Google Inc., owner of the world’s largest search engine, tried to persuade a judge that digitally copying millions of books for online searches without authors’ permission is protected by copyright law.

The company argued Monday in federal court in Manhattan that the fair-use provision of the Copyright Act shields it from liability for infringement. Authors and a trade group oppose the project, claiming Google has taken away their rights for its own gain without compensating them.

U.S. Circuit Judge Denny Chin quizzed both sides about the public’s interest in the project, at a hearing where Google asked him to end an eight-year-old lawsuit by the Authors Guild and individual writers. If Chin finds Google liable for infringement, it could cost the company more than $3 billion in damages and end a project on which it has spent as much as $40 million annually. He didn’t say when he’ll rule.

Several times during the hearing, Chin pressed a lawyer for the authors to provide him with any disputed facts that would prevent him from ruling in Google’s favor.

“Google has engaged in a massive campaign of bulk copying of books, which could adversely affect actual and potential markets for copyrighted books,” authors said in a court brief.

Google argued that providing snippets of text from more than 20 million books in online searches constitutes fair use under copyright law because the action benefits the public and authors and doesn’t cause them financial or other harm.

Buying Books

Authors are helped because consumers discover and buy their books, Google said. Copyrighted content used for criticism, comment, news reporting, teaching and research is generally protected from liability under fair use.

“Plaintiffs have adduced no evidence that Google Books has displaced the sale of even a single book,” Google said in its brief. “A survey of authors has shown that the majority of authors approve of their inclusion in Google Books.”

David Leichtman, a lawyer with Robins, Kaplan, Miller & Ciresi LLP, doesn’t think Chin will grant Google the fair-use defense. Leichtman, who wrote a brief on behalf of a different authors’ group, doesn’t represent any parties in the case.

“It’s a case where the fair-use doctrine is being misused in a sense because it’s really for purely commercial reasons Google is doing this,” Leichtman said in an interview.

Google makes much of its revenue by placing advertisements on the Web pages that list users’ search results.

Other Opinions

A key component of the fair-use defense is whether the use is considered “transformative” or not.

Google will rely on federal appeals court opinions that providing content for online searches transforms a work by giving it a new purpose and thus makes its use fair. The authors have argued that no new work or meaning is created.

“I’m not optimistic that Google is going to win on summary judgment,” Peter Vogel, a lawyer at Gardere Wynne Sewell LLP who teaches e-commerce law at Southern Methodist University, said in an interview. “This is going to go on for a while in order to figure out what the fair use is.”

The outcome may be different, though, if Chin relies on a case in his own federal jurisdiction.

David Shlansky, managing partner of Boston-based Shlansky Law Group LLP, said Google may prevail on the fair-use argument because of the HathiTrust precedent in U.S. District Court in New York.

University Libraries

In Authors Guild v. HathiTrust, Judge Harold Baer in 2012 ruled that the trust, a group of five university research libraries given the task to create a shared digital book repository, wasn’t liable for copyright infringement because of fair use.

Baer said Hathi’s use was transformative because “the copies serve an entirely different purpose than the original works.” That purpose was “superior search capabilities,” Baer said.

“Authors Guild v. HathiTrust is highly similar and it’s highly probable that Google will be treated in a similar fashion,” Shlansky said. “That decision would be coherent with a lot of other case law.”

The HathiTrust case, like Google’s, involves digitizing library books. In 2004, Google announced its project to digitally scan millions of books from research libraries such as the University of Michigan and the University of California and provide three snippets (about one-eighth of a page each) from each book that an online user calls up from a search. In 2005, the Authors Guild, publishers and authors sued for copyright infringement.

Search Terms

The authors claimed that a single visitor to Google’s site might see many snippets from a particular book by using different search terms — permitting a user to read a significant portion of a book. Google “reaped substantial profits” from the searches and made no attempt to compensate the authors, they said. Google’s competitors, such as Microsoft Corp. and Amazon.com Inc., also digitized books, though with the permission of copyright owners.

Chin appeared skeptical of that argument today, asking whether the snippets might be more likely to convince users to buy the books.

Edward Rosenthal, a lawyer for the authors, asked Chin to rule against Google, arguing that the company “is proposing a dramatic change in the balance” between copyright holders and the users of copyrighted material.

Settlement Rejected

The two sides negotiated a settlement in 2009. After hundreds of objections from authors, publishers and companies that compete with Google, the settlement was revised. In 2011, Chin rejected the revised agreement, valued at $125 million, as “not fair, adequate and reasonable.”

He cited objections from, among others, the U.S. Justice Department over Google’s requirement that authors opt out of the project rather than opt in.

Leichtman said that although Google could agree to an opt-in clause, “they’ve scanned so many books it would be cost-prohibitive to go to every author and copyright owner to get permission.”

Chin said the settlement would have granted Google too much of a competitive advantage over other companies and given it a monopoly over the rights to certain works. The settlement is “an attempt to use the class-action mechanism to implement a forward-looking business arrangement that goes far beyond he dispute before the court,” Chin said in his ruling.

Talks Resume

Google and its opponents resumed talks to modify the agreement. The publishers and the company reached a settlement in 2012. The authors didn’t, so the litigation continues.

The issue of fair use is being argued now because of a ruling by the U.S. Court of Appeals in New York. Chin certified the suit as a class action, meaning that the named authors —Jim Bouton, Betty Miles and Joseph Goulden — could stand for all authors of books in Google’s project. Google appealed, and the appeals court overturned Chin’s ruling in July, saying that the district court should rule on the fair-use argument first.

No matter the outcome today, appeals are likely, which means the case may continue for a few more years. The authors have said they may seek a jury trial if the judge doesn’t dismiss the case. “The passage of time probably benefits Google,” Shlansky said. “Judges are more familiar with the societal effects.”

‘Pretty Woman’

The U.S. Supreme Court could step in and settle it at some point, although that court has ruled already on fair use, in a case involving the rap group 2 Live Crew. In Campbell v. Acuff-Rose Music, the Supreme Court decided in 1994 that the group’s recorded parody of the Roy Orbison song “Oh, Pretty Woman” was transformative because it commented on and criticized the original and thus was protected by the fair-use provision.

“Transformative use is not in the fair-use statute,” said Leichtman. “It’s really judge-made law.”

Eleanor Lackman, a lawyer at Cowan, DeBaets, Abrahams & Sheppard LLP, said in an interview that if Chin decides Google’s digitizing isn’t fair use, that could create a circuit split, where courts in different jurisdictions reach opposite conclusions on the same points of law. The Fourth and Ninth circuits have ruled that copying content to make it searchable is transformative and thus fair use. Circuit splits are often chosen for Supreme Court review.

Although Chin is a Second Circuit appeals judge, he retained the Google case that he was assigned when he was still a district court judge.

‘Well-Versed’

Lackman, who has argued cases before Chin, said he’s “well-versed in copyright law.”

Another legal argument the authors will make in their motions for judgment against Google is that it violated the copyright holders’ rights of reproduction and distribution of their works when it agreed to let libraries digitize copies of the books for their own collections in exchange for lending the books to Google for the project.

Google will argue that the libraries themselves reproduced and distributed the books, and the company merely provided the technology.

In a twist, Google may rely partly on a New York appeals court ruling involving Cablevision Systems Corp., which was sued by television companies for allowing its subscribers to make copies of TV shows and view them later using remotely located digital video recorders.

Cablevision successfully argued that it was the customer, not the company, who made the copy and that consumers have the right to record TV shows for later viewing without liability. The appeals court overturned a ruling by the district court judge who said Cablevision had indeed infringed copyrights. That judge was Chin.

The case is Authors Guild v. Google, 05-cv-08136, U.S. District Court, Southern District of New York (Manhattan). A companion case, involving visual artists, is ASMP v. Google, 10-cv-02977, U.S. District Court, Southern District of New York (Manhattan).

Image: Kate Ter Haar

This article originally published at Bloomberg here