Despite initially calling the Google Books settlement a "positive development," the US Copyright Office Thursday scrapped some key constituents of the deal, saying that the agreement was not only unfair to out-of-print authors, but also "fundamentally at odds with the law."

The Register of Copyrights, Marybeth Peters, said that after a review of the proposed settlement, the "collective mind" of the Copyrights' Office opined that Google was actually trying out to rework the US copyright law through the courts.

Raising concerns about the deal, Peters said that it "would create mechanisms by which Google could continue to scan with impunity, well into the future, create yet additional commercial products without the prior consent of rights holders. Allowing Google to continue to scan millions of books into the future, on a rolling schedule with no deadline, is tantamount to creating a private compulsory license through the judiciary."

With the Google Books settlement already met with widespread opposition, including that from Amazon and Microsoft among others, the Copyright Office's decision may further make things difficult for Google.

Even though the Copyright office cannot directly block the deal, it is in talks with the Department of Justice for representing its concerns to US District Court Judge Denny Chin, who has to give the final verdict, and has given the Department a September 18 deadline for filing a brief.