Sept. 10 (Bloomberg) -- Google Inc., the Web-search engine scanning millions of books to create a digital library, may have to modify a settlement with publishers and authors after more than 60 groups and individuals filed objections or demanded changes, lawyers said.

A federal judge is scheduled to decide Oct. 7 whether to approve a $125 million agreement to establish a “Book Rights Registry,” which would identify and compensate rights holders whose books have been scanned by Google.

The governments of Germany and France have joined authors in the U.S., Japan and Europe to oppose the settlement, saying it doesn’t give copyright owners enough choice about how their content is used.

“There are some good points the court cannot ignore” while some attacks are unfair, said Terence Ross, a copyright lawyer with Gibson, Dunn & Crutcher in Washington who’s following the case and doesn’t represent either side. “He may ask the parties to go back, without rewriting the agreement from scratch, and address certain objections. Innovation often poses problems for the law and established bureaucracy.”

The settlement has become part of a larger fight over the future of digital books. Sales of electronic titles more than doubled to $61 million in the first six months of 2009, according to the Association of American Publishers in New York. Total U.S. book sales rose just 1.8 percent over that period.

Objections Due

Objections to the agreement were due this week. The U.S. Justice Department, which is investigating whether the plan violates antitrust law, has until Sept. 18 to weigh in on the issue. U.S. District Judge Denny Chin in New York will then oversee the Oct. 7 review.

At a U.S. House Judiciary Committee hearing today in Washington, the nation’s top copyright officer said the settlement usurps the role of Congress in making copyright law.

“The so-called settlement would create mechanisms by which Google could continue to scan with impunity well into the future and, to our great surprise, create yet additional commercial products without prior consent of rights holders,” said Marybeth Peters, the register of copyrights at the Library of Congress.

David Drummond, Google’s chief legal officer, said company policy would let rivals, including Amazon.com Inc., obtain and resell out-of-print works made available by the settlement.

Sued in 2005

Google was sued in 2005 by authors and publishers who said the company was infringing their copyrights on a massive scale by digitizing books without their permission. The Mountain View, California-based company said a settlement struck last year will “bring back to life” millions of books sitting unread on library shelves or out of print.

Amazon.com is part of a group that argues the agreement would give Google unfair control over a vast database of books. Sony Corp., which makes a digital-book reader that competes with Amazon.com’s Kindle, works with Google to offer digital books and supports the settlement.

“I doubt the judge is going to just say, ‘I disapprove it,’” said June Besek, executive director of the Kernochan Center for Law, Media and the Arts at Columbia Law School, part of Columbia University in New York. “There is enough good in it, he might indicate what changes are needed and how it could be done.”

Authors in the U.S. are split on the agreement. “Wonder Boys” writer Michael Chabon and “Pay It Forward” author Catherine Ryan Hyde object, while satirist Dave Barry, “Presumed Innocent” writer Scott Turow and the author Judy Blume are among those who support it.

Digital Copies

Under a key aspect of the agreement, Google would make digital copies of books that are no longer commercially available yet are still covered by copyright. The out-of-print books would be available for preview and purchase, unless the author told Google not to offer them.

Changes to the plan could include eliminating a provision that gives Google “most-favored nation status,” which means publishers pledge not to strike more favorable deals with Google rivals, and addressing how Google would use information on people’s reading habits, said Tom Selz, a copyright lawyer with Frankfurt, Kurnit, Klein & Selz in New York.

Google is “confident in our agreement,” said Jennie Johnson, a spokeswoman for the company. The company also said the agreement allows for court supervision.

Google rose $6.97, or 1.5 percent, to $470.94 in Nasdaq Stock Market trading. The shares have gained 53 percent this year through yesterday, compared with a 42 percent gain in the Standard & Poor’s 500 Information Technology Index.

Benefit to Blind

Google has sought to highlight the benefits of creating a digital library. Civil rights groups say individuals with disabilities, people who live in poor neighborhoods and community college students would have access to the top-notch libraries like those at Harvard, Princeton and Columbia universities. Blind people also would benefit because digital books can be read aloud or shown on Braille displays, according to the National Federation of the Blind.

“It would give blind people more access to more books than we have had in all of human history,” said Chris Danielsen, a spokesman for the federation. “Google is the only one making sure these books are accessible to blind people. If it is derailed, it would be a huge setback for blind Americans.”

A group of 32 economics and antitrust professors said the agreement fosters competition because it gives consumers more information about how to find and buy books.

Access, Simplicity

The American Library Association and other library groups say the agreement would give “unprecedented” access to digital books and simplify how digital rights are managed.

Still, the library groups expressed concern that Google would have too much control of digital books and are worried about protecting user privacy.

Germany and France both filed objections to the agreement, and the European Union held a Sept. 7 hearing in Brussels. Germany said the plan would interfere with a European initiative to create noncommercial digital libraries.

The biggest concern for the judge in the U.S. will be the Justice Department’s investigation, Selz said. What Google might have to change is still unclear, he said.

“They have to be prepared to modify, but what the modifications will be and what the judge will require is anybody’s guess,” Selz said.

The case is Authors Guild v. Google Inc., 05-cv-8136, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Susan Decker in Washington at decker1@bloomberg.net; David Glovin in New York federal court at glovin@bloomberg.net.

Last Updated: September 10, 2009 16:49 EDT