• by Wendy Davis  @wendyndavis, November 15, 2009

Google has curbed its plan to digitize and sell books through a new registry, but critics say the proposal remains problematic.

The revised plan, filed late Friday, would only allow Google to digitize books registered in the U.S. or published in Canada, the U.K. or Australia -- a limit that responds to concerns raised by some European governments. The changes also affect "orphan works," or books whose copyright owners can't be found, but some critics say the new terms don't solve the antitrust problems posed by the deal.

Google submitted the amended settlement to U.S. District Court Judge Denny Chin in New York, who is presiding over a lawsuit filed by the Authors Guild and the Association of American Publishers. The groups sued Google in 2005 for allegedly infringing copyright by digitizing books. The $125 million settlement agreement 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.

The original deal would have allowed Google to digitize and sell orphan works at prices set with the new book registry. Currently, no one can publish orphan works without risking liability -- which can run as high as $150,000 per infringement. Rival Web companies, advocacy groups and the U.S. Department of Justice said the orphan works provisions posed antitrust problems because Google's rivals would still face potential liability for publishing such books.

The new proposal calls for a trustee to make decisions about orphan works and also allows the trustee to license the right to publish orphan works to other companies. But critics say that the clause permitting licenses to competitors comes with too much fine print to be effective.

New York Law School professor James Grimmelmann points out that the trustee would only be able to license copyrights to other companies "to the extent permitted by law." He says that such a limit would amount to a bar on other companies' ability to publish. "Settlement 2.0 confirms that Google will have the only game in town for the unclaimed works," Grimmelmann wrote in a blog post about the amended deal.

The Open Book Alliance, a coalition including Amazon, Microsoft and Yahoo, also criticized the revised deal. "Our initial review of the new proposal tells us that Google and its partners are performing a sleight of hand; fundamentally, this settlement remains a set-piece designed to serve the private commercial interests of Google and its partners," co-chair Peter Brantley said in a blog post. "None of the proposed changes appear to address the fundamental flaws illuminated by the Department of Justice and other critics that impact public interest."