Tuesday, January 17, 2012

Digital Rights Showdown: HarperCollins v. Open Road

Posted by Victoria Strauss for Writer Beware

One of the effects of the phenomenal growth of ebooks over the past few years has been to bring new value to the backlist--both for publishers who hold the contracts for backlist books, and authors who want the freedom to exploit a new range of rights. Since many of the most valuable backlist books were published long before ebooks existed, the issue of who controls electronic rights is a pressing one, for authors and publishers alike. Is it the authors, who granted only print rights at a time when print rights were all there were? Or is it the publishers, which bought the exclusive right to publish a book, regardless of the form in which that book appears?

This question may soon be tested in court. Just before Christmas, HarperCollins filed suit against Open Road Integrated Media over Open Road's 2011 publication, in ebook form, of Jean Craighead George's Newbery Award-winning children’s book Julie of the Wolves. (The complaint can be found here.)

The claim: copyright infringement. According to Harper, its circa-1970 contract with Ms. George, which gives it the exclusive right to publish "in book form" as well as the right to exploit future technologies "now known or hereafter invented," implicitly includes a grant of electronic rights--even though those rights did not exist when the contract was signed. Ms. George, therefore, did not have the right to enter into an ebook agreement with Open Road.

This isn't the first time that disputes over digital rights have arisen from pre-digital contracts. In 2001, a number of Random House authors signed ebook contracts with epublishing startup Rosetta Books, reasoning that, since their contracts pre-dated the existence of ebooks, they could dispose of e-rights as they chose. Random House filed suit, with a claim similar to the one Harper is making now: that the right to publish "in book form" includes not just print, but digital, and Rosetta was therefore committing copyright infringement.

Random's request for a preliminary injunction was denied by a federal judge, who ruled, on the basis of Random's own contract language, that "the right 'to print, publish, and sell the work[s] in book form'...does not include the right to publish in the format that has come to be known as the 'ebook.'" (An analysis of that decision can be found here.) An appellate court, to which the decision was appealed, agreed. The parties eventually settled, with Rosetta agreeing to pay licensing fees to Random.

Then in 2009, Random decided to try again. It sent a letter to dozens of literary agents, warning them that the company’s older contracts gave it the exclusive right to publish in ebook form, even where the contracts pre-dated the existence of digital formats.

The letter was likely triggered by the ramping up of Random's efforts to digitize its backlist, but possibly also by the fact that Open Road--which was then, like Rosetta Books before it, a startup--had signed agreements with the estate of Random author William Styron to issue e-versions of some of his print books. As in the Rosetta case, Open Road and Random eventually reached an agreement, with Random dropping its opposition to Open Road's publication of the Styron works.

There's no way to know whether the current suit by Harper will go all the way through the courts. Open Road has hired legal representation, and indicated that it intends to fight Harper's claim. But if the parties don't wind up settling, the outcome--whichever way it goes--will be a game-changer. As IP attorney Lloyd Jassin puts it,
Depending upon how the case brought by HarperCollins is decided, or resolved, the big six multinational, New York-based, publishers (and their cousin to the north, Harlequin) could either score a copyright and unfair competition protection windfall, or meet their digital Waterloo. Only time will tell.
For analysis of the case, see Jassin's post--especially interesting because it places Harper's suit in the context of the entertainment industry's ongoing effort to argue that old contracts cover new uses--as well as this post from Passive Voice, which examines Harper's complaint in detail.

11 comments:

steeleweed said...

The ambiguity of many contracts and unpredictability of judicial decisions constitute a strong argument for self-publishing, particularly since ebooks are now outselling paper (at least on Amazon). As an author with full ownership, I can license very specifically.
Now that 'traditional' publishers have seen what's happening, you can be sure all future contracts will be ironclad in protecting their rights, no matter what future methods of distribution & sales may be devised.

Victoria Strauss said...

I'm on Open Road's side in this fight. But it's really not surprising that publishers--which after all are businesses and need to make money--would try to lock up rights in this way.

I think the media perception of Amazon as a juggernaut tends to obscure the current facts of the digital marketplace. Ebooks may be outselling paper on Amazon, but Amazon is just one source of book sales, and print sales still beat e-sales by an enormous margin overall. Despite the exciting new frontiers that ebooks are opening up for writers, print can't yet be written off for writers who want a broad readership.

Michael Capobianco said...

My problem with this lawsuit is that the language in this particular contract is much more specific about computers than it is for many of the books that were published prior to the nineties. Some of that language may very well mean that the publisher has electronic rights, but that decision isn't applicable to those other books. As a result, if HarperCollins wins, we still don't know the status of those other books, for which there is no mention of computers or technologies yet to be invented. In fact, I would bet that Harper chose this particular book to sue over because it's the contract that gives them the most chance of winning, and, if they do, they'll start claiming that the win means that all the other books are thirs, too.

Laroquod said...

It's very likely that HarperCollins used the same boilerplate contract for all of its authors; so if the computer-language is in this contract, that means it is likely in all their contracts, so I wouldn't worry about them cherrypicking cases.

To be clear, though, I support Open Road's interpretation simply out of the general principle that I don't really believe in intellectual property -- particularly when it is allegedly "possessed" by someone other the author!

Michael Capobianco said...

Laroquad, that may be true for contracts from this same time period, but it's highly unlikely that that language would be the same in contracts written during the sixties, much less the twenties or thirties. Books published after 1923 are in still in copyright, and many of those contracts are still in effect.

behlerblog.com said...

I'm rooting for Open Road. We all need to make money, of course, but it's wrong to make a rights grab on technology not yet invented at the time of the contract.

We have authors that pre-date e-books, and we simply went back and negotiated an e-book contract. That's the only fair and right thing to do.

Anonymous said...

""now known or hereafter invented,"

I think that publishers are making a mistake in settling cases where they should be able to pound out a win. It's just too damn bad for the authors who let their agents accept the contracts. I am no fan of publisher tactics, but they should win big on this. Why settle?

Morgen said...

I'm with anonymous on that clause. It has no business in ANY contract. I've set myself up as a publisher, owning my property. I can be as specific as I want to when I grant rights. And I can put a time limit on those rights.

docstar said...

I also have to agree with Anonymous. With that particular clause, it seems pretty clear that HarperCollins has covered itself. I also agree that an agent or author accepting that language was pretty foolish.

Deb said...

Just for curiosity's sake, why did Rosetta Stone agree to a monetary settlement? Isn't a settlement, in laypeoples' eyes, proof that there was some degree of infringement? If they won the case, you'd think no money would've changed hands, and Victoria's summary sure sounds as though they prevailed.

Knave said...

Deb, one of the main reasons to settle at that point is the cost of lawyers. Every round in court, ever perperation and every delay causes the bill to go up.
The tactic is often applied by larger organizations to subdue compitition. You can be legally clear of wrong and still be 'expensed to extinction'. If you look up EFF.org you'll see enough horror stories of patent trolls using the same tactics.
...
Kinda sad really.