AFP-Google settlement leaves open questions

While the two companies avoided going to trial, they also avoided tackling some thorny legal issues about fair use

The resolution of AFP's (Agence France-Presse) lawsuit against Google closes a two-year litigation process but opens up many questions, primarily because the companies provided few details about their settlement and licensing agreement.

For example, it's not clear whether the licensing agreement involves Google paying AFP for the right to use its material in Google News. Consequently, all outsiders can do is speculate about which company gave more in settlement negotiations that put an end to the copyright-infringement lawsuit AFP filed in March 2005.

The resolution could be seen as a Google acknowledgement that it may need to pay, at least sometimes, for posting third-party material in Google News, even if it believes that it legally doesn't have to compensate content owners or get permission from them. Seen from this perspective, the resolution may embolden other companies to take Google to court over the unauthorized use of their material in Google News.

On the other hand, the settlement could be interpreted as a move by AFP to end litigation it believed it had little chance to win or benefit from, thus recognizing Google's defense that the fair use principle protects the Google News site. Taken from this angle, Google would be seen as having strengthened its long-standing claim that reproducing headlines, text snippets, and thumbnail images from news Web sites in Google News is legal.

These and other questions would have been addressed if the case had gone to trial, but AFP instead decided to drop its allegations of copyright infringement over the unauthorized use of its headlines, text fragments, and thumbnail photos in Google News.

Eric Goldman, a law professor at the Santa Clara University School of Law, sees the settlement as another in a recent and growing string of deals Google has struck with content owners. "Google has shifted gears from its historical position that it can grab whatever it wants without permission, and has made a lot of efforts [recently] to build bridges with content owners," Goldman said.

If Google is paying to include AFP material in Google News, that would be a significant concession on the part of the search engine giant, indicating an acknowledgement by Google that there is enough legal doubt about its Google News operation and its general practice of indexing Web content without permission, Goldman said. "It may be that over time, Google would have to start paying content owners for things it currently gets for free," he said, adding that this is purely speculative, not knowing the details of the agreement.

John F. Ward, an intellectual property attorney with the Boston firm Bromberg & Sunstein, believes it is unlikely Google agreed to compensate AFP for using its material in Google News. "AFP's claims for damages were subject to a very strong defense by Google," Ward said. Moreover, compensating AFP would open the door for others to demand similar payments from Google, Ward said.

Although AFP had solid copyright infringement claims, it would have had a hard time convincing a jury that Google News harmed its business, considering that Google News drives traffic to the Web sites of the news outlets that subscribe to AFP's services, Ward said. That traffic from Google News helps media outlets generate more ad revenue, which indirectly helps them pay for AFP services, he said. AFP sought damages of at least $17.5 million.

Unlike Ward, industry analyst Greg Sterling of Sterling Market Intelligence, in Oakland, California, believes Google agreed to compensate AFP financially for Google News. It will be interesting to see how other companies react, he said. However, he pointed out that most news outlets want their material to be featured in Google News, and that AFP and other wire services like it may be a minority with different concerns. Unlike the average Web publisher, which gets revenue from online ads, AFP and the Associated Press, which also signed a licensing deal with Google last year, get the bulk of their revenue from service fees from their subscribers and derive little direct benefit from Google News traffic, Sterling said.

For its part, Google believes that Google News fully complies with copyright law, Google spokesman Ricardo Reyes said. He declined to give details about the licensing agreement, including whether Google will compensate AFP for using its material in Google News. He reiterated the agreement calls for launching a new Google product where AFP material will be more broadly used than in Google News.

Ultimately, Google and AFP benefit from having settled out of court, Ward said. Right now, there is great tension between copyright law, which changes very slowly, and Internet technology, which evolves very quickly. This makes the judicial system a less than ideal forum for solving these disputes. "I don't think either party probably wanted to leave it to the courts or a jury to decide what was their best interest here," Ward said.

Needless to say, with copyright law as it applies to the Internet feeling intense growing pains, we'll see many more lawsuits of this sort, Ward predicted. "There will be suits we can't even imagine because we don't know what the Web will evolve into," he said.

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