The Association of American Publishers and Google Inc. announced their settlement on Thursday to end a lawsuit filed by five publishers in October 2005.
Google already has scanned more than 20 million books. Publishers and authors sued, saying the project violated their copyrights. Authors' and publishers' groups had settled with Google before, but a federal judge tossed the deal following objections. One point of contention was the fact that books were included unless Google was informed that an author or publisher objected.
Google and the publishers say the new settlement won't require court approval because it involves only parties to the litigation. Publishers will get to choose which books are included.
"We are pleased that this settlement addresses the issues that led to the litigation," said Tom Allen, president and CEO of the publishers group. "It shows that digital services can provide innovative means to discover content while still respecting the rights of copyright-holders."
Michael J. Boni, a lawyer for The Authors Guild, said he was "cautiously optimistic" about the prospects to make progress in the rest of the case now that the publishers have settled.
"We're delighted that Google and the publishers forged an agreement," Boni said. "We see that as a sign of Google's willingness (to be open) to the concept of settlement. And we hope we can get to the bargaining table as soon as we can.
Boni said authors and publishers have been working separately with Google after the court rejected the first settlement.
U.S. District Judge Denny Chin in Manhattan in March 2011 rejected a $125 million settlement between Google and authors and publishers after hundreds of objections to the deal were made by Google rivals, consumer watchdogs, academic experts, literary agents and even foreign governments.
The judge criticized the access Google would have to so-called orphan works - out-of-print books whose writers could not be located - saying the deal gave the company "a de facto monopoly over unclaimed works."
The Department of Justice had highlighted the issue in 2009 when it concluded that the agreement probably violated antitrust law and could decrease competition among U.S. publishers and drive up prices for consumers.
The court case was brought after Google in 2004 announced it had agreed with several major research libraries to digitally copy books and other writings in their collections. The authors and publishers sought financial damages and a court order to block the copying when they sued Google in 2005 after Google failed to obtain copyright permission to scan the books.
A deal was first reached to settle the claims in 2008 and was tentatively approved by the judge in November 2009.
AP writer Larry Neumeister in New York contributed to this story.