Google Print and the economics of copyright

I started to first think about the theory of group polarization. According to Lessig, a victory for copyright owners would be “the biggest landgrab in the history of the Internet” and “chill a wide range of innovation”. According to book authors and publishers, Google engages in “massive copyright infringement” which results in “napsterization” of the publishing industry. They fear a win for Google would give an unintended sign for Internet-companies with “who knows what result in the future”. And so on…

Both lines of argument are of course worth to think through. They are, however, based on unfitting analogies and special-interest politics (copyright owners v. copyright users) gone into extremes.

Thus, I propose a more analytical approach. I’d ask, for example, the following questions:

1. Does copyright cover format? From “right maximizer” perspective it would appear so. Author’s guild and prior mp3.com case basically say that if you are a business user, you are not allowed to rip books or CDs to your database. Reason: copying to other than private use. Thus for example Gramex (collecting society for record labels) in Finland wants money from DJs who play music from iPods instead of CDs or LPs. Just 30 CDs meaning c. 300 tracks costs 200 eur / year… I think this is economically unsound (no effect to markets) and is based on formal legal reading of the law. If Google’s case will be decided on this ground – which I think is indeed highly probable – the whole affair will have no impact whatsoever to anything. The public policy sucks but what can you do.

2. Does fair use / citation right cover a case where a firm advertises with “fair” clips on the Internet? Now the question is not about users who take citations from books themselves (traditional meaning of a “citation”). This is about a company advertising a product with a random “clip-right”. Well… I think an economically justified fair use right should cover reasonable ad citations. Good clips only increase sales so it’s a win-win for everyone. However, some time ago was it Danish supreme court which decided 30 sec clips on an Internet music retailer’s website are not fair use. In Finland, Gramex seems to sell licenses to such purposes. Max length being 30 sec 100 discs (10000 tracks) would cost you 10000 eur / every 3 months. Quite a lot. And the same thing to Teosto (collecting society for composers) I suppose. So again Google’s position is economically sound but legally somewhat in the gray area…

3. Does copyright cover a case where a firm builds a huge database of copyrighted content and then makes business by giving Internet users clips of that stuff – with a careful reading of the limits of fair use rights? From policy perspective this one comes close to Grokster – which, by the way, I think was a good decision from economic perspective. If you think Grokster from bottom up sure it sounded “ok”. They don’t control the network, they just make the tech, etc. But the big thing was that there was a company profiting from a gray area in copyright law. Now I’m not against Google as a company. But in this particular case I think a Gokster-analogy is perhaps the real public policy nail in their coffin. Google Print must fail and my only hope is that the decisive argument will be this one.

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Overall, I think the real problem in Google Print is copyright’s term. Fair use has nothing to do with copyright’s term. We have an enormous back catalogue of all kinds of out-of-print works with no publisher interest to republishing. It makes sound economic policy to allow Google and others to put that stuff in the pipeline right now. However, at the same time when we would legalize abandonware, Google and others should not have any right to scan every new bestseller without a contract (or blanket license) to benefit their business. It simply makes no sense unless you fundamentally denounce the economic logic of copyright law.