University of Miami Law Review Volume 61 Number 1 Volume 61 Number 1 (October 2006) Article 4 10-1-2006 Google Book Search and Fair Use: iTunes for Authors, or Napster for Books? Hannibal Travis Follow this and additional works at: https://repository.law.miami.edu/umlr Part of the Law Commons Recommended Citation Hannibal Travis, Google Book Search and Fair Use: iTunes for Authors, or Napster for Books?, 61 U. Miami L. Rev. 87 (2006) Available at: https://repository.law.miami.edu/umlr/vol61/iss1/4 This Article is brought to you for free and open access by the Journals at University of Miami School of Law Institutional Repository. It has been accepted for inclusion in University of Miami Law Review by an authorized editor of University of Miami School of Law Institutional Repository. For more information, please contact [email protected]. Google Book Search and Fair Use: iTunes for Authors, or Napster for Books? HANNIBAL TRAVIS* Google plans to digitize the books from five of the world's big- gest libraries into a keyword-searchable book-browsing library. Pub- lishers and many authors allege that this constitutes a massive piracy of their copyrights in books not yet in the public domain. But I argue that Google's book search capability may be a fair use for two inter- related reasons: it is unlikely to reduce the sales of printed books, and it promises to improve the marketing of books via an innovative book marketing platform featuring short previews. Books are an experi- ence good in economic parlance, or a product that must be consumed before full information about its contents and quality becomes availa- ble. This makes new technologies that are capable of rapidly search- ing and previewing relevant passages from books a development that the law should encourage, not burden or restrain. I. INTRODUCTION ..... ..................................................... 88 9 . .. II. WHAT Is GOOGLE BOOK SEARCH 94 A. Google Printfor Publishers ....................................... 94 B. Google Printfor Libraries ........................................ 95 C. Google Printfor Authors? ......................................... 99 III. THE INTERNET-BASED MARKETING OF EXPERIENCE GOODS ..................... 101 A. Economic Characteristicsof Experience Goods ....................... 101 B. The Paradoxof Experience Good Marketing ......................... 102 C. Market Solutions to the Paradox ................................... 103 D. Fair Use: Legal Shelter for Market Solutions to the Experience Good Paradox ........ ............................................... 105 IV. THE GOOGLE BOOK SEARCH COPYRIGHT LITIGATION ........................... 112 A. Overview of the Litigation ....... ................................. 112 1. THE AUTHORS' PUTATIVE CLASS ACTION .......................... .112 2. THE PUBLISHERS' JOINT ACTION ................................. 113 B. The Web Precedents.............................................. 114 C. The Contributory Infringement Precedents ........................... 115 1. THE SONY CASE .............................................. 115 2. THE NAPSTER CASE ............................................ 117 3. THE GROKSTER CASE .......................................... 119 * Assistant Professor of Law, Florida International University College of Law; J.D., Harvard Law School, 1999. This Article was selected as one of five to be presented at the workshop on Intellectual Property and Competition at the Association of American Law Schools' 2006 Mid-Year Meeting in Vancouver, British Columbia. Many thanks are due to Alfred C. Yen, Keith Aoki, Mark Janis, and Roberta Rosenthal Kwall, for organizing the Mid-Year Meeting and the workshop on Intellectual Property and Competition, to Stacey L. Dogan for agreeing to serve as my commentator, to Jane La Barbera for logistical assistance, and to Ediberto Romdn, Tyler Ochoa, Diane Zimmerman, Merrill Travis, and Ryan Littrell for their insightful comments and advice. UNIVERSITY OF MIAMI LAW REVIEW [Vol. 61:87 V. GOOGLE BOOK SEARCH AS A FAIR USE .................................. 123 A. An Interlude on Library Exemption Doctrine ......................... 123 B. A Fair Use Analysis of Google Book Search ......................... 126 1. PURPOSE AND CHARACTER OF THE USE ........................... 126 2. NATURE OF THE COPYRIGHTED WORK ............................. 128 3. AMOUNT AND SUBSTANTIALITY OF PORTIONS TAKEN .................. 129 4. EFFECT ON THE MARKET FOR THE WORKS ............................. 131 C. Reforming Fair Use Law for the Internet Age ........................ 139 1. WHY THE GOOGLE BOOK SEARCH COPYRIGHT LITIGATION IS ULTIMATELY NOT ABOUT GOOGLE ........................................... 140 2. HOW COURTS SHOULD DEVELOP INTERNET FAIR USE LAW .............. 145 VI. ANTITRUST IMPLICATIONS OF THE GOOGLE BOOK SEARCH COPYRIGHT LIT IGATIO N ......................................................... 15 1 A. Joint Ventures as Antitrust Problems ................................ 152 B. Potential Economic Benefits of Joint Ventures ........................ 152 C. Tensions Between Joint Ventures and Antitrust Laws .................. 153 D. Alleged Agreements Not to Compete on Price and Quality in Digital Markets ........................................................ 155 1. PARALLEL PRICING OF DIGITAL MUSIC ............................ 155 2. SUPPRESSION OF OUTPUT AND DIVERSITY IN THE MARKET FOR DIGITAL FILM S ....................................................... 157 E. Will Publishers Form a Joint Venture Like MusicNet or Movielink? ..... 158 F. Will Google Book Search Facilitate Antitrust Violations by Google? ..... 159 V II. C ONCLUSION ........................................................ 161 I. INTRODUCTION The litigation and public relations campaign launched against Google over its Google Print for Libraries project, now called Google Book Search, may decisively influence the marketing of experience goods such as books and entertainment content. Google Book Search promises not only to enhance scholarship and education, but to demon- strate how Internet technology can promote more efficient competition in industries reliant on intellectual property, specifically book publish- ing, music recording, and motion picture production. If Google is stopped, Internet companies may be prevented from facilitating the effi- cient sampling of experience goods. Information, entertainment, and cultural products are known as experience goods in economic parlance because consumers must experi- ence them, typically by purchase, before obtaining perfect information about their properties. The inability to obtain such information leads to systematic market failures, namely disappointing purchases or media sales that should never have been made, as well as missed opportunities such as transactions that would have benefited buyer and seller alike had information flowed better between them. Governments and market par- ticipants commonly resolve this economic quandary by permitting the free or inexpensive previewing and browsing of such products: reviews of books in newspapers and magazines, browsing in bookstores, broad- 20061 GOOGLE BOOK SEARCH AND FAIR USE cast of musical recordings on the radio, and exhibition of trailers in movie theaters and on television. Internet technology has introduced new risks and opportunities for the marketing and sale of experience goods. First, the World Wide Web and file transfer protocol popularized ways of transmitting digital ver- sions of text, photographs, music, and movies over the Internet.1 Because most of the early digital copies of copyrighted informational and cultural works made available over the Internet were housed on cen- tral servers, however, they were vulnerable to demands from copyright holders that Internet service providers deny users the ability to access the works. These demands prompted the invention of peer-to-peer file- sharing software such as Napster, Scour, and Kazaa, all of which afforded Internet users the ability to create their own decentralized net- works for sampling musical works, books, pictures, videos, and software, prior to or in lieu of purchase. Copyright owners, software companies, economists, and legal scholars have vigorously debated whether the transmission of digital versions of copyrighted works over the Internet tends to solve or exacer- bate the experience good problem. On the one hand, digital sampling permits consumers to explore literary or musical genres and excerpts before they buy, avoiding many inefficient purchases based on inade- quate or misleading information.2 On the other hand, by facilitating the unlimited reproduction of informational and cultural products, the Internet makes it easier to substitute the sample for the original, thereby 3 reducing the incentive to produce new works. In recent years, the legality of diverse Internet technologies for sampling experience goods has been thrown into severe doubt, in large part due to the resolution of several important copyright cases in favor of copyright owners and against software and Internet service providers. With the shuttering of file-sharing software companies such as Napster and Grokster, the market for technologies used to sample experience goods has shifted dramatically away from relying on highly flexible for- mats such as MP3 and MPEG and toward proprietary digital rights man- agement technologies such as Windows Media Audio, used in the new 1. See Hannibal Travis, Building Universal Digital Libraries: An Agenda