New York Times Reports on RESCUECOM Lawsuit Against Google

By Katie Hafner The New York Times
MONDAY, OCTOBER 23, 2006:

We're Google. So Sue Us.

SAN FRANCISCO Google attracts millions of Web users every day. And, increasingly, it's attracting the attention of plenty of lawyers, too.

As Google has grown into the world's most popular search engine and, arguably, the most powerful Internet company, it has become entangled in scores of lawsuits touching on a wide range of legal questions, including copyright violation, trademark infringement and its method of ranking Web sites.

Any company that is large and successful is going to attract lawsuits, and Google's deep pockets make it an especially big target. But as it rushes to create innovative new services, Google sometimes operates in a way that almost seems to invite legal scrutiny.

A group of authors and publishers is challenging the company's right to scan books that are still under copyright. A small Web site in California is suing Google because it was removed from the company's search results. And European news agencies have sued over Google's use of their headlines and photos in Google News.

In these cases and others, potential legal problems seem to give the company little pause before it plunges into new ventures.

"I think Google is wanting to push the boundaries," said Jonathan Zittrain, professor of Internet governance and regulation at Oxford University.

"The Internet ethos of the 90's, the expansionist ethos, was, 'Just do it, make it cool, make it great and we'll cut the rough edges off later,' " Professor Zittrain said. "They're really trying to preserve a culture that says, 'Just do it, and consult with the lawyers as you go so you don't do anything flagrantly ill-advised.' "

Now, with its planned $1.65 billion acquisition of the video site YouTube, which contains not just homemade videos but also copyrighted clips that users upload without permission, some observers say Google is exposing itself to a new spate of lawsuits.

Along with YouTube's 34 million viewers, Google will inherit a lawsuit filed last summer against the company. Robert Tur, who owns a video from the 1992 riots in Los Angeles that shows a trucker being beaten by rioters, is suing YouTube, accusing it of copyright infringement.

"Clearly, we investigated that whole issue," said David C. Drummond, Google's general counsel and senior vice president of corporate development. Drummond pointed to the "safe harbor" provision of the 1998 Digital Millennium Copyright Act. A number of courts have held that under this provision, Web sites are not liable for copyrighted content posted by users, as long as they promptly remove it when it is pointed out to them.

"We rely on the same safe harbor that YouTube relies on, so we're fairly familiar with the issues," Drummond said. "If you look at it, it's somewhat illustrative of the kinds of lawsuits we face."

Google has been known to settle, but for the most part it aggressively fights litigation - so far with a good deal of success.

Over the last few years, the company has spent millions in legal fees and hired a small army of bright young lawyers, many of them technically proficient and experts in the field of intellectual property.

The company's legal department has grown from one lawyer in 2001 to nearly 100 lawyers now, not just at its headquarters in Mountain View, Calif., but also overseas. The company has also retained counsel at many outside law firms.

Many of the lawsuits Google is facing carry little weight. Yet it has a vested interest in fighting all of them, even those of questionable merit, and seeing that they are resolved quickly. In part, this is because any lawsuit that reaches the discovery, the pretrial fact-finding phase, poses the danger of revealing too much about Google's proprietary technology. Google also has an interest in establishing a solid body of legal interpretation in its favor.

Many of the plaintiffs are asking for damages, but money is not always the issue. There are several cases, focusing on questions of intellectual property and trademark protection, that challenge Google's whole way of doing business. These plaintiffs are suing Google to protect their well-established practices; their interest is not so much in remuneration as it is in getting Google to change its approach.

Peter S. Menell, a professor at Boalt Hall School of Law at the University of California, Berkeley, said that although Google's well-established core search functions are not at risk, "there are a number of areas now in which new and exciting business models are being threatened."

Cases addressing trademark protection in Google's ad system could hurt its bottom line, as the company's revenue comes mainly from advertising sales, said Eric Goldman, director of the High Tech Law Institute at the Santa Clara University School of Law in California.

In one of the most important such cases to date, last year a federal judge in Alexandria, Va., dismissed a claim by Geico, the auto insurance company. Geico said that a Google policy of permitting Geico's competitors to buy advertisements tied to searches for the keywords "Geico" and "Geico Direct" confused Web surfers looking for the company's site. The two companies settled the case before the judge reached a full decision on the other issues involved.

"This is Google's cash cow," Professor Goldman said. "If they can't sell keywords freely, they're not worth their market valuation."

Michael Kwun, a senior litigation counsel at Google, agreed that "the Geico case was very important." Kwun said that establishing a body of precedent was a priority for Google, especially as legal interpretations continued to evolve. "If we don't at least litigate to the point where we get rulings on the issues that matter to us, we're left with less clarity in the law," he said.

Yet in the course of a long run of legal triumphs there have been a few bumps, and Google is facing some uncertain outcomes in the coming months.

Copyright challenges are at the center of the uncertainty. In one case that could have large ramifications, Perfect 10, a publisher of pornographic magazines and Web sites, sued Google for using thumbnail-sized reproductions of photos in its image search results, among other things.

Earlier this year, a Federal District Court judge in California said Google had violated copyright because it had undermined Perfect 10's ability to license those images for sale to mobile phone users, and he issued a preliminary injunction. Google appealed the decision, and oral arguments before the United States Court of Appeals for the Ninth Circuit are scheduled for next month.

Google's use of snippets of copyrighted works has also raised the ire of news outlets.

Last month, a Belgian court ordered Google to stop publishing headlines from Belgian newspapers without permission or payment of fees. And in a case pending in a Federal District Court in Washington, Agence France-Presse is suing Google, accusing it of violating its copyright by using its headlines, photographs and story fragments in Google News.

Google is arguing that news headlines and short phrases are not copyrightable.

"From our perspective, these are simple issues that were decided a long time ago," said Alex Macgillivray, 34, whose title at Google is senior product counsel.

The company is making the same argument in cases pending against its book search service. Representatives of publishers and authors are challenging the company's practice of scanning books that are still under copyright. They argue that because Google must copy an entire book to make it searchable, it is violating the copyright of the author or publisher if it does so without permission.

Google has offered to let publishers opt out of the book search program but has refused to ask permission to make the copies in advance.

Google has been known to settle cases. But in general it mounts a vigorous defense, Goldman said. "If they get sued, they turn the tables on the plaintiff and file motions to get the upper hand in the case," he said.

Last spring, KinderStart, a small search engine in Southern California that focuses on information for parents of young children, sued Google after it noticed that its site had been removed from Google's search results - leading to a loss of traffic and revenue for the company.

Google said in court filings that an area of the site that permitted visitors to add links had been full of pointers to low-quality or pornographic sites, indicating that it was poorly maintained or was an effort to manipulate Google's search results. KinderStart said the removal was unfair and unjustified and that Google's guidelines on ways to avoid such punishment were too vague.

A federal judge in San Jose dismissed the first version of the complaint, in essence agreeing with Google that the company is free to shape its search results in any way it chooses. KinderStart has filed a second, amended complaint, which is scheduled to be heard by the same judge on Friday.

"We're not against innovation at all," said Gregory J. Yu, a lawyer for KinderStart. "But Google should not dictate what we should or should not see and find on the Web. They can knock off these small Web sites and there's nothing the small Web sites can do."

In the KinderStart case, Google was quick to take the offensive. Shortly after the lawsuit was filed last spring, Google responded with a motion that, if granted, would throw out several of KinderStart's claims and require KinderStart to cover Google's legal fees. The judge deferred consideration of the motion.

Professor Zittrain of Oxford said Google's corporate mantra - "to organize the world's information and make it universally accessible" - gives some insight into its approach.

"They actually see that as Promethean," Zittrain said. "They think of it as bringing fire to humankind. And it may even cause them to be bolder than other companies."

Google's legal muscle and shrewdness are not lost on those on the other side of the fights.

"We've got a formidable legal team, but obviously it's nowhere near the unlimited resources of Google," said David A. Milman, the chief executive of Rescuecom, a nationwide computer repair company that sued Google on trademark infringement grounds similar to Geico's - and quickly lost. The company said that it would appeal the decision.

"People say you can't fight the government," Milman said. "Google, in this case, is very similar to the government. They're the government of the Internet."