HathiTrust Summary Judgment (9)
Factor 4: Effect Upon the Potential Market For or Value of the Copyrighted Work
This factor should have been at minimum a toss-up. Unfortunately, it is not; Judge Baer's decision is a clear victory for the defendants, marred as it is by rhetoric applied well beyond the 78 works at issue.45 He is careful, however, to note that this particular factor relates to the libraries, and not to their profit-seeking agent Google:
Plaintiffs argue that Defendants uses cannot be considered noncommercial because of their relationship with Google. Although the relationship between Google and Defendants is potentially relevant to the uses of the works made by Google, that issue is not before this Court. My determination that the Defendants' uses are noncommercial relies on the uses actually made by Defendants in this case, that is, text searches, access for print-disabled persons, and preservation.46
In the context of the uses at issue, for the works at issue, by the defendants at issue, Judge Baer's analysis of the statutory fourth factor is quite straightforward. He stumbles a bit on the disabled-access issue by continuing to mix that separate defense with fair use, but that is ultimately unavailing in this context anyway. The two realistic objections by plaintiffs inside the bounds of the fourth factor are rather cursorily rejected... but the record makes that almost inevitable. The plaintiffs objected that there are "mass security risks" to their works created by the continuing existence of the digitized copies. In one sense, the plaintiffs are correct to worry about this: Piracy is going to happen as a result of these copies. That said, it's not the libraries' problem,47 and the libraries appear to be taking reasonable precautions.48
Judge Baer's analysis of the final argument made by the plaintiffs on this factor reveals far more about the lack of business acumen and knowledge on the part of the plaintiffs than it does anything else:
Plaintiffs' argument about a potential market is conjecture. "Were a court automatically to conclude in every case that potential licensing revenues were impermissibly impaired simply because the secondary user did not pay a fee for the right to engage in the use, the fourth factor would always favor the copyright owner." A copyright holder cannot preempt a transformative market. Although Plaintiffs cite the Second Circuit’s decision in Texaco for the proposition that this Court ought to consider the "impact on potential licensing opportunities," they omit the remainder of the quote, which concludes that courts should consider "only traditional, reasonable or likely to be developed markets." Because I conclude that at least two of the uses are transformative—that is, the provision of search capabilities and access for print-disabled individuals—any harm arises, if at all, to a "transformative market." A use that "falls within a transformative market" does not cause the copyright holder to "suffer market harm due to the loss of license fees."49
Had the plaintiffs entered into evidence the terms of Amazon's Kindle Select Program — which limit royalties for works that are otherwise available in electronic form, and have been enforced against copyright holders facing widespread pirated editions — that would have been enough to at least make this a nonspeculative argument. On the record in front of him, though, Judge Baer didn't have a lot of choice... especially given the overblown rhetoric in the precedent he was faced with.
- I must admit to more than a bit of frustration at the way this factor was handled, but not so much with Judge Baer's handling of this factor (as he believes himself bound by some dubious precedent). I do not have access to the discovery that the parties engaged in; I only have access to what they filed with the court. The defendants' presentations will win no prizes, as they frequently involve speculation on market values and processes by people with little or no actual knowledge of or engagement with market values and processes (let alone for self-publishing, the most-frequent way for authors to bring older works back into availability these days). The plaintiffs' presentations, however, are much, much worse, and reflect inadequate consideration of what proof would be necessary when structuring the complaint, inadequate discovery, and poor preparation for the actual motion practice... all of which, unfortunately, come back to the Authors' Guild's arrogance in refusing to accept input from (and assistance from) authors' organizations — primarily organizations that specialize in categories of publishing, and in particular in various types of commercial category fiction — at any stage, let alone an early enough stage to make a difference.
- Slip op. at 19 n.27 (internal record citation omitted).
- Leaving aside for the moment that if the defendants' activities are lawful, and if they act as "libraries," the defendants are no more responsible for what their patrons do with electronic materials obtained from the library than they are for physical materials. Ripping copies of CDs, DVDs, Blu-Ray discs, etc. happens all the time... and the less said about off-campus copy shops and the fate of overnight loans from the reserve shelf, the better. Cf. Princeton Univ. Press v. Michigan Document Servs. Inc., 855 F. Supp. 905 (E.D. Mich. 1994), aff'd en banc, 99 F.3d 1381 (6th Cir. 1996). In short, this is a stupid argument, and the authors' groups should be glad that Judge Baer did not stomp on them more thoroughly.
- Hopefully, these will be better precautions — even for display of "snippets" — than Amazon took with its Search Inside the Book program. Fifteen minutes and double-checking of a couple of command-line parameters for open-source and freeware utilities resulted in a working, kludged PERL script to retrieve the entire work from SITB after landing on the first page of the text...
- Slip op. at 20 (citations and footnote omitted).