As authors venture further into inking separate e-book or multimedia deals with publishers like Open Road, the threat of lawsuits from their print publishers looms. The legal tug-of-war has only just begun with the 2001 judgment in the Random House v. Rosetta Books case, said speakers at the “Rethinking Author Contracts for the Digital World” panel during last month’s Publishing Business Conference in New York.
Despite non-compete clauses in many author contracts, said Sara Pearl, VP and Director of Business Affairs at Trident Media Group, courts tend to favor the authors.
“The courts don’t like to cut off how someone makes their living,” she said.
Nevertheless, Pearl is concerned that authors are often not indemnified by their e-book publishers, leaving the authors with the legal exposure at a time when multimedia rights ownership is still hotly contested.
“It’s clearly up in the air,” Pearl said. “It shouldn’t be up to the author to bear the risk.”
The Random House v. Rosetta Books case set a major legal precedent when the New York Federal Court refused to grant Random House a preliminary injunction against Rosetta, an e-book publisher that was trying to publish electronic versions of Random backlist titles like Styron’s Sophie’s Choice and Vonnegut’s Breakfast of Champions.
According to U.S. District Judge Sidney H. Stein, “In [Random House’s] case, the ‘new use’ – electronic digital signals sent over the internet – is a separate medium from the original use – printed words on paper.” The court pointed out that Random House included separate language in its contracts for other forms of printed books such as large print, book club editions, and Braille editions, indicating that Random House did not believe that its contracts automatically granted the company the rights to all possible forms of its books.
But Random House struck back this December when CEO Markus Dohle sent a letter to agents asserting that it holds e-book rights to all of its titles. In the letter, Dohle calls the 2001 judgment and other challenges to its claims “misunderstandings” and points to Random House’s noncompetition clause as further proof that authors are prevented from “granting publishing rights to third parties that would compromise the rights for which Random House has bargained.”
Judge Stein’s ruling itself takes pains to limit its scope. The judgment was merely a “neutral” interpretation of contract law in Random House’s case, he noted in the decision.
“This is neither a victory for technophiles nor a defeat for Luddites,” he wrote, leaving the door wide open for new interpretations of other publishers’ claims.
John Silbersack, an Executive VP at Trident, admitted at the panel that Amazon’s practice of selling e-books and print books next to each other on its website gives publishers possible legal ground to stand on.
“We’re talking about developing products that are going side by side” with print books, Silbersack said. “It’s a little hard to argue that you’re not in the same space.”
For agents, backlist titles are an attractive option because newer contracts often include the sale of ebook rights. “When you get to the frontlist, you cannot sell a book without selling ebook rights,” Pearl said. “The hot new thing is multimedia rights.” The new mobile or iPhone content is only restricted to 20-25% verbatim from the author’s work – the rest is “bells and whistles,” she said.
But publishers are also eager to capitalize on backlist titles; Silbersack said that agents are encountering pushback when they try to obtain termination notices for out-of-print books, something that he said his agency is “aggressive” about.
An author’s sale of his multimedia rights is not yet a major revenue source, serving instead as a form of publicity.
“It’s more of a forward-looking thing, a marketing thing,” Silbersack said. “They can make use of these features to reach beyond the book reading world.”
Though little money is currently changing hands in these deals, it’s obvious that both agents and publishers are anticipating an industry-wide shakeout over these new platforms and are jittery about losing their stakes.
“I don’t think that anyone can argue . . . that this is a battle that needs to be fought right now from a monetary perspective,” Silbersack said. “However, it’s a battle that needs to be fought to discuss what the points of tension are. Trident is beginning to test these waters.”
Pearl agreed that despite the hassle and the possible legal ramifications for authors selling multimedia rights, the panelists were enthusiastic about pursuing multimedia deals.
“I think you can’t fight it,” Pearl said. “Most of this is found money. Authors can control how the content is used, and they make a little bit of money. Right now, nobody’s doing anything with [the rights]. Net, it’s not a bad thing.”
Other legal issues discussed at the panel, and at other conferences last month, stemmed from Macmillan and Amazon’s agency model vs. trade model tug-of-war, which Silbersack said would be the next big legal issue for publishers, and the familiar struggle over fair use that Google Books is currently involved in. At the OnCopyright Conference, also held last month in New York, Google’s Senior Copyright Counsel Bill Patry said the best approach to fair rights issues concerning the Internet was self-policing through privately sourced licensing agreements. Patry cited as an example the CHORUSS music copyright licensing service, which allows schools to pay a set licensing fee for unlimited use of a music catalogue within the schools. He recommended that trade groups stop lobbying so fervently for copyright as an “economic right” and instead seek actuarial solutions from the Copyright Clearance Center or ASCAP. Relying on changes in the law will lead nowhere, said Patry, as technology moves faster than our legal system ever could.
