The University of Michigan Library is one of the five libraries Google plans to digitize materials from. The Michigan Daily article: U backs Google in lawsuit, offers comments from a U of M official who says that the unversity is enthusiastic about the program. On Tuesday, The Authors Guild (and three authors) filed a class action lawsuit. The Authors Guild says that the Google Library scanning program is a, "brazen violation of copyright law."
From the Michigan Daily article:
Defending the legality of Google's actions, the University said it continued to be enthusiastic about the project. "We are confident that this project complies with copyright law," James Hilton, an associate provost and the University's interim librarian, said in a written statement. "This project represents an enormous leap forward in the public's ability to search and find knowledge," he said.
The article also includes comments Stanford Law School Prof. Lawrence Lessig:
"Technically, copyright law states that if you make of copy of a work, that you need to obtain permission from the author," Lessig said. However, he said it is important to recognize what Google is attempting to accomplish by digitizing works and enhancing public access.
Postscript: The full text of the University of Michigan statement about Google Library is available here.