He rejected a $125 million settlement that was opposed by Google rivals, consumer watchdogs, academic experts, literary agents and even foreign governments.
Google has already scanned more than 15 million books for the project.
Mr Chin said the settlement that the company reached with US authors and publishers would "grant Google significant rights to exploit entire books, without permission of the copyright owners".
The deal gives Google "a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case," Mr Chin said.
He noted that many of the concerns raised in objections to the settlement would go away if it were converted to an "opt-in" settlement from an "opt-out" settlement.
Hilary Ware, Google's managing counsel, called the decision disappointing and said the company was considering its options.
"Like many others, we believe this agreement has the potential to open up access to millions of books that are currently hard to find in the US today," Ms Ware said.
"Regardless of the outcome, we'll continue to work to make more of the world's books discoverable online through Google Books and Google eBooks."
The judge acknowledged that there were many benefits to Google's project, including that libraries, schools, researchers and disadvantaged populations will gain access to far more books.
He also agreed that authors and publishers would find new audiences and new sources of income and that older books - particularly those out of print - will be preserved and given new life.
The case developed after Google in 2004 announced it had agreed with several major research libraries to digitally copy books and other writings in their collections.
The authors and publishers sought financial damages and a court order to block the copying when they sued Google in 2005 after Google failed to obtain copyright permission to scan the books.
A deal was first reached to settle the claims in 2008 and was tentatively approved by Mr Chin in November 2009.
heraldsun.com.au 23 Mar 2011
Google has committed a breach of copyright, that being acted illegally.
The copying of software or downloading music (piracy) is considered to be illegal.
A Swedish company thepiratebay has been in the European courts for alleged piracy or theft of material. This campaign was headed by RIAA (Recording Industry Association of America).
The thepiratebay does NOT hold / possess ANY copyright material.
According to the above article Google committed a breach of copyright 15 million times.
The operators of thepiratebay are appealing jail sentences regarding the allegation brought before them.
The major difference being that thepiratebay has allegedly committed the offenses against the multinational giants, whereas Google committed the offenses against the people.
There will be NO jail time for Google.
One law for 'us' and another law for 'them'.