Connecticut Attorney General's Office

Press Release

Attorney General, In Federal Court Filing, Raises Concerns About Google Settlement

September 15, 2009

Attorney General Richard Blumenthal, in comments filed in federal court, raised concerns about a proposed settlement between Google, the Authors Guild and the Association of American Publishers that may misdirect charitable funds and unclaimed property.

Blumenthal filed the comments in the U.S. District Court of Southern New York, urging that the proposed Google settlement be amended to comply with state laws governing charities and unclaimed property.

Blumenthal is also objecting to Google's efforts -- through this private agreement -- to hamper the ability of Connecticut and other states from protecting the rights of charities.

Connecticut's unclaimed property laws require that unclaimed funds and property be deposited with the state.

Under the proposed settlement, unclaimed funds generated by a digital Google library would be appropriated to the maintenance of a Book Rights Registry (Registry) that would reimburse authors and publishers by "topping up" their payments under a set distribution plan.

When funds are generated from "orphan works" -- where the copyright holder cannot be located -- Blumenthal said the Registry would have unfettered, unlawful discretion to direct illegal windfalls.

"The riches produced by creative work belongs to the creator -- or as the creator may have intended through charitable trusts," Blumenthal said. "This settlement must be amended to protect creative rights -- as well as our state charities laws. When authors bequeath proceeds of their hard work to charity, this settlement fails to ensure that the Registry respects their intent.

"Under state law, my legal responsibility is to protect donor intent whenever it is disregarded -- as is happening here. When authors and other creators die, they may bequeath the monetary benefits of their creations to charitable interests -- purposes that must be protected and preserved. Enriching entities or individuals completely unrelated to creative works, particularly where proceeds should serve a charitable interest, is unfair and unacceptable."

Blumenthal said it is not uncommon for authors to give or bequeath copyright interests to charities or for the benefit of a specific charitable purpose. In addition, many charities, including the many museums, colleges and universities located in Connecticut, publish works for which the charity holds the copyright, Blumenthal said. State law requires that charitable property under its jurisdiction is used forever solely for the intended charitable purposes.

Under the Google settlement, in cases where copyright holders fail to register with the BRR -- or who the BRR fails to notify when funds are generated by the underlying work -- the BRR may use those funds for its own expenses, disperse them to other rights holders or seek to distribute the funds to another charity.

To protect the interest of all creators, as well as charitable interests, Blumenthal said the settlement should be modified to ensure that unclaimed funds generated by the Google digital library would escheat, as state law requires.

Blumenthal said that -- when it is impossible, impractical or illegal to use charitable funds for their intended purpose -- only a court with appropriate jurisdiction may designate an alternate charitable purpose.

Only the trustee or charitable institution that holds the property, the charitable beneficiary of the property, or the Attorney General on behalf of the public interest, has standing to apply to a court seeking such distribution. The BRR would not have standing to apply for such action under state law, Blumenthal said.

View the entire Google Settlement - (PDF-106KB)