• The Washington Post, Monday, November 3, 2008 12 PM

Google last week settled a controversial copyright case, agreeing to pay tens of millions in licensing fees to authors and publishers. Far from signifying that Google is caving into the interests of copyright holders, the move illustrates that Google is comfortable to settle such claims out of court. However, before the court approves such a settlement, it has to consider the deal's anti-competitive effects.

When Google began its Book Search project in 2002, it faced a pivotal question: do we pay for the right to scan books in libraries or do we go ahead and scan them first and worry about copyright violations later? The search giant obviously took the latter approach, which has meant court case after court case. As The Washington Post points out, claims of fair use are common in the Internet age, and damages in such cases can be "frighteningly high". Google is an unusual defendant in the sense that the company seems happy to take its chances in court. "Few defendants have the guts to see their fair use claims all the way through", especially after losing one or two cases along the way.

This makes Google's recent settlement look like a failure. On the contrary, settling probably puts Google in a better position than it would have been had it won its court case, because Book Search competitors can now no longer invoke fair use in creating digital copies of book pages. In other words, the courts will say, "Hey, Google manages to pay for this sort of thing. What makes you so special?" It's a brilliant move because most companies do not have the resources to scan millions of books and pay licensing fees, leaving Google alone at the top of the book search pile.

Read the whole story at The Washington Post »