Google Book Settlement Falls Short For Justice Dept.

Google's latest effort to settle the copyright lawsuit brought against it by The Authors Guild and several publishers in 2005 suffered a setback on Thursday when the U.S. Department of Justice said that copyright and antitrust issues arising from the revised settlement proposal haven't been adequately addressed.

The lawsuit charged that Google's effort to scan and digitize books violates copyright law. Google and the plaintiffs have been trying to reach an agreement that allows Google to make scanned books available in a limited form online and to sell electronic access to digital books with the consent and participation of copyright owners.

The DoJ filed a statement of interest with U.S. District Court for the Southern District of New York stating that despite good faith negotiations on the part of the parties involved, "the amended settlement agreement suffers from the same core problem as the original agreement: It is an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation."

A hearing on the proposed amended settlement is scheduled for February 18 and the judge is likely to take the DoJ's concerns seriously. The original settlement, presented in October 2008, was shot down after widespread criticism.

Google in a statement said that the DoJ's filing "recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S."

The company said that it is looking forward to Judge Chin's review of the DoJ filing and that the settlement, if approved will expand online access to published works and provide authors and publishers with new ways to distribute their works.

The Open Book Alliance, a group opposed to the settlement that counts Amazon, Microsoft, and Yahoo as members, praised the DoJ's action. The group said it was heartened by the government's recognition of the anti-competitive consequences of the proposed settlement on digital book sales and the Internet search market.

On Friday, The Authors Guild, one of the plaintiffs in the case, issued a statement justifying its decision to settle rather than litigating the copyright claims against Google to a judgment. The group said that Google could have prevailed with its argument that its book scanning effort is protected as fair use under copyright law, a decision it believes would harm authors and publishers.

The group also said that it might have won. But it noted that "copyright victories tend to be Pyrrhic in the digital age." It cited the music industry's string of legal victories against file sharing services and said that such wins only made illegal copying worse. It took Apple, making digital music affordable and easily available through iTunes and the iPod, to turn things around, the group said, but by then, the damage to the music industry had already been done.

Authors and publishers could suffer the same fate as the music industry, the group argues.

"Protecting authors' interests has always been our top priority: In this case a timely harnessing of Google was the best way to do it," the group said.