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Authors, Publishers Set To Part Ways In Google Books Settlement?

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Google (NSDQ: GOOG), authors and publishers have been locked in a stalemate since last March when a federal judge rejected their ambitious book scanning settlement. The parties met once again in court today and this time an end game may be in sight.

Since Judge Chin rejected the original settlement, there has been uncertainty over whether the original litigation — in which the authors and publishers filed copyright class actions against Google — will go forward.

At a half hour hearing in New York, lawyers for the parties told Judge Denny Chin that they had not reached a compromise over how to fix their original agreement and instead proposed a schedule for the matter to go to trial. Significantly, however, an attorney for the publishers told the court that Google and his clients were nearing an independent settlement and that “we’ve made enough progress so we won’t need a date.” After the hearing, a source with knowledge of Google confirmed this development.

Michael Boni, a lawyer for the Authors Guild, told the court that the group was still in negotiations with Google but appeared less optimistic that a deal would be reached soon.

“The publishers are closer to a settlement than the authors are,” Boni told paidContent after the hearing.

Today’s developments are consistent with recent news indicating that the common front between authors and publishers against Google has come apart. In the last two months, for instance, major publishing houses in France have signed partnership agreements with Google. Publishers were also not part of new a lawsuit filed this week by the Author’s Guild and international writers’ groups against university libraries over the schools’ plans to share a handful of so-called “orphan works.” That lawsuit also asks to seize university computers that contain millions of books scanned by Google.

A rift between authors and publishers over Google Books also makes sense from an economic point of view. Struggling publishing houses are likely to welcome the near-term cash infusion a deal with would bring Google as they try to grab a piece of the growing ebook market. Individual authors, on the other hand, stand to gain less — the initial settlement would have paid them $60 to $300 per book — so they may have more of an incentive to continue the court fight.

The original settlement was first announced in 2008, three years after authors and publishers sued Google over its decision to scan books in partnership with university libraries. The parties together reached a deal that would have made millions of out-of-print books available to the public. Under the scheme, Google would have taken a one third cut of the revenue and allowed publishers and authors to control the price of the books.

The settlement came unraveled after an Amazon-led coalition asked Judge Chin to reject it in favor of an “opt-in” scheme that would let individual authors sign up for the plan when and if they chose.

In March, Judge Chin decided the Google Books Settlement was a “bridge too far” and instructed the parties to amend it to overcome opponents’ objections. The parties have so far been unable to do so.