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The Google Books case will drag on for at least a few more months, as a judge in New York has set a November deadline for the submission of a new settlement.

Google's original settlement with groups representing publishers and authors over the right to digitize certain kinds of books was met with howls of objection from authors, privacy advocates, and perhaps most importantly, the U.S. Department of Justice. A hearing on whether to approve that settlement was originally scheduled for Wednesday, but last month the publisher and author groups asked for more time to work out a new deal that satisfies the Justice Department's concerns.

The parties were directed by Judge Denny Chin to submit a reworked settlement by November 9, according to the Associated Press. An approval hearing would be held at some point after that, and the judge will only hear objections to any of the new provisions at that hearing.

The original settlement was signed last October, but final approval of that settlement has now been delayed twice as the publishing and technology communities grapple with the complicated and far-reaching effects of the deal. Under the settlement as previously written, Google would have been the only organization in the world with explicit permission to digitize out-of-print but copyright-protected books. In addition, an independent Books Rights Registry set up as part of the deal would have been the sole clearinghouse for revenue shared with book rights holders and would have had the power to set prices for institutional subscriptions to the library of scanned books.

The judge overseeing Google Books settlement has agreed to the plaintiffs' request for a delay of the final hearing scheduled to approve the controversial settlement, which is being reworked by the parties.

Judge Denny Chin of the U.S. District Court for the Southern District of New York had been scheduled to oversee a October 7 hearing about whether to approve a 2008 settlement between Google and several groups representing authors and publishers. However, the settlement, which gives Google sweeping rights to digitize out-of-print but copyright protected books, has drawn staunch opposition from many corners of the literary world as well as the U.S. Department of Justice.

As a result, the settlement is in the process of being reworked, and Judge Chin agreed to give the parties more time to rework the settlement following a request from the plaintiffs filed earlier this week. "Under all the circumstances, it makes no sense to conduct a hearing on the fairness and reasonableness of the current settlement agreement, as it does not appear that the current settlement will be the operative one," Chin wrote in a letter sent to both parties.

Instead, the parties will hold a status conference on the 7th to figure out what to do next. Chin noted that this case has been in the works for over four years, when groups representing authors and publishers sued Google in 2005 for digitizing books without explicit permission.

Updated 2:18 p.m. PDT with comment from Google.

The parties involved in the Google Book Search settlement have asked a federal court to postpone an October hearing to approve the proposed settlement while they work out a new deal.

When the Department of Justice made it clear last Friday that it could not support the settlement as written--which would give Google unique rights to scan out-of-print books still protected by copyright law--it said the parties were in talks to amend the settlement. In a joint brief (click for PDF), lawyers the Authors Guild, the Association of American Publishers, and others asked Judge Denny Chin to delay a hearing on whether to approve the settlement while the parties work out the new terms of the settlement with the DOJ.

"Because the parties, after consultation with the DOJ, have determined that the Settlement Agreement that was approved preliminarily in November 2008 will be amended, plaintiffs respectfully submit that the Fairness Hearing should not be held, as scheduled, on October 7," the plaintiffs in the case said in a briefing. They said Google had given them permission to indicate that the company was not opposed to the motion.

The Open Book Alliance, a group of companies and organizations opposed to the settlement, declared victory.

"This is a huge victory for the many people and organizations who raised significant concerns that this settlement did not serve the public interest, stifled innovation, and restricted competition. It's also an enormous loss for Google, which had been saying for months that no changes were necessary to the settlement. Now, that settlement, as we know it, is dead," the alliance said in a blog post Friday.

In a statement, Google has this to say: "The plaintiffs moved for an adjournment of the final Fairness Hearing, currently scheduled for October 7. We are considering the points raised by the Department of Justice and others, and we look forward to addressing them as the court proceedings continue."

The parties had originally settled in October 2008, ending a dispute over Google's legal right to scan copyright protected out-of-print books. But the settlement gave Google the sole legal right to scan those books, raising anticompetitive fears and provoking strong opposition from authors, academics, privacy advocates, and some libraries.

Judge Chin had been scheduled to decide whether or not the settlement should go forward in a hearing at the U.S. District Court for the Southern District of New York. The parties asked for a November 9 status conference to discuss the modifications they plan to make to the settlement.

It's not clear whether Judge Chin will automatically approve the request. He could still hold the hearing as scheduled and make his own decision about whether or not to approve the settlement, although that seems highly unlikely given the recent developments, especially the involvement of the DOJ.

It's likewise not clear what types of modifications to the deal are being discussed. The DOJ's main objection to the deal was that "the Proposed Settlement seeks to implement a forward-looking business arrangement rather than a settlement of past conduct," which is not what class-action suits are designed to do, it said in a filing with the court last Friday. It is also concerned about potential violations of antitrust law, concerns that Google has grown accustomed to hearing with mounting government scrutiny this year.

The U.S. Department of Justice late Friday urged the court overseeing Google's book search settlement with authors and publishers to reject the settlement in its current form, although it strongly hinted that the parties are flexible on certain provisions.

"As presently drafted, the Proposed Settlement does not meet the legal standards this Court must apply," the DOJ said in a 32-page filing (click for PDF) with the U.S. District Court for the Southern District of New York. "This Court should reject the Proposed Settlement in its current form and encourage the parties to continue negotiations to modify it so as to comply with Rule 23 (a federal law governing class-action settlements) and the copyright and antitrust laws."

After Google was sued in 2005 for digitizing out-of-print yet copyright protected books by several groups representing authors and publishers, the parties settled out of court in October 2008. That deal granted Google sweeping rights to scan and display out-of-print books. Ever since the settlement was announced, opposition has mounted to what one University of California at Berkeley professor recently called "the largest copyright licensing deal in U.S. history." Opponents claim that Google and the plaintiffs overstepped their bounds in assigning the company the sole right to make digital copies of out-of-print books that are still protected by copyright law.

"The Proposed Settlement is one of the most far-reaching class action settlements of which the United States is aware; it should not be a surprise that the parties did not anticipate all of the difficult legal issues such an ambitious undertaking might raise," the DOJ wrote in its filing.

The DOJ has been looking into antitrust concerns stemming from the fact that Google and the nonprofit Books Rights Registry set up to handle payments to authors would have sole control over the pricing of institutional subscriptions to the digital library. But in its filing, it also raised questions about whether the settlement complies with Rule 23 of the Federal Rule of Civil Procedure as well as copyright law in general. "In the view of the United States, each category of objection is serious in isolation, and, taken together, raise cause for concern."

Still, the DOJ noted that a digital library of books holds important benefits for society, a point that has been repeatedly raised by Google's supporters, who argue that it would improve access to knowledge. It would appear that the DOJ, however, would prefer Congress settle the thorny issues of copyright laws that apply to orphan works--books whose rightholders cannot be located but which can be scanned by Google under the agreement--rather than making policy through legal settlements.

"As a threshold matter, the central difficulty that the Proposed Settlement seeks to overcome - the inaccessibility of many works due to the lack of clarity about copyright ownership and copyright status - is a matter of public, not merely private, concern. A global disposition of the rights to millions of copyrighted works is typically the kind of policy change implemented through legislation, not through a private judicial settlement," the DOJ wrote.

Reaction to the DOJ's filing allowed parties from all sides of this issue to claim victory.

"The Department of Justice's filing recognizes the value the settlement can provide by unlocking access to millions of books in the U.S. We are considering the points raised by the Department and look forward to addressing them as the court proceedings continue," Google said Friday in a statement.

The Internet Archive, perhaps Google's most vocal opponent in this matter, was likewise pleased. "Despite Google's vigorous efforts to convince them otherwise, the Department of Justice recognizes that there are significant problems with terms of the proposed settlement, which is consistent with the concerns voiced with the Court by hundreds and hundreds of other parties," the Open Book Alliance said in a statement.

"This is a major agreement, and it is entirely appropriate for DOJ to look at a deal of this magnitude," said Ed Black, president and CEO of the Computer & Communications Industry Association, which has supported the settlement. "They are doing their job scrutinizing the competition aspects of this settlement."

And Consumer Watchdog, a strident opponent of the settlement, also found something to like in the DOJ's filing:

Consumer Watchdog supports digitization and digital libraries in a robust competitive market open to all organizations, both for-profit and non-profit, that offer fundamental privacy guarantees to users. But a single entity cannot be allowed to build a digital library based on a monopolistic advantage when its answer to serious questions from responsible critics boils down to: "Trust us. Our motto is 'Don't be evil.'"

Google will learn whether it has earned that trust from Judge Denny Chin on October 7 in New York. That is, unless the settlement is modified in the coming weeks, in which case we could be looking at several more weeks of debate.