Update March 2011: Southern District of NY Judge Denny Chin rejected a class action settlement between plaintiff publishers and Google that would have permitted Google to publish orphan works on an opt out basis. The Department of Justice and potential competitors such as Microsoft and Amazon argued that the settlement would allow Google to monopolize the market for orphan works. The court also expressed concern that the settlement would allow Google to usurp copyrights to unclaimed works. Judge Chin suggested that the settlement be revised to require authors to opt in to the digital publishing scheme. Such a structure may not work, however, because orphan works by definition have unclear copyright histories, making the identification of a copyright holder difficult and expensive. Google may be unwilling to invest in the project if the number of works is drastically limited, and publishers may be less willing to support a deal that does not establish a single publishing entity that can maintain desirable price levels.
Update November 2009: Google has agreed to amend the settlement with the Author’s Guild to limit the publication of foreign works, i.e. those not published or registered with the U.S. copyright office or published in the UK, Canada or Australia before January 5, 2009. Google also agreed to withhold display of any book Google deems “not commercially available” until 60 days after the designation and to permit authors to block display if they believe that the book is commercially available. Finally, Google agreed to limit its print on demand functionally to books not commercially available.
Update July 2009: The DOJ has opened a formal investigation, announcing that its initial inquiries created enough antitrust concern to justify going forward. The judge overseeing the class action settlement has asked the Division to file any comments by mid-September. The EC also confirmed that it was also talking to interested parties.
The massive settlement between Google and copyright holders to enable Google to scan and post millions of books on the Internet has sparked a DOJ investigation. Although the DOJ has not identified its concerns, they are believed to stem from the provision that allows Google to publish orphan works, that is those covered by copyright but whose owners are unknown or cannot be located. Under the terms of the settlement, the authors of works in this category must opt out. If they do not, Google may publish the work without fear of liability. The concern is that smaller competitors would be unable to duplicate such a deal.