The Association of American Publishers and Google’s agreement last week to settle the publishers’ long-running litigation over Google’s library scanning program put an end to the lengthy and expensive suit, but without resolving any of the underlying copyright and fair use issues. The main component of the deal: copyright owners with books scanned by Google under its library program can choose to “opt out” of the program and have their books removed. Of course, that settlement condition is something Google has offered copyright owners with books in the program all along.

“We basically worked out an arrangement that doesn’t resolve the legal issues,” said AAP president Tom Allen. “We agree to disagree on those. But as a practical matter, it does resolve our differences with Google.” Jonathan Band, a Washington lawyer and library consultant who has written extensively about the litigation, had a slightly different take. “It sure looks like [publishers] have decided to throw in the towel,” he told PW.

The announcement of the settlement is not big news—it has been expected since September 2011, when the parties told presiding Judge Chin that such a deal was imminent. As a private settlement, the final details remain confidential, thus it is not known whether there was any payment involved. But on its public face, the publishers’ abandoning the court battle without getting any significant concession from Google represents a significant development.

“The publishers have embraced the digital transition in books,” explained New York Law School’s James Grimmelmann, on his blog. “In the last few years, Google and the publishers have made their peace. This is just the treaty-signing ceremony. Google is now a player and partner in that ecosystem, rather than a dangerous, disruptive presence.”

The evolution from “disruptive presence” to “partner” comes after seven contentious years of litigation. In its original suit, filed in October 2005, publishers sought a declaration that Google’s book scanning was copyright infringement and wanted an injunction to bar the activity. Google, on the other hand, countered that its scanning was fair use. Each side’s position on the core copyright issues proved to be so intractable that in 2008 they (along with the Authors Guild) crafted a complex, controversial settlement that avoided the copyright issue entirely, but that deal was rejected in March 2011.

During the settlement process, it became clear that publishers never really disagreed about the potential benefit of Google’s index. Their problem was always one of control. Google could not be perceived to have the right to copy books for an index without permission, they argued; the opt-out provision offered by Google turned “copyright on its head” and put an undue burden on copyright owners. Further, even though Google was not displaying books, it was creating a valuable asset—an online index—publishers said, using copyrighted material for which it did not pay. Publishers wanted their cut. But in the end, publishers swallowed the opt-out and, as Allen said, agreed to disagree. What happened?

“Basically, the case was filed seven years ago, and the world has changed a lot,” Allen told PW. Indeed, much has changed since the lawsuit was first filed in 2005. The chaos publishers predicted did not come to pass, and e-book sales are now a significant percentage of publisher revenue. “[Publishers] invested a ton of time and money fighting something that they realize now really isn’t a problem,” said Band. “And it didn’t preclude the development of a robust e-book market.” In addition, at the time the suit was filed, there was a Google partner program, but no real Google “bookstore.” Now, millions of long out-of-print books scanned by Google can theoretically be included in Google Play, turning what once was perceived as a potential threat into a potential moneymaker.

“To take a book that has been long out-of-print and have a publisher provide for display or sale will mean there are going to be many more books on the current e-book market than were there before,” said Google’s Tom Turvey, “and [books] that probably would have no other way of getting there.” In something of a win for Google, the settlement also paves the way for orphan works to remain searchable—if not accessible—in Google’s database. After all, if a work is truly orphaned, by definition it has no copyright owner to “opt out” of the database.

The path from Google’s database to Google’s bookstore, however, will likely not be quite so simple for publishers. Under the settlement, Google has agreed to provide to participating publishers, upon request, digital copies of their scanned books, which, Turvey said, publishers will have “broad” rights to exploit. Publishers, however, will still have to sort out their own rights situations for those books before placing them for sale, and it is certain that many of these long out-of-print books lack digital rights provisions in their contracts—just one part of a larger backlist rights issue facing publishers and authors in the digital transition.

Despite the settlement, the legal battle over Google’s scanning is far from over as the Authors Guild litigation continues. “Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights,” AG executive director Paul Aiken told PW, “and our class-action lawsuit on behalf of U.S. authors continues.” Also, Judge Harold Baer in New York’s Southern District is preparing to rule on summary judgment motions in a case filed by the Authors Guild against the HathiTrust, a library-based digital preservation program built largely with Google scans.

The question, now, is whether the publishers’ settlement might affect the Authors Guild litigation. “I think it will have an indirect impact,” noted Band. “Judges Chin and Baer will be aware that parties with a significant commercial interest have decided that scan and snippet display does not harm their market, and this could undermine the AG’s claim of market harm.”