Google Books: (un)fair use and its implications for Australia
By Sabiene Heindl, SWH Legal & Business Consulting
Over 10 years on and finally the Google Books saga has drawn its last breath. The US Supreme Court rejected an application by the Authors Guild of America (AGA) and other individual writers to challenge the earlier Google Books decisions in lower courts.
The Google battle for the books
In 2004, Google announced its lofty goal to scan all English books — including those out of copyright (pre-1923 at the time of the first scanning exercise), those in copyright and in print and those in copyright but out of publication. Google’s “Library Project”  has seen it scan over 20 million entire books from libraries without the permission of rights holders.
On 20 September 2005, the AGA brought a class action suit against Google for copyright infringement. They were later joined in the action by the Association of American Publishers (the AAP). The class action was based on the argument that Google had engaged in massive copyright infringement. Following a number of legal skirmishes, a little over 3 years later the parties reached a settlement. This was to be the first. It was subsequently amended in November 2009. The terms of this latter settlement were struck down by the court.
In November 2012, Google announced that it had settled its litigation with the AAP (the Google Book Settlement). The terms of the settlement were confidential. However, some hypothesised that the size of the settlement must have been greater than the original US$125 million offered to the publishers earlier. However, the “elephant in the room” of the Google Book Settlement was the authors themselves.
On 14 November 2013, Chin J of the District Court concluded that Google was entitled to rely on the defence of “fair use” under s 107 of the US Copyright Law to the allegation of copyright infringement. 
His Honour went on to find Google’s conduct constituted “fair use” on the basis of the following.
- Purpose and character of use — Google’s use of the works was “highly transformative”,  particularly with its comprehensive word index that had become an essential tool for scholars, researchers and libraries and the snippets that allowed people to better find and locate books. It also transformed the use of books for data mining purposes. Importantly, his Honour held that Google books did not supersede or supplant books, because it was not a tool to “read books”.
- Nature of copyrighted works — the fact that the works were books, including fiction and nonfiction, in-print and out-of-print, published and available, favoured the finding of fair use.
- Amount and substantiality of proportion used — despite the fact that Google was scanning entire books, his Honour held it was critical that it limited the amount of text that it displayed in the results of a search. Scanning entire books was critical to the functioning of the full-text searching of books.
- Effect of use upon potential market or value — his Honour rejected the plaintiffs’ claims that Google Books negatively impacted the market for books including in terms of sales, stating that Google did not sell scans and the scans were not books.
Decisions of the Second Circuit
In 2015, the Second Circuit Court of Appeal affirmed the decision of the lower courts in the Google Books decision.
AGA appeal to the US Supreme Court
In its appeal to the US Supreme Court on 31 December 2015, the AGA argued that the interpretation of the Second Circuit effectively nullified the four statutory fair use factors in US copyright legislation.
Four questions were posed to the US Supreme Court:
- whether, in order to be “transformative” under the fair-use exception to copyright, the use of the copyrighted work must produce “new expression, meaning, or message,” or whether the verbatim copying of works for a different, non-expressive purpose can be a transformative fair use;
- whether the Second Circuit’s approach to fair use improperly makes “transformative purpose” the decisive factor, replacing the statutory four-factor test applied by the Seventh Circuit in other decisions;
- whether the Second Circuit erred in concluding that a commercial business may evade liability for verbatim copying by arguing that the recipients of those copies will use them for lawful and beneficial purposes, a rationale that has been flatly rejected by the Sixth Circuit; and
- whether a membership association of authors may assert copyright infringement claims on behalf of its members.
On 18 April 2016, the US Supreme Court dismissed the application.
Implications for Australia
There is little doubt that the Google Book’s very broad interpretation of “fair use” could have far reaching ramifications for innovative business content models in the United States.
These ramifications may potentially extend across the Pacific. On 29 April 2016, the Productivity Commission recommended that the Australian Government introduce a US-style fair use exception into Australian law. This follows similar recommendations by the Australian Law Reform Commission in 2014. While it is not clear yet whether US-style fair use will have a place in Australian jurisprudence, the potential appears ever closer, meaning that similar projects to Google Books could be legitimately undertaken on Australian soil.