On October 16, 2015, the Second Circuit Court of Appeals confirmed that Google can digitally scan millions of books and make snippets of them available for searching. The Google Books service is a fair use under U.S. copyright law.
“Google’s making of a digital copy to provide a search function is a transformative use, which augments public knowledge by making available information about the plaintiffs’ books without providing the public with a substantial substitute for matter protected by the plaintiffs’ copyright interests in the original works or derivatives of them. The same is true, at least under present conditions, of Google’s provision of the snippet function.”
The case has been ongoing since 2005 when the Authors Guild took Google to court in 2005.
The opinion may be accessed here.