Extended Collective Licensing: A way forward on book digitization?

The project of digitizing books has pitted copyright holders concerned with earning royalties against search engines that want to index their works. In 2004, Google began digitizing millions of books, including many protected by copyright. Since then, Google has provided digital copies of these books to partner libraries and has made searchable versions available for free, all without the permission of the authors or publishers. The Google Books project came under severe criticism and eventually resulted in a class action lawsuit in 2005 for willful copyright infringement. In 2009, authors, publishers, and other stakeholders came to a settlement with Google whereby Google Books could include digitized copies of out-of-print books unless the copyright owner had specifically opted out. The settlement also proposed to establish a “Books Rights Registry” which would maintain a database of rights holders and administer the distribution of revenues paid to the Registry by Google. Many have noted the similarity of this settlement to an Extended Collective Licensing (ECL) system. Questions remain about whether ECL is the best policy solution to resolve this issue.

Extended Collective Licensing

According to the June 2015 Orphan Works and Mass Digitization report by the U.S. Copyright Office, an ECL system is one in which the government authorizes a collective organization to negotiate licenses for a particular class of work. By law, the terms of such licenses are extended to all members of the relevant class of rights holders unless they affirmatively opt out. As is currently true under existing collective licensing law, the negotiation of licenses in an ECL system would be handled by Collective Management Organizations (CMO) on behalf of copyright owners in a particular category of works. However, an ECL system differs from compulsory licensing in that the user and the CMO, not the government, set the royalty rate and terms of use.

The principal question regarding ECL systems is whether the benefits of collective licensing outweigh the potential harms. District Courts have held that mass digitization can create considerable public benefits including the facilitation of research, particularly via data mining; the expansion of access to books, specifically to underserved populations; and the preservation of older books. However, mass digitization authorized by ECL could result in a significant increase in illegal distribution of copyrighted works. The U.S. Copyright Office notes that it “does not take these concerns lightly.” As such, ECL must balance the facilitation of the benefits of mass digitization with the responsibility of protecting the rights of copyright owners.

Judicial Opinion

In 2013, the United States Court of Appeals for the Second Circuit ruled in favor of Google Books. The Court noted that Google takes significant steps to limit potential impacts to the market for books, including only allowing users to only view portions of texts and “blacklisting” certain pages. As such, the Court held that the Google Books project does not supplant books because it is not a tool that can be used to read books, but rather a comprehensive index used for searching texts. The Court also relied heavily on Fair Use doctrine in its decision which allows for reproduction of copyrighted works under certain criteria including:

  1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
  2. The nature of the copyrighted work
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
  4. The effect of the use upon the potential market for or value of the copyrighted work

Future of ECL

The Google Books case has created some precedent for future ECL legislation. However, the Court did not address certain remaining questions of mass digitization such as the maximum proportion of a copyrighted work that can be made available to the public as well as the question of orphan works, which are copyrighted works for which the rights holders are unknown or cannot be contacted. To further test the prospects of an ECL system in the United States, the U.S. Copyright Office proposes a limited pilot program, the details of which can be found in their June 2015 report. The Report concludes with a dire warning: the public is and will continue to be deprived of the benefits of mass digitization, not because of differences between rights holders and users, but because of inefficiencies in the licensing process. The U.S. Copyright office argues that these obstacles are “highly detrimental to a well-functioning copyright system in the twenty-first century” and that a solution is desperately needed.

Joseph Schuman contributed to this post