One thing lost in the conversation here is the original source of copyright law — the Constitution: “The Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”
Note that the goal here is to promote the “useful Arts”, i.e., the public good, and that authors’ rights derive from that goal, presumably by creating an incentive to write, said incentive including fame, fortune, and the right to vent about Google online.
Congress wrote the Copyright Act (http://www.copyright.gov/title17/92chap1.html) and specifically carved out the Fair Use limitation on exclusive rights in paragraph 107. The courts have looked at various issues when determining whether a copying event falls under fair use: the amount of material copied, the purpose for copying, the “transformative” nature of the use (which was mentioned in the court’s ruling in the Author’s Guild v. Hathitrust case), and the financial harm arising from copying.
Clearly, having the ability to search through a large collection of copyrighted material is useful to the public at large, not just academics; the fact that Google did it (in partnership with the libraries of several large research universities like Stanford and the University of Michigan) instead of the Library of Congress or a nonprofit consortium, and profits from it through increased traffic to its site, is irrelevant. It’s incredibly useful to both the public and the libraries who partnered with Google (who were sued — not just Google — because they later used the resulting digital scans for three purposes: preservation, a full-text search engine, and electronic access for disabled patrons who could not read the print versions.) And let’s not forget that while Google made digital copies of complete works (and not simply snippets), the full copies are not available for purchase or reading online — you can’t download one of these books, you can only get search results from them. The full copies are only available to libraries for legitimate purposes under the Copyright Act (see paragraph 108) — preservation and electronic access to the disabled.
Google made a huge, up-front investment in scanning millions of books and articles. They supplied the *full* database to their partner libraries. The search results that they publicly supply online are snippets of the same size that you’d see in reviews, summaries, biographies of writers, etc., all of which fall under fair use and for which other authors (and not the quoted works’ authors) are typically paid. The search results typically have a link to purchase the full work (if it’s available online), which is essentially free marketing for the author and publisher.
Honestly, it seems to me the courts did, in fact, get this one completely right. Google’s size and/or commercial gains are not and should not be a factor in the decision. Their intent — whether they acted at least partly for the greater good or wholly for commercial reasons — also shouldn’t be a factor. The question is whether they actually “took” something that wasn’t theirs to take (as defined by the fair use doctrine, and not the “exclusive right” assigned to the authors). They didn’t.