NEW YORK: A US judge dealt a major blow to Google's digital book-scanning project Tuesday, rejecting a settlement with authors and publishers that would have paved the way for the Internet giant to run a vast online library.
US District Court Judge Denny Chin said in a 48-page ruling handed down 13 months after the parties had their day in court that the proposed agreement "is not fair, adequate and reasonable."
"While the digitisation of books and the creation of a universal digital library would benefit many, the (proposed settlement) would simply go too far," Chin said.
Explaining his ruling, he said the settlement would grant Google "significant rights to exploit entire books, without permission of the copyright owners."
The settlement would give Google "a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission," he said.
At the same time, the judge left the door open for the parties to go back to the negotiating table.
"The motion for final approval of the (proposed settlement) is denied, without prejudice to renewal in the event the parties negotiate a revised settlement agreement," Chin said.
The settlement agreement resulted from a class action lawsuit filed in 2005 by the Authors Guild and the Association of American Publishers (AAP) charging Google with copyright infringement.
The settlement called for Google to pay $125 million to resolve outstanding claims and to establish an independent "Book Rights Registry," which would provide sales and advertising revenue to authors and publishers.
Supporters of the settlement argued that Google's proposed digital library and electronic bookstore would make millions of out-of-print books available and provide a new avenue for authors to profit from their works.
Opponents urged the judge to reject the deal on antitrust, copyright and privacy grounds and said it would give Google exclusive rights to digitise "orphan works" -- out-of-print books whose authors cannot be traced.
The US Justice Department criticized the settlement between Google and the Authors Guild and the AAP for including books unless an author expressly opted out of the deal.
Chin also expressed concern about the opt-out aspect of the settlement.
"Many of the concerns raised in the objections would be ameliorated if the (proposed settlement) were converted from an 'opt-out' settlement to an 'opt-in' settlement," he said in his ruling.
Google counsel Hilary Ware expressed disappointment with the ruling.
"This is clearly disappointing, but we'll review the court's decision and consider our options," Ware said in a statement.
"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 US today," she said. "Regardless of the outcome, we'll continue to work to make more of the world's books discoverable online through Google Books and Google eBooks."
Google opened an electronic bookstore, the Google eBookstore, in December, a project that is separate from its Google Books project, which was launched in 2004 and has digitised over 15 million books from more than 100 countries.
The Open Book Alliance, a coalition of groups which opposed the settlement and included Amazon, Microsoft and Yahoo!, welcomed the judge's ruling, calling it "a victory for the public interest and for competition in the literary and Internet ecosystems."
"The ruling ratifies the objections of a diverse cross-section of voices who stood up to Google and its partners," Open Book Alliance counsel Gary Reback said in a statement.
