Source: http://freelancerights.blogspot.com/2010/03/
Timestamp: 2019-04-22 06:18:25+00:00

Document:
"Second chance for copyright deal"
As the Muchnick of the Supreme Court’s freelance journalists’ class-action copyright case Reed Elsevier v. Muchnick, I believe yesterday’s ruling is a very good thing – but not for the reason that will have been promoted all over the mainstream media by the time this essay is published. The New York Times, Reuters, and other corporate publishers can be counted on to do their usual linguistic and journalistic contortions to suggest that the justices, by this ruling, approve of the settlement of the lawsuit that was reached years ago between the periodicals industry and their electronic database partners, and a group of plaintiffs stage-managed by the Authors Guild, the National Writers Union (NWU), and the American Society of Journalists and Authors (ASJA).
The reason the Court’s action is good news is that it keeps alive the dream of a reasonable royalty system for re-use of copyrighted works in new media. This, in turn, would empower independent creators – who currently lie prostrate before big publishers – and enhance the diversity and vitality of American culture.
As soon as the settlement, known by the shorthand “Freelance,” was announced in 2005, I recognized it as a miserable sellout of writers’ rights and the public interest, concocted by the legally and financially overmatched alphabet-soup authors’ organizations. One way I knew this was that, as a former NWU assistant director myself, I had helped put together the very first piece of litigation in this field, Ryan v. CARL Corp., and gotten results.
I immediately organized a slate of objectors to Freelance. After the federal district court judge in New York, George Daniels, blew us off, we appealed to the Second Circuit Court of Appeals.
Then a three-judge appellate panel there did something odd. In what is known as a sua sponte ruling, the Second Circuit threw out the settlement – but on technical grounds that would have been disastrous for the future ability of anyone to seek redress for blatant wide-scale piracy. The judges held that the federal courts had no jurisdiction to consider settlements of lawsuits involving works whose copyrights were not registered with the U.S. Copyright Office.
In Freelance, unregistereds made up an estimated 99 percent of the infringement universe. Indeed, the inclusion of unregistereds in Freelance, along with registered, was very nearly the only thing on which we objectors agreed with the settlement parties.
So the publishers and the writers’ organizations appealed to the Supreme Court. At the invitation of the justices (who showed the additional impeccable taste of renaming the case Reed Elsevier v. Muchnick), the objectors weighed in too.
What yesterday’s decision means is that we all go back to the Second Circuit to argue what the objectors have always wanted to argue: the settlement’s merits or lack thereof.
Meanwhile, the better-publicized Google Books settlement is similarly stalled at the district court level. When President Obama’s Justice Department intervened with a withering “statement of interest,” buoying that settlement’s objectors, the parties went back to the drawing board. But most of the people (including Obama Justice) who were dissatisfied with Version 1.0 say the resulting Version 2.0 has the same fundamental flaws.
In an amusing twist of bedfellows, the long list of Google Books objectors from across the globe include the Authors Guild’s two partners in Freelance. What’s more, NWU and ASJA are making some of the same arguments that the objectors in Freelance had developed earlier against all three of them!
Yet for all its problems, the Google Books deal (to which I am “opting out” rather than objecting) at least includes a future royalty system, which I personally consider the key missing ingredient in Freelance. That is why I wrote last September to Attorney General Eric Holder and made the decidedly unrigorous recommendation that his office knock some heads together and try to fuse Google Books and Freelance into a truly comprehensive negotiation of all interests: librarians and information consumers, as well as publishers and a few writers’ organizations claiming to represent everyone. My letter can be viewed at http://muchnick.net/lettertodoj.pdf.
On January 27 of this year, Pam Samuelson – the Cal legal scholar, new technology activist, and MacArthur Fellow, and one of the leading objectors to the Google Books settlement – asked Judge Denny Chin to wait for the Supreme Court’s decision in Reed Elsevier v. Muchnick before deciding Google 2.0. “If the Supreme Court rules that owners of copyrights in unregistered works are eligible to participate in copyright class action settlements, the court should direct the parties to renegotiate the agreement,” Samuelson’s brief argued.
The first part is exactly what the justices have now done. Let’s see if Judge Chin takes up Samuelson on the second part.
Neither Rome nor ASCAP – the musical licensing system launched after the advent of records and radio – was built in a day. It will be the same for a fair and equitable royalty system in the digital age for unaffiliated writers, photographers, videographers, and graphic artists. Whether all of them realize it or not, they should be celebrating.
Irvin Muchnick will be in Connecticut later this month to promote his book CHRIS & NANCY: The True Story of the Benoit Murder-Suicide and Pro Wrestling’s Cocktail of Death, at Borders stores in Stamford (March 25) and Farmington (March 27). He blogs about freelancer issues at http://freelancerights.blogspot.com.
Andrew Albanese of Publishers Weekly is his characteristic breath of fresh air in coverage of the Supreme Court ruling in Reed Elsevier v. Muchnick. See "Tasini Case Revived by Supreme Court," http://www.publishersweekly.com/article/451840-Tasini_Case_Revived_By_Supreme_Court.php?nid=2286&source=link&rid=17015961.
"Class action is a form of leverage, and any settlement is ultimately going to be anywhere from pennies on the dollar to a decent sum that is still far short of the claim's black-and-white statutory value. But that is only one piece of this exercise. The far more important piece, for all writers today and tomorrow and for the diversity and vitality of our culture, is designing the architecture of [authors'] rights in the new information age. And we'll only have one shot at it."
I’ve taken my little victory lap for Reed Elsevier v. Muchnick – one shared, in terms of the Supreme Court decision itself, with the settlement parties.
Now it’s back to the task of making lemonade out of the lemons that were plucked off the tree by the periodical and electronic database industries, in cahoots with three authors’ organizations. Will they negotiate with the objectors or do we go back to slugging out the merits of the settlement before the Second Circuit?
The landscape has changed dramatically since the three-judge panel there misguidedly overturned the settlement on jurisdictional grounds. There’s Google Books, of course. And there’s whatever effect the nuances of the Supreme Court’s decision this week will have on the upcoming merits phase.
I call it very, very interesting. Three justices -- Ginsburg, Breyer, and Stevens -- concurred with the main opinion, written by Justice Thomas, but produced a separate one that emphasized different aspects of the law undergirding the decision. It’s way too early in the morning for me to try to explain that in any more depth.
However, I am intrigued by the implications of the Ginsburg-Breyer-Stevens troika. Ginsburg had written the Tasini opinion, which was a 7-2 vote – and Breyer and Stevens were those two dissenters.
Back in October, after attending the oral argument in Reed Elsevier v. Muchnick, I wrote that the perceptive questions from Breyer and Stevens were leading me to the conclusion that they had dissented in Tasini not out of a disrespect for independent creators’ rights, but because they had a different and more pragmatic vision of how those rights should be applied. At our hearing, Stevens – ornery but in a cool way – showed impatience for the hairsplitting between calling the copyright registration requirement either “mandatory” or “jurisdictional.” And Breyer placed so much importance on the value of the fairness of the settlement (which was only indirectly related to the narrow and technical question before the Court) that he turned one of his questions into a long riff about a hypothetical royalty system. Music to my ears, obviously.
That Stevens and Breyer wound up joining Ginsburg, the architect of Tasini, in a nuanced affirmation of a unanimous opinion in an offshoot case is more than sweet. It may help pave the road ahead.
In the wake of yesterday's Supreme Court ruling in Reed Elsevier v. Muchnick, there is not a heck of a lot I would change in my September 23, 2009, letter to Attorney General Eric Holder. Full text below.
As the named respondent in the current Supreme Court case Reed Elsevier v. Muchnick (scheduled for oral argument on October 7), I address the expressed interests of the United States both in that case and in the Google Books settlement (hereinafter “Google”). My purpose is to advance the Government’s appreciation that the two cases are best discussed, prospectively and in the public interest, as a package.
In Google, the Antitrust Division and the United States Attorney for the Southern District of New York filed a Statement of Interest with Judge Denny Chin outlining concerns not only in the area of antitrust, but also with the proposed settlement’s fidelity to Rule 23 (class action) and copyright law. The Government brief was the clear impetus for the parties’ subsequent motion to postpone the fairness hearing.
The Google settlement parties have indicated to the District Court their intention to use the period before a November 6 scheduling conference to revise the proposed settlement – based both on the Statement of Interest and, more broadly, on the Government playing a facilitating role in the drafting of revisions. It is in that context that the Freelance respondent-objectors seek your good offices in broadening the scope of the negotiations in both cases. Such a step, we believe, not only would serve judicial efficiency; it also would improve public policy in the evolving copyright architecture of new technologies.
Google and Freelance are at different procedural stages. The two cases, however, have striking and compelling similarities. Most fundamentally, both are copyright class actions involving claims by authors of the unauthorized reuse of their works by new digital publishing products. Beyond that, both cases have controversial settlement mechanisms turning on the deployment of “opt out,” rather than “opt in,” definitions for the granting of future rights to the defendants. This flaw in the Google settlement was particularly and aptly identified in the Government’s Statement of Interest.
The Government’s Statement of Interest in Google called attention to links between the two cases at p. 25, in the discussion of “Potential Foreclosure of Competition in Digital Distribution.” The brief cited the Order for Final Approval of Settlement and Final Judgment in Freelance, noting that it provided for “numerous companies beyond the named defendants [to be] allowed to obtain benefits of settlement.” In this way, the Government supported the argument that the Google settlement was defective on antitrust grounds.
Respectfully, the Freelance respondent-objectors believe that there are much stronger links between the two cases, as noted above. Further, the ability of a spectrum of publishers to obtain the benefits of settlement is far from the most pertinent set of facts in Freelance. While the antitrust principles propounded in your Google brief are well judged, the real connections between Google and Freelance revolve around Rule 23 and copyright. We are gratified that the Government’s Statement of Interest in Google went out of its way to offer cogent analysis in all three areas.
of periodical publishers and their electronic database licensees – collectively identified as the Defense Group. Thus, the sharing of the benefits of settlement was not a function of antitrust sensitivity; it was simply a way to describe the population of defendant-infringers (all of which, due to the unusual and complex nature of the settlement, also stood to “obtain benefits” therefrom).
Even so, the Freelance respondent-objectors are quick to point out that, with this passage, the Government has put its finger on the central solution tying together both cases: the need for comprehensive, industry-wide royalty systems. In their current forms, the Freelance settlement has the comprehensiveness but not the royalty system; Google has the royalty system but not the comprehensiveness.
During the public debate of Google, there has been a great deal of discussion of “compulsory licenses.” The Freelance respondent-objectors are not opposed to such arrangements per se; the main concern on our end is that they not be promulgated for the exclusive benefit of private litigation parties, and it is questionable whether that goal can be achieved by the courts rather than by Congress. In her recent testimony before the House Judiciary Committee, Register of Copyrights Marybeth Peters spoke eloquently on this point, and it has become the nexus of the successful resolution of both Google and Freelance.
The Supreme Court review of Freelance is on other grounds. But certainly one possible outcome of Reed Elsevier v. Muchnick – the one desired by the respondent-objectors – is a remand to the Second Circuit for the express purpose of reviewing the merits. Another possible outcome, of course, is that the Supreme Court will affirm the Second Circuit on the jurisdiction question under review, thus killing the settlement. We may know which path we are on by December or January. In the event the case does return to the Second Circuit, a possible decision there on the compulsory license issue would fundamentally affect Google.
For these reasons, the Freelance respondent-objectors request that the Government use its facilitating role in the renegotiation of the Google settlement, first and foremost, as a platform for broadening those negotiations. They should include the Freelance respondent-objectors, to be sure, but not only us; all stakeholders in the emerging copyright landscape should have their interests heard and incorporated. From a policy perspective, perhaps the most egregious lapse to date has been the disenfranchisement of librarians and information consumers in the rush to tailor litigation settlements. The resulting pastiche of proposed solutions is poorly integrated and has ill-served all parties.
We believe that the Government’s constructive intervention in Google marks a hopeful turning point in this process. Coordination of the Google and Freelance settlements would be the next step.
Thank you for your attention to this proposal.
As the Muchnick of the Supreme Court’s freelance journalists’ class-action copyright case Reed Elsevier v. Muchnick, I believe yesterday’s ruling is a very good thing – but not for the reason that will have been promoted all over the mainstream media by the time this essay is published.
The New York Times, Reuters news service, and other corporate publishers can be counted on to do their usual linguistic and journalistic contortions to suggest that the justices, by this ruling, approve of the settlement of the lawsuit that was reached years ago between the periodicals industry and their electronic database partners, and a group of plaintiffs stage-managed by the Authors Guild, the National Writers Union (NWU), and the American Society of Journalists and Authors (ASJA).
The reason the Court’s action is good news is that it keeps alive the dream of a reasonable royalty system for reuse of copyrighted works in new media. This, in turn, would empower independent creators – who currently lie prostrate before big publishers – and enhance the diversity and vitality of American culture.
The United States Supreme Court has reversed the Second Circuit Court of Appeals in Reed Elsevier v. Muchnick, ruling that holders of unregistered copyrights can participate in settlements of infringement cases.
The decision means that the case, commonly called "Freelance," will return to the lower courts for further adjudication. The Second Circuit had invalidated the settlement on jurisdictional grounds.
Freelance involves the consolidated settlement of several class-action cases over the unauthorized and uncompensated electronic reuse of freelance writers' previously published articles. The cases stemmed, in turn, from the 2001 Supreme Court opinion in Tasini v. New York Times.
The Reed Elsevier v. Muchnick opinion can be viewed at http://www.supremecourtus.gov/opinions/09pdf/08-103.pdf.
The objectors to the settlement are gratified by the jurisdiction ruling. We now look forward to the opportunity to argue the merits of our objections before the Second Circuit.
Follow this blog for further details and comment soon.

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