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Article: Second Circuit Holds Google Books Is Fair Use

Business Litigation Reports

In a much anticipated decision, handed down in October of last year, the Second Circuit held Google Books to be a fair use of the copyrighted works Google digitized, catalogued, and offered for on-line searching. The Second Circuit’s decision upheld a grant of summary judgement dismissing copyright infringement claims brought by a group of authors (the “Authors Guild”). Authors Guild v. Google, Inc., No. 13-4829-cv (2d Cir. Oct. 16, 2015). The decision provides important guidance on how fair use will be analyzed for digitizing and cataloging copyrighted media.

The Authors Guild brought a putative class action suit against Google in 2005, alleging Google Books infringed the authors’ copyrights. Pursuant to agreements with major libraries, Google scanned books from the libraries’ collections, created searchable texts, and provided digital copies to each library of the books from its own collections. In addition, Google made the digital copies publicly searchable on Google Books. The search results reported the number of times the word or term selected by the searcher appears in a book and displayed “snippets” of approximately one-eighth of a page showing the search query in its surrounding context. (But Google disabled snippet view entirely for types of books for which a single snippet would likely satisfy the searcher’s present need for the book, such as dictionaries, cookbooks, and books of short poems.) 

Fair use is an  affirmative defense to  copyright infringement that requires consideration of four statutory factors: (1) “the purpose and character of the use;” (2) “the nature of the copyrighted work;” (3) “amount and substantiality of the portion used;” and, (4) “the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. § 107. Courts analyze and weigh these factors together, but Factors One and Four are often considered more important to the outcome.

Factor One: The Purpose and Character of Google Books is Transformative. The Second Circuit found that both Google Books’ search and snippet functions are transformative. Following the Second Circuit’s decision in another copyright case brought by the Authors Guild against an entity formed by libraries participating in the Google Books project (Authors Guild, Inc. v. HathiTrust755 F.3d 87 (2d Cir. 2014), the court had “no difficulty concluding that Google’s making of a digital copy . . . for the purpose of enabling a search for identification of books containing a term of interest to the searcher involves a highly transformative purpose[.]”  Authors Guild at 21 (emphasis added). To provide searches of the complete text—noted to be of great help to researchers—copying the entire book “was essential to permit searchers to identify and locate the books in which words or phrases of interests to them appeared.” Id. (citing HathiTrust, 755 F.3d at 97). The purpose and character of the use is to allow researchers to identify certain of a book’s attributes.

The Second Circuit rejected the Authors Guild’s argument that Google Books’ display of a snippet view was not transformative because Google had a commercial motivation. The court held that the snippet view has a transformative purpose because it allows a searcher to determine whether the keyword searched for, in context, matches the purpose of the search and not just the search term. The court also found that “Google’s overall profit motivation should [not] prevail as a reason for denying fair use over its highly convincing transformative purpose,[]” observing: “Many of the most universally accepted forms of fair use, such as news reporting and commentary, quotation in historical or analytic books, reviews of books, and performances, as well as parody, are all normally done commercially for profit.” Id. at 26.

Factor Two: Nature of Digitized Books. The Second Circuit held that “[n]othing in this case influences us one way or the other with respect to the second factor considered in isolation.” Id. at 28.

Factor Three: Amount of Work Used By Google Books. The Second Circuit found that the amount and substance of the potions used by Google Books weighed toward finding fair use. The court was not persuaded that Google’s copying of the entirety of the book was a justification for denying fair use, reasoning that the amount of copying was “reasonably appropriate to Google’s transformative purpose” (id. at 30), as the entire book must necessarily be scanned in order for users to be able to search the full text of digitized copies. The court also noted that Google Books only made excerpts of the work available to users, and those excerpts were “arbitrarily and uniformly divided by lines of text, and not by complete sentences, paragraphs, or any measure dictated by content,” rendering them “of little substitutive value” for the original work. Id. at 32-33.

Factor Four: Google Books Effect on Value. The Second Circuit found that Google Books did not diminish the value of the copyrighted materials or create a competing substitute. The court recognized that Google Books could cause some loss of sales, but that this potential loss did not result in a “meaningful or significant effect” on the market, noting that these losses would likely be due to interests unprotected by copyright, such as confirming historical facts. Weighing this factor with the other three, the Second Circuit found that Google Books was a fair use of the copyrighted materials.

The Second Circuit’s transformative use analysis creates at least a superficial tension with its summary rejection of the Authors Guild’s derivative rights claim. By statute, a copyright holder retains exclusive rights to derivative works. The statute defines derivative works as “any other form in which a work may be recast, transformed, or adapted.” 17 U.S.C. §§ 101, 106(2) (emphasis added). But although the Second Circuit’s fair use holding emphasized the “transformative” nature of Google Books it flatly rejected the Authors Guild’s argument that this transformation rendered Google Books a derivative work, stating “[t]here is no merit to this argument.” Id. at 37.  It contrasted Google’s transformative use with “[p]aradigmatic examples of derivative works,” such as the translation of a novel into another language, the adaptation of a novel into a movie or play, or the recasting of a novel as an e-book or an audiobook, which “do not involve the kind of transformative purpose that favors a fair use policy.” Id. at 19 (emphasis added).

As the Second Circuit acknowledged, the Seventh Circuit has criticized the “transformative purpose” analysis for fair use as incompatible with copyright owners’ rights in derivative works. Id. at 20 n. 18)). The Seventh Circuit notes that “transformative purpose” does not appear in § 107’s list of factors to determine fair use. In addition, “[t]o say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). . . . [T]he Second Circuit do[es] no[t] explain how every ‘transformative use’ can be ‘fair use’ without extinguishing the author’s rights under § 106(2).” Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014), cert. denied 135 S. Ct. 1555 (2015). Instead, the Seventh Circuit analyzes whether the allegedly infringing work is a complement or substitute and focuses on the market effect of the work. The Authors Guild court shot back, critiquing the Seventh Circuit’s analysis of “complementary” uses as not “particularly helpful” and expressing concern the “[t]he term would encompass changes of form that are generally understood to produce derivative works, rather than fair uses, and, at the same time, would fail to encompass copying for purposes that are generally and properly viewed as creating fair uses.” Authors Guild at 20 n.18.

Despite its linguistic disagreement, the Seventh Circuit’s view of fair use would likely result in the same outcome for Google Books. Arguably, Google Books “complements” the original work by making its text searchable online, thereby helping users to identify copyrighted works relevant to their interests and satisfying the first statutory fair use factor. Nevertheless, the open acknowledgment of the circuit’s disagreement may play a prominent role in any Circuits' petition for a writ of certiorari.