Google’s ambition to create the world’s largest digital library and bookstore has run into the reality of a 300-year-old legal concept: copyright.
The company’s plan to digitize every book ever published and make them widely available was derailed on Tuesday when a federal judge in New York rejected a sweeping $125 million legal settlement the company had worked out with groups representing authors and publishers.
The decision throws into legal limbo one of the most ambitious undertakings in Google’s history, and it brings into sharp focus concerns about the company’s growing power over information. While the profit potential of the book project is not clear, the effort is one of the pet projects of Larry Page, the Google co-founder who is set to become its chief executive next month. And the project has wide support inside the company, whose corporate mission is to organize all of the world’s information.
“It was very much consistent with Larry’s idealism that all of the world’s information should be made available freely,” said Ken Auletta, the author of “Googled: The End of the World as We Know It.”
But citing copyright, antitrust and other concerns, Judge Denny Chin said that the settlement went too far. He said it would have granted Google a “de facto monopoly” and the right to profit from books without the permission of copyright owners.
Judge Chin acknowledged that “the creation of a universal digital library would benefit many,” but said that the proposed agreement was “not fair, adequate and reasonable.” He left open the possibility that a substantially revised agreement could pass legal muster. Judge Chin was recently elevated to the United States Court of Appeals for the Second Circuit, but handled the case as a district court judge.
The decision is also a setback for the Authors Guild and the Association of American Publishers, which sued Google in 2005 over its book-scanning project. After two years of painstaking negotiations, the authors, publishers and Google signed a sweeping settlement that would have brought millions of printed works into the digital age.
The deal turned Google, the authors and the publishers into allies instead of opponents. Together, they mounted a defense of the agreement against an increasingly vocal chorus of opponents that included Google rivals like Amazon and Microsoft , as well as academics, some authors, copyright experts, the Justice Department and foreign governments.
Now the author and publisher groups have to decide whether to resume their copyright case against Google, drop it or try to negotiate a new settlement.
Paul Aiken, executive director of the Authors Guild, said in an interview that it was too early to tell what the next step would be. “The judge did expressly leave the door open for a revised settlement,” he said.
Hilary Ware, managing counsel at Google, said in a statement that the decision was “clearly disappointing,” adding: “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.” The company would not comment further.
Google has already scanned some 15 million books. The entire text of books whose copyrights have expired are available through Google’s Book Search service. It shows up to 20 percent of copyrighted titles that it has licensed from publishers, and only snippets of copyrighted titles for which it has no license.
The settlement would have allowed it to go much further, making millions of out-of-print books broadly available online and selling access to them. It would have given authors and publishers new ways to earn money from digital copies of their works.
Yet the deal faced strong opposition. Among the most persistent objections, raised by the Justice Department and others, were concerns that it would have given Google exclusive rights to profit from millions of so-called orphan works, books whose rights holders are unknown or cannot be found. They also said no other company would be able to build a comparable library, leaving Google free to charge high prices for its collection. And some critics said the exclusive access to millions of books would help cement Google’s grip on the Internet search market.
Judge Chin largely agreed with the critics on those points. But he suggested that substantial objections would be eliminated if the settlement applied only to books whose authors or copyright owners would explicitly “opt in” to its terms.
When the Justice Department suggested as much last year during a court hearing, Google rejected the idea as unworkable. It would leave millions of orphan works out of the agreement and out of Google’s digital library, greatly diminishing its value to Google and to the public.
“Opt-in doesn’t look all that different from ordinary licensing deals that publishers do all the time,” said James Grimmelmann, a professor at New York Law School who has studied the legal aspects of the agreement. “That’s why this has been such a big deal — the settlement could have meant orphan books being made available again. This is basically going back to status quo, and orphan books won’t be available.”
Some longtime opponents of the settlement hailed the decision, saying that they hoped it would prompt Congress to tackle legislation that would make orphan works accessible.
“Even though it is efficient for Google to make all the books available, the orphan works and unclaimed books problem should be addressed by Congress, not by the private settlement of a lawsuit,” said Pamela Samuelson, a copyright expert at the University of California, Berkeley who helped organize efforts to block the agreement.
Gina Talamona, a Justice Department spokeswoman, said in a statement that the court had reached the “right result.”
A group of publishers said they were disappointed by the decision, but believed that it provided “clear guidance” on the changes necessary for the settlement to be approved.
John Sargent, the chief executive of Macmillan, spoke on behalf of the publishers, which included Penguin Group USA, McGraw-Hill, Pearson Education, Simon & Schuster and John Wiley & Sons.
“The publisher plaintiffs are prepared to enter into a narrower settlement along those lines to take advantage of its groundbreaking opportunities,” Mr. Sargent said in a statement. “We hope the other parties will do so as well.”
He added: “The publisher plaintiffs are prepared to modify the settlement agreement to gain approval. We plan to work together with Google, the Authors Guild and others to overcome the objections raised by the court and promote the fundamental principle behind our lawsuit, that copyrighted content cannot be used without the permission of the owner, or outside the law.”