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

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