Google settles copyright dispute

Google Inc. has closed the book on a long-running copyright battle with publishers and authors over its controversial project to scan the world’s libraries by forging a landmark deal that would bring millions of titles to the Internet.

The Internet giant said Tuesday that it had agreed to pay $125 million to settle lawsuits brought by the book-publishing industry. The settlement would expand the Google Book program, allow consumers to search for and buy books online and give U.S. libraries free access to the database.

If approved by a Manhattan federal court judge next summer, the settlement has the potential to revolutionize the publishing industry by creating a giant online marketplace that would dramatically increase the volume of literature available to readers and researchers -- while compensating authors and publishers.

“Fifteen to 20 years from now we will say that this was a watershed event,” Washington intellectual property lawyer Terence Ross said. “It does serve as a model not just within the book business but in all content industries.”

The settlement certainly signals a thawing in relations between old media and new. It also points to a growing recognition that the adversaries were better off forging partnerships than fighting over gray areas of copyright law in the digital age, intellectual property experts say. Google and publishers had fought over whether the company’s unauthorized scanning of copyrighted books so it could offer snippets to Web searchers was permissible, intellectual property experts say.

“It makes sense for copyright owners to figure out how to live in the digital world rather than bury their heads in the sand,” Washington copyright lawyer Jonathan Band said. “They need to get with the program and find a way to partner with the Internet companies as opposed to fighting them.”

The case has been closely watched by the publishing industry, which has been weighing whether making books available to read on computer screens could boost sales. The industry has begun to experiment more aggressively with that approach this year.

Google started its book project in 2004, scanning millions of books made available to it by universities and public libraries.

It let Web surfers read and download entire books that were in the public domain but see only three or four lines of text from copyrighted books. The Mountain View, Calif., company promoted the program as a way to increase exposure of these books. But in lawsuits filed against Google, publishers and authors claimed that merely copying their books to its computers servers infringed their copyrights.

The settlement, reached after more than two years of negotiations, would end the lawsuits. Under the deal, individuals and institutions could buy full online access to copyrighted, out-of-print books (prices haven’t been determined). Google would also provide free online access at public libraries. Only Web surfers in the U.S. would have this access. Copyrighted books that are in print would not be included unless publishers decided to participate in the program.

Of the $125-million payment, $34.5 million would be used to form a registry to store copyright information and arrange payments. Google also would pay about $60 per copyright holder for copyrighted books it has already scanned and would give 63% of all money from sales, subscription and advertising revenue to copyright holders.

“What this agreement does is, it provides a model for us to work together,” said Macmillan Chief Executive John Sargent.

The deal would give Google, which has scanned more than 7 million titles, more Web content to help pump up a book search business that has yet to gain momentum. Yet it has little competition: Microsoft Corp. ended a similar books search program in May, essentially ceding the business to Google.

Google has carved out a lucrative business selling advertising alongside digital content and splits the revenue with partners rather than selling access to the content.

Selling access to content is one of the new ways the company is exploring to make money, said Adam Smith, a Google director of product management.

Google’s more conciliatory posture toward copyright issues may not apply to other cases. The company has faced similar legal challenges on multiple fronts.

Its biggest legal headache is a major copyright battle over its popular video-sharing site YouTube Inc. Viacom Inc. is seeking at least $1 billion in damages in a lawsuit in New York federal court. It accuses Google of illegally profiting from pirated clips from such shows as “South Park” and “The Daily Show.” That case is pending.

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jessica.guynn@latimes.com