"The breadth of the proposed settlement -- especially the forward-looking business arrangements it seeks to create -- raises significant legal concerns," the DOJ said Friday in a letter to U.S. District Court Judge Denny Chin in New York. Chin is slated to preside over an Oct. 7 hearing about the deal.

While the government expressed doubts about portions of the deal, the DOJ also said that the resolution offered potential benefits and suggested that it should be revamped, rather than scrapped altogether. "The United States is committed to working with the parties constructively with respect to alterations the parties may propose," the DOJ wrote. "A properly structured settlement agreement in this case offers the potential for important societal benefits."

Google said in a statement that it is considering the points raised by the government and will address them as the case continues to play out in court.

The ambitious agreement, announced last year, would resolve a copyright infringement lawsuit filed in 2005 by the Authors Guild and the Association of American Publishers. The resolution calls for Google to fund a new book rights registry, similar to the music industry's ASCAP and BMI, and will allow Google to sell downloads of books at prices that it sets with the registry.

One portion of the settlement that has drawn significant opposition concerns orphan works -- books under copyright, but whose owners can't be found. The deal would allow Google to digitize orphan works without fear of copyright infringement lawsuits. Currently, anyone who publishes such books risks copyright liability -- which can run as high as $150,000 per infringement.

While the agreement would result in the increased availability of many out-of-print books, it also significantly changes the copyright landscape. In addition, it appears to give Google an advantage over other potential publishers, who would still face liability for printing orphan works.

The DOJ pointed out that such far-reaching changes are typically accomplished through legislation, not private lawsuits. "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," the government wrote.

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