In a recent decision handed down by the United States Court of Appeals for the Second Circuit, the court found that Google’s scanning of copyrighted books as part of its Library Project amounted to “fair use” and did not violate federal copyright law.

In The Authors Guild, et al. v. Google, Inc., Google was sued by a group of authors who alleged it violated their copyrights by making digital copies of their works. As part of the project, the plaintiff authors’ copyrighted books had been scanned without their permission by Google. The Authors Guild, et al. v. Google, Inc. (2d Cir. Oct. 16, 2015) No. 13-4829-CV, 2015 WL 6079426, at *2. Google then made them available for search by internet users who could access a “snippet” view through Google’s service.  This was done as part of Google’s Library Project, in which Google partnered with major research libraries to scan selected works from their collections.  Since 2004, Google has scanned more than 20 million books.  Some of those books are works in the public domain.  However, many are copyrighted.  Google’s service allows a copyright holder to exclude the work from “snippet” views by request.

After a proposed settlement was rejected by the federal district court, Google brought a motion for summary judgment on its fair use defense. In 2013, the federal district court granted Google’s motion, finding that Google’s project constituted fair use. In its recent decision, the Second Circuit upheld that ruling.

What is Fair Use?

The doctrine of fair use allows unauthorized copying of otherwise copyrighted works for certain limited purposes. The modern fair use doctrine is codified in Section 107 of the Copyright Act of 1976.  17 U.S.C. § 107.  The statute provides that “fair use” for purposes such as “criticism, comment, news reporting, teaching … scholarship, or research” is not an infringement of copyright.  The statute contains a list of various factors to be considered in determining if any given use is a protected fair use. Those factors include the “purpose and character of the use,” “the nature of the copyrighted work,” “the amount and substantiality of the portion used,” and the impact on the “the potential market for or value” of the copyrighted work.

The purpose and character of the purported fair use will weigh in favor of a finding of fair use where there is a “transformative use” that “communicates something new and different from the original or expands its utility…”  Authors Guild, supra, at *7.  In this case, the Court concluded that the making of a digital copy of copyrighted works to allow the sort of advanced search capabilities allowed by Google’s Library Project amounted to “a highly transformative purpose.”  Authors Guild, supra, at *8.

The Court observed that providing “tiny snippets” for view was designed to permit a researcher just enough context around a search term to evaluate whether the work was of relevance or not without “revealing so much as to threaten the author’s copyright interests.”  Authors Guild, supra, at *10. Interestingly, the court noted that it saw no reason to conclude that “Google’s overall profit motivation should prevail as a reason for denying fair use” in light of what the court viewed as a “highly convincing transformative purpose.”  Authors Guild, supra, at *11.

What Does the Decision Mean for Authors?

Authors or copyright holders with concerns about having portions of their works available for view through the Google’s Library Project should consider initiating the opt out procedure.  However, for many, the exposure and ease of search provided by Google’s service will outweigh any concerns over a “snippet” view available in the context of making the work searchable for online users.

It’s 1975; Saturday Night Live just debuted, disturbed women keep shooting at President Ford and Sony just came out with a new-fangled product called Betamax that allows television viewers to record shows and watch them on their own schedules and to fast forward through the ads. The television networks, there were only a handful, since this was the dark ages (a.k.a. pre-cable), claimed this would destroy their industry and sued Sony for copyright infringement.

The Betamax Decision Begat the VHS, DVD, Blu-ray and DVR Revolutions

The networks’ argued that Sony designed Betamax to enable copyright infringement and thus it was liable for contributory infringement. The Supreme Court ruled for Sony, finding that “the business of supplying the equipment that makes such copying feasible should not be stifled simply because the equipment is used by some individuals to make unauthorized reproductions of [the networks’] works.”

The Aereo Decision Will Wound, if not Kill, a Cutting Edge Industry

This week, the Supreme Court took a giant step backwards when it ruled for the networks and against Aereo. Aereo provides antennas to its subscribers that, at the subscribers’ direction, record or view broadcast signals. This allows subscribers to unbundle cable by allowing subscribers to subscribe to just the channels they want at a fraction of cable’s cost. The Court rejected Aereo’s argument that, like Betamax, Aereo simply allowed each subscriber to view or record whichever programs he or she wanted and to watch them at the time of their choice. Instead, the Court found that Aereo was publicly rebroadcasting the networks’ programs when it sent the same signal to multiple subscribers and thus Aereo was infringing the networks’ copyrights.

In a statement that will send chills to cloud storage innovators, the Court stated that “resolution of questions about cloud computing, remote storage DVRs and other novel matters not now before us should await a case in which they are clearly presented.” To paraphrase the Court’s pronouncement on pornography, the Court will “know [copyright infringement] when they see it.”

If you’re an unhappy cable subscriber (is there any other kind), or a start-up developing cloud storage devices, the Supreme Court just slammed a door that looked pretty securely open with its prior Betamax decision.   In the real world, investors and innovators are unlikely to sink hundreds of millions of dollars into developing technology that may or may not infringe the networks’ copyrights.