NEW YORK, NY -- A federal judge on Tuesday rejected Google's $80 million copyrights settlement offer as it tries to digitize every book ever published. U.S. District Judge Denny Chin cited monopoly, antitrust and copyright concerns.
The Authors Guild and the Association of American Publishers sued Google in 2005 over its plan to scan and make available every book ever published. Those plaintiffs worked out a deal with Google in 2007, and became allies as competitors to Google, such as Amazon and Microsoft, and copyright attorneys and professors and some government officials - and governments - fought the proposal.
Google already has scanned more than 12 million books, often without obtaining copyright permission to do so, Judge Chin wrote. As part of the settlement Judge Chin rejected, Google was to pay $34.5 million to set up a Book Rights Registry, another $45 million for a Settlement Fund to pay copyright holders whose books had been scanned before the registry was set up. "These are minimum amounts, and if more than $45 million becomes necessary to pay all eligible claims, Google will provide additional funds," Judge Chin wrote.
Citing testimony, Chin estimated that 174 million books have been published.
Another sticking point was orphan books, whose copyright owners are unknown or cannot be found. Google's ability to collect and scan them could have given it an unbeatable edge in orphan works, allowing it to charge what it would.
The original plaintiffs now must decide whether to resume their 2005 lawsuit, or try to craft another, probably narrower, settlement.
Here is Judge Chin's summation, with which he begins his 48-page ruling: "Before the Court is plaintiffs' motion pursuant, to Rule 23 of the Federal Rules of Civil Procedure for final approval of the proposed settlement of this class action on the terms set forth in the Amended Settlement Agreement (the 'ASA'). The question presented is whether the ASA is fair, adequate, and reasonable. I conclude that it is not.
"While the digitization of books and the creation of a universal digital library would benefit many, the ASA would simply go too far. It would permit this class action which was brought against defendant Google Inc. ('Google') to challenge its scanning of books and display of 'snippets' for on-line searching - to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners. Indeed, the ASA would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case.
"Accordingly, and for the reasons more fully discussed below, the motion for final approval of the ASA is denied. The accompanying motion for attorneys' fees and costs is denied, without prejudice."
Judge Chin was recently elevated to the 2nd Circuit, but made this ruling as a U.S. District Judge.