Here is the deal, as outlined by my research and an intensive coaching by mindyklasky, who is one author who knows whereof she speaks when it comes to copyright:
About 2003 or so, Google announced it was going to digitize the content of thousands of books. Why not? Amazon was starting their "search inside the book" thing, and after all, Google is primarily known for their search engine. The idea was, folks would be able to search books with other content and see snippets of the text surrounding their search terms.
Then somehow folks would be able to read the whole book. But not to worry, because they would only make out of copyright books avaialavble. Oh, but wait! What about these orphan books that aren't out of copyright but are our of print? It seems a shame for no one to ever read them. Google decided to include them, too.
Oh, and by the way, Google decided that so long as all this content was available in digital format, why not sell it as ebooks?
At some point in all of this, the Authors Guild (which actually represents mostly nonfiction writers) and some publishers sued Google in a class action lawsuit alleging violation of copyright. Ya think? And somehow when Google and these folks got together, what they came up with was that Google would agree to pay authors $60 per work and the authors would quit whining about copyright violations.
But what about authors who didn't want to sign away their rights for $60? That's when it got truly weird. Because in order not to be covered by the settlement, authors had to opt into it, and then notify Google that they did not want their works included, listing each one separately and specifically— every edition, every translation, every reprinting of a story in an anthology.
The only good thing I can say about the settlement is it proved someone was a fan of Douglas Adams, because it's right out of Hitchhiker's Guide to the Galaxy, where the Vogons destroy the earth after first warning us about it by posting the notice in another galaxy. I guess the other thing it proves is you can get away with piracy if you get a big enough ship and fill it full of lawyers.
Now foreign publishers and even nations are weighing in. It looks like foreign publishers might get a better, more logical deal where they are automatically opted out unless they specifically opt in. What a great idea!
An interesting side note is that Google's plan to sell ebooks doesn't include eReaders. They don't plan to let ebook buyers download books, only to read them from the web via a browser. They might not get their $60 back with that marketing plan!
But the other interesting thing is the settlement isn't final yet. As a matter of fact, the parties involved have asked for more time and it looks like we could get a decision on Friday the 13th!