Source: http://freelancerights.blogspot.com/2009/07/
Timestamp: 2019-04-22 06:07:26+00:00

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The lead story in today's New York Times is headlined "Cracking Down, Antitrust Chief Hits Resistance." The online link is http://www.nytimes.com/2009/07/26/business/26antitrust.html?_r=1&hp.
The article talks about how Christine A. Varney and the new Obama team at the Justice Department, in a reversal of the Bush Administration, are working to tighten the antitrust noose in several industries. The Google Books settlement investigation is mentioned in passing, in paragraph 4 (before the continuation "jump" inside in the print edition of The Times).
Varney previously had delivered a speech on this subject and The Times covered it. Today's Newspaper of Record take is more specific and focuses on "resistance" she is encountering from established interests.
I have no inside information on any of this. But I know how to read my morning news over my third cup of coffee. The New York Times is the Twitter of the ruling class. These kinds of stories, and their prominent play, do not happen by accident. I am sure Judge Denny Chin and the parties of the Google settlement are taking note.
U.S. District Court Judge Denny Chin already has delayed the opt-out/objection deadline until September and the settlement hearing until October -- in part because the Justice Department is investigating the deal on antitrust grounds. Something tells me that the international rumblings may push things back even more. As noted earlier, the current fairness hearing date, October 7, happens to be the same day as oral arguments before the Supreme Court in Reed Elsevier v. Muchnick.
As noted in the previous post, reader Andrew Hughes caught a factual error in my piece for Beyond Chron about the Amazon Kindle/Orwell affair. Thanks, Mr. Hughes.
"[Information Access Company and its successors] had indemnities from the publishers who licensed the content -- so they were aware of and covered the issue, which rests with the newspapers who licensed them.
* Indemnities, inshmemnities. Writers don't particularly care who is on the hook for the infringement of their works -- just that some combination of first-print and electronic publishers have indeed infringed. I have heard the indemnity argument for 15 years. The database companies were put on constructive notice from Day 2 or Day 3, at the latest, that they were marketing pirated content. Making the indemnity argument to the people who are harmed is more of a runaround than anything else.
* "Internal information." What in the world does that mean? The database companies' for-profit products are utilized by libraries, institutions, individuals, the works. Tell you what: Let's deposit the royalties that writers would like to receive for their fair share into their "internal bank accounts."
* "Generates pennies." At the time Information Access Company was first being confronted by the National Writers Union's "Operation Magazine Index" campaign, in 2004, Ziff-Davis was selling it to Thomson for several hundreds of millions of dollars. Math lesson: one penny times 100 billion = $1 billion.
* Disruption of the historical record. Here's a real public-interest issue, and one that creators who are being ripped off by corporations are far more eager to solve, flexibly and fairly, than the corporations that are ripping us off. The Supreme Court in Tasini recommended a royalty system. The publishing industry responded with the mess of the UnSettlement that is now back before the Court. I have written at length on who is responsible for article databases turning into "Swiss cheese." Not freelance writers.
A Beyond Chron reader, Andrew Hughes, pointed out that the reference to the successor of Information Access Company was incorrect: after merging with Reuters in 2007, Thomson sold Gale Group, which is now part of a company called Cengage. You will see the correction of that text below. In the next post I will publish Hughes' full letter, which contains other points, and my response.
Last week brought one of those quirky stories, combining legal confusion and Big Brother overtones – the kind technology journalists love to bat around. Amazon.com, whose Kindle appliance is taking the book industry by storm, discovered that it hadn’t acquired the electronic rights to George Orwell’s Animal Farm and 1984, which Amazon was already marketing on Kindle. Amazon immediately pulled the books out of its e-catalogue and remotely expunged them from the Kindle accounts of customers who had purchased them. The New York Times retailed the anecdote with a cheeky and predictable headline, highlighting the irony of invading privacy in the name of the master literary chronicler of totalitarianism.
As lead respondent in a writers’ rights dispute now before the U.S. Supreme Court, I have a dog in this fight. Some of the issues of Reed Elsevier v. Muchnick dovetail with questions about a proposed settlement in federal district court of a class action sparked by Google’s project to scan and market books online.
The first step in untangling all this legalese is to filter out the privacy alarms raised by the Amazon story. Without dismissing this element, I think other worthies, like San Francisco’s Electronic Frontier Foundation, can more competently address it.
What I ask you to focus on here is a different question, one that established for-profit media companies have spent more than a decade co-opting and manipulating: how to harness the marvelous tools of digital technology for the benefit of everyone.
One such entity once went by the very name “Information Access Company.” Like Lexis Nexis and others, it markets databases of articles originally published in newspapers and magazines. Apparently, the former IAC never cared that it was distributing and selling a significant subset of the database articles – those written by freelance writers, who by law retained copyright in them – without our permission and without compensation.
It was we writers who were the enemies of access. Not Thomson. They, after all, were Information Access Company.
Documentary filmmakers, whose stock-in-trade is cutting and pasting snippets, which involves permissions red tape, were especially susceptible to corporate info-speak. Going beyond Lessig, the celebrity PBS director Ken Burns even supported publishers and opposed writers in the landmark 2001 Supreme Court case, Tasini v. New York Times, brought by National Writers Union President Jonathan Tasini.
The Tasini plaintiffs won their point of law in a slam dunk. But the publishers didn’t care about no stinkin’ law. Encouraged by cyberspace gurus who failed to grasp the role of new tech in correcting the power imbalance between writers and publishers, the losers shrugged off their defeat like a flea. Their lawyers simply drafted new freelance contract language to trump copyright law, forcing non-staff contributors to sign over all rights in perpetuity to publishers as a condition of getting assignments.
I lead a slate of objectors to the terms of the freelance settlement, which was engineered by three writers’ organizations. Playing point for the settlement plaintiffs was the Authors Guild, also one of the driving forces behind the Google Books settlement. The Google case is currently being held up by a combination of multi-faceted objections and a Justice Department antitrust investigation.
Is there is a better way? I believe there is, and I think Amazon’s difficulties with Orwell illustrate it. At this moment in American information history, what we need is a comprehensive and one-stop solution to these thorny rights problems. The solution would include the two features of music industry licensing that evolved more than half a century ago after the advent of recording equipment and radio: a “compulsory license” and a fair and equitable standard royalty system.
A compulsory license means that anyone reusing a copyrighted work – whether Amazon or you or I – is assumed to have permission without having to negotiate with the rights holder, who might be difficult to find, or even dead.
A fair and equitable royalty system means that, in gaining automatic permission, a licensee also automatically pays a fee to a central registry. These admittedly complex, but eminently doable, arrangements require comprehensive negotiations, bringing inside the tent all the stakeholders in the contemporary information revolution: creators, publishers, and consumers.
Of the two writers’ class action settlements now being litigated, one – Google Books – provides for a royalty system. But both settlements bungle the compulsory license part. Even the royalty system in Google is privately – not publicly – conceived, advantaging only the particular parties in that case.
In lieu of compulsory licenses, both settlements seek to ratify “licenses by default”; that is, unless members of the plaintiff class affirmatively step forward to block access to their works, they are assumed to be granting permission for the defendants to use them in perpetuity. But a class action lawsuit is about redressing damages. It is not about turning the settlement into the product-development and marketing arms of the same defendants who inflicted the damage in the first place.
The right setting for codifying compulsory licenses and royalty systems is not the courts. It is the United States Congress. The last copyright overhaul by legislators was in 1976, when the Internet wasn’t even a gleam in Al Gore’s eye.
On October 7, the Supreme Court will hear oral arguments in Reed Elsevier v. Muchnick. Coincidentally, the Google Books settlement fairness hearing will be held in U.S. District Court the same day. The judicial stars are aligning.
Now Congress needs to step up and do its job by ensuring that the information superhighway gets paved with a donkey trail of rights and dignity. Whenever good law does get written and followed, every stakeholder will have to give up something. Publishers will lose their stranglehold over freelancers. Consumers will have to trade a little bit of privacy for a lot of convenience and empowerment.
Some of my writer friends also will have to get their heads out of the 19th century and into the 21st. Compulsory licenses – real ones, transparent ones, derived fairly and openly rather than by fine-print lawyer tricks – will be good for all of us in an age when a photo, an article, or a book is just a mouse-click away.
Irvin Muchnick blogs at http://freelancerights.blogspot.com and tweets at http://twitter.com/irvmuch, and is author of the forthcoming CHRIS & NANCY: The True Story of the Benoit Murder-Suicide and Pro Wrestling’s Cocktail of Death.
Amazon has peremptorily and retroactively deleted from its Kindle book offerings George Orwell's Animal Farm and 1984. The reason is confusion over the rights status of those works. Today's New York Times story about this is at http://www.nytimes.com/2009/07/18/technology/companies/18amazon.html?_r=1&ref=business.
The Kindle deletion anecdote is one with tremendously important implications for both of the major authors' rights cases rattling around in the courts (the freelance case, now at the Supreme Court by the name Reed Elsevier v. Muchnick, and the Google Books settlement, now meeting unexpected delays and impediments in federal district court).
Many commentators are focused on the privacy issues raised by Big Brother Amazon's capacity to know everything about customers' reading lists -- and, on an even scarier level, to expunge material from them. The privacy piece is important, of course. It impacts on everything about Google's creepy ability to break down online data, and it is a factor in any intelligent cost-benefit analysis of the Google Books project in particular. But I'm going to leave the privacy question to others.
Instead, I want to suggest that the Amazon story exposes one of the big flaws in what I regard as these overly ambitious class action settlements. Both the freelance and the Google Books cases have license-by-default mechanisms. These are bad because they turn copyright on its head. However, I do not count myself among those who emphasize that aspect of their badness to the exclusion of everything else. I recognize that the defendants in the current big authors' copyright cases are innovators to varying degrees. And on a policy level, copyright paradigms should evolve appropriately in response.
But here's the thing: The way to achieve that is not through overreaching private court settlements. Hard cases are about facts, infringements, damages. They are not platforms for giving advantage to the very defendants who have trirggered the harm to the plaintiffs.
If the goal of the defendants in these cases is to create a publicly sanctioned "compulsory license," I'm all for that. It will be good for authors, good for readers, good for society -- altogether, a benign use of the wonderful resources of new digital technologies.
Let's be honest, though. The lawyers for infringing defendants have no substantial interest in opening the vault of information to the masses. Their interest is in covering the asses of the private for-profit entities that have usurped the role and prestige of the public library system.
The Amazon Kindle Orwell fiasco reminds me -- again -- of the outrageous conduct of the database company defendants in the freelance case. As early as 1994 (and, really, in all probability, far earlier), Information Access Company, later Thomson Gale, knew full well that a substantial subset of the articles on its products was not properly licensed. Because the aggrieved rights holders were powerless freelance writers, this corporation, and others like it, simply blew off complaints or, even more perniciously, deleted by stealth the works of those who complained. Years later, after the fallout of the Tasini case at the Supreme Court was becoming clear, Barbara Quint of Information Today began expressing alarm over supposedly comprehensive databases that were now being turned into "Swiss cheese." Hey, no kidding!
The Amazon story illustrates the same lesson of the class actions: The new global information system needs to move toward compulsory licenses. Real compulsory licenses. Not pseudo license-by-default fine-print tricks.
Real compulsory licenses will involve comprehensive good-faith negotiations with all the players. They will require antitrust waivers. And they will be sanctioned by acts of Congress -- not by patchwork lawsuit settlements, which, more than anything else, are about leveraging organizations like the Authors Guild while it wrongly projects an image of representing all of us, and about the lawyers desperate to collect multimillion fees for helping perpetuate a regime of Swiss cheese.
Below is my completed survey for Publishers Weekly on my opinion of the proposed Google Books settlement. Submit your own answers at http://www.zoomerang.com/Survey/survey.zgi?p=WEB229EB66ZEQ5.
1 How familiar are you with the terms of the Google Book Search Settlement?
2 Which best describes your position on court approval of the Google Book Search Settlement?
I oppose the settlement without key changes.
Authors who participate in the settlement cannot get terms inferior to those routinely and publicly offered to authors outside the settlement.
There must be a true compulsory license rather than the proposed settlement's "license by default."
A compulsory license must be truly universal, involving negotiations with all the stakeholders. Otherwise, it runs afoul of antitrust law and is simply an arm of defendant Google's product development and marketing divisions. For Google to achieve this advantage by virtue of calculated and systematic infringement is wrong.
Many observers -- including the Register of Copyrights -- have questioned whether a compulsory license can be legally achieved via private litigation. They believe such a step requires an act of Congress.
3 What action have you taken or will you take on the proposed settlement?
I have or plan to file comments OPPOSING approval.
4 Do you have standing to participate in the settlement?
5 If you have standing, do you feel you've been adequately notified of your need to act to preserve your rights?
6 If you have standing, do you feel you have had enough time to make a sufficiently informed choice about participation in the settlement?
This is an incredibly complex action. I consulted on the very first copyright class action for freelance authors (Ryan v. CARL Corp., filed in 1997 and settled in 2000), and I lead a slate of objectors in the freelance case now at the Supreme Court (Reed Elsevier v. Muchnick), and I have not read all of the hundreds of pages of legalese of the Google Books settlement, and it is very hard to imagine others doing so. The settlement parties and their lawyers should be required by the court to undertake a full year of transparent public education of the implications of this settlement for creators, publishers, and consumers. My own contribution to that process would include the painful observation that the Authors Guild, the self-appointed representative of the author class in this case, is the same party that engineered the horrible sellout In Re Literary Works in Electronic Databases Copyright Litigation (now the aforementioned Reed Elsevier v. Muchnick).
7 How would you best describe your professional affiliation?
8 Are you currently a member of the Authors Guild?
9 Did you support the filing of the initial lawsuits by publishers and the Authors Guild?
Much of my response is contained in #6 above. I am on record as noting approvingly the contrast between the $125 million settlement fund in this case and the $18 million cap on the settlement fund in the freelance case (though I have not been privy to enough information to know whether the $125 million fund here is adequate, either). I also praised the concept here, if not the execution, of a royalty system rather than a 100% naked rights grab. I believe a fair reading of the 2001 Supreme Court decision in Tasini v. New York Times (the case that gave rise to what is now Reed Elsevier v. Muchnick) is that the Court was encouraging models that allocate to writers a fair share of the revenues from new technologies.
Largely covered by the responses above.
12 May a reporter from Publishers Weekly contact you to discuss your answers?
Yes, you may contact me for further discussion.
Blog reader and commenter "Moxie" was the first to point out that the Supreme Court yesterday published the schedule for oral arguments during the October term. Our case, Reed Elsevier v. Muchnick, is set for Wednesday, October 7.
By coincidence, October 7 is also the current date scheduled by U.S. District Court Judge Denny Chin date for the fairness hearing in the Google Books settlement.
With a September 4th deadline looming to opt out of or object to the Google Book Search Settlement, PW is conducting a survey designed to gather a broad view of how the Settlement is being viewed.
We urge you to take a few minutes to answer this brief, targeted questionnaire to help us gauge industry opinion on whether the settlement should be approved, modified or rejected. Note that you do not have to have standing in the suit to participate in the survey.
Please click on the link below when you are ready to take the survey.
Results of the survey will be shared in the August 24th issue of PW. If you have questions or comments about the survey, please contact Laura Girmscheid, PW Research Manager at lgirmscheid@reedbusiness.com.
The Justice Department has sent a July 2 letter to Judge Denny Chin informing the court of the antitrust investigation of the Google Books settlement. The judge responded with an order that the government would need to submit substantive comments by September 18, in advance of the October 7 fairness hearing. Nothing terribly new, but an interesting incremental step at the Kabuki-dance level of this story.
Deputy Assistant Attorney General William F. Cavanaugh's letter, attached to Judge Chin's order, is viewable at http://www.scribd.com/doc/17045068/SDNY-Order-DOJ-Letter.
The lead item in the new July issue of Bytes in Brief, viewable at http://www.senseient.com/publications/bytes/html/july_2009.html, tiptoes its way to referring to a "major copyright case" involving "a settlement with freelance writers." The article erroneously states that the Supreme Court granted certiorari on February 23 (actually it was on March 2), and links only to the defendant publishers' brief. But it beats the sounds of silence.

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