Google Inc and authors and publishers groups have about nine more months to untangle their six-year-old legal dispute over plans to create the world's largest digital library, a federal judge said on Thursday.

Manhattan federal court Judge Denny Chin told lawyers at a hearing that he was still hopeful they could reach a settlement even though you're essentially starting from scratch.

Chin said Google, the Authors Guild and Association of American Publishers Inc could request assistance from the court or a magistrate judge if they needed it. But a Google lawyer said much of the discussions between authors and the company were taking place between the principals, not the lawyers.

This is a case not particularly amenable to the services of the court, the lawyer, Daralyn Jeannine Durie, told Chin.

The Authors Guild lawyer, Michael Boni, presented a pretrial schedule to the court, saying the group very much wants to work out a settlement with the company.

Chin agreed to the schedule of discovery and legal briefs to be filed up to July 2012, unless a deal is struck before then.

Google has scanned roughly 15 million books from some of the country's finest libraries in what it has said is an effort to provide easier access to the world's knowledge.

In a statement on Thursday, the publishers group said the five publisher plaintiffs and Google have made good progress toward an agreement.

The talks are aimed at amending a settlement to a 2005 lawsuit by the Authors Guild and the Association of American Publishers.

Under the original settlement, authors and publishers were to register works and be paid when those works and other publications were sold online. The settlement covered books that were out of print but still under copyright.

Also, Mountain View, California-based Google was to pay $125 million to people whose copyrighted books had been scanned and to locate and share revenue with authors who had not come forward.

ANTITRUST CONCERNS

Chin rejected the settlement last March, citing antitrust and copyright concerns. He has urged that it be amended to include only books whose copyright owners agree to the arrangement, rather than require authors to opt out.

There have been signs that negotiations to amend the deal to satisfy Chin are not going well.

Most publicly, the Authors Guild sued the University of Michigan, the University of California, the University of Wisconsin, Indiana University and Cornell University.

The lawsuit alleges that Google gave the schools unauthorized scans of some 7 million books under copyright.

The Authors Guild said the University of Michigan will soon allow downloads of orphan books -- books whose authors cannot be found.

Paul Courant, the dean of libraries at the University of Michigan, said the school does have scanned books but is not allowing them to be used unless the rights holder agrees or, in the case of 26 orphan books, if the rights holder cannot be found.

Amazon.com Inc, Microsoft Corp, some academics and authors are among those who say the original settlement appeared to violate copyright and antitrust law. The U.S. Justice Department agreed.

Amazon sells the Kindle digital reader, which is not compatible with Google's library. Sony Corp, which makes a compatible e-reader, has favored the settlement.

Chin was elevated last year to the federal appeals court in New York but retained jurisdiction over the Google case.

The case is The Authors Guild et al v. Google Inc, U.S. District Court for the Southern District of New York, No. 05-08136.

(Reporting by Grant McCool in New York and Diane Bartz in Washington; editing by John Wallace)

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