>When you license lyrics, you don't necessarily get the actual written words to use (the lyrics).
Yep
>You simply get permission to use the lyrics.
Also yep.
>Genius volunteers listen to music and write down their interpretation (punctuation, spelling, spacing etc.)
This does not give the volunteers or Genius ownership of the transcribed lyrics.
>Genius has a TOS to prevent republication of their content.
The recent LinkedIn lawsuit seems to set precedent that you cannot enforce a TOS on publicly accessible content like this.
>Genius started the lawsuit because they claim Google violates this TOS by duplicating Genius's unique transcriptions.
Sure. Doesn't mean they have any chance of winning it.
>Google specifically claims they are NOT scraping Genius, but Genius claims they have proven that they do with watermarks.
My understanding is Google is claiming they get their lyrics from a 3rd party. If that's the case, they can certainly say that they aren't scraping Genius themselves.