In our recent report on HarperCollins lawsuit against e-book publisher Open Road Media (See Can Open Road Beat the Harper Lawsuit Rap?) we wrote: “Our own guess is that this case will never go the distance and will instead be settled.”

Shows how wrong one can be, and it proves once again that when great principles are involved, litigants will fight harder than they will over mere money.

Today Publishers Weekly reports that Open Road has decided to lawyer up. The e-book publisher recently launched by former Harper CEO Jane Friedman, accused by Harper of infringing on the latter’s rights, has retained the team of attorneys that represented the Authors Guild in its class action case against Google.  Open Road Chief Operating Officer Chris Davis said “It appears to us that HarperCollins is trying to intimidate authors, overturn established law and grab rights that were not in existence when the contracts were signed many years ago. We are confident that we will successfully defend authors’ rights and we look forward to filing our response in court.”

Considering that copyright authority Lloyd J. Jassin calls it “The Court Battle that Could Determine the Fate of the Book Industry,” authors and publishers may get their wish to see contradictions and ambiguities in book contracts, respecting digital rights, resolved once and for all.

But at what fearful price? The cost of litigating the issues to the max, including appeals that could rise as high as the Supreme Court, will be millions. Both parties have deep pockets. The whole world will be watching.

For Jassin’s superb analysis of the issues and potential legal strategies, read Who Controls eBook Rights?

Richard Curtis

Copyright authority Lloyd J. Jassin calls it “The Court Battle that Could Determine the Fate of the Book Industry”, and that’s no exaggeration. The principles are of the very highest order, and every author, publisher and agent has a major stake in the outcome.

We are referring to HarperCollins’s infringement lawsuit against Open Road Media about which we reported the other day. Open Road, the independent e-book publisher started by former Harper CEO Jane Friedman, issued an e-book edition of Julie of the Wolves, a children’s book classic that is still in print with HarperCollins.

In his masterful analysis, posted on his “Copylaw” blog, Jassin cites a number of key arguments in Harper’s brief. Principal among them:

1. Does the “exclusive right to publish in book form” – the phrase in Harper’s original contract – cover digital formats undreamed of when that contract was originally framed?

2. Similarly, does contractual language like “computer storage and retrieval,” “future technologies” and “now known or hereinafter” apply to a medium three decades over the horizon?

3.Does Open Road’s e-book violate the noncompetition language of HarperCollins’s contract?

Significantly, Jassin doesn’t see a knockout punch for either contender. The publishing establishment could either score “an unfair competition protection windfall, or meet their digital Waterloo.”

One huge factor he doesn’t mention is the expense of staging this legal battle. If litigated to the max, including appeals that could take the issue to the highest court in the land, the costs could run into the millions of dollars. In an earlier lawsuit brought by Random House against another indie e-book publisher, RosettaBooks, the parties settled after Rosetta won early rounds in the court system and the price tag for both parties started to get prohibitive. If Open Road decides to fight it out, it will look at the arguments presented by Rosetta. But it will also look at the expense.

One other interesting note is that Harper has elected not to sue the author.  As she signed the Harper contract she is the logical party to go after for the infringement.  But suing authors is bad public relations. What about Open Road? They too have a contract with the author, one that relies on the author’s warranties.  Open Road has the option to claim that the author breached those warranties and licensed rights she didn’t clearly own.  But that doesn’t look so hot either. So, looking to the author for satisfaction is simply not an option for either Harper or Open Road.

Our own guess is that this case will never go the distance and will instead be settled.  Though that’s the prudent thing to do, it will just leave the issues hanging for another day.  Too bad. We’d all like to know where we stand. Thousands of contracts containing language as ambiguous as the old Julie contract hang in the balance.

Read Lloyd J. Jassin’s The Court Battle that Could Determine the Fate of the Book Industry:A Review & Analysis

Richard Curtis

Towards the end of the twentieth century just about every book contract contained language granting the publisher computer storage and retrieval rights. Though the first people to employ the term probably did not envision e-books, the advent of digital technology sent publishing lawyers scurrying to their contracts to make sure they contained some variant of that term. For, in their opinion, the ownership of e-book rights stood firmly upon it. And when at the turn of the 21st century authors examined those same contracts, the existence of “Computer Storage and Retrieval” loomed like a snarling guard dog warning them to step no further across the owner’s line.

Though there have been some probes by authors, agents and startup e-book publishers of this and similarly ambiguous phrases in book contracts, none has ever been fully litigated. That may now change if a just-announced lawsuit is carried out to the max.

Over the Christmas holiday Publishers Lunch‘s Michael Cader broke the news that HarperCollins has sued Open Road, the independent e-book publisher founded by Jane Friedman (former CEO of HarperCollins incidentally), for infringing on Harper’s digital rights to a classic work of children’s literature, Julie of the Wolves by Jean Craighead George. The author was not named in the suit, however.

Key to Harper’s position is the phrase in its contract with the author that “makes clear that the scope of HarperCollins’ publishing rights extends to exploitation of the work ‘through computer, computer-stored, mechanical or other electronic means now known or hereafter invented’ — language that serves only to reinforce HarperCollins’ exclusive rights to publish the Work as an e-book.”

There have been some previous territorial quarrels over e-book rights based on vague contractual terminology such as the phrase “in book form” in some Random House contracts issued long before Kindle was a gleam in Jeff Bezos’s eye. If there was no such thing as an e-book when the original volume was acquired, can a publisher claim that e-book was meant by “in book form?”

The following piece was posted on our blog when Random House, feeling threatened by newly created independent e-book publishers, decided to assert its rights in no uncertain terms.  Anyone interested in the Harper-Open Road dispute will benefit from this backgrounder.

Richard Curtis

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Random Serves Notice on Would-Be E-Interlopers
Like a wolf marking its territory against rivals, Random House served unequivocal notice today on what it perceives as potential e-poachers seeking a loophole in Random’s definition of “book”.

The warning was embedded in a letter from Random CEO Markus Dohle mailed or emailed to literary agents describing the company’s plans and initiatives in the digital world. Authors were also put on notice that they are “precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained.”

“The vast majority of our backlist contracts,” writes Dohle, “grant us the exclusive right to publish books in electronic formats. At the same time, we are aware there have been some misunderstandings concerning ebook rights in older backlist titles. Our older older agreements often give the exclusive rights to publish ‘in book form’ or ‘in any and all editions’. Many of those contracts also include enhanced language that references other forms of copying or displaying the text that might be developed in the future or other more relevant language that more specifically reflects the already expansive scope of rights. Such grants are usually not limited to any specific format, and indeed the “form” of a book has evolved over the years to include variations of hardcover, paperback and other written word formats, all of which have understood to be included in the grant of book publishing rights. Indeed, ebook retailers market, sell and merchandise ebooks as an alternate book format, alongside the hardcover, trade paperback and mass market versions of a given title. Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge to discovery stories, ideas and information through the process of reading. Accordingly, Random House considers contracts that grant the exclusive right to publish ‘in book form’ or ‘in any and all editions’ to include the exclusive right to publish in electronic book publishing formats. Our agreements also contain broad non-competition provisions, so that the author is precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained.”

If Random’s position sounded familiar to some, it’s the same one that the company used in 2001 when it sued Rosetta, an e-book startup that offered digital editions of books by Kurt Vonnegut Jr., William Styron and Robert B. Parker, having secured them directly from the authors. Random had published the books before there was such a thing as the Internet, but nevertheless considered a book to be a book no matter what form it took. Random’s request for an injunction was denied by the court, and Random then filed an appeal. It too was denied.

Random and Rosetta eventually settled, allowing Rosetta to continue publishing the books but leaving unresolved the issue of who controls e-rights to books where the language defining them is ambiguous.

By issuing its letter to agents today, Random House reasserted its position that, ambiguous or not, the publisher considers the language in its contracts to grant it ironclad control over e-rights. Anyone who believes otherwise is advised to take a good sniff before venturing over the perimeter of Random’s territory.

Richard Curtis

Is the pen mightier than Perseus's sword?

Perseus Book Group, a leading publisher and distributor for small presses, has announced a service to distribute and market self-published books, particularly out of print titles whose rights have been reverted to authors.  It will pay a 70% share of net revenues to content providers, as opposed to the 25% share paid by major publishers and 50% by some independent e-book publishers including E-Reads.

“The service,” writes the New York Times‘ Julie Bosman, “arrives as authors are increasingly looking for ways to circumvent the traditional publishing model, take advantage of the infinite shelf space of the e-book world and release their own work. That’s especially the case for reviving out-of-print books whose rights have reverted back to the author.”

The service is not offered to the general public but is open only to authors represented by literary agents. And though it offers distribution (to such retailers as Kindle, Nook, iPad, Kobo and Sony) it does not produce the books themselves, meaning that the authors have to create (presumably through scanning) text files, proofread them, format them (such as putting them into ePub), design covers, and undertake other editorial functions now performed by full e-book publishers such as Open Road, Rosetta, and E-Reads (full disclosure: Richard Curtis is CEO of E-Reads).

Perseus CEO David Steinberger made it clear that while the new company, called Argo Navis, “provided distribution and marketing services, the author remained the publisher,” writes Bosman. “While authors get a much higher share of the revenue under this arrangement, they’ll receive fewer of the services, and financial support, provided by publishers under more conventional contracts.”

Authors and agents interested in Perseus’s offering will undoubtedly factor in the time and labor involved in producing books themselves, but this service nevertheless opens the door for literary agents to find a comfortable place in digital publishing on behalf of their clients.  By helping their clients to produce books, they can justify the higher commissions or management fees that many agents now seek to balance softening revenue flow resulting from a struggling book industry.  It is also a way for agents to strengthen bonds with their clients whose eyes may be roving in the direction of independence and self-publication.

New Service for Authors Seeking to Self-Publish E-Books

Richard Curtis

Jonathon King didn't autograph in his bathrobe but he could have (photo by Lauren Naefe)

Remember Autography, the e-book signing technology we wrote about last spring? (See Autograph E-Books in Your Bathrobe) We’ve been waiting for the first practical demo. It finally happened last week.

E-book publisher Open Road hosted an autographing – we think that’s the word for the process developed by the company’s co-founders T.J. Waters and Robert Barrett.

We hesitate because we’re still grounded in pens on paper.  Hell, we’re still grounded in places, the brick and mortar locations where autographing sessions used to be held. The Open Road session was conducted in a place (Bouchercon Mystery Conference, in St Louis, Missouri) but it didn’t have to be. It could have been performed by author Jonathon King in Rangoon, Paducah or Sasketoon and the lucky recipient of his cyber-greeting would not have been the wiser.

Here’s what Open Road had to say about the event:

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Autography’s e-signing technology works across all major eReader platforms and applications. Jonathan’s signature page will feature special graphics just for Bouchercon and can include a picture with the author that is also inserted into the ebook. The now personalized greeting can be exported to the consumer’s Facebook or Twitter space with a single button if they choose.

Attendees will have the opportunity to see our technology in action by having their ebooks signed and getting photos added to the signature page,” said Autography cofounder Tom Waters. “This exclusive opportunity is available only for Bouchercon attendees who visit Jonathon Saturday afternoon.”

Rachel Chou, Chief Marketing Officer from Open Road said: “We are always looking for innovative ways to connect authors with readers and are excited to usher in the digital age of book signings with Autography and Jonathan King.”

Edgar-award winning author Jonathon King is the author of the Max Freeman crime series set in the Everglades and on the hard streets of urban South Florida. In addition to his award winning backlist titles, Open Road published an E-riginal Midnight Guardians this past year.

About Open Road Integrated Media

Open Road Integrated Media is a digital publisher and multimedia content company. Open Road creates connections between authors and their audiences by marketing its ebooks through a new proprietary online platform, which uses premium video content and social media. Open Road has published ebooks from legendary authors including William Styron, Pat Conroy, Jack Higgins, and Virginia Hamilton, and has launched new e-stars like Mary Glickman. (www.openroadmedia.com)

About Autography

Autography LLC is a media technology company headquartered in St. Petersburg, Florida. The firm features a patent-pending method for inserting an autograph or other personalized salutation into an e-book or other digital media. The system works with all popular eReader devices. The company was cofounded by author TJ Waters and technology executive Robert Barrett in May 2011. (www.autography.com 727-388-1605)

After warning e-poachers to keep their mitts off its books (see Random House Serves Notice on Would-be E-Interlopers) Random House agreed to let the William Styron estate place e-book rights to some of the late author’s books with recently formed independent e-book company Open Road Integrated Media.

It was speculated that Random’s threat last winter, advising authors they were “precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained,” had been provoked by Open Road’s announcement that it had reached agreement with the Styron estate. So it is puzzling that Random yielded to the very same company without a fight. Motoko Rich, writing the story up in the New York Times, seems to suggest that the accommodation was achieved by friendly persuasion stemming from warm feelings between the company and the estate.

Random’s Stuart Applebaum, however, asserted that “The decision of the Styron estate is an exception to these discussions. Our understanding is that this is a unique family situation.” Whether the publisher will be moved by similar auld lang syne appeals from other authors is an intriguing question. But Random has not made it easier on itself by making an exception to its own stern rule.

Read Rich’s story in detail: Random House Cedes Some Digital Rights to Styron Heirs

Richard Curtis
Every Blogger owes a debt of gratitude to newspapers and magazines. This posting relies on original research and reporting performed by the New York Times.

Afoot and light-hearted, I take to the open road,
Healthy, free, the world before me,
The long brown path before me, leading wherever I choose.
Walt Whitman, Song of the Open Road

We’re not sure if publishing superstar Jane Friedman chose Whitman’s hymn for the name of her company but we greet her on the launch of her e-book venture Open Road and hope the long path before her leads to fame and fortune.

Friedman announced her venture at Frankfurt Book Fair in mid-October. Backed by a $3 million investment by James A. Kohlberg, the company’s goal is to reissue in downloadable format major authors such as William Styron, Iris Murdoch and Pat Conroy.

As reported by Motoko Rich of the New York Times, “Ms. Friedman said Open Road would use a new proprietary online marketing platform to promote backlist titles on blogs, Twitter and social networking sites…
Open Road will also produce video content, including documentaries about the authors and scene setting about the books, which it will push to fan sites and other relevant Web sites.”

We welcome this latest wedding of literature and digital technology. As Whitman put it, “Allons! be not detain’d!”

Richard Curtis