A US judge has dealt a major blow to Google's digital book-scanning project, rejecting a settlement with authors and publishers that would have allowed the internet giant to create a vast online library.
"While the digitisation of books and the creation of a universal digital library would benefit many, the (proposed settlement) would simply go too far," US District Court Judge Denny Chin said in his ruling.
In his 48-page ruling, which came 13 months after Google and opponents of the deal had their day in court, Chin said the proposed settlement was not "fair, adequate and reasonable".
Explaining his decision, he said the settlement would grant Google "significant rights to exploit entire books, without permission of the copyright owners".
The settlement would give Google "a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission", he said.
The settlement agreement resulted from a class action lawsuit filed in 2005 by the Authors Guild and the Association of American Publishers (AAP) charging Google with copyright infringement.
The settlement called for Google to pay $US125 million ($A124.76 million) to resolve outstanding claims and to establish an independent "Book Rights Registry", which would provide sales and advertising revenue to authors and publishers.
Google managing counsel Hilary Ware expressed disappointment with the judge's ruling.
"This is clearly disappointing, but we'll review the court's decision and consider our options," Ware said in a statement.
"Like many others, we believe this agreement has the potential to open-up access to millions of books that are currently hard to find in the US today," she said. "Regardless of the outcome, we'll continue to work to make more of the world's books discoverable online through Google Books and Google eBooks."
Supporters of the settlement have argued that Google's proposed digital library and electronic bookstore would make millions of out-of-print books available and provide a new avenue for authors to profit from their works.
Opponents urged the judge to reject the deal on antitrust, copyright and privacy grounds and said it would give Google exclusive rights to digitise "orphan works" - out-of-print books whose authors cannot be traced.
The Justice Department criticised the settlement between Google and the Authors Guild and the AAP for including books unless an author expressly opts out of the deal.
Judge Chin also expressed concern about the opt-out aspect of the settlement.
"Many of the concerns raised in the objections would be ameliorated if the (proposed settlement) were converted from an 'opt-out' settlement to an 'opt-in' settlement," he said in his ruling.
