Prior permission for indexing books?

Timothy Lee writes that the agreements backing Google Books are undergoing renegotiation. He argues that Google should seek a fundamental legal principle rather than negotiating a contract via class-action law.

Fair use exists as a kind of safety valve for the copyright system, to ensure that it does not damage free speech, innovation, and other values. Although formally speaking judges are supposed to run through the famous four factor test to determine what counts as a fair use, in practice an important factor is whether the judge perceives the defendant as having acted in good faith. Google has now spent three years looking for a way to build its Book Search project using something other than fair use, and come up empty.

I like this approach better myself. It's better to have simple, common-sense rules about proper rules of engagement than to have a thousand-page contract that nobody has even read in its entirety. For books, part of the common sense rules would include that indexing is allowed, and that abandonware is largely free reign, at least until the owner shows up again.

To contrast, the current approach has Google negotiating a contract that will bind all authors. That seems a little weird given that all authors aren't really present. It doesn't seem like a good fit for contract negotiation. It's one of those rare beasts that is a good fit for our legislative bodies to sort out.