The U.S. Department of Justice has come out against the proposed agreement to settle copyright lawsuits that authors and major publishers filed against Google over the search company's book search program.
"This Court should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations," reads a filing the DOJ submitted to the U.S. District Court for the Southern District of New York late on Friday.
The proposed settlement must be modified by Google and the plaintiffs so that it complies with U.S. copyright and antitrust laws, the DOJ said in its filing, a 32-page Statement of Interest.
The DOJ also expressed concern that the proposed settlement doesn't satisfy the requirements of Federal Rule of Civil Procedure 23, which sets parameters for approving settlements of class action lawsuits.
Delays Settlement -- Again
The DOJ's opinion is likely to be seen a major blow against Google, which has been in court over this matter for about four years and is eager to get the case settled.
"We are considering the points raised by the Department and look forward to addressing them as the court proceedings continue," Google and the plaintiffs -- the Authors Guild and the Association of American Publishers (AAP) -- said via e-mail in a brief joint statement reacting to the DOJ's filing.
The DOJ had until Friday to submit a written report to the court on the findings of a formal investigation over whether the proposed agreement violated U.S. laws.
In fact, the DOJ's Antitrust Division continues investigating the settlement, the DOJ said in Friday's filing, which nonetheless contains "a preliminary explanation" of the agency's antitrust concerns.
Despite its criticisms, the DOJ said it recognizes that a settlement of the case would benefit the public by making millions of hard-to-find books easily accessible in digital form, something Google and the plaintiffs highlighted in their statement.
The DOJ said in the filing that it is "committed to working with the parties constructively with respect to alterations the parties may propose."
"Because a properly structured settlement agreement in this case offers the potential for important societal benefits, the United States does not want the opportunity or momentum to be lost," the filing reads.
Rumors that the DOJ had started reviewing the proposed agreement surfaced in April. The DOJ confirmed that it was conducting a formal investigation in July.
Those following the case have been widely anticipating the result of the DOJ's probe of the proposed agreement, which has been loudly praised and criticized since it was announced in October of last year.
Authors Cry Foul
In 2005, book authors and the Authors Guild filed a class action lawsuit, while five large publishers filed a separate lawsuit as representatives of the Association of American Publishers' membership.
The lawsuits were brought after Google launched a program to scan and index sometimes entire collections from the libraries of major universities without always getting permission from the copyright owners of the books.
Google made the text of the books searchable on its book search engine, claiming it's protected by the fair use principle because it only showed snippets of text for in-copyright books it had scanned without permission.
However, after two years of negotiations, Google and the plaintiffs reached middle ground, hammering out a wide-ranging settlement agreement that calls for Google to pay US$125 million and in exchange gives the search company rights to display meatier chunks of these in-copyright books, not just snippets.
In addition, Google would make it possible for people to buy online access to these books. The agreement would also allow institutions to buy subscriptions to books and make them available to their constituents.
A royalty system would also be set up to compensate authors and publishers for access to their works via the creation of the Book Rights Registry. This would be an independent, nonprofit entity entrusted with distributing payments to copyright holders earned through online access to their works. Revenue will come from institutional subscriptions, book sales and ad-revenue sharing.
The Registry, whose board of directors would be made up of an equal number of author and publisher representatives, would also locate and register copyright owners, who in turn have the option to request to be included in or excluded from the project.
A big portion of Google's $125 million payment would go towards funding the Registry, while the rest would be used to settle existing claims by authors and publishers and to cover legal fees.