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Originally published Monday, July 1, 2013 at 6:18 PM

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Google wins ruling in digital books lawsuit

An appellate court decided that, before allowing the 8-year-old lawsuit to move forward as a class-action case, a trial judge should consider Google’s argument that showing excerpts from books online is a “fair use” allowed under copyright law.

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Google won an important round Monday in a long-running legal battle over the company’s plan to digitize the world’s books, as a federal appeals court dealt a setback to an authors organization fighting the project.

The ruling by itself is not the end of the case. But the appellate court in New York decided that, before allowing the 8-year-old lawsuit to move forward as a class-action case, a trial judge should consider Google’s argument that showing excerpts from books online is a “fair use” that’s allowed under copyright law.

It’s unusual to decide that kind of question at this stage in a lawsuit, said James Grimmelmann, a University of Maryland law professor who has followed the case closely. In a blog post analyzing the ruling, Grimmelmann wrote that “it strongly suggests that the judges in the appeal believe that Google has a compelling fair-use defense that will end the case without the rigmarole of a full class action.”

Google has already scanned and indexed more than 20 million books in partnership with leading university libraries. Supporters say the project will give new life to obscure and out-of-print books.

But the Authors Guild and other critics argue Google is violating copyrights and exploiting authors’ work without compensation.

A group representing publishers had raised similar objections. But the publishers negotiated a settlement last year in which Google said it would let people read portions of each digitized book online, or buy the entire book from the Google Play store, which would share the revenue with publishers.

The Authors Guild, meanwhile, won a victory last year when U.S. Judge Denny Chin of New York ruled the guild could pursue its case as a class-action lawsuit. That would let the case move forward more quickly than if authors had to bring individual claims.

Google, which argues that many writers will benefit from its project, objected to letting the guild speak for all authors in the case. The U.S. 2nd Circuit Court of Appeals sided with Google on Monday by setting aside the class-action certification and ordering Chin to consider the fair-use issue first.

The fair-use doctrine of U.S. law allows quoting portions of copyrighted work for purposes such as criticism, reporting, teaching or research. Decisions in other recent cases have supported the notion that quoting from copyrighted work in search-engine results is fair use, Grimmelmann said in an interview, adding that if Google prevails on the fair-use issue, the case could end there.

The Authors Guild didn’t immediately respond to a request for comment, while a Google spokesman said “we are delighted” with the appellate court’s ruling.

Book giants wrap up merger

Random House and Penguin completed their planned merger Monday, creating the biggest and most powerful book publisher in the world.

The new company, called Penguin Random House, will control more than 25 percent of the U.S. trade-book market, giving it unmatched leverage against Amazon.com, a growing force in the industry.

Bertelsmann, the owner of Random House, and Pearson, the owner of Penguin, announced the merger in October, saying that Bertelsmann would control 53 percent of the company and Penguin 47 percent. Since then, the merger has sailed through regulatory approvals in the United States and Europe, as well as China, Canada and other countries.

The new company would have more than 10,000 employees, 250 independent publishing imprints and about $3.9 billion in annual revenues.

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