On Thursday, February 18, the federal court considering the proposed Google Books settlement held an all-day fairness hearing. In addition to the authors, publishers, and Google arguing in favor of the settlement, the court heard from the Department of Justice and twenty-six supporters and opponents of the settlement. Thursday's hearing showed that the presiding judge, the Honorable Denny Chin, appears to be taking up his responsibilities in earnest. Although he didn't press far into details, his questions showed familiarity with the arguments for and against the settlement, along with a sense of which issues were central to the settlement and which were peripheral. He set a quiet but controlled tone, mostly letting the various speakers structure their arguments as they preferred, while occasionally interrupting to post a probing question or to ask that they move on from issues that others had already covered.
Over the course of the day, the "opt-out" nature of the settlement emerged as perhaps _the_ critical issue facing the court. Because the original lawsuit was filed as a class action, the settlement would be binding on millions of copyright owners of books. Under its terms, Google would be allowed to sell electronic copies of out-of-print books unless and until their copyright owners tell it to stop. The parties to the settlement spent much of their time defending the choice of an opt-out rule. They argued that it was essential to the settlement because it would create a market for many out-of-print books. Since Google would be required to turn over 67% of the revenues, regardless of whether the copyright owner had yet "claimed" the book, Google's sales would actually create a pool of money, giving the copyright owner a ready incentive to come forward and identify herself. Once she had, the saved-up 67% would be hers, and she could take full control over how--and whether--Google made the book available.
The objectors, however, argued that the opt-out provision was illegal. Some claimed that it was improper to use a class action to set rules for future sales of complete books when the original lawsuit concerned only Google's past scanning and indexing. Judge Chin's decision on these issues is likely to turn on an analysis of how closely related the original lawsuit and the forward-looking terms of the settlement are. Other objectors pointed to issues in copyright law, claiming that an opt-out rule "turns copyright on its head," in an oft-used phrase from the day. This argument was pressed with particular strength by international objectors (including a German copyright minister), who argued that imposing an opt-out rule on copyright owners would violate U.S. treaty obligations. Although heavily briefed in the objections to the settlement and the parties' defense of it, antitrust issues played a comparatively smaller role in the day's procedings.
To no one's surprise, Judge Chin announced that he would take the case under advisement. There is no clear sense of when he will decide the case and issue an opinion. Based on the presentations of the day, his questions, and his reputation as a thoughtful judge, it is expected to be a detailed and careful opinion, however he rules.
