In a crushing blow to Google Inc.'s grand ambition to build the world's largest digital library, a federal judge rejected the company's plans to share and sell the millions of books it has scanned over the last decade.
U.S. Circuit Judge Denny Chin said Tuesday that Google's agreement with publishers and authors "would simply go too far" toward giving the company a major advantage over competitors in the electronic book world.
The ruling, a crucial development in a five-year legal saga, effectively keeps Google from offering to the public more than 15 million books it has scanned since 2004. Many of those books are no longer in print — available as hard copies in some libraries, but nowhere online — leaving a vast empty shelf in the world's storehouse of digital books that Google believes it could fill.
Google scans most of its books without asking permission from their authors, many of whom are deceased or otherwise unreachable. Under the rejected settlement, authors and publishers would have been able to claim 70% of the proceeds from the sale of their books, with Google keeping 30%.
But opponents have said the proposed deal would have given Google near-monopolistic control over sales of a large swath of books that few other organizations have the money or technical capacity to scan and catalog. Those critics argued that the complicated legal questions over digital copyrights should be resolved by lawmakers, not by the court system.
"We're in favor of building a digital library system that has many winners, but the Google book settlement was a bridge too far," said Brewster Kahle, founder of the Internet Archive, a nonprofit, online library for digital media, including books. "It looked more like they were building a bookstore with no real parallel library system."
For its part, Google said it was disappointed by the judge's decision, but it left the door open to striking a new deal that would be more amenable to the judge. If Google fails to reach another agreement with authors and publishers, the legal fight could go on for years.
"This is clearly disappointing, but we'll review the court's decision and consider our options," said Hilary Ware, Google's managing counsel. "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 Author's Guild, one of the parties that originally sued Google, said it also hoped to come up with another version of the settlement that could satisfy the court's objections.
"Regardless of the outcome of our discussions with publishers and Google, opening up far greater access to out-of-print books through new technologies that create new markets is an idea whose time has come," said novelist Scott Turow, the guild's president. "There has to be a way to make this happen."
Since 2004, the Internet giant has used high-speed scanning devices to process close to 12% of the world's estimated 129 million books, many lent by some of the world's most prominent libraries. As of last year, for instance, the New York Public Library said it was still sending Google "a truckload" of books every month.
But the scanning effort ran into a legal challenge in 2005 when groups representing authors and publishers filed a lawsuit against Google, alleging that the company was violating the copyright on the huge number of works it was scanning without permission from the copyright holders.
After years of legal wrangling, the parties submitted a settlement agreement in 2008, agreeing to share any revenue generated by the project with authors and publishers.
But that settlement became controversial in its own right, with hundreds of authors, companies and interest groups stepping forward to oppose it. The settlement also drew opposition from the Justice Department, which warned the court not to act too hastily in the face of complicated copyright and antitrust issues.
On Tuesday the Justice Department said it was pleased that Chin's decision supported its position.
In his ruling, the judge suggested that the issue could be resolved if Google allowed authors to explicitly allow their books to be sold through Google, a process known as "opting in." Under the rejected settlement, Google would have blanket permission to sell the books unless copyright holders choose to "opt out."
But that option may be untenable to Google because it would require the company to seek advance permission from millions of authors, which would be costly and time-consuming.
Even if the case goes no further, legal lessons learned during the protracted proceedings may provide a guide to legislators who are trying to wade through the murky world of digital copyright law.
"The gift that Google brought was raising awareness that access to literature has tremendous benefits," said Peter Brantley of the Open Book Alliance, a group of companies and organizations that has opposed Google's plan. "And that's something that, as a society, we can work to achieve."