Contracts

Universal Music Settling Big Class Action Lawsuit Over Digital Royalties

6 September 2018
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From Billboard:

An important chapter in the legal history of the music business may be coming to conclusion soon as Universal Music Group is close to submitting a settlement resolving claims that it cheated recording artists of royalties from digital downloads.

The putative class action from artists including Chuck D. of Public Enemy, Rick James (by way of trust), Dave Mason of Traffic, Whitesnake, Andres Titus of Black Sheep, Ron Tyson of The Temptations, among others, alleges that record labels should be treating digital download income off of venues like Apple’s iTunes as “licenses” rather than “sales.” By accounting the other way, the artists get about 15 percent of collected income rather than 50 percent they allege is due.

. . . .

The monetary value of UMG’s coming settlement haven’t yet been disclosed, but The Hollywood Reporter has learned that it will likely cover EMI, which was acquired by UMG in 2012 and has been dealing with its own litigation on the digital download front. Following settlements by Warner Music and Sony, UMG’s deal if approved would mean that all of the record majors have resolved claims following the 2010 appellate ruling in F.B.T. Productions v. Aftermath — dealing with Eminem songs — which suggested that “licenses” rather than “sales” were the more appropriate accounting treatment in an era where record labels no longer spend huge amounts on packaging physical CDs.

According to sales data released this week by the RIAA, digital downloads is the top revenue producer in the music industry. Download sales are at $2.64 billion, which beats physical music sales of $2.27 billion.

. . . .

As streaming gets closer to dominating downloads, the litigation may shift likewise as well.

The digital downloads cases may be on the precipices of conclusion, but scrutiny may follow as to whether record labels are cheating artists on money collected from outlets like Spotify. For instance, on Tuesday, a judge refused to reject claimsthat Sony breached agreements and good faith dealing with 19 Recordings — the label of former American Idol contestants Kelly Clarkson, Carrie Underwood and Jordin Sparks — by allegedly mischaracterizing income from streaming services as as “sales” or “distributions” rather than as “broadcasts” or “transmissions.”

Link to the rest at Billboard

Starting several years ago, PG blogged about this issue before in the context of book publishing agreements. For a great many years, standard publishing contracts included royalty provisions that paid a much lower royalty for books that were sold than for books that were licensed.

PG hasn’t surveyed Terms & Conditions for online ebook sellers for a long time, but the last time he did, the major online retailers all said something to the effect that the publishers were licensing ebooks to readers, not selling them.

Here’s the relevant portion of Amazon’s current Kindle Store Terms of Use, located in Paragraph 1, “Kindle Content”:

Kindle Content is licensed, not sold, to you by the Content Provider.

If you pull up a publishing contract that’s more than ten years old and search for the royalty rates payable when the publisher licenses the book, you may well find that, like the music business, Big Publishing paid much higher royalties for licenses than it did for sales.

AI reveals potential Amazon, Facebook GDPR problems to regulators

5 July 2018

From c/net:

AI [artificial intelligence] software reportedly uncovered suspected GDPR breaches by Alphabet, Amazon and Facebook.

The software — created by EU Institute researchers and a consumer group — looked at the privacy policies of 14 major technology businesses in June, the month after the EU’s new data privacy laws went into effect, according to Bloomberg.

Researchers named the software “Claudette” — short for automated clause detecter — and Alphabet (Google’s parent company), Amazon and Facebook were among the companies whose policies were under the AI microscope.

It found that a third of the clauses within the policies were “potentially problematic” or contained “insufficient information,” while a further 11 percent of the policies’ sentences used unclear language, the academics noted.

The software also noted that some policies failed to identify third parties that the company could share data with.

. . . .

Despite the software’s findings, researchers admitted that the results of the automated scan “are not 100 percent accurate” since the software has only viewed a small number of policies.

Google insisted that its policy is compliant and highlighted that the updated version doesn’t expand or make any changes to how it collects or processes users’ information.

. . . .

The EU has been enforcing the General Data Protection Regulation since May 25 and the law requires the companies adopt greater openness about data they have on EU residents, as well as with whom they share the data.

Link to the rest at c/net

PG suspects that AI might not be the best solution for reviewing 14 terms of use or similar documents today (he suspects it took more time and effort to create the artificial intelligence application than simply having lawyers or paralegals simply review the 14 documents would have required).

However, over the longer term, he thinks it quite likely that AI apps will become common tools for creating and reviewing legal documents.

From the MIT Technology Review:

Meticulous research, deep study of case law, and intricate argument-building—lawyers have used similar methods to ply their trade for hundreds of years. But they’d better watch out, because artificial intelligence is moving in on the field.

As of 2016, there were over 1,300,000 licensed lawyers and 200,000 paralegals in the U.S. Consultancy group McKinsey estimates that 22 percent of a lawyer’s job and 35 percent of a law clerk’s job can be automated, which means that while humanity won’t be completely overtaken, major businesses and career adjustments aren’t far off (see “Is Technology About to Decimate White-Collar Work?”). In some cases, they’re already here.

“If I was the parent of a law student, I would be concerned a bit,” says Todd Solomon, a partner at the law firm McDermott Will & Emery, based in Chicago. “There are fewer opportunities for young lawyers to get trained, and that’s the case outside of AI already. But if you add AI onto that, there are ways that is advancement, and there are ways it is hurting us as well.”

. . . .

So far, AI-powered document discovery tools have had the biggest impact on the field. By training on millions of existing documents, case files, and legal briefs, a machine-learning algorithm can learn to flag the appropriate sources a lawyer needs to craft a case, often more successfully than humans. For example, JPMorgan announced earlier this year that it is using software called Contract Intelligence, or COIN, which can in seconds perform document review tasks that took legal aides 360,000 hours.

These programs are, simply put, changing the way legal research is carried out. Workers used to have to trudge through stacks of dusty law books and case files to find relevant information.

. . . .

People fresh out of law school won’t be spared the impact of automation either. Document-based grunt work is typically a key training ground for first-year associate lawyers, and AI-based products are already stepping in. CaseMine, a legal technology company based in India, builds on document discovery software with what it calls its “virtual associate,” CaseIQ. The system takes an uploaded brief and suggests changes to make it more authoritative, while providing additional documents that can strengthen a lawyer’s arguments.

“I think it will help make [entry-level lawyers] better lawyers faster. Make them more prolific,” says CaseMine’s founder, Aniruddha Yadav. “If they are handling a couple cases at a time, they will learn the law faster.”

. . . .

Other legal tech startups with AI at their core have been gaining steam as well. Kira Systems, which makes a contract review platform, counts four of the top 10 American law firms, as well as several international firms, as clients. Meanwhile, investors plowed $96 million into Zapproved, a startup that makes a cloud-based electronic discovery tool. Overall, it’s been a banner year for new legal tech companies, with funding up 43 percent in the first three quarters of 2017 compared with the same time last year, according to a report by the research firm CB Insights.

. . . .

There are, however, still obstacles to further adoption of AI in the legal profession. Chief among them is a lack of accessible data to use in training the software. Take the contract analysis company Legal Robot. In order to train its program, a team of developers built their own database of terms and conditions by collecting examples from major websites. But that wasn’t enough—the company also had to strike deals with law firms to gain access to their private repositories. In total, they compiled over five million contracts.

Link to the rest at the MIT Technology Review

PG notes that the MIT article is not the only one about the legal profession which is primarily based upon the methods of practice followed by large American law firms. He doesn’t blame the authors of the article or the firms profiled therein because most of the large sales opportunities for these technical products or services will be in major law firms.

However, only a small percentage of practicing attorneys work for major law firms in the US. About 85% of American attorneys work in firms of 50 lawyers or fewer and about half of all American attorneys are sole practitioners. The legal “market” is really fragmented into business organizations that may have less in common than non-experts first assume.

In PG’s experience, the most technically-savvy lawyers are either in very small firms (many with a single attorney) or as small groups in very large firms (fewer than 5 lawyers in a firm of 500 attorneys, for example).

Tech companies and venture capital firms typically misjudge the true size of the legal market for advanced tech products. The average gross revenue (not profit) per lawyer (not including paralegal, secretary, other support staff, etc.) for the 100 largest law firms in the United States was somewhat less than $1 million in 2017 and about $850K in 2016.

Additionally, the management structure of many major firms is not well-suited for supporting the acquisition of major technology products via a capital spending budget. A typical industrial firm will calculate profits after including all costs, including salaries and bonuses.

Generally speaking, a law firm’s “profits” don’t include all salaries and bonuses the firm routinely pays year in and year out. These law firm “profits” are divided among the long-term partners or major shareholders of law firms and distributed each year rather than retained or accumulated to fund long-term growth.

It is not unusual for the controlling partners/shareholders to take relatively small salaries or draws against distributions based on equity compared to their end-of-year distributions. Using money to acquire new technology products or services typically means that each of the firm’s big shots takes home less money at the end of the year.

The bottom line is that, as a group, major law firms are not big-time purchasers of new technology products and services because of the immediate hit to the partners’ income. For example, it took many years for the original computer-assisted legal research services, Lexis and Westlaw, which had a clear and compelling value proposition for lawyers, to achieve any sort of respectable penetration of and associated revenue from these firms.

Morality clauses: are publishers right to police writers?

16 June 2018

From The Guardian:

When the American Libraries Association awards its Andrew Carnegie medals in New Orleans later this month, there will be no winner for excellence in non-fiction. Sherman Alexie, the poet and novelist who was due to receive it for a memoir, You Don’t Have to Say You Love Me, has declined the award following allegations of sexual harassment.

Last month, the novelist Junot Díaz withdrew from the Sydney writers’ festival and from chairing the Pulitzer prize board after being confronted by his own accusers. As the allegations swept through social media, another writer, Mary Karr, joined the fray, tweeting of her distress that her testimony to DT Max, the biographer of her one-time partner David Foster Wallace, about Foster Wallace’s abusive behaviour had been marginalised. “Deeply saddened by the allegations against #JunotDiaz & I support every woman brave enough to speak. The violence #DavidFosterWallace inflicted on me as a single mom was ignored by his biographer & @NewYorker as ‘alleged’ despite my having letters in his hand,” she wrote.

Such high profile cases are far from rare as the #MeToo movement spreads across the creative industries. They come at a time when writers are facing increasingly draconian attempts by publishers to police their behaviour, calling into question centuries old assumptions about the desirability – or even the possibility in today’s networked world – of separating writers’ lives from their work.

. . . .

Morality, or morals, contracts have existed in the film industry since 1921, when Universal Pictures introduced them in response to Fatty Arbuckle’s trial for manslaughter, but they are relatively new in the publishing industry. One such clause, introduced by HarperCollins in the US, stipulated that the publisher could terminate a contract in cases of “conduct [that] evidences a lack of due regard for public conventions and morals”, or in the case of a “crime or any other act that will tend to bring the Author into serious contempt, and such behaviour would materially damage the Work’s reputation or sales”. Caroline Michel, a leading literary agent, said this week that the use of morality clauses had doubled in the US over the past year. In a recent speech, Royal Society of Literature president Marina Warner warned that “being good” should not be conflated with “good writing”. But where is that line drawn?

Clearly, reputation doesn’t matter to a controversialist in the way it does to literary authors such as Alexie or Díaz, who are facing serious damage to their careers. In the weeks since 10 women came forward with accusations against Alexie, the Native American author has been subjected to a cascade of punitive measures. His name has been stripped from a scholarship awarded by the Institute of American Indian Arts, all references to him have been “deleted or modified” in the blog Native Americans in Children’s Literature, bookshops and libraries are destocking his books and his US publisher has said that it will be postponing the paperback of his memoir (though his UK publisher, Penguin Random House, says it will continue to reprint his work as required).

. . . .

The high emotions surrounding the behaviour of writers are starkly exemplified by the case of Foster Wallace. Though Karr feels understandably aggrieved that her experience wasn’t taken more seriously by his biographer, she would be wrong to think it wasn’t noted. In a blog written at the time, Kristen Roupenian – who went on to write the New Yorker short story sensation “Cat Person” – described her dismay at discovering in Max’s book that the literary hero she worshipped as a student would probably have dismissed her as “audience pussy”.

She wasn’t looking for a boycott of his work, she wrote. “All I expect is a quiet, un-showy disqualification for the role of hero, mentor or saint. I would like the ‘statue’ (Wallace’s word) of his public image to be carefully dismantled, for the overblown ideas we have of him and what his life meant to slowly begin to deflate. I would like him to become just another writer, imbued with no moral authority beyond what is contained in his words on the page.”

. . . .

As the pressure has mounted, London-based authors’ agent Lizzy Kremer has taken pre-emptive action – drawing up a new, industry-wide code of conduct on behalf of a coalition of authors, booksellers, agents and publishers. The voluntary code was partly inspired by London’s Royal Court theatre, which constructed one in reaction to its own sexual misconduct scandal involving a former artistic director. Among the theatre’s first responses was a call out for testimony about sexual harassment to help it to identify “patterns and scenarios”. In a detail that chimes strongly with the publishing industry, the report drew attention to the dangers of a “blurred social context”: “13.3% of reported incidents happened at work parties … with alcohol.”

“Publishers feel an obligation to use their personal social media accounts to publicise books and to go out for drinks,” says Kremer. “People forget that these are not friendships, they are friendly business relationships. You have to understand what’s off limits.”

In a personal blog, she recalled meeting up with a younger woman who told her of several “small yet frightening liberties” that men in publishing had taken at parties and in offices over the years. “One of the things that interested me about the [Royal Court] report was its emphasis on the vulnerability of the creative person,” says Kremer. “Obviously it’s not the same in publishing – you don’t have to get changed in communal dressing-rooms – but it’s another industry with a culture of asking employees to give something personal of themselves.”

Link to the rest at The Guardian

The Big Secret Why Behind Everything so Far

7 June 2018

From Chuck Palahnuick:

On the plus side I’m not crazy.  For several years my income has dwindled.  Piracy, some people told me.  Or the publishers were in crisis and slow to pay royalties, although the publishers insisted they’d sent the money.

More recently, the trickle of my income stopped.  Not that there wasn’t always a good excuse.  Someone’s mother was suffering from Alzheimer’s and needed constant looking after.  The bank’s wire transfer system wasn’t secure, and hackers were a new threat.  You don’t question someone who claims to be the caregiver for a mother with dementia.  You let it slide.  I let it slide.

That’s why my big shows on book tour stopped.  Because the payment for Fight Club 2 and the two coloring books and Adjustment Day never seemed to arrive.  Years of income.  Each of those big shows cost north of ten grand to stage.  Money I paid.  For the glowing beach balls, the severed arms, the $150 leather-bound books as prizes, not to mention the dog toys, the shipping, the candy.  So much candy.  For each event, shopping carts full of candy.  It was justified in my mind because most of my readers had never attended an author reading, and I wanted their first to be exceptional.  But when my income stopped, when I had to choose between health insurance and autographed rubber arms… the shows stopped.  There, I’ve said it.

In comics, you pay your own way.  Invitations arrived from Comic-Cons, Dragon Cons, Wizard Worlds, but my money for travel had dried up.  Instead of income, I got excuses.  But this entire time an idea nagged at me:  What if someone’s stealing?

But that, that was insanity.  I’ve worked with the same team of people since 1994.  To suspect anyone was stealing, I had to be crazy.

And then I wasn’t.  You may have read about this over the weekend in the New York Post.  All the royalties and advance monies and film option payments that had accumulated in my author’s account in New York, or had been delayed somewhere in the banking pipeline, it was gone.  Poof.  I can’t even guess how much income.  Someone confessed on video he’d been stealing.  I wasn’t crazy.

Link to the rest at Chuck Palahnuick’s blog

PG is interested to see a couple of articles describing the literary agency, Donadio & Olson, as a victim of the wholesale theft of client funds.

If a community bank closes because of financial improprieties that have continued for years, is the president of the bank regarded as an innocent bystander? Can he/she credibly point to a clerk and say, “It was all her fault! I had no idea this was happening over all these decades.”

In a criminal trial held in a court of law, the president is presumed innocent until proven guilty. In the court of public opinion, the president is presumed to be part of the scheme or too incompetent to be responsible for running a bank.

PG suggests that in the court of public opinion, the agents that own (and have owned) and operated Donadio & Olson during the lengthy period of time over which client funds were stolen from authors should be similarly judged.

In the  event of a bank failure or financial difficulties, typically, an aggressive federal agency swoops in late on a Friday afternoon and takes over the books and records and operations of the bank. All the bank’s employees walk out the  door while the government agency figures out what went wrong and who is entitled to how much money. The bank reopens on Monday morning under the direct management of the Federal Deposit Insurance Corporation. (Similar enforcement actions by other government agencies if a bank is not federally insured or a savings & loan has problems.)

It is PG’s impression that, like California, New York’s legislature has passed a law about nearly every subject imaginable. New York City prides itself as being the center of the traditional American publishing industry.

Where is the government regulation requiring that, if literary agencies are receiving and holding money that really belongs to someone else – authors – the literary agencies act like banks that receive and hold money belonging to other people and be treated as custodians of funds held to the highest standard of care?

If Big Publishing really cares about authors and doesn’t take them for granted, why don’t the standard terms of a traditional publishing contract include provisions that pay royalties directly to authors and agency fees directly to agents? Publishers will do this if asked by an attorney for the author. Why not make it the default?

As PG has stated before, nothing that is good for the author happens when an agency receives royalty payments to which the author is entitled. Passing funds through the agency bank account adds no value whatsoever and only provides an opportunity for something bad to happen to those royalties.

If small print ‘terms and conditions’ require a PhD to read, should they be legally binding?

10 May 2018

From The Conversation:

You may not realise it but you are signing legal agreements all the time. Think of all those “terms and conditions” boxes you tick when you buy new software or travel insurance. How many times have you tried to read these and not really understood that they were saying?

You’d not be alone in that. Our research outlines how insurance policies are incredibly difficult to understand. So difficult that you need a PhD to understand them.

Yet consumer law requires legal agreements to be transparent. This means that they need to be in plain, easy to understand language. If legal documents are not written in plain English, then they may not be legally binding – or at least the parts that are not transparent won’t be. So does this apply to those contracts you sign on a regular basis? And, if so, how do we measure how readable something is?

. . . .

Over the years, hundreds of different readability measures have been created for English and other languages.

. . . .

The choice of measures is complicated by the fact that different measures calculate readability in different ways. But broadly speaking the measures that we used are based on the number of words in a sentence, as well as the number of syllables or number of letters in the words. If a document has lots of words with multiple syllables and sentences with more words, then its readability will be less than one that has words with fewer syllables and shorter sentences.

There are lots of online tools to calculate readability. Even tools that try to produce the same measure, like the Flesch-Kincaid reading scores, can have significant discrepancies. One of the reasons for this is how the software counts number of words and syllables. For example, does the program count hi-tech as one or two words?

. . . .

All of the policies we tested needed a very high level of education to be fully understood. The most readable policy required almost 14 years of education (high school plus one year of university), while the least readable needed 19 years (PhD level). This suggests that at least some parts of these policies could be challenged on grounds of their transparency – no matter whether they are fair or not. This has important implications for consumers.

Based on these common measures, a reasonable conclusion might be that these policies are not written in clear and plain English. Not so in the UK. Readability scores do not have any legal effect in the UK – there isn’t a target score to beat.

This is because European case law requires courts to consider whether the contract clearly communicates its effects. A reading score may be good evidence that the effects cannot be understood by a consumer, but are not seen as the determining factor.

. . . .

In the US, however, there is a trend towards using reading scores to assess contracts. In Texas, for example, consumer banking contracts have to meet prescribed Flesch-Kincaid reading scores calculated by Microsoft Word. Similarly, in South Carolina loan contracts have a Flesch-Kincaid score of no higher than seventh grade.

Link to the rest at The Conversation and thanks to Nate at The Digital Reader for the tip.

PG decided to check some readability scores. He checked several documents by calculating their Flesch Kincaid Reading Ease scores. Fortunately, he quickly located a helpful website that did the calculations for him – here’s the link.

MS Word 2016 and Office 365 have an Editor feature, but, like the early versions of so many Microsoft features when first released, they’re a little clunky.

So, here are the documents and their Flesch Kincaid Reading Ease Score and Flesch Kincaid Grade Level Scores:

PG’s Standard Retainer Agreement for his Clients:

Flesch Kincaid Reading Ease – 47.4 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 10.9

PG’s standard introductory email sent to New Clients:

Flesch Kincaid Reading Ease – 66.8 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 7.1

Amazon KDP Terms and Conditions

Flesch Kincaid Reading Ease – 54.8 (0 to 100, higher is better)

Flesch Kincaid Grade Level – 9.5

Barnes & Noble Press Author Membership Agreement

Flesch-Kincaid reading ease score – 40.3 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 14

Big Five Publisher – A

Flesch-Kincaid reading ease score – 38.8 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 14.5

Major Publisher – B

Flesch-Kincaid reading ease score – 27.5 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 19.7

Major Romance Publisher

Flesch-Kincaid reading ease score 33.1 (0-100 scale, higher is better)

Flesch Kincaid Grade Level – 16.7

Perpetual License for Derivative Rights

6 May 2018

From Writer Beware:

SFWA’s Contracts Committee has recently been seeing a proliferation of contracts from small magazines, and a very few established markets, that license all derivative rights in perpetuity.

This is a red flag for a number of reasons, even if these rights are licensed non-exclusively. A derivative work is defined by copyright law as “a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” This sort of rights grab is by no means normal; magazines generally only take very limited first publication and archival rights for a limited time. Licensing the right to create derivative works can and mostly likely will interfere with the author’s right to exploit their right to create or license derivative works to others.

The risks of signing such contracts can be serious. To give examples of some of the negative impact of these rights grabs.

1) Dramatic rights are compromised, limiting the author’s ability to sell works for TV and film use because the author can no longer offer exclusive rights to the story, which means movie or TV producers who want exclusive dramatic rights are not likely to be interested in the work. The best case scenario is that the author may end up having to give the publisher of the magazine a cut of any income.

2) Marketing rights are compromised, in that any marketing deal could be undercut by the publisher, who would also have the ability to market those rights.

3) The ability of the author to publish sequels is compromised. The Publisher could commission sequels to the work from another writer, in competition with the author. Even if the Publisher were required pay a fee to the author for a sequel written by another writer, the existence of such competitive sequels would likely seriously hurt the author’s own sequels.

4) The author would have a de facto business partner for the rest of the author’s life and beyond for the life of copyright. Whether or not a clueless publisher would even realize what they’ve acquired or have any idea how to exploit it, the specter would hover over the author’s further use of any elements in the original story. In addition, if the publisher files for bankruptcy, any rights the publisher held would likely become part of its assets sold during the bankruptcy process. The author would then end up with a completely unknown business partner.

5) Even with a perfectly drafted contract, which seems unlikely with a publisher who would propose such a contract in the first place, it could easily take years of legal action to unscramble the competing rights.

Link to the rest at Writer Beware

In the #MeToo Moment, Publishers Turn to Morality Clauses

4 May 2018

From Publishers Weekly:

Until recently, the term “moral turpitude” is not one that crossed the lips of too many people in book publishing. But Bill O’Reilly, Milo Yiannopoulos, Sherman Alexie, Jay Asher, and James Dashner changed all that.

A legal term that refers to behavior generally considered unacceptable in a given community, moral turpitude is something publishers rarely worried themselves about. No longer.

Major publishers are increasingly inserting language into their contracts—referred to as morality clauses—that allows them to terminate agreements in response to a broad range of behavior by authors. And agents, most of whom spoke with PW on the condition of anonymity, say the change is worrying in an industry built on a commitment to defending free speech.

“This is very much a direct response to #MeToo,” said one agent when asked about publishers’ growing insistence on morality clauses. Most sources interviewed for this article agreed with this sentiment, citing the way sexual misconduct allegations and revelations are ending careers and changing the way companies do business. But it’s not just sexual harassment charges (which embroiled bestselling authors O’Reilly, Alexie, Asher, and Dashner) that publishers are scrambling to protect themselves against. It’s also the fallout that can come from things their authors say.

The situation with Yiannopoulos highlights this. S&S’s purchase of his book Dangerous in December 2016 caused a backlash in certain circles of the industry, with some complaining that the right-wing provocateur peddled in hate speech and should not be given a platform by a major publisher.

In February 2017, after the deal received bad press and several of S&S’s authors threatened to leave it, the publisher canceled Yiannopoulos’s book. The cancelation coincided with the resurfacing of an old interview Yiannopoulos gave, in which he appeared to condone child abuse.

S&S said that it canceled Dangerous because the manuscript was not to its liking. (The language in most author contracts gives publishers quite a bit of latitude in determining what constitutes a suitable manuscript.) Some felt, however, that the publisher was looking for a reason to drop the “alt-right” bad boy. Yiannopoulos sued S&S but wound up dropping the case earlier this year.

The controversy surrounding Dangerous highlights the stakes for publishers at a moment when platforms and reputations can be built, or destroyed, with a tweet. For agents, the Yiannopoulos case underlines some of the biggest concerns about morality clauses: the threat of muzzling speech.

“The gist of it,” one agent said in reference to a clause in Penguin Random House’s boilerplate, “is that [the publisher] wants the right to cancel an author’s book anytime the author says or does something the publisher doesn’t agree with. It’s crazy.”

. . . .

 “There are obviously a lot of very complex things going on here,” he said, speaking to the way publishers are reacting to the shifting social climate. He also noted that most publishers he’s dealt with have been open to changing these clauses. “When you go back to [publishers] and remind them that authors are allowed protected speech, political or otherwise, my experience is that they’ve been very responsive.”

But the agent who called these clauses “crazy” said he felt that more nefarious possibilities lie ahead. “Once Medusa’s head is removed from the box, a whole series of events can occur,” he complained. “Maybe [the publisher] signs up three books for $1 million, and the first book doesn’t do so well, and they use this clause to get around what’s legal and fair. This is like dropping a pebble in a pond: there are a lot of ripples.”

. . . .

“There are instances where it is appropriate to cancel a contract with someone—if, say, they are writing a book on investing and they’re convicted of insider trading.” But Rasenberger has concerns about the new boilerplates she’s been seeing. “These clauses need to be very narrowly drawn. The fear is that clauses like these can quash speech that is unpopular, for whatever reason.”

Another agent admitted to being distressed by the fact that some of the morality clauses she’s seen “are going very far.” She said that though she and many of her colleagues think it’s “not unfair for a publisher to expect an author to be the same person when it publishes the book as when it bought the book,” she’s worried how extreme some of the language in these new clauses is.

“If you’re buying bunny books or Bible books, these clauses make sense,” said Lloyd Jassin, a lawyer who specializes in publishing contracts, referring to deals for children’s books and Christian books. He wondered, though, about a publisher trying to hold authors of any other type of book to a moral standard. Noting that morality clauses are about money, not morality (specifically, they’re about a publisher’s ability to market an author), he posed a hypothetical. “Is the author of The El Salvador Diet, which touts a fish-only regimen, allowed to be photographed eating at Shake Shack? That goes to the heart of the contract.” He paused and added: “This is definitely a free speech issue.”

Link to the rest at Publishers Weekly

PG is old enough to remember when morality clauses aka morals clauses were considered unacceptably puritanical.

Morality clauses are standard practice in some Texas divorces. (They may also be used in some other states, but PG has only heard about the Texas variety.)

PG understands that courts in several Texas counties automatically issue orders including morality clauses on a temporary basis when a divorce petition is filed and there are minor children. Morality clauses can also be permanent and continue after the divorce. Since a divorce court may have continuing jurisdiction over custody matters, if the custodial parent and children move out of state, a custodial parent who violates the morality clause elsewhere may be hauled back into a Texas court for enforcement purposes.

PG further understands that a typical Texas morality clause will prohibit a custodial parent from having any adult to whom the custodial parent is not married be present in the home from 10:00 pm to 7:00 am if the children are also there. Grandparents and similar relatives are permitted, but on at least on occasion, a morality clause has been enforced to prevent a lesbian lover from spending the night with a custodial parent.

On many more occasions, a “friend” of the custodial parent may walk out of the door at 9:59 pm and quietly return at 10:30 pm after the children are in bed. In the morning, when the alarm clock sounds at 6:30 am, the friend gets up, gets dressed and leaves, only to return at 7:01 am with donuts.

As might be assumed, if the non-custodial parent asks for a change of custody because the morality clause was violated, the kids are usually the principal witnesses in such litigation.

PG has not made these comments to denigrate the great state of Texas, its laws, judges or citizens. He is merely pointing out that the same types of legal provisions that might be considered hopelessly retrograde in the context of a Texas divorce are now absolutely right, proper and essential in a Manhattan publishing contract.

 

Facebook admits it did not read terms of the app that harvested data of 87 million

26 April 2018

From CNBC:

Facebook did not read the terms and services of the app that improperly shared user data with Cambridge Analytica, the company’s chief technology officer said Thursday.

“We require that people have a terms and conditions and we have an automated check there at the time — this was in 2014, maybe earlier,” Mike Schroepfer told U.K. lawmakers at a parliamentary committee hearing. “We did not read all of the terms and conditions.”

Aleksandr Kogan, a Cambridge University researcher, created an app that collected data on millions of Facebook users. Kogan’s company, Global Science Research, then shared that data with political analytics firm Cambridge Analytica.

. . . .

Kogan said on Tuesday that Facebook did not pull it up on its terms of services until after The Guardian newspaper reported early informationabout it harvesting user data.

Facebook CEO Mark Zuckerberg told U.S. lawmakers earlier this month that Kogan was “in violation” of his agreement with the platform and that this was a “big issue.” But the data scientist hit back at the company’s boss, arguing that tens of thousands of other developers were employing similar practices to his app.

Link to the rest at CNBC

PG has lost track of the number of Terms of Service, Terms and Conditions, Terms of Use, etc.,  documents he has read or reviewed or written since the lovely little contracts started popping up online over thirty years ago. Had he known where the internet would go, he would have counted.

Apples iTunes’ TOS reportedly runs to over 20,000 words.

A website called TermsFeed provides both free and “premium” terms of service you can just copy and paste into your online business’s website. It has a nice article about “I agree to” Checkboxes so you can appreciate the full range of possibilities.

PG is certain Facebook’s “automated check” is an interesting program, but PG suggests it will require the highest form of artificial intelligence to avoid being fooled by the lengthy and impossibly dense language contained in a great many TOS documents.

Unfortunately, TOS documents are legally binding – sort of, maybe, up to a point.

Legally binding or not, when people depend upon a company for a significant portion of their income (like KDP) and KDP receives the money and passes some of it through to those people, the TOU document can be rather important, particularly when the violation of its terms can stop the money flowing.

PG just checked KDP’s Terms and Conditions, which Amazon helpfully indicates were last updated in September 2016. Since he has looked at them since September, 2016, he doesn’t have to look at them. No, PG is not aware of any case involving a modification of a TOU where someone forgot to update the “date last modified” information. He is certain this mistake has occurred on at least a few occasions, however.

(Legal minutia tip – If you want to know what changes from revision to revision, save a copy somewhere on your computer that you’re not using for something more useful and do an MS Word document comparison with the prior TOU when a new TOU shows up. If you have your own website with your own TOU, keep the old ones somewhere. If you don’t, you’ll be embarrassed like the Facebook guy if anyone claims they didn’t violate the old ones and you improperly changed them.)

 

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