Saying the deal goes “too far,” a federal judge Tuesday rejected Google’s proposed legal settlement with book publishers, an accord that would have paved a path toward digitizing the world’s books.

“While the digitization of books and the creation of a universal digital library would benefit many, the ASA [Amended Settlement Agreement] would simply go too far. It would permit this class action — which was brought against defendant Google Inc. to challenge its scanning of books and display of ’snippets’ for on-line searching — to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners,” U.S. District Judge Denny Chin of New York ruled. “Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case” (.pdf).

Tuesday’s decision centers on Google’s long-running bid to end a 2005 lawsuit, which Google proposed settling with book publishers and authors of works registered in the United States or published in the United Kingdom, Australia or Canada.

For the most part, the parties have agreed to allow Google to scan their works, sell them on the internet and have them pop up in search results, while allowing up to 20 percent of the text to display in a search.

The rights holders get 67 percent of the take and Google the remainder. This part of the deal — the least controversial — does not preclude any other Google competitor from negotiating a deal, or even a better

deal, to perform the same function as Google.

But when it comes to millions of so-called orphaned works, Google’s proposal goes too far, Chin said. Google would be able to scan them, sell them and place up to 20 percent of a title’s words in search results — all without the rights holder’s consent. Chin said Congress, not he, should “establish a mechanism for exploiting unclaimed books.”

Yahoo, Amazon, Microsoft, the Obama administration and dozens of others had urged Chin to reject the deal. The Authors Guild, however, supported the plan, regardless of its legalities — all in a bid to legitimize a fledgling online book-selling business in a world beginning to embrace the digital word as the gospel.

The Obama administration summed up the issue in what is best described as an intellectual and legal crossroads. The administration told Chin — a President Bill Clinton appointee — that despite the legal uncertainties, Google’s idea “offers the potential for important societal benefits.”

To appease copyright concerns, however, Google has agreed to place the proceeds from the sales of millions of orphaned works in a trust in hopes that rights holders would come forward, collect their royalties, and either sign up for Google’s book program or walk away.

What’s more, when it comes to orphaned works, the deal gives Google immunity from copyright-act violations — which can run as high as $150,000 an infringement.

The antitrust issue comes into play because no other entity — like Amazon, Microsoft and Yahoo — would enjoy the same luxury. A rights holder of an orphaned work could sue those companies for digitizing and selling that orphaned work without permission. The deal, however, forbids Google from being sued.

“This is clearly disappointing, but we’ll review the court’s decision and consider our options. Like many others, we believe this agreement has the potential to open up access to millions of books that are currently hard to find in the U.S. today,” Hilary Ware, Google’s managing counsel, said in a statement.

Once they come forward and collect, they can continue to be bound by Google’s terms, negotiate new ones and even strike deals with others, including Google’s competitors, Google said.

Google has digitized and opened to online search more than 15 million books since 2002 — a move that prompted the lawsuit and settlement. More than 2 million of those books are out of copyright and in the public domain. Google makes those available online for free in PDF form.

Chin urged continuing negotiations and set a hearing in New York federal court for April 25. He said some of his concerns might be “ameliorated” if the deal did not require authors to “opt out.”

Photo: Babblingtweeb/Flickr

See Also: