Update: Google settles copyright lawsuits with publishers, authors for $125M

IDG News Service - Google Inc. has settled lawsuits brought against it by major authors and publishers that argued that Google's wholesale scanning and indexing of in-copyright books without permission amounted to massive copyright violations.

The Authors Guild, the Association of American Publishers (AAP) and Google announced the settlement today.

The lawsuits were brought after Google launched a program to scan and index books from the libraries of major universities without always getting permission from those who owned the books' copyrights.

Google then made the text of the books searchable on its book search engine; it argued that that application was protected by the fair use principle because it only showed snippets of text for the in-copyright books that had been scanned without permission.

The settlement comes after two years of negotiations and resolves a class-action lawsuit brought by book authors and the Authors Guild, as well as a separate lawsuit filed by five large publishers as representatives of the AAP's membership, according to Google and publishers groups.

The settlement must still be approved by the U.S. District Court for the Southern District of New York.

Paul Aiken, executive director of the Authors Guild, said during a press conference that the settlement could be considered "the biggest book deal in U.S. publishing industry."

Despite their deep disagreements over copyright law, the publishers, authors and Google recognized that finding a middle ground would allow them to accomplish things that would be out of their reach individually, Aiken said.

"For the sake of this agreement, we were all able to set our differences aside," he said, adding that all parties involved, including readers, will benefit from the settlement because books will be easier to discover and acquire.

The wide-ranging agreement calls for Google to pay $125 million and gives the search company rights to display chunks of the in-copyright books, not just snippets. This will result in broader exposure for out-of-print books that are hard to find.

In addition, Google will make it possible for people to buy online access to these books. The agreement will also allow institutions to buy subscriptions to books and make them available to their constituents.

A royalty system will also be set up to compensate authors and publishers for access to their works via the creation of an independent, nonprofit entity called the Book Rights Registry. Revenue will come from institutional subscriptions, book sales and ad-revenue sharing.

This organization will also be tasked with locating and registering copyright owners, who will be able to ask to be included in or excluded from the project.

A big portion of Google's $125 million payment will go toward funding the Book Rights Registry, while the rest will be used to settle claims by authors and publishers and to cover legal fees.