Inside Google

$125 Million Pact ‘Raises Significant Issues’

A US federal judge has postponed a fairness hearing that was set to decide the fate of Google’s $125m book-scanning settlement with American authors and publishers, after the Department of Justice raised concerns over the pact.

On Tuesday, the plaintiffs in the four-year-old case – the US Authors Guild and the Association of American Publishers – asked Judge Denny Chin to delay the hearing, and today, he said OK. In their Tuesday filing, the plaintiffs said Google did not object to a postponement.

The request came after the DoJ urged the New York-based court to reject the pact as written, citing concerns over class action, copyright, and antitrust law. The plaintiffs were already in talks with Google, with both sides working to bring the agreement into accord with the DoJ suggestions, and more time was needed to make these changes. The fairness hearing had been set for October 7.

In his order (PDF), Judge Chin said: "The current settlement agreement raises significant issues as demonstrated not only by the number of objections, but also by the fact that the objectors include countries, states, non-profit organizations, and prominent authors and law professors."

But he also added that a fair deal "would offer many benefits to society," citing a statement from the DoJ that said "the proposed settlement has the potential to breathe life into millions of works that are now effectively off limits to the public."

Instead of a fairness hearing, the court will conduct a status conference on October 7 to determine how to move the case forward as quickly as possible. But judge Chin will not hear argument from anyone other than the parties involved.

Last October, Google settled a lawsuit from the US Authors Guild and the Association of American Publishers over its Google Book Search project, which seeks to digitize texts inside various research libraries. At the time, the Mountain View web giant had scanned more than 10 million books, and many are still under copyright. The deal creates a "Book Rights Registry" where copyright holders can resolve claims in exchange for a cut of Google’s revenues.

But the pact also gives Google a unique right to digitize and sell and post ads against "orphan works," titles whose rights holders have yet to come forward. Other organizations could negotiate the rights to works in the Registry, but the Registry alone would have the power to set prices.

After the DoJ raised concerns over the pact, the plaintiffs realized the pact wouldn’t go through. And presumably, Google did too – though it was the plaintiffs who formally moved for a postponement.

"Clearly, voices such as ours had an impact on Judge Chin," says John Simpson, of the consumer watchdog known as Consumer Watchdog, one of the many organizations opposed to the deal. "There was no way the proposed settlement could go forward. Consumer Watchdog is pleased there will be a status hearing on the case on Oct. 7."

Like the Open Book Alliance – a group that includes the Internet Archive, Microsoft, and Amazon – Consumer Watchdog advocates solving the ebook copyright issue with federal legislation.

"We believe that will demonstrate that the proper place to solve many of the case’s thorniest problems, such as that of orphan books, is in Congress," Simpson says. "Consumer Watchdog urges Congress to act expeditiously because it is important to build digital libraries."