Google Announces $125M BookSearch Settlement

MANHATTAN (CN) - Google will pay $125 million to settle a copyright dispute with the publishing industry that will pave the way for readers to preview and buy millions of books online, while directing a cut of profits toward authors and publishers.

The Authors Guild and the Association of American Publishers filed suit against Google in 2005 after finding out that the Internet giant had contracted with the University of Michigan and other major libraries to digitize their collections without copyright permission.

Google launched its large-scale scanning project, BookSearch, four years ago, which gave free access to segments of books using a full-text search under a claimed public "fair use" interest. After two years of negotiations with outraged authors and publishers, BookSearch will now provide entire works, but for a price.

Under the settlement, authors and publishers can control how a work is accessed, how many pages are available, and the "presentation and pricing" of the books, according to Ray Blount Jr., president of the 8,000-member Authors Guild.

A $34.5 million portion of the settlement will go to form the Book Rights Registry, an independent, nonprofit entity that will enable authors and publishers to register works and receive payment from subscriptions or book sales. Through the registry, copyright holders can also request that their work be excluded from the project. The registry's board of authors and publishers will work to locate rights-holders and process settlement claims. The registry will track profits from subscriptions, online sales and public library printouts, and then pay rights-holders, much like the music industry's ASCAP, Blount said, which charts song use and collects royalties for songwriters and musicians.

Another $45 million of the settlement will go to authors and publishers whose copyrighted works have already been scanned without permission. Blount estimates that payments will be about $60 dollars per book.

The settlement outlines a plan for Google's BookSearch to include more out-of-print books, charge for online access, provide subscriptions to institutions, such as colleges and universities, allow free full-text viewing from public libraries, and direct payments to authors and publishers for online access.

Five major publishers, McGraw-Hill Companies Inc., Pearson Plc's Pearson Education and Penguin Group (USA) units, CBS Corp's Simon & Schuster and John Wiley & Sons Inc., all members of the Association of American Publishers, were part of the settlement.

The settlement awaits federal court approval in Manhattan.

"It's hard work writing a book, and even harder work getting paid for it," Blount said in a press release. "This deal makes good sense."

Sergey Brin, co-founder and president of technology at Google, stated in a press release, "While this agreement is a real win-win for all of us, the real victors are all the readers."

Google is now digitizing books from the New York Public Library and the libraries at Stanford and Harvard, which will be entirely searchable on online display pages with advertisements. With BookSearch, a reader may preview up to 20 percent of a book before purchasing it.

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