Legal Stuff

Sherlock Holmes and the mystery of copyright

21 July 2014

From SCOTUSblog:

Are Sherlock Holmes and Dr. Watson still under a legal cloak (or cape, if you will) of copyright law?  The Supreme Court may have to solve that mystery, to decide a new legal plea filed Tuesday by the estate of Sir Arthur Conan Doyle, the Scottish creator of that fictional detective and his far less colorful companion.

The estate has been attempting to block a California lawyer and Holmes fancier, Leslie S. Klinger, from publishing a new book about the two characters unless he is willing to get a license from the estate and pay a fee.  The U.S. Court of Appeals for the Seventh Circuit rejected the estate’s copyright claim, calling it “quixotic.”

. . . .

At this point, the Doyle estate is only seeking a delay of the Seventh Circuit’s ruling, until it can file a petition for review of the decision itself.  The Seventh Circuit refused a stay on July 9.  But to deal with the application, the Court will have to decide whether the legal claim has any chance of ultimately succeeding and decide who might be hurt if a stay is, or is not, issued..

Doyle has been dead for eighty-four years, but because of extensions of copyright terms, ten of his fifty-six short stories continue to be protected from copying.

. . . .

The Doyle estate, though, is pressing a quite unusual copyright theory.  It contends that, since Doyle continued to develop the characters of Holmes and Watson throughout all of the stories, the characters themselves cannot be copied even for what Doyle wrote about them in the works that are now part of the public domain and thus ordinarily would be fair game for use by others.

. . . .

After the estate said that it would use its connections with and others to see that the new book did not get distributed, and added that it might sue for copyright violation, Klinger sued the estate in federal court to get the copyright issue settled.

In its ruling in mid-June, the Seventh Circuit found that nothing in the planned new volume will touch upon what Doyle wrote about his characters in the final ten stories that remain protected.  With its focus on those characters in the earlier, and no longer protected works, the new volume did not violate any of the estate’s copyrights, the court of appeals decided.

. . . .

That is the ruling that the estate is planning to appeal to the Supreme Court.   Its main argument is that, if other authors may exploit the Holmes and Dr. Watson characters, that “will stifle the estate’s ability to manage the Sherlock Holmes character’s further promotion and development through licensing agreements at a time when Sherlock Holmes movies and television shows are more popular than ever.”

Link to the rest at SCOTUSblog

Amazon’s E-Books Antitrust Clash in Germany on EU Radar

16 July 2014

From Bloomberg: Inc.’s e-books clash with a publisher is on the European Union’s radar after EU officials said they’re seeking to understand the dispute, which also spurred a German antitrust complaint by booksellers.

Germany’s association of booksellers said they were told of the EU’s interest by Germany’s Federal Cartel Office.

. . . .

Book retailers already sought a German probe of Amazon’s negotiation practices for buying rights to e-books in a dispute with Amazon over delays for deliveries of Bonnier AB physical books to force it to accept lower prices, according to a complaint filed last month.

The European Commission is “trying to understand the issues involved,” said Antoine Colombani, a spokesman for the commission, in an e-mailed statement.

Link to the rest at Bloomberg

Enhanced editions!

8 July 2014

From author Courtney Milan:

Hi everyone! The enhanced editions of my first five books–Unveiled, Unclaimed, This Wicked Gift, Proof by Seduction, and Trial by Desire, are now available–and they’re only 99 cents each through July 25th.

. . . .

Q. Why are you releasing enhanced editions?

A. Because I can. I know that sounds a little bit ridiculous, but let me put it to you this way–if you had a contract with a publisher for print-only releases, and the contract specifically stated that you reserved digital rights, would you put that book up as a digital edition? Of course you would.

That’s what my contract looks like with regards to enhanced editions. They specifically reserve the right to make enhanced ebooks to me. I had that right, and so I am now exercising it.

Releasing enhanced editions gives me control over pricing, covers, branding, promotion, and back matter. It also makes me more money.

. . . .

Q. Specifically what in your contract allows you to do this? Can I do this, too?

A. There are two parts to my contracts that allow me to do this. The first is the following statement in the Grant of Rights section of my contract:

(d) electronic use of the non-dramatic unenhanced verbatim text of the Work, excluding video use (whether in a now known form or hereafter discovered) … Notwithstanding anything to the contrary in this Agreement, electronic rights shall be limited to the display of the text in the Work and shall not include any moving images, sound or any interactive or multimedia elements.

Incidentally, give my agent, Kristin Nelson, a hand for drafting an extremely clear statement. If she’d just left it as “unenhanced verbatim text” or even limited it to “multimedia elements” we might have had to argue about what “multimedia” and “enhanced” meant. As it is, the line about “sound” gave me a really, really clear out: As long as I included audio, I was outside the rights I had granted to my publisher.

The second is something that is not in my contracts, and that is a noncompete provision of any kind.

I don’t know if you can do this. You’ll have to look at your contract. I’ve mentioned here the two things you’ll need to look at–the grant of rights section and…uh, the rest of the contract. In the grant of rights section, you need to look and see if you are only granting rights to the “unenhanced” text, or if you reserve “multimedia” rights or something along those lines. There are probably a thousand different ways to word the reservation, and so there’s no magic language I can tell you to look for.

There are also a lot of authors out there who don’t have an enhanced reservation at all. I’m pretty sure that Harlequin series boilerplate, for instance, will not allow this.

Whether you can do this will depend entirely on what you and/or your agent negotiated.

Link to the rest at Courtney Milan and thanks to Amy for the tip.

From Google to Amazon: EU goes to war against power of US digital giants

6 July 2014

From The Guardian:

Within the salons of the Elysée Palace, along the corridors of the European parliament and under the glass dome of the Reichstag, Old Europe is preparing for a new war. This is not a battle over religion or politics, over land or natural resources. The raw material that Paris, Brussels and Berlin are mobilising to defend is the digital environment of Europe’s inhabitants; their enemies are the Silicon Valley corporations that seek to dominate it.

Coal, gas and oil powered the industrial revolution, but in the digital era, data is replacing fossil fuels as the most valuable resource on Earth, and the ability to collect and interrogate it has created organisations with a power that can at times seem beyond the control of nation states. Amazon, Apple, Facebook and Google represent, in the words of Germany’s economy minister Sigmar Gabriel, “brutal information capitalism”, and Europe must act now to protect itself.

“Either we defend our freedom and change our policies, or we become digitally hypnotised subjects of a digital rulership,” Gabriel warned in apassionate call to action published by the Frankfurter Allgemeine. “It is the future of democracy in the digital age, and nothing less, that is at stake here, and with it, the freedom, emancipation, participation and self-determination of 500 million people in Europe.”

In France, economy minister Arnaud Montebourg believes Europe risks becoming a “digital colony of the global internet giants”, and ministers have called for Google to contribute to the cost of upgrading the country’s broadband infrastructure. Gabriel says Germany’s cartel office is currently examining whether Google should be regulated as a utility, like a telecoms supplier – the group has 91.2% market share of search in Germany.

. . . .

“In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes,” Almunia said. His intervention was widely interpreted as a politically motivated act. It almost certainly was.

There are those who believe that Jean-Claude Juncker, the former Luxembourg prime minister who has just been elected as the next president of the European commission – despite vocal opposition from David Cameron – is out to get Google.

Its corporate motto is still “don’t be evil”, but Google seems to have replaced Microsoft – which was embroiled for years with regulators over monopolistic practices – as the bête noire of Brussels.

. . . .

Google has a friendly face, but its creeping power is causing alarm. The company controls two of the world’s biggest search engines: Google itself and its video site YouTube, which ranks alongside Microsoft’s Bing! and China’s Baidu. The company’s own web browser, Chrome, has overtaken Firefox and Microsoft’s Explorer as the most popular browser, its Gmail is the largest email service, and its Android software controls more mobile phones than any other operating system.

Now Google is moving into the home, buying cloud-connected thermostat maker Nest and home security camera operator Dropcam. It wants to drive our smart cars and build humanoid robots, and it is funding a network of satellites to beam internet connections from space.

In an extraordinary metaphor, the boss of German media group Axel Springer has compared Google to the dragon Fáfnir, from the Norse myth that inspired Tolkien to write The Hobbit and Wagner to compose the Ring Cycle. Fáfnir was the son of a dwarf king, who became so jealous of the family’s vast store of gold and gems that he killed his father to take sole possession of the treasure. Greed turned Fáfnir into a dragon, who guarded his hoard with fire and poison.

“Google is sitting on the entire current data trove of humanity like the giant Fáfner in The Ring of the Nibelung,” Axel Springer boss Mathias Döpfner wrote in an open letter to the firm’s chairman, Eric Schmidt, in April.

. . . .

Amazon is under fire for tax avoidance and strong-arming publishers and traders. In Europe, it has been banned from telling companies that sell on its German website that they can’t offer their goods at cheaper prices elsewhere. The online retailer shelters profits by funnelling most of its European revenues through Luxembourg. The European commission is considering whether to investigate as part of a potentially wide-ranging tax probe which began in June.

Link to the rest at The Guardian

Start Media Buys Whiskey Creek Press, Imposes New Contract Terms

28 June 2014

From Writer Beware:

In early June, Debra Womack, owner of Whiskey Creek Press, announced in a letter to authors that the publisher was in the process of being acquired by Start Media (a company that has recently acquired two other small presses, Night Shade Books and Salvo Press).

As part of the acquisition process, Start is asking all current WCP authors to agree to and sign an offer of new terms as follows on page two below. We are offering you the non-refundable sum of $1 and other good and valuable consideration, payable to you if and when the sale of the company to Start is completed (expected to be by the end of June 2014). Upon closing you will also receive a payment from WCP of current royalties and/or advances or any other sums owing to you by WCP for sales up through and including April 30, 2014.

. . . .

WCP’s contract includes this clause:

If the Publisher sells its assets to another publisher who does or plans to market and promote books of the type and genre of the Work, the successor publisher will be bound, as a minimum, to the same terms delineated in this agreement.

In direct contradiction to this, however, the letter of agreement Start Media is asking authors to sign imposes some substantially different terms. WCP’s contract term is 3 years from publication; Start Media’s is life-of-copyright. WCP’s ebook royalties are 35% of the net download price; Start Media’s are 25% of net (“all monies actually received”). There’s also a troubling gap between April 30, when WCP ceases to pay royalties, and July 1, when Start Media’s new royalty rate kicks in. What happens to books sold in May and June?

Understandably, WCP authors are upset and angry. Many are refusing to sign–despite the fact that no explanation has been provided, either by Womack/WCP or Start Media, of what will happen to their rights if they don’t.

Link to the rest at Writer Beware

The moral of this cautionary tail is that authors can’t assume the publisher they sign with (and who gives them all sorts of promises that aren’t written into the contract) will be the same publisher they’ll be dealing with for the entire term of their contract.

Indeed, in a life-of-the-copyright agreement, it is virtually certain the existing publisher will disappear before the contract ends. At a bare minimum, all the people working for the existing publisher will be long gone before the contract is done.

Writer Beware is an excellent site and provides insightful analysis and warnings concerning publishers and their contracts. However, PG disagrees with WB’s defense of life-of-the-copyright contract terms. Ultimately, it’s the worst sort of rights grab and, in PG’s unceasingly humble opinion, is always unreasonable.

Additionally, as they are typically written, out-of-print clauses are seldom a reasonable solution to the problem of ridiculously long publishing contracts.

First, the typical OOP clause is extremely complex and difficult for an author to navigate. Having to pay an attorney to help figure out whether a book is out of print and work through the OOP administrative process is ridiculous.

Second, the typical OOP clause gives the publisher all sorts of ways to avoid reverting the title with no material benefit to the author.

Third the typical OOP clause is set to such a low trigger point – WB mentions 50 copies per year or 25 copies per year – that the author has probably experienced years of absurdly small royalties before the OOP clause can be triggered.

A long time ago (as measured in Internet time), PG suggested an improvement to OOP clauses – A Mimimum Wage for Authors. Basically, it’s tied to royalties paid by the publisher to the author, not the number of copies the publisher sells. The author cares about dollars (or euros, etc.), not how many ebooks were sold at 99 cents each.

In a nutshell, the Minimum Wage for Authors OOP clause says if the author doesn’t receive a certain minimum royalty payment for a book, the book reverts. In a life-of-the-copyright contract, PG recommends that an inflation adjustment provision be applied to the minimum royalty payment as well because $100 will be worth a lot less fifty years from now than it is today.

The best solution is, of course, a publishing contract that ends within a specific number of years which is the way contracts operate in the reality-based business world.

Amazon Faces German Booksellers’ Antitrust Complaint on E-Books

24 June 2014

From Bloomberg: Inc., the world’s largest online retailer, faces a complaint filed at Germany’s antitrust regulator claiming it’s unfairly wielding its market power against publishers.

The Boersenverein des Deutschen Buchhandels, the country’s association of booksellers, asked the Federal Cartel Office to probe Amazon’s negotiation practices when buying rights for e-books. Since March, Amazon has delayed deliveries of Bonnier Media’s physical books to force it to accept lower prices, the association said in an e-mailed statement today.

“With this extortive action toward publishers, Amazon violates antitrust laws,” said Alexander Skipis, managing director of the association. “The action has not only consequences for the publishing house, but is a threat for all e-book sellers and distributors in Germany.”

Link to the rest at Bloomberg

Open Road Fires Back at HarperCollins in Copyright Case

23 June 2014

From Publishers Weekly:

In a court filing, Open Road attorneys last week assailed what it called HarperCollins’ “extreme”proposal for an injunction and more than $1.1 million in legal fees and damages to settle claims stemming from Open Road’s unauthorized e-book edition of Jean Craighead George’s Julie of the Wolves.

Claiming that the Harper proposal is based on “a misleading portrayal” of the facts, Open Road attorneys argued that not only has Harper not suffered the kind of irreparable harm necessary to justify its proposed remedy, in fact it has not suffered any harm at all. “Harper cannot prove any present harm, let alone irreparable harm,” Open Road attorneys argued, noting that despite its win in court, Harper does not have the right to sell Julie of the Wolves e-books without the author’s consent, “which it has never obtained” owing to “a fundamental disagreement as to a fair e-book royalty.”

. . . .

 In its response last week, Open Road argued that it litigated the case in a “non-vexatious” manner only after two separate legal reviews supported its belief that George held e-book rights. The brief concluded that a damage award in the $750 to $30,000 range would be “sufficient,” given that Open Road has not made significant profits and that Harper lacks the explicit right to publish a digital edition of its own.

. . . .

 “Authors who believe they have retained e-book rights and traditional publishers who often overreach in claiming broad grants under the original contracts are often involved in negotiations over the exploitation of the authors’ works in new media,” the Open Road brief argues. “Given the disparity in economic resources, those negotiations are already heavily skewed in favor of the large publishers. The Court should not skew the balance further against authors who seek to assert their rights with the threat of million dollar attorneys’ fee awards.”

. . . .

 At its heart, however, as Open Road’s brief suggests, the case is more about e-book royalties. HarperCollins signed George’s Julie of the Wolves in 1971, for a $2000 advance and has since sold over 3.8 million copies in print. But according to court filings, Harper has refused to budge from a 25% net royalty on e-book sales, which George, before her death in May 2012, deemed fundamentally unfair. Open Road paid George a 50% e-book royalty.

Link to the rest at Publishers Weekly and thanks to Dana for the tip.

Price-Fixing Lawsuit Filed by Retailers Given Green Light by Judge Cote

10 June 2014

From The Digital Reader:

Judge Denise Cote breathed life into another antitrust lawsuit against Apple and five publishers today.

Dnaml was the first of several retailers to file a lawsuit against Apple and the 5 publishers, and it will also be the first to go to trial. In a 22-page ruling, Judge Cote ruled that the Australian ebook company had met the minimum requirements to have its day in court.

The case, which passed under everyone’s radar when it was filed in September 2013, argues that Dnaml was financially harmed “directly and as a proximate result” of the price-fixing collusion by Apple and the five publishers (Macmillan, Hachette, HarperCollins, Simon & Schuster, and Penguin).

Much of the Dnaml complaint directly cites and quotes the 2012 lawsuit filed by the DOJ and state’s attorneys general, and it asks for “all fair and equitable damages” as well as attorney fees.

. . . .

Judge Cote has scheduled a pretrial conference for 25 July, and she also included two other retailers who have filed similar lawsuits. BooksonBoard and Diesel eBooks, two US ebook retailers, each filed a lawsuit in early 2014 making many of the same allegations as Dnaml.

. . . .

“It is more than plausible that a discount retailer was harmed by a conspiracy to remove retailers’ ability to discount e-books,” the judge wrote in her order, adding that the retailers were “indisputably competitors in a market in which trade was restrained.”

Link to the rest at The Digital Reader

U.S. Goes Back to Publishers on Prices

3 June 2014

From The Wall Street Journal:

Two years after three major book publishers settled a major civil antitrust lawsuit with the federal government, the Justice Department has gone back to the publishers asking about any recent pricing discussions they may have had with others in the industry, say people familiar with the situation.

The inquiries, made in recent weeks by letter to Lagardere SCA’s Hachette Book Group, CBS Corp.’s Simon & Schuster and News Corp’s HarperCollins Publishers, have created anxiety in the publishing industry. The inquiries reopened a sensitive and costly issue that publishers thought they had resolved, and raised the possibility of additional constraints on how they do business.

. . . .

The significance of the Justice Department’s latest move isn’t clear. The inquiries don’t necessarily mean any legal action is imminent or even likely, a person familiar with the situation said.

The three publishers the Justice Department has contacted are the ones who first settled the lawsuit. Two other publishers also named in the suit settled later. Apple went to trial, was found guilty of collusion and said it would appeal.

Link to the rest at The Wall Street Journal (Link may expire)

Apple ebooks damages trial to start July 14 after appeals court refuses delay

2 June 2014

From GigaOm:

An appeals court this week refused to halt a trial that could require Apple to pay hundreds of millions of dollars over price-fixing, even as the company continues to deny any wrong-doing and seeks an appeal.

In a succinct order, the U.S. Court of Appeals for the Second Circuit said a trial can go forward on July 14 that will determine how much Apple should pay for brokering a conspiracy with book publishers to fix the price of ebooks.

In April, class action lawyer Steve Berman said, “Consumers could see a judgment of between $750 to $850 million,” as punishment related to Justice Denise Cote’s conclusion last year that Apple organized the scheme.

Link to the rest at GigaOm

PG says this is the second time Apple has gone to the Second Circuit to try to stop this case from going forward. The Court of Appeals has turned them down twice.

Apple will get another appeal after the damages trial, but PG suspects that if the Court of Appeals had seen anything materially wrong with how the trial judge had handled the case so far, it would have intervened.

As PG has written previously, he thinks the Price-Fix Six (Apple and five big New York publishers) engaged in a mundane and, as these things go, very unsophisticated price-fixing scheme. They were stupid to try in the first place and the whole conspiracy fell apart pretty quickly.

Smart price-fixers can keep these operations going for years before they’re caught.

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