Where will the next Google come from?

The Guardian reports that British Prime Minister, David Cameron, believes that the UK should adopt a US-style “fair use” regime (and as expected, criticized by the music industry, publishers, etc.). Apparently, Cameron was convinced that a company such as Google could not have started up in the UK after Google’s founders explained to him that their service “depends on taking a snapshot of all the content on the internet at any one time”, and felt that the UK copyright system “is not as friendly to this sort of innovation as it is in the United States”.

Google’s founders and Cameron have a point. In order to run its search engines, Google systematically copies every webpage on the internet, stores it on its servers, and indexes it.  And Google copies every such webpage without asking the permission of the copyright owners in the content of such webpages. It is pretty obvious that if Google had to contact every website owner and get her permission before indexing her website that would be extremely costly, and highly inefficient. Not impossible, I must emphasize, but highly inefficient. But copyright law generally requires that the copyright owner’s permission be granted before copying can be legally done. So how does Google get around the permission-first rule?

The answer is twofold. The first answer is that in the US, Google can make a plausible claim–and the case law supports such a claim–that its systematic copying does not infringe copyright because it falls under “fair use”. In addition, Google (and other search engines) rely on a technological opt-out system.  This opt-out system allows website owners automatically to notify Google if they don’t want Google to index their website or specific parts of it. Website developers can simply insert widely known lines into the html code of the website (known as “Robots exclusion protocol” or robots.txt). Google’s computers that otherwise would automatically copy everything recognize the code, and know to keep out. In a few cases, courts invoked notions of implied consent and ruled that a copyright owner who fails to implement such opt-out technologies impliedly consents to the copying by Google, but it remains to be seen how widely will courts be willing to endorse this view.

Strictly speaking, the two answers are independent of each other. If Google’s copying falls under fair use, then Google doesn’t need to get the copyright owner’s consent, whether express or implied. At the same time, the ability to opt-out easily probably makes it easier for courts to find that Google’s practice is “fair”. But clearly, Google is safer where it can rely on both (and practically, because the copying takes place in the US it is governed by US law, meaning that all of us can benefit from the results of this copying, even in jurisdictions in which the copying itself would be unlawful).

So what about Canada? Would Google be able to run from Canada? It’s very difficult to predict whether courts will go along with the notion of implied consent, because the case law is too sparse. So could Google rely on Canada’s “fair dealing”? Perhaps. The American cases may be instructive on the “fairness” prong, but unlike in the US, Canadian courts might feel that Google would still have to fit into one of the enumerated purposes, namely, research, private study, criticism, review or news reporting. The Supreme Court told us in CCH v. LSUC that the “research” of research (and probably the other purposes) “must be given a large and liberal interpretation in order to ensure that users’ rights are not unduly constrained”, so it is possible that Google could place its servers in Canada under the theory that it fairly facilitates research by those who use its search engines. If so, Google and other search engines might be safe in Canada.

But Google already exists, and it matters less where it is physically located. The more important question is what about the next Google, the next start-up whose services may be “fair” but outside the scope of “research, private study, etc.”? Who are those start-ups, and what are their services? We don’t know, that’s the point about innovation: we cannot know in advance who will come up with the next big thing. But we can know that if the next big thing involves some use of others’ copyrighted materials, such start-ups may find that they can’t legally work from Canada, and will have to locate in jurisdictions that are friendlier to such innovators, such as the US or Israel. Alternatively, they may just give up.

Cameron seems to get it.  Will Harper get it too?