Judge rejects Google's book deal with publishers

A federal judge rejected a proposed $125 million class-action settlement between Google and book publishers and authors on Tuesday, saying the deal was "not fair, adequate and reasonable." US District Court Judge Denny Chin said that it would have allowed Google to still profit on books without getting the permission of the publisher.

Google was sued by the Author's Guild in September 2005 and by the Association of American Publishers the following month, claiming its plans to digitize books to create a massive online library violated copyright. The two sides decided to settle out of court, negotiating a deal they saw as beneficial to both sides.

Under the terms of the deal, authors and publishers were able to register their books with Google and be paid for those books that the search giant digitized and sold through its service. Out of print books that were still in copyright would be covered under the settlement.

There was one problem, though: it was not Google's duty to check whether or not the book service was infringing on someone's copyright, rather it was the rights holder itself. Any work that the rights holder did not claim was free game for the Mountain View, Calif. company to digitize.

Opponents balked at the deal, including the Justice Department, which said the deal would allow Google to profit on books where the copyright holder was not known or could not be found. In that case Google would not have to split any profits with anyone.

While Chin had initially given preliminary approval to the settlement, he seemed to suggest that the number and intensity of the objections -- across hundreds of groups -- had caused him to switch his position. He noted that if the settlement would have allowed rights holders to 'opt-in,' the complaints would have had a lot less validity.

"This is clearly disappointing, but we'll review the court's decision and consider our options," a Google spokesperson 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 U.S. today."

It is unclear what Google, the Author's Guild, and the Association's next steps would be. The text of the decision seems to suggest that the door would be open to a revised settlement that would resolve Chin's concerns, however.