Palo Alto Weekly

Cover Story - February 5, 2010

The antitrust advocate

Veteran Palo Alto attorney Gary Reback takes aim at Google's ambitious plan for a digital library

by Susan Kostal

Gary Reback has the subtle restlessness of a man facing a deadline.

It is a feeling he knows well. A longtime intellectual property and antitrust lawyer in the Valley, Reback is a battle-scarred scribe. In his career, he's penned thousands and thousands of pages on behalf of clients large and small, including Apple, Sun and Oracle.

The task doesn't necessarily get easier for all of his experience. In fact, Reback says he feels the pressure even more keenly, the fates of his clients depending on his skill at translating logic and passion into compelling and persuasive argument.

His latest deadline: a legal brief targeting none other than Internet-search giant Google Inc. over its plans to establish and license a vast digital library. The brief seeks permission to take part in oral arguments in the Google case, which faces a fairness hearing this month in federal court in Manhattan.

At 60, Reback is a Valley legal celebrity, having had a hand in nearly every big antitrust case here since he moved from the East Coast to practice law in 1981. He may be recognized by insiders (he's been on the covers of "Wired" and the "Industry Standard" and even cartooned in "The New Yorker"), but he's not stop-on-the-street famous. Still, he is to antitrust in the Valley what Ralph Nader is to consumer protection — a strident voice for consumers.

The Palo Alto attorney tends to be the hired gun smaller companies seek out when challenging bigger competitors in quickly evolving industries. A huge believer in the power and necessity of the free market — last year he penned a book on the topic, "Free the Market! Why Only the Government Can Keep the Marketplace Competitive," — he argues that consumers benefit from healthy industry competition, which encourages product choice and innovation.

Reback is perhaps best known as the man who instigated the U.S. government's prosecution of Microsoft over the company's efforts to embed its browser in PC operating systems, which, in the 1990s, made him a hero in the Valley tech community. Now grayer and no longer rail-thin, though still careful in his appearance, he's wrangled himself a role in the escalating fight over Google's control of what is, at more than 10 million works, the world's largest digital library.

Ironically, he's done it by reaching out to his old nemesis, Microsoft.

On Feb. 18, a federal judge in Manhattan will be asked to give his final approval to a settlement that, in Reback's view, will not only change the course of what and how people read, but how they search the Web, and which company controls access to it.

With Peter Brantley of the Internet Archive, Reback co-founded the Open Book Alliance last August to fight what is known as the Google Book Settlement, or GBS 2.0, as it has been tagged. The alliance includes some unlikely partners, including Microsoft, Yahoo, Amazon, the Internet Archive, the American Society of Journalists and Authors, and the Special Library Association, among others.

The Google Book Settlement, announced in October 2008, is an agreement between Google and those who hold a U.S. copyright to one or more books. It covers a host of issues, including rights, revenue and uses.

The settlement was developed in response to a class-action litigation filed in 2005 by the Authors Guild and Association of American Publishers over copyright issues raised by Google's massive online library. GBS 2.0 has yet to receive final court approval.

As it stands, the settlement gives Google sole control over a digital library containing much of the written works of the 20th century. Google alone controls access to it and can sell or license it to university libraries and others as it sees fit.

"This is not like any library you have ever seen before. This is not a public library; this is a private library. And it is not run for the public benefit; it is run for private profit," Reback said during a recent interview in a spacious, old-fashioned, book-lined library from his offices at Carr & Farrell in Palo Alto.

Google has argued its database constitutes what is known as "fair use" under copyright laws because it publishes only "snippets" of books by authors who object to their work being included or whose authors cannot be found. It contains works whose authors have opted in to the settlement (or rather, as Reback and others often complain, have failed to opt out) and works no longer covered by copyright, such as those by Chaucer, Shakespeare and Austen.

The U.S. Justice Department has said the settlement may violate U.S. antitrust laws, meaning it may give Google an unfair edge over its competitors in the market. Google and the authors agreed to revise the deal, and it is those revisions that are being reviewed this month by the court. Critics, including Reback, say the revisions are minor and do little to remedy what they claim are its legal failings and lurking dangers.

Reback — an armchair historian and an avid reader — came to his passion for antitrust early in his career.

He was immersed in economics when he worked his way through undergrad at Yale University as a programmer for the economics department. At Stanford Law School, he was a cerebral student with an interest in public policy and took every antitrust course taught by the late Professor William Baxter, who later served as assistant attorney general for the Antitrust Division under President Ronald Reagan and broke up AT&T into the seven regional "Baby Bells."

After graduating from law school in 1974 and a prestigious clerkship at the 11th Circuit U.S. Court of Appeals in Atlanta and New Orleans, Reback practiced law in Washington, D.C. He came to Palo Alto in 1981, a mere 10 years after the moniker "Silicon Valley" was minted, to practice law at Fenwick & West. The firm has represented many famous Valley start-ups. Reback had a front-row seat, and threw some of the punches, at the prizefights that hatched a world-class technology market.

"Gary Reback is a person of great energy and enthusiasm. When he throws himself into something, he does it wholeheartedly," said law professor Pam Samuelson of UC Berkeley's Boalt Hall Law School, where she heads the Berkeley Center for Law and Technology.

He's good enough, in fact, to have argued before the U.S. Supreme Court early in his career, on behalf of Borland, which was locked in a copyright dispute with Lotus over the menu templates of two competing spreadsheet programs. He was an attorney with Wilson Sonsini Goodrich & Rosati at the time.

Borland won the case in 1996, which became an important precedent in copyright law. Reback was 46. The white quill traditionally given to all who argue at the high court is framed in his office.

As in that case and others, Reback can be a fierce combatant. Dr. Ron Rosenfeld, a longtime friend and fellow member of a book group, said: "I do feel comfortable saying I'm glad he's a friend and not an enemy. ... He's obviously superb at what he does."

One of Reback's professional strengths is his long ties to key Valley players. He has taken time out from his law practice to work with several startups. He worked, for example, with a brilliant but little-known programmer named Nathan Myhrvold. Reback helped Myhrvold sell his company, Dynamical Systems Research, which had produced a clone of an IBM multitasking environment. Reback offered Myhrvold and the young company to Apple, which showed little interest. He then helped Myhrvold sell the company to Microsoft. The product morphed into Windows, and Myhrvold became Microsoft's chief technology officer.

Ironically, Apple and Microsoft, along with HP, would tangle in court over the similarity of Microsoft's Windows user interface to Apple's.

"In the early days I worked for Apple, Sun, Oracle, just about every big company in the Valley," he said. "In fact, over the years, I've represented almost everyone in the technology sector, except for Google."

"I really, frankly, don't think one of these big companies is much different than the other. Some companies have smarter people, are more talented, or more creative, but in terms of corporate business goals, is Google really more on the side of the consumer than Microsoft? All these companies are out to make money. What protects us is the free market system," he said.

It is the maintenance of that system, which he believes provides a level playing field, that has served as the central axis for his career.

In his book, he offers a tale of competition law in America, of mergers, monopolists and magnates, and what happens to markets and industries when they are allowed to run amok, unfettered by government regulation or guidance. Corporations, it turns out, are a little like teenagers; they need some ground rules.

So it's not that Reback is simply partial to underdogs. True, he has a tendency to represent challengers and smaller companies — anyone challenging the dominant paradigm. But his interest lies in ensuring the level playing field — and the ground rules — are maintained in an ever-changing environment.

Which made his involvement in the Google case more or less inevitable.

Originally, Google set out to compile a digital index and called it the Google Books Library Project. It began by scanning works from major university libraries, including Stanford and Harvard. Then, it announced last summer it would begin selling digital versions of books online.

Suddenly the library became a bookstore, Reback said.

These scanned works show up in Google search results and include Reback's own book on antitrust, "Free the Market." In fact, one can search for references to Google within Reback's book.

"Technically, my book is not included in the settlement" because it was published after the settlement was reached, he said. "That's what is so nefarious with this thing," referring to Google's copying of works without explicit author permission.

It was difficult, initially, for those challenging the settlement to stir up public interest. After all, to most, having access to books online seems like a good idea. Complicating matters, the lengthy settlement itself induces insomnia, Reback said, and its machinations, in his view, are barely decipherable.

"The settlement document is 300 pages long," Reback said. "I'm a lawyer, and I can't figure it out. I've never been able to read it through without falling asleep. How can we expect authors to understand what rights they are giving away with this settlement?"

The settlement has wide implications for the Internet search industry, which is why Yahoo and Microsoft are interested. Reback believes that any search engine that can also tap into a vast digital library, as Google now can, will become a category-killer in the search market, with serious chances of quickly wiping out any other competitors.

"Google controls 70 percent of the organic search market and 90 percent of syndicated search," Reback said. "If someone controls 90 percent of the steak sauce market, do I really care about that? But search is not like other markets. It's not even like other tech markets. Anyone who does business on the Web is dependent upon Google's search engine. ... If you control search, you control those markets."

It's not at all certain that Reback's efforts will bear fruit. He is not representing any parties to the litigation directly but rather a consortium objecting to the settlement as a "friend of the court." His is just one of numerous amicus briefs (400 objectors, by Reback's count) that have been filed complaining about the reach and terms of the settlement.

In his brief, Reback argues that Google's power over the Web will be equal to John D. Rockefeller's power in the oil industry in the late 1800s, which was aided by collusion from the railroads, who agreed to fix prices if Rockefeller transported his oil on their lines. Rockefeller's sweet deal with the railroads allowed him to quickly buy up nearly all his local competitors.

Google, Reback argues in the Open Book Alliance brief, will be able to "fix prices, restrain competition and retard technological advancement" in the digital-book industry if the settlement goes through.

Samuelson's own objections, which she has summarized in a letter to the court and elaborated upon in numerous blog postings, are based more on copyright grounds. She fears the judge in the case, Denny Chin, will not look at the broader antitrust issues raised by Reback but will confine himself to ruling whether the settlement was reached properly under the laws governing class actions.

"Until the U.S. Justice Department says this is a clear antitrust problem, I don't think the judge will find there are antitrust problems," Samuelson said. (The Department of Justice was scheduled to weigh in on the settlement Thursday, Feb. 4, after the Weekly's press deadline.)

While Reback is clearly impassioned about the settlement, its implications, and antitrust in general, there is more to him than just the law. He's a swimmer, a Civil War buff and a member of two books clubs. He reads books the old-fashioned way and does not own a Kindle or e-reader.

Dr. Michael Greenfield, a friend for 20 years, said he appreciates Reback's wide range of interests. In their book group, for example, Reback is comfortable discussing mathematics, history, philosophy and, of course, literature, Greenfield said.

"He's taken math classes at Stanford and knows an incredible amount about business. It's a hackneyed phrase, but he's almost a Renaissance-type person," Greenfield said.

One might expect a lawyer to dominate such a group, but Reback "never overwhelms people with his opinions. He is smart and eloquent, and will debate them strongly, but he's a generous person and will listen to others," his friend Ron Rosenfeld said.

Rosenfeld said he particularly enjoyed listening to Reback's tales of writing his book.

"As enormously proud of it as he undoubtedly is, he is remarkably modest about it and self-deprecating. He was willing to share mistakes he made, mistakes in judgment he has made along the way. I really appreciate when someone at the top of his field, as Gary is, comes across like that."

With all his experience in antitrust, one might think Reback would be interested in working for the Justice Department or the Securities and Exchange Commission. But he said that kind of public service requires a different mindset, and perhaps a patience, that he doesn't have in sufficient quantity.

When asked about his vices, he claimed to squander what could be more leisure time, thanks to his penchant, he said, for disorganization. When writing his book, or a brief, he barricades himself in a conference room to seal himself off from distractions.

"I tend to spend a lot of time thinking, and I sometimes can't turn that off when I get home. It spills over," he said. "I am testy, inward-looking and frustrated when I can't figure it out."

For now, Reback will have to try to burn off the nervous energy generated by the Google case via another one of his habits, exercise. He said he does some of this best thinking in the pool or on an elliptical machine.

"If my optimism quotient was a little higher than my pessimism quotient, it would be better for everybody," he said.

Susan Kostal is a San Francisco-based freelance writer. She can be e-mailed at skostal@mac.com.

Comments

Posted by Mark Borofka, a resident of another community
on Feb 18, 2010 at 1:42 pm

Great article. Highlights the need to understand the relationship between publication of information and control of information - especially as it relates to search technology. One thing that stands out is the comment that "Google controls 70 percent of the organic search market and 90 percent of syndicated search," Reback said.... "It's not even like other tech markets. Anyone who does business on the Web is dependent upon Google's search engine. ... If you control search, you control those markets." Pretty ominous stuff.


Posted by Walter_E_Wallis, a resident of Midtown
on Feb 18, 2010 at 2:42 pm

Walter_E_Wallis is a registered user.

Owners of material under copyright can obviously contractually sell access to their works, but material out of copyright are available to all - and all Google could charge for is their scanning efforts, right?


Posted by R Wray, a resident of Midtown
on Feb 19, 2010 at 9:44 am

Mark, what's your model for search control? China?


Posted by Mark Borofka, a resident of another community
on Mar 1, 2010 at 3:15 pm

Hi R Wray, No - not China. I prefer Teddy Roosevelt's view that Government has a role to protect the public against the "tyranny" of unrestricted capitalism. Per TR "The truth is that we who believe in this movement of asserting and exercising a genuine control, in the public interest, over these great corporations have to contend against two sets of enemies, who, though nominally opposed to one another, are really allies in preventing a proper solution of the problem. There are, first, the big corporation men, and the extreme individualists among business men, who genuinely believe in utterly unregulated business -- that is, in the reign of plutocracy; and, second, the men who, being blind to the economic movements of the day, believe in a movement of repression rather than of regulation of corporations, and who denounce both the power of the railroads and the exercise of the Federal power which alone can really control the railroads." Which are you?


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