Judge Chin suggested that he saw the case, if it were to be litigated, in terms of fairly straightforward cross motions for summary judgment on whether snippet display is a fair use.

Michael Boni, counsel for the Authors Guild (AG), represented Google and the parties in the presentation before the court, as has usually been the case. As I have recently speculated, it would not surprise me to find that the AG are the only actors with any real skin in the game, due to the compensation expectations of their counsel. Notably, they remain just as handicapped in obtaining an approved class certification as before; neither ASJA nor NWU have suddenly swooped to offer support, and I see no sign that academic authors – whose interests were previously stated to be “inimical to the interests of the class” – suddenly espouse that a new revision would fall to their favor. Since the majority of digitized books are academic — from research libraries — one has to wonder who the AG thinks they are negotiating for.

It seems to me that the only benefit Google obtains from a new settlement is clean hands over the past claims of infringement for digitization, but if the only operation they conduct is snippet-view, there is not necessarily a requirement for all-party approval. One could well argue from Google’s perspective that they actually don’t want to establish a precedent for asking permission for a broad class of activities that have been elsewhere held as Fair Use when they have been litigated. Furthermore, the barrier of final class certification resides primarily in the house of settlement; it need not be invoked if snippet display was decided on motion.

Finally, the arrangement that Google made with Hachette Livre in late 2010, which has received inadequate attention in the United States, belies any assertion that Google requires a class action settlement to obtain relief for claims against commercial uses of works that are out of print. To a degree, a contract was the only course available due to the absence of class action in France’s legal system, but it demonstrates that acceptable results can be obtained through bilateral agreements. As an evident precondition, intent and willingness had to be present for any understanding to be reached.

If the case should return to litigation in the absence of any settlement, even for claims of past infringement, there would be a number of potentially interesting consequences. One of those is that archives, museums, library associations, and the Internet Archive –- the latter having been a particularly staunch opponent of the settlement — might actually wind up writing amicus briefs on behalf of Google in support of a favorable Fair Use finding. Far stranger things have happened in Silicon Valley.

The Google Settlement issue did not seem as important as it did two years earlier. In part this is because the publishing and distribution landscapes have changed rapidly. Today there are more distribution channels for ebooks, the Hathi Trust continues to grow, various publishers have initiated their own ebook programs, etc. The ebook market—including access to out of print works—is becoming increasingly varied and competitive.

As the summer spins closer to the Google Book Search settlement status conference on July 19, a variety of nuanced speculations are beginning to emerge around the set of possible scenarios that might develop in the months ahead (solid answers are not expected to emerge as early as July).

At the 2010 February 18 hearing in the SDNY, Google clearly stated that an opt-in regime was not particularly appealing to them, yet the 2011 March 22 ruling that came from the court suggested that such a path was the only one favorable to a positive review. Much of the debate therefore has centered on the parameters around which an opt-in regime might emerge. It is widely expected that all or most non-display uses would be represented in a revised settlement under an opt-out basis; unfortunately for cultural sector organizations, these are the uses that are most likely to legitimately fall under a Fair Use exemption. It remains to be seen if an opt-out endorsement for snippet view would harm the ability of libraries to assert copyright exception for similar uses for their own digital collections.

Arguably, not just Google would see diminished benefit from an all-parties opt-in regime for commercial uses. For many publishers, the existing Google Partners Program permits a degree of control over terms of access and revenue distribution that is unavailable through the settlement. At the cost of some bright-line clarity over author-publisher distributions associated with older contracts, publishers lose only the availability of an institutional subscription database (ISD); a revenue model that is increasingly faulted for its coverage gaps as trade publishers pull out their more attractive titles, and academic publishers waver towards more open access principles under pressure from their host institutions and faculty authors. Additionally, academic catalog initiatives from Project Muse and JSTOR are likely to claim an ever-growing portion of university press backlists, and as trade backlist titles are digitized and enter markets at Amazon, Barnes & Noble, and Kobo, only smaller or niche publishers with fewer resources might benefit from settlement clauses. They are not the ones at the bargaining table.

It is conceivable that the participant publisher representative body, the Association of American Publishers (AAP) lacks the financial resources to participate in a resumption of costly litigation in a case where even the discovery process was never completed. Indeed, the scope of material available for discovery now is vastly greater, with millions more books scanned and many more agreements with international libraries in place. As the ALA report suggests, the AAP’s most vocal members, the trade publishers, are well aware that the world has moved on – a sentiment widely expressed to me off-hand as recently as the 2011 BookExpo America exposition. It seems entirely conceivable that the publishers might be willing to fold their cards, with only compensation for claims of past infringement as their ticket out of this increasingly dreary poker game.

This would leave the authors to negotiate with Google alone. It is not a far-fetched notion: the class action attorneys for the Authors Guild are operating under the premise that a settlement would fetch them their fair portion of an allocated $45.5 million in attorney fees; there’s a clear financial incentive to see some kind of settlement emerge. But if it is to be authors only, what would an opt-in settlement look like?

In the face of continuing litigation over the split of revenue between authors and publishers for books governed by older contracts which did not anticipate digital availability, it might be appealing for authors with strong rights claims to be able to commercialize their titles. There is no “Authors Program” of the same standing as the publishers program, and while individual authors could attempt to enter into contracts, the entry barrier is relatively high. For many authors, better to have the opportunity to opt-in to commercialization for business models that permit readers to buy individual books that would otherwise not likely be noticed in the market. Although authors can opt for rapidly-emerging self-publishing options that would permit entry in distribution channels, the prospective revenue of many older titles is modest. Inclusion in an Internet scale finding aid would be better than solitary competition against a mass of newly emerging titles and authors.

Calving off the publishers and leaving the authors in a much reduced settlement, while of some benefit to Google, would have other ramifications. For example, it would eliminate any remaining motivation to carry forward an ISD offering, leaving only individual title business models available for refinement.

A crucial unresolved question is whether an author class could be certified. The Court acknowledged that the objections of academic authors to the settlement held merit; party briefs for the settlement stated that the interests of these authors were “plainly inimical” to the interests of the class. There would be a challenge in re-binding academic authors to the goals of a new revision: a challenge, but one conceivably met if the lessened barrier for class representation of opt-in participation was stipulated.

This leaves perhaps the biggest conundrum: the disposition of the Books Rights Registry (BRR). An Authors Guild-only settlement would leave the current conception of the BRR severely under-funded, since it would be starved of significant publisher title revenue. It is conceivable that the BRR could be re-specified as a registry-only service, perhaps with court-appointed oversight to appease some of the private-party concerns expressed by settlement objectors. Excision from the settlement of some administrative burdens, such as author-publisher contract mediation, would permit the BRR to settle into a leaner operational model closer to the European ARROW project. Re-allocation or re-provisioning of licensing income might be another path towards financial stability, but this is an issue of concern for any settlement of reduced ambition. The BRR is the cobbler’s child that has no shoes (or perhaps only huaraches).

This discussion has attempted to illuminate one possible path forward; I present no assertion that this must be the road taken, and while directions such as this are being debated, the complex mix of factors and interests dictates hard against definitive analysis. Still, it is likely to be some form of reduced, hybrid model that emerges from the on-going discussions of the parties in the GBSS in the summer months ahead.

In this particular case, Random House – the publishing company most persistent and notorious for its aggressive pursuit of electronic rights from its backlist authors, responded aggressively by disputing Wylie’s ability to exploit their author’s titles, alleging that Wylie had set himself up as a direct competitor to Random, and by refusing to negotiate with Wylie over any additional titles.

The issues behind this dispute are complex, but at its heart is the fact that e-rights were not clearly negotiated with authors before the digital technology for ebook creation and distribution became more widely disseminated in the 1980s. This is not a surprise: it’s hard for pundits to accurately predict the intercourse of media and technology, just as much as it remains difficult to forecast weather beyond 48 or 72 hours. As a result, the right to publish digital editions, and the royalty rates that would accrue to authors for those publications, are often opaque to the stakeholders and subject to negotiation. Or litigation.

In fact, the landmark legal precedent in this case was a 2002 denial of a preliminary injunction, Random House v. Rosetta Books [pdf], by a judge in the Southern District of New York. The court ruled that Random House was unlikely to succeed on the merits of its allegations. Among other organizations filing supportive briefs was the Authors Guild (AG), an agency that represents a relatively small number of authors; its filing was submitted by an attorney named Michael Boni.

The Authors Guild (AG) reacted to Random House’s threats in the Wylie imbroglio with a chastising note:

To a large extent, publishers have brought this on themselves. This storm has long been gathering. Literary agencies have refused to sign e-rights deals for countless backlist books with traditional publishers, even though they and their clients, no doubt, see real benefits in having a single publisher handle the print and electronic rights to a book. Knowledgeable authors and agents, however, are well aware that e-book royalty rates of 25% of net proceeds are exceedingly low and contrary to the long-standing practice of authors and publishers to, effectively, split evenly the net proceeds of book sales.

Today (August 24 2010), Random House and Wylie announced a deal that marked a victory for the publisher in this most recent skirmish over the rights to digitally exploit backlist titles:

We are pleased to announce that The Wylie Agency and Random House have resolved our differences over the disputed Random House titles which have been included in the Odyssey Editions e-book publishing program. These titles are being removed from that program and taken off-sale. We have agreed that Random House shall be the exclusive e-book publisher of these titles for those territories in which Random House U.S. controls their rights.

As Kassia Krozser has commented, this was a skirmish. There will be others.

— —

Six months after the GBS hearing in the New York court, the world still wonders about the nature of the opinion that Judge Chin must eventually deliver. Most observers are skeptical that the settlement will be approved in its current form; conjecture is actually most heated around the possible endgames that might result from the parties – the Authors Guild; the five publishers from the original publishing suit and their associative organization, the AAP; and Google – being pressed back into active litigation.

The litigation process that brought us to this point started in 2005 with a class action filing by the Authors Guild; the AG’s lead attorney in the complaint was Michael Boni. (The publishers did not participate in a class action until they later procedurally joined the class action settlement proposal with Google.) At the time of its filing, the AG class action drew sharp criticism from not only Google, but many prominent authors as well, who did not believe their own perspectives were represented by the Authors Guild – a concern that would be echoed by many observers in detailed objections in the months ahead. The AG’s class action was then joined by a suit from five individual New York publishers alleging copyright infringement.

Eventually, a proposed class action settlement involving the Authors Guild, the publishers, and Google was entered before the Court. During the painful course of its two and a half year gestation, Google continued to digitize books from partner libraries. The proposed settlement was audaciously broad in scope, and secured opposition even from the U.S. Government’s Department of Justice [pdf] for – among other sins – the proposal’s departure from the motivations of the initial litigation.

One of the keystones of the settlement proposal is lodged in Attachment A (Author-Publisher Procedures), which attempts to clarify the digital rights issues that have brought authors and publishers so often to litigation or its brink. The proposal provides for a default bright line assignment of revenue from the exploitation of works included in the terms of the settlement. As Pamela Samuelson of UC Berkeley notes in a footnote of her filing [pdf] (Fn. 15) before the Court (Supplemental Academic Author Objections to the Google Book Search Settlement, Authors Guild, Inc. v. Google, Inc.):

Appendix A takes advantage of the settlement on other issues as to which Google is the antagonist to bring about a new allocation of copyright ownership, licensing, and reversion rights and procedures that, but for the settlement, could only have been accomplished through legislative action.

This outcome could never have independently arisen without the Google Book Search litigation. As Samuelson notes in the same paragraph:

Had Random House tried to resolve this e-book rights issue by bringing a class action lawsuit on behalf of a class of publishers against a class of authors in order to negotiate a settlement along the lines of Appendix A, the case would have been dismissed because the dispute would have involved both varying contract language and different state laws so that Rule 23 requirements could not have been satisfied.

— —

It is not too much to suggest that the conflict over ebook rights and royalties is one of the most outstanding irritants in the transition to digital publishing. It is an irritant that has drawn the Authors Guild and authors, and the AAP and publishers, into conflict time and time again. These actions have repeatedly involved the same small circle of actors – Paul Aiken, the Executive Director of the Authors Guild; Michael Boni, class action attorney for the Authors Guild; and Richard Sarnoff, the Co-Chairman of Bertelsmann, Inc. (responsible for the acquisition of Random House), the Chairman of the AAP, and widely attributed as an architect and lead negotiator for the GBS settlement.

In some lights, the proposed settlement in the Google Book Search case is really a proposed settlement in the conflict between the Authors Guild and the AAP over the exploitation of digital rights. Google, a bystander to that particular conflict, managed to drop a convenient litigation container for a class action settlement that could be alleged to contain all authors and publishers in a common agreement. The eventual proposal attempts to bring wholly new benefits to the other parties in the suits; benefits that Google might not have even imagined when it first began the Google Print program.

As Pamela Samuelson noted in Footnote 15 in her submission, Paul Aiken testified before Congress on this same point:

One of the reasons this thing [Attachment A] 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.

These words echoed those that Paul Aiken had made almost a year previously, at the release of the first instantiation of the settlement in October 2008. As Library Journal noted:

We had a major disagreement with Google, and we still do,” said Paul Aiken, executive director of the Authors Guild. “We also don’t see eye-to-eye on with publishers on book contract law,” he added, before calling the settlement the “the biggest book deal” in U.S. publishing history. Aiken said two “guideposts” helped lead his organization through a thicket of issues in the suit. “Authors like their books to be read,” he noted, “and like they like a nice royalty check.”

It’s always nice to work out differences, but Google is arguably the party most likely to benefit out of all proportion to its potential liabilities from this divertissement. In the unlikely event that the settlement is approved, it moves forward on its merry way (subject of course to a lengthy appeals process). More likely, if the settlement is denied, it is difficult to envision a scenario where active litigation will re-commence. As a not necessarily naive bystander to the fundamental conflict between the AG and publishers, Google makes out like a bandit.

In the last five years, Google has amassed a singular and growing compendium of digital books; established a nascent rights registry; digitized historical Copyright Office renewal records; and moved to deepen commercial relations with publishers through its Google Editions service – whose release keeps coincidentally slipping in concert with the withering expectations of a summertime ruling from the SDNY. It is hard to imagine the AAP pursuing their case when Google is a useful potential ally in the publishers’ ongoing ebook pricing struggles with Apple and Amazon, which have themselves drawn scrutiny by State Attorney Generals.

And for the AG, it will have lost a most critical product: a determination of royalty revenue for the digital editions of backlist books that would have taken much of the provocation away for continuing uncertainty and conflict with publishers. With not that much to gain on the flip side.

— —

The firefight between Wylie and Random House, and AG’s strong public interest in its outcome, highlights the fact that the struggle to obtain mutually perceived value in royalty outcomes for backlist titles is very much a matter of the moment. The AG’s engagement on behalf of its clientele in the rights and royalty struggles emerging over the next few years grow ever more at odds with the terms it has attempted to obtain through the proposed settlement.

Those terms – certainly for prominent authors and their estates – are increasingly likely to be improved when aggressively negotiated by authors or their agents, or when titles are re-published digitally through new publishing ventures, such as those established by well-known and highly respected agents – e.g., Andrew Wylie’s Odyssey Books, Richard Curtis’ E-Reads, and Scott Waxman’s Diversion Books. Independent self-publishing firms such as Smashwords promise to bring mid-tier authors of backlist titles equally promising results when they take back titles for themselves.

The participation of the ASJA and the NWU in the Open Book Alliance, which contests the proposed GBS settlement, suggests that not all author agencies believe these issues can best be determined through this particular resolution.

As the summer months march into autumn, a historical engagement of a small circle of actors around the Authors Guild and the AAP may be increasingly misaligned from the interests of their larger, and evolving, constituencies.

I was speaking with a researcher pulling together data on the development of digital books and the IDPF, and I found myself discoursing about the larger organizational responses that publishers are, or are not, invoking in response to revolutionary changes in media. The post is specifically motivated by the observation that some strategies common to other organizational fields under competitive threat are not being widely implemented among large trade publishing firms.

I have a particular interest in this topic; my doctoral research (never culminated in a degree) focused on the adoption of biotechnology – a new way of doing product development, through new forms of science and engineering – by established biopharmaceuticals.

Broadly speaking, a large biopharm company has a limited number of ways to adapt to a R&D environment in which new products can be developed in a fundamentally new way, via genetic engineering versus chemical discovery. It is useful to compare biopharm’s strategic options to those embraced by the NYC based trade publishing industry, which is confronting the explosion of possibilities for new generation publishing and distribution made available by network technologies.

Publishing, in many ways, is arguably more complex a case than biotech because the innovations are more diffused and are associated with widely disparate competencies; it is not merely a case of molecular biology contra chemistry. New forms of engagement with social media; struggles to foresee attractive device engineering strategies; models for mobile consumption; changes in book packaging, particularly toward network based access; migrations from traditional physical to network based design paradigms; new models of remuneration; the challenges of an increasingly flat, complex, and global rights world; and the escalation of traditional factor costs all impose severe constraints on traditional publishing’s ability to rapidly innovate.

Here are some options:

1). Get the religion, and reinvent your company. This is grossly difficult, and arguably not done in biopharm. There are several reasons, and one of them is that older forms of drug discovery and development still have some value, so throwing out the baby is not a good choice. However, more importantly, a very large company is not well positioned to undertake the wrenching changes necessary in strategy reformulation and organizational restructuring to go native; additionally, and equally as importantly, a phoenix company will need to wholly re-structure its world of network ties to external firms: suppliers, customers to some extent, and developers. In biotech, a suddenly critical resource was the strength and extant of ties to fundamental science researchers in molecular and genetic biology, versus chemistry. This is not the kind of network redesign that happens overnight. In fact, because of career advancement patterns, it usually does not happen.

In publishing, I just do not see this happening anywhere. No publisher has looked at the precipice and said, “Yep, that’s not good, we’re heading for a new high ground.” Instead they have valued their existing baby – traditional models of publishing – very highly. In an odd but direct sense, this can be reflected in the AAP’s embrace of the Google Book Search settlement proposal, which is a profoundly conservative method of maintaining the existing book business, off loading some innovation in distribution, but not touching the essence of the product – the book – itself. (It also has some characteristics of an alliance strategy, discussed below). At any rate, I do not believe we are likely to see a large, established publishing company transform itself into a technology focused innovator.

2) Birthing the beast within. In biotech, some large companies tried desperately to create an entrepreneurial atmosphere within their companies, setting up quasi-independent units to undertake biotech style research and drug discovery; encouraging their scientists to form new relationships with university science departments, and allowing them to operate with relative freedom, including the opportunity to establish new alliances with external biotech firms without the traditional review triage.

Success has been slow, at least at the fundamental task at creating a beach-hold from which the new way of doing science and business might establish itself as a rapid and healthy alternative within the established company. Again, there are many reasons for this: a reluctance to surrender resources in environments constrained by external factors and threats; resource envy over the targeting of a select group for streamlined operation and concomitant higher risk innovation; the extraordinary difficulty of establishing communication, much less practice-sharing, with the mother-ship; and the pragmatic likelihood that the individuals placed in such units are already part of professional networks that are “outside” the industry, and are thus more likely to find attractive employment elsewhere.

Some publishing outfits are attempting to implement this strategy. Harper Studio is exemplary; there are a few others. I find Tor’s pan-sci/fi portal site to be a bold step in a future-forward direction, although Tor is specifically focused on user (web) transactions versus more polygamous engagements with data (for example, by developing enhancements that facilitate linked data and integration with off-site network resources).

I frankly cannot afford these much assurance of success, except for very limited purposes. Most of these efforts fail to deliver their original vision for the host organization, even if they are locally successful within their units, for a simple reason: they grossly underestimate the extent of the revolution occurring outside the doors of their house.

3. Allying oneself with transformative companies. This has been a very common strategy for biopharm; it does not invoke painful internal change, and it allows one to suck off some of the benefits of innovation elsewhere. However, it conversely does not reinvent your firm, and it creates resource dependencies that can debilitate over time. Alliances are fragile, and the costs of out-of-firm maintenance can suddenly emerge as a threatening constraint. This strategy generally pulls out the survival curve but does not alter its direction.

Publishing has done some of this, usually with firms that engage in new forms of content distribution, e.g., in mobile platform. This is a conservative approach, and one already established in publishing by historical patterns of off-loading technology development to digital conversion hotels and content repositories. Adequate internal expertise has to be developed to successfully interface with more specialized staff in external firms, but these units, and the individuals within them, can often be “bolted on” to existing firm divisions such as “digital media” or “acquisitions” or “marketing” without massive disruptions. Random’s engagement with gaming firms is a wonderful example of the short term success that can come with this strategy.

As I mentioned previously, in some form, the GBS settlement can be seen as a limited, non-transformative alliance between an innovation purveyor and traditional industrial firms. It is limited to an innovation sector in discovery and distribution, and the most attractive innovation, in data and related integration services, is not shared beyond Google, and indeed not adequately perceived by publishing as a longer term strategic necessity. This characterizes one great shortfall of this approach: it is often narrowly focused on innovative forms that occur on well-marked edges of existing firm processes instead of the hazy, shadowy borders of greater risk and return; alliances focus on incremental versus revolutionary embrace.

4. Acquisition. It is always easier for significant revolutions in production, distribution, and product design to emerge wholly apart from existing industry. The resource inputs are either dramatically different, or distinctly sourced; development processes require different input skills that are more prevalent in unfamiliar professional networks; the organizational field of collaborators, and the type and nature of resource dependencies often resides on an entirely different vector to the established sector. Indeed, a hallmark of transformative eras is that the most market-disruptive firms are often entirely blind to the existing industry, or at least not reliant on its continued existence. Arguably, e.g., craiglist could give a shit if newspapers folded; from their perspective, that is not a location for competitive friction. Facebook might be; Hearst Media is not.

For these reasons, one of the most prevalent strategies of established biopharm firms under threat from biotech is to acquire these competencies, or alternatively make significant equity investments in them; in the case of acquisitions, usually “parking” them to the side of the existing core organizational structure. This protects the innovator’s ecology, and shields the larger organization from disruption, while lowering the risks of external alliance collaboration and resource dependency. Roche (+) Genentech, and the various share-wars that have erupted between those two firms, is an interesting case in point. (Indeed, as Genentech’s fortunes have stabilized, it has thrown increasingly stronger ripostes to Roche’s efforts at incremental consolidation).

This is not happening to any significant degree in trade publishing. That is striking to me. It speaks, potentially, to a greater breadth of transformation in media, compared to drug development. Biopharm and biotech both had to make accommodation to the identical set of ultimate customers, physicians and hospitals; both were reviewed and regulated (albeit in different fashion) by similar government processes, generally by the same agency. One could argue that the transformation confronting most legacy media companies is more encompassing. In fact, instead of these changes becoming more tractable over time, reflecting the same conundrums from music to books, it might be that they are becoming more intractable as the pace of external innovation accelerates.

Harper did not acquire Lexcycle; Amazon did. If I had to conservatively predict an acquirer for Scribd, it would be Google, Amazon or Microsoft, not Random House. That is a particularly telling commentary, and I think it argues for an unhealthy and fulsome separation between traditional publishing and the locus of innovation boiling up on the edges of the traditional publishing industry.

In sum. Revolutions in industry are times of both great creativity and disruption. It is intriguing to witness the development of responsive strategies by existing firms, as they learn to recognize external threats to their business model, emerging from larger social, scientific, economic, and/or political changes. So far, as indicated in this very informal analysis, I would suggest that publishing has only anemically adapted to an altered landscape, and the consequences could be very troubling for existing firms.

[A]t the invitation of the AAP and Google I moderated a panel discussion with John Sargent from Macmillan and Richard Sarnoff from Bertelsmann that had the … goal of illuminating for publishers some of the basics of the proposed settlement of the Google Book Search lawsuits. The session was strictly limited to publishers only … .

Both Sargent and Sarnoff were extensively involved in the negotiations of the Google Book Search settlement, and the interview is revealing for the attitudes of the large trade publishers who negotiated the proposed agreement with Google. The attitudes expressed toward libraries, e.g., while sadly not atypical of NY publishers, are striking to those of us who care about the public services that libraries provide.

Cader’s post on the discussion is long; I’ve merely excerpted portions below, attempting to retain the parts most newsworthy. The report originally appeared in Publisher’s Lunch Deluxe, Michael’s superb subscription based news service for the publishing industry. Although little known outside of publishing, I would encourage anyone following publishing and its transformations to subscribe to the free Lunch, and consider the paid version.

Following are some of the highlights of Cader’s reportage. Clarifications in [...] are Cader’s.

Sargent’s opening statement addressed head-on the question of what will happen if the settlement is not approved by the judge. “We will proceed to have litigation for a long time period, perhaps up to five years, during which Google will continue to scan and libraries will continue” to use files in ways that publishers might not like. “The libraries then get to do what they want to do with the scans” and since the law does not allow obtaining monetary awards from state institutions, “there’s a very real danger those files go the way that files do.” … Google’s Tom Turvey agreed with Sargent’s assessment that scanning (and litigation) would proceed in the absence of an approved agreement.

Among the many advantages of the settlement that Sargent forsees are “an agreement that IP is something to be paid for when it is dispersed” and “a way to control those scans [as they are given back to libraries] that is clearly defined.”

Speaking to concerns about Google’s apparently exclusive franchise over orphan works–whatever body that winds up constituting after books are claimed–Sargent acknowledged that “in a plain fact they have a lot of power over those works,” but “anybody has the right to follow in Google’s footsteps if so desired.” Both men anticipate that the financial incentives will lead to the claiming of many works. “If checks start to go out,” Sargent said, “everybody will be claiming.”

Though foreign publishers have objected to what appears to be sweeping authority from the US over their books, Sargent noted that “the advantage…is that you get protection on your works” that would not exist without the settlement.

…

A concern from abroad has been the lack of international representation on the board of the Book Rights Registry, even though works in foreign language have been estimated in the past to potentially comprise half of all the material in academic libraries. Here Sargent disclosed that “we are looking at a two-tier structure for the registry board” and said “we do expect to satisy the concerns of foreign publishers for representation.” He added that they “realize there are lot of constituents that need a voice,” also including an array of scholarly and educational publishers.

Sarnoff would not speak to the revenue that they estimate would be generated from institutional subscriptions under the settlement agreement. But he noted that “just by the level of concern” over potential pricing it’s clear “the library community feels that this product will be enormously attractive.” On the contrary concern–that pricing might not be competitive and that agreements with parties other than Google might not emerge, Sargent noted, “think of all the players who would like to use some of these books now.”