Jenna Newman is a graduate of the Master of Publishing program at Simon Fraser University.

The long-awaited ruling on the proposed Google Books settlement is out: the court has rejected the settlement. So many serious concerns were voiced by potential class members as well as scholars, librarians, the US Department of Justice, other nations—on questions of copyright, international law, class action validity, antitrust, privacy, and access—that it would have been surprising for the settlement to be approved as presented. In his opinion, Judge Denny Chin acknowledges many of the “troubling” issues in the settlement (James Grimmelmann and Kenneth Crews offer detailed reviews of the opinion), though Chin doesn’t rule specifically on each one.

Instead, Chin zeroes in on the scope of the class action. In addition to addressing Google’s past acts of scanning, indexing, and snippet display (and alleged copyright infringement), the settlement proposed a broad licence for Google to use and sell full texts and a system to share the revenues earned from these uses. Since the settlement was an opt-out agreement, rights-holder silence would have been deemed as consent, and Google could have acquired default permissions for millions of works for the duration of their copyright terms.

Google’s potential exclusive access to orphan works loomed large in many objections to the settlement. Chin acknowledges this concern and states clearly that “the establishment of a mechanism for exploiting unclaimed books is a matter more suited for Congress than this Court” (p. 22). This aligns with my own conclusions on the settlement: a private contract is not the place to set new copyright law.

Judge Chin has set a status conference for April 25, 2011. The case could proceed to trial, the parties could appeal, or they could choose to revise and resubmit the settlement, presumably to the specifications Chin has outlined. Both the Authors Guild and the Association of American Publishers seem to favour this approach: they may be eager to come to some resolution, and may not be well-positioned to withstand what would be a long, costly, and uncertain litigation.

Google hasn’t been as specific about its intentions, but in its reponse we may get to see what is truly at issue for Google. Google has claimed that the settlement isn’t about the orphan works; that in fact there are relatively few works whose rightsholders would remain unknown and unlocated, especially with the promise of financial reward once they step forward and collect their accrued payments. Google has also said before that it has no interest in switching to an opt-in settlement, which is the exact change Chin recommends.

But Google already maintains a popular opt-in agreement for scanning books: the Partner Program. Since 2005, this program has offered a way for the public to find books and, often, to browse portions of them. With the recent US launch of Google eBooks (also known as Google Editions, and soon to be launched in Canada and elsewhere), publishers and authors can also choose to sell e-books through Google Books. If anyone interested in participating can easily do so by entering into a Partner agreement with Google directly, what use could the settlement—and its attendant bureaucracy, the Book Rights Registry—possibly have had?

The chief benefit of the settlement was that it would have allowed Google to absorb nearly all already-published books in one fell swoop, much more quickly and efficiently than Google could by waiting for rightsholders to step forward (especially considering that for many older works, the financial incentives may have been too small to outweigh the administrative effort of bothering to make a claim). As an opt-out agreement, the settlement also neatly encompassed all the rights-uncertain works, many of which are unobtainable in any market since there is no one exploiting the rights to them, or available to assign licences for others to do so. If Google wants to legally include in its search engine the books of the past as well as those still to come, an opt-out settlement is the most efficient way to do it. But Chin has, it seems, taken precisely this feature of the settlement off the bargaining table. The orphan works problem is now clearly returned to a legislative arena.

Without an opt-out settlement, Google may instead push hard for orphan works legislation; if such legislation were passed, recall that no one has as many scans as Google, and it continues to scan library books even now. A new, opt-in settlement would exclude the orphan works (and many others) and thus may hold scant appeal and make little business sense, to Google. On the other hand, Google may extract value from scanning books without displaying book pages; it might rely on its fair-use position and see no need to settle at all. It’s still unclear what Google thinks book scans are worth as raw data, what older titles are worth in today’s markets, or what capturing users’ book-reading preferences and activity is worth in advertising potential.

In my paper published recently in Scholarly and Research Communication, I outline a publisher’s strategic response to Google’s various proposals for digitizing books and analyze the legal and cultural implications the settlement posed for copyright and for publishing. Although this settlement has been rejected, and its specific binding deadlines and terms will not be implemented as proposed, some of its approaches may persist should a revised settlement emerge.

It may be that the parties effectively start over—which might mean lobbying legislators, abandoning the suit, or going to trial. But the Google Books case to date has highlighted many of the increasingly pressing questions for publishers struggling to find new business models as the demands of distribution shift; for authors trying to earn income and find audiences in a DIY media environment glutted with free content; for libraries upholding long-standing commitments to freedom of information and public access; and for rights-holders, users, and legislators considering how copyright can function meaningfully online. Answering some of those questions is work that has to be done, with or without Google.