful 

mediator, and I asked him what is the secret? What is the secret 

of getting warring parties that argue in court and you get settlements? And he said, Charlie, it is simple. If I can devise a way that 

all parties make money, the case is settled. 

I think we have a situation today where all parties make money. 

But Ms. Peters has observed that it is just not the parties who are 

involved here. There is public interest. And there is ongoing—Professor Picker—certain principles that we recognize. Mr. Balto, we 

even—copyright, antitrust. That is why we are having this hearing. 

It is not just about parties getting together and saying, can we 

reach some agreement where we all have some advantage? We 

know how that works. But it is bigger, bigger than Google, bigger 

than the parties. 

So what I want to ask Mr. Drummond, the genesis of this whole 

lawsuit, which is very interesting, it was doing something good for 

mankind. And that was to make books available to the children in 

the school yards and those who are vision impaired and so on. And 

that is noble and wonderful. But you are also a business, so I suspect that there has to be some sort of business model associated 

with this. You are going to go ahead and scan the entire books, but 

under fair use you only use snippets, which is a lot like being little 

bit pregnant when it comes to copyright law. 

My question to you is this: When you envisioned Google Books 

and the business model and before this lawsuit, did you entertain 

the following: that you would have and be part of and be central 

to institutional subscriptions? Just yes or no. 

Mr. DRUMMOND. When we originally started the scanning? 

Mr. GONZALEZ. Before you were made party to a lawsuit, was it 

your intention to have some sort of rights conferred—I will just go 

over the list that has been provided to the Committee as part of 

a memo. The memo doesn’t take any sides. It is just very thorough, 

and I commend staff. 

Listed below are various potential revenue streams for Google as 

identified within the settlement stemming from Google print: institutional subscriptions, consumer purchases, advertising uses, public access service, print on demand, custom publishing, PDF 
156 

downloads, consumer subscription models, summary abstracts, 

compilations of books. 

That is what you are going to end up with, at a minimum. I am 

sure you guys are saying, thank God we got sued, because I don’t 

think you would end up with any of this under what your original 

concern was. 

So my point is—and I know the benefits of Google, and I have 

to be with Professor Picker. We have to have this disclaimer. We 

love you guys and everything, and then we come and ask this. We 

use you. We love you. You are the best at it. But that doesn’t mean 

that you can act in a way that, in fact, may impact competition. 

This reminds me of Microsoft a few years ago. Remember, because of technology, the laws not keeping up with it, forget about 

these legal principles, can’t make the adjustments timely and so 

on. Let’s just have temporary monopolies. 

Don’t you remember that argument? It is a great argument, and 

I think we are always going to have it. 

I am not real sure this is really the model to be used as technology moves forward and maybe Congress doesn’t act quick 

enough and the courts move in. What I am saying to you, Mr. 

Drummond, does this in fact place Google at such a tremendous advantage in disregard of what has been historically copyright law, 

prospectively you don’t have to do anything on orphan works? I 

don’t think you have to try to find anybody and get permission. We 

understand that. But, also, from a business model and the antitrust concerns that this Committee should have in mind, how do 

you respond to those concerns? 

Mr. DRUMMOND. No, we don’t think it puts us in a huge advantage. Again, you have to step back and remember what this market 

is. Electronic books, out-of-print books, which is what the settlement is largely covering, are not driving the electronic book market. It is in-print books. 

As of today, we have zero market share in any sort of books. So 

we are a new entrant to the market. So far from being someone 

who is controlling the market, we are not even in it yet; and we 

are trying to get in there and compete with some of the existing 

players. It is an emerging market, and we think it will be very 

competitive, and there will be lots of players and lots of different 

models. 

What we have is a settlement of a particular lawsuit that was 

brought against us being settled under a pretty well-established set 

of rules governing class actions with lots and lots of opt-out ability 

and flexibility for the rights holders and complete ability for them 

to go deal with others. And to the extent that there is a concern 

that truly orphan works that are going to be available to Google 

won’t be available to others, certainly we support Congress going 

and legislating around that. And as I’ve announced here today, we 

are going to allow anybody to resell those orphaned works that we 

have access to, including all of our competitors. 

Mr. GONZALEZ. But you would still be the gatekeeper. You still 

get a cut. 

Mr. DRUMMOND. We would get a cut, but we would give more of 

the money to someone else. 
157 

Mr. GONZALEZ. Would you mind if other people were gatekeepers 

and you got the cut? 

Mr. DRUMMOND. Excuse me? 

Mr. GONZALEZ. Would you mind if there was another gatekeeper 

and you got a cut? 

Mr. DRUMMOND. That happens in our business all the time. We 

have revenue shares and we work with partners and through other 

partners. That is pretty common practice on the Internet. 

Mr. GONZALEZ. On this scale as it comes to copyrighted material 

I don’t believe that exists. I guess what I am saying is this lawsuit 

went beyond what is the real issue here. And I understand there 

were financial advantages to some, and thank God for the writers 

and everybody else out there. But I think this goes way beyond 

what was intended. If you had gotten permission to scan books and 

use snippets as part of searches and such, that should have settled 

the entire case, I would imagine. But we are way beyond that now. 

Thank you very much for your indulgence, Mr. Chairman. 

Mr. CONYERS. Thank you very much. 

From California, Mr. Brad Sherman. 

Mr. SHERMAN. Thank you, Mr. Chairman. 

I think we need to take a step back and just think of how wonderful it is that we are going to see 100 million books available in 

every village on this planet. Chiefly the private sector developed 

the Internet, and we need to make sure that this additional and 

huge chunk of information is available on the Internet. We ought 

to give a high priority to moving legislation in this area. It has 

been suggested that we provide to other firms the rights that 

Google has under this settlement. Surprisingly, Google seems to be 

the chief advocate of this. 

Mr. Misener, would you object to legislation that codified this 

agreement and allowed other responsible parties to do exactly what 

Google is doing on their own? 

Mr. MISENER. Instead of the settlement? 

Mr. SHERMAN. I don’t know if it would be instead or in addition 

to or superseding. 

Mr. MISENER. Certainly not in addition to. Because this would 

give them a temporary—how long is it—a few months, advantage 

at the very best. But there are plenty—— 

Mr. SHERMAN. If everybody at the table agreed on the legislation, 

that is why we have suspension bills. 

Mr. MISENER. I am happy to support legislation, as we have for 

years. We would be happy to support orphan works legislation to 

get at this problem. But we will not agree to a circumstance in 

which one company gets an exclusive opt-out copyright regime 

while everyone else waits for legislation. There are other problems 

with this proposed settlement, Mr. Sherman. 

Mr. SHERMAN. You could probably move the legislation pretty 

quickly and delay the settlement. You have got some lawyers. 

Moving along, you are focusing on the orphan works. What is 

Amazon doing and planning to do with respect to making orphan 

works available? What effort is Amazon making to scan out-of-print 

books? 

Mr. MISENER. We are complying with the law. 
158 

Mr. SHERMAN. Well, so am I, but I haven’t done a damn thing 

to make orphan books available. 

Mr. MISENER. That is pretty funny. We have scanned 3 million 

books. So we have been at the scanning business longer than 

Google has, and we are very pleased with our efforts, but in each 

case we have gone out one by one and done what the law says. 

Mr. SHERMAN. You are scanning the very popular books that 

have not become orphaned. As to orphaned books, what are you 

doing? 

Mr. MISENER. We are not scanning books that the rights holders 

cannot be found and negotiated with in advance. That is what the 

law requires, and that is what we are doing. 

Mr. SHERMAN. The law in my State and most States has an unclaimed property provision that says if there is any other property 

right where you can’t find the owner it is unclaimed property. I 

think the principles of that law, if not directly applicable to copyright, but the general principle of law in my State is that we want 

unused property and unclaimed property made use of, and we want 

the ultimate owner to be compensated when that owner can be 

found. 

To say that all the knowledge and learning of all the authors 

that cannot be found should be locked up and unavailable to humankind doesn’t seem to be in the interest of knowledge. 

What is—other than they seem to have a few months head start 

on you, what is stopping other companies from going down the 

exact same route, doing what Google did, getting sued by the same 

people that sued Google and entering into the same settlement? 

This assumes that Congress abdicates its responsibility in this 

area, which I hope we don’t. 

Mr. MISENER. It would be incredibly irresponsible for a company 

to do this. To actually seek out a class action lawsuit against us? 

Mr. Balto actually proposed that that could be a good way for an 

Amazon or a competitor to Google to go about doing this. To actually seek a class action is extraordinarily irresponsible. It is hard 

to imagine—— 

Mr. SHERMAN. I think the only thing irresponsible is to tell the 

people of the world they are not going to have access to all the 

knowledge in all the books for which authors cannot be found. That 

is what is irresponsible. 

Now if Congress doesn’t act, maybe that is irresponsible. If you 

try to prevent others from acting, that may be irresponsible. If you 

choose not to act yourself, that is irresponsible. 

The overriding message here is this knowledge needs to be made 

available, and I hope that we do that as quickly as possible. 

My time has expired. 

Mr. BALTO. Mr. Chairman, I would just like to briefly reply. 

I don’t think I suggested that. Even though I am a class action 

attorney and would love more cases, I don’t think I actually made 

that suggestion. 

But, look, what we have here is a potential—what Google is offering is not only good for consumers but also good for the competitors who are there perhaps ready to compete against Amazon. And, 

like any other competitor, Amazon doesn’t like competition. Google 

may make these books available for other electronic rivals which 
159 

can come up with other products which will compete with Amazon’s 

products. 

Mr. CONYERS. Thank you. 

The Chair now recognizes former magistrate Hank Johnson, who 

is also a Subcommittee Chairman in the Judiciary. 

Mr. JOHNSON. Thank you, Mr. Chairman; and I want to commend you for holding this hearing on this very important issue 

right now. 

Who were the parties to the settlement agreement? In other 

words, who sued whom? 

Mr. AIKEN. We sued him down there. 

Mr. JOHNSON. All right. 

Mr. DRUMMOND. Us, Google. 

Mr. JOHNSON. Who sued whom? 

Mr. AIKEN. The Authors Guild brought the first lawsuit, the class 

action lawsuit in September of 2005. Five publishers then filed suit 

a month later in a nonclass action lawsuit also against Google basically over the same set of facts. 

Mr. JOHNSON. Was there any entity with the interests of the orphan works owners a party to the legislation—excuse me, a party 

to the litigation? 

Mr. AIKEN. Orphan works are works for which you can’t find—— 

Mr. JOHNSON. I understand. I understand. It is totally impossible 

to have a group that represents the orphan works owners. But perhaps there could be some entity set up that would be like a fiduciary, a guardian ad litem, if you will, for the orphan works owners. And that was not done in this litigation. 

What troubles me about the settlement is what gets included 

within the scope of the agreement. Of course, settlements are a 

part of ordinary litigation. I love settlements myself. They must be 

fair, of course; and they generally only apply to the parties. 

This settlement agreement it seems that it is going to bind orphan rights holders. It is not clear to me that copyright owners of 

orphan works were adequately represented. In fact, it appears that 

they were not represented in the plaintiff’s class. 

As Chairman of the Courts and Competition Policy Subcommittee, I am also particularly sensitive to the antitrust implications of the settlement. That is why I am troubled by the exclusive 

access Google will have to orphan works. It will be like the gatekeeper. Why should Google be the only entity permitted to sell access to orphan works? And I guess I will ask Mr. Balto that question. 

Mr. BALTO. Thank you. 

I think it is important to recognize a couple of things. 

First, the number of orphan works is extremely limited. 

Mr. JOHNSON. Well, I mean, does it matter whether or not it is 

one or 10,000? And I would submit to you that there is probably 

almost an infinite number of orphan works out there. 

Mr. BALTO. My testimony and my paper cites different things 

that suggests that it is relatively modest, less than a million works. 

Second, the problem with orphan works—I mean, I think it is 

really important—one is more than none. The problems that people 

are posing on orphan works would just prevent orphan works from 
160 

ever being accessible, and you need to overcome them, and I think 

this is one sound approach for being able to overcome them. 

Mr. JOHNSON. To set up this process where Google is the gatekeeper you think is the way do settle this universally? When I say 

‘‘universally’’—in terms of U.S. law? 

Mr. BALTO. Representative, I put myself in the shoes of—I used 

to be an antitrust enforcer. I did this for over 15 years. And I asked 

myself, how would I solve this problem? And I have found these 

people have gotten really sound antitrust advice. This is a sound 

approach for dealing with this issue. So there is not some kind of 

critical gatekeeper role. They have tried to permit in as many fashions as possible for these orphan works to be accessible. And, 

again, I just don’t—I tend to think it is not that significant an advantage. 

Mr. JOHNSON. Well, there are those who would thoroughly disagree with you, and I would be one of those. 

Mr. BALTO. By the way, there is a great brief by 30 antitrust law 

professors—and 30 is more than two—and they went and analyzed 

the settlement at length and found that the exclusivity, it is really 

nonexclusive. And I commend that analysis to you. 

Mr. JOHNSON. Well, let me ask Professor Picker for his response. 

Why should Google be the only entity permitted to sell access to 

orphan works? 

Mr. PICKER. I guess I would start where you started, which was 

the question of how were the orphan works represented in the case. 

In many class actions or bankruptcy settings, for example, in tort 

situations, you have current tort victims and the possibility of future tort victims. It is pretty routine to appoint a separate representative, just as you said, as guardian ad litem for those future 

claimants. 

So a very natural approach here would have been to appoint an 

independent representative as a guardian ad litem for the orphan 

works. Had that been done, God only knows what kind of licensing 

scheme would have emerged and whether it would have involved 

an exclusive license or a broad license. 

To go back to what Google has said—Google is good on this; they 

are very clear—they favor broad licensing access to the orphan 

works, and I agree with them. 

Mr. JOHNSON. Where would they get the license from? 

Mr. PICKER. Only from the government. Only from you or the 

court. 

Mr. JOHNSON. You are going to bind the United States Government, the legislative branch, to the terms of a settlement that is 

in the judicial branch? 

Mr. PICKER. I actually think that is a tricky question. That goes 

back a little bit to Congressman Sherman’s question he posed to 

Mr. Drummond, which is the interrelationship between the settlement and a subsequent legislation and the terms to when you can 

overturn that settlement in the legislation. 

I don’t know the answer to that. I love to write about that kind 

of question, so I am excited. I think it is hard. 

Mr. JOHNSON. I would pose to you that the legislative branch of 

government is responsible for policy. 

Mr. PICKER. I agree. 
161 

Mr. JOHNSON. You hear a lot of people talk about legislating 

from the bench. This would be a classic case. And that is why I am 

happy that you are holding this hearing, today, Chairman Conyers, 

because I think that it does give the parties to the litigation and 

others kind of a bird’s eye view of the various issues that are involved here. 

And also I doubt whether or not Judge Chin watches C-SPAN, 

but perhaps in a moment of pleasure he might. And I know judges 

are not supposed to look at outside information in making their decisions. But their decisions are based on their experience, their living, their experience. And so perhaps this hearing could be of some 

interest to the judge. I am not saying somebody here should pull 

his coattail and tell him to watch this later on at night on C-SPAN. 

But the sweeping scope of this settlement and the significant 

limitations it places on rights holders who did not opt out it seems 

to me that the settlement is coming very close to whittling away 

the powers of the United States Congress. The treatment of orphan 

works rights holders who did not opt out is a matter that should 

be decided by Congress, not a group of plaintiffs in a private litigation format. 

I would like to know, if I were to purchase a book through 

Google’s service, what would I be getting exactly? Would I be getting actual—I could produce a hard copy and keep it forever? Or 

would I just be renting or leasing the book for a certain period of 

time? How does that work? 

Mr. DRUMMOND. Two different ways. Many of the books we have 

are public domain books, and we will allow you to download those 

and do what you want with them, the digital bits. The in-copyright 

books will be in the cloud. Think of it as a cloud structure. I think 

amazon knows a lot about this as well. But you will get access to 

them. They will be streamed to you. They will not be downloaded 

onto your computer, but you will get access. Once you purchase 

them, you will have indefinite access to the books. 

Mr. MISENER. Mr. Johnson, if I may, one of the future business 

models reserved to Google and the proposed settlement is for print 

on demand, which is the way the publishing industry is going. It 

is a highly efficient way to make physical books available to consumers. Google has reserved that to themselves as well. Imagine 

also these electronic books encompassing print-on-demand books, 

which would be a physical paper book that you would keep forever. 

Mr. DRUMMOND. Just to complete the thought, you will be able 

to print out pages from the books as well. If you want to print out 

and have a hard copy, you can do that as well. 

Mr. JOHNSON. Are books that are reduced to audio format covered under this litigation? 

Mr. DRUMMOND. I am not sure what you mean. 

Mr. JOHNSON. I mean, when you say purchase the rights to a 

particular book—— 

Mr. DRUMMOND. Oh, I see. The only thing that is covered in here 

is the ability to make books under the settlement available for the 

visually impaired. Beyond that, there is nothing. 

Mr. JOHNSON. So this does not have any implication to those who 

produce books that have been—— 

Mr. DRUMMOND. Books on Tape, you mean? No, it is not covered. 
162 

Mr. JOHNSON. Why not? 

Mr. DRUMMOND. We just didn’t cover it. 

Mr. JOHNSON. Okay. All right. 

My last concern, and I would say also that this panel—the scope 

of the intelligence of the people on this panel is just breathtaking. 

And someone mentioned about the mousetrap. This would have to 

be—in order to match you all’s intellect and knowledge on this 

issue, the mousetrap would have to be inconceivable in its largeness, in its scope; and the animal that it was seeking to capture 

would have to be a real, real beast. 

To be clear, I don’t think that this settlement will withstand a 

separation of powers review on the issue of its applicability to anyone other than the parties to the settlement. Could you talk about 

that, Mr. Simpson? 

Mr. SIMPSON. Yes, thank you very much. 

I think one of the tremendous problems here is that the settlement goes so far beyond the original complaint, and I find it particularly ironic that I would put myself in the camp with Google 

from the beginning of the suit, which is to say that, in the digital 

age, to scan things into a database and offer up snippets is a perfectly appropriate fair use. 

What has happened here is that, instead of settling that issue, 

which was what the litigation was all about, we have created a tremendous new business model and gone off to areas that I think 

usurp, as you correctly have pointed out, Congressman Johnson, 

that go way, way beyond the powers that the party should have. 

So I think that is a huge, huge problem. And were this simply 

about whether serving up snippets in a search is appropriate, I 

think that is what the settlement should have been about. And this 

is so far beyond that that it is, frankly, incomprehensible to me. 

Mr. JOHNSON. Well, I tell you, I am really in awe of the technology that Google possesses to be able to carry out the terms of 

this settlement. And certainly to my friends who are visually impaired, you know, I am glad that relief is on the way. 

But I will tell you, if it is only one entity involved, how can you— 

it is kind of like health care, health insurance. How can you create 

a competitive environment where you, as consumers, get the best 

price? I am concerned about that consumer protection angle. 

And, with that, I do want to say that I am personally sensitive 

to the visually impaired, and I certainly appreciate you all coming 

to express your views on this important topic. And, at the same 

time, there is a larger picture out there that we, as legislators, 

have to be concerned about. And so we mean no disrespect to you 

as we oppose this type of settlement agreement. 

Thank you. I will yield back. 

Mr. CONYERS. The Chair would advise our Members that we will 

have 5 days to submit any additional questions and 5 more days 

for the submission of any other additional materials. 

I think the importance of this hearing has been thoroughly restated, and I am deeply grateful to all eight of the members that 

comprised the panel for this afternoon. 

And the Committee is adjourned. 

[Whereupon, at 1:18 p.m., the Committee was adjourned.] 
(163) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE DARRELL ISSA, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA, AND MEMBER, COMMITTEE ON THE JUDICIARY

Thank you, Mr. Chairman. I appreciate this opportunity to hear from our panel 

on such an interesting and unsettled area of copyright law. 

The settlement between Google and copyright owners presents us with an opportunity to examine yet another area of evolving law involving copyright and the 

internet. Questions remain regarding several aspects of the deal between Google 

and content owners, both within the settlement and without. For example, what can 

Google do with a book online without paying for that use—i.e. what is fair use and 

what is not? Will giving Google so much blanket access to works grant them too 

much of an advantage over competitors? Can the marketplace advantages afforded 

Google under the settlement realistically be replicated by its competitors? Is the 

court, by accepting the settlement, bypassing the role of Congress to set public policy in the areas of copyright law, competition and the role of class action litigation? 

If the settlement is a byproduct of Google’s having infringed on book copyrights, 

would the court’s approval of the settlement encourage others to infringe copyright 

in other forms of digitized intellectual property, including musical works, sound recordings, and motion pictures? These are all significant questions of importance to 

this Committee. 

It is important that any class action settlement not benefit one interest such as 

Google, at the expense of Google’s competitors. Such a result would be completely 

inappropriate and unfair. I understand that the Department of Justice is currently 

examining this issue, and I look forward to reviewing their findings, as well as those 

of the U.S. Register of Copyrights Marybeth Peters, who provided testimony on behalf of the U.S. Copyright Office. 

Thank you, Mr. Chairman. I look forward to working with you, Ranking Member 

Smith, and our other colleagues in reviewing the policy issues raised by this proposed settlement, and I yield back. 

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Æ