The company's plan to resolve copyright claims arising from its book scanning project will need to be revised.
Google on Tuesday suffered a significant setback in its mission to organize the world's information and make it universally accessible.
Federal appeals court judge Denny Chin ruled that Google's proposed settlement of copyright claims arising from the company's digitization of books and presentation of excerpts online isn't fair.
"While the digitization of books and the creation of a universal digital library would benefit many, the ASA [Amended Settlement Agreement] would simply go too far," the judge wrote in his ruling. "...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."
The judge suggested that many of his objections would be resolved were the settlement converted from "opt-out" to "opt-in."
Google began its book scanning effort in 2004 and struck deals with several research libraries to scan their books. But among the more than 12 million titles it scanned over the years were a number of copyrighted titles. Some of those holding copyrights to those titles sued in 2005.
Google first proposed a settlement in October, 2008. Vocal criticism of that proposal sent the company back to try again. Following Google's presentation of an amended settlement, the U.S. Department of Justice last February said the revision suffered from the same deficiencies as the first draft.
Google has long pushed the envelope of copyright law and has mostly been successful in convincing courts that its use of content should be allowed. But not this time.
Hilary Ware, managing counsel at Google, expressed disappointment in an emailed statement and said Google will weigh its options upon reviewing the decision. "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 US today," she said. "Regardless of the outcome, we'll continue to work to make more of the world's books discoverable online through Google Books and Google eBooks."
Foes of Google's plan celebrated the ruling.
The Open Book Alliance, a coalition that includes Amazon, Microsoft, Yahoo, and a variety of publishing groups, called the decision "a victory for the public interest and for competition in the literary and Internet ecosystems."
FairSearch.org, a group set up to oppose Google's proposed acquisition of travel software company ITA, tried to link Chin's ruling to its cause. The group said the ruling "confirms that allowing Google to acquire exclusive access to content and withhold it from other search engines -- as Google threatens to do with ITA Software in online flight search -- raises serious antitrust concerns."
In 2010, Google spent $5.16 million on lobbying, up from $4 million the previous year. It may have to spend more this year to counter the efforts of its competitors.
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