Legal Stuff

Katina Powell’s publisher sues Louisville lawyers

28 October 2016

From the Louisville Courier-Journal:

The publisher and co-author of Katina Powell’s book, “Breaking Cardinal Rules: Basketball and the Escort Queen,” have sued two Louisville lawyers for bringing a “baseless” lawsuit on behalf of University of Louisville students who claimed the book reduced the value of their education.

The students’ suit, filed by lawyer Nader George Shunnarah and John Andrew White, was dismissed by a Jefferson Circuit Court judge who said there were no grounds for recovery and permitting it to go forward would “drastically expand the avenues of civil liability and recovery in the commonwealth of Kentucky.”

IBJ Book Publishing LLC and Dick Cady, the co-author, say they have been forced to spend at least $150,000 defending the suit, which they alleged was filed “to extort a monetary settlement and gain notoriety for their clients and themselves.”

. . . .

Hornback alleged in a suit filed in October 2015 that the book tarnished the university and reduced the value of her education. She asked that it be designated a class action so she and other students could share in the profits.

. . . .

In the book, Powell, a self-described escort, said U of L employee Andre McGee paid her $10,000 over four years to provide sex and striptease shows to players and recruits.

Link to the rest at Louisville Courier-Journal

Our journey has come to a close

17 October 2016

From Jolly Fish Press:

It is with deep sadness that we are announcing the closing of Jolly Fish Press (JFP). For nearly five years, JFP has been a beacon of inspiration to many in the publishing industry; we’ve opened up doors to authors, editors, designers, publicists, and illustrators alike, providing them with a platform on which their dreams of establishing themselves in the industry could be realized.

JFP has accomplished much. We’ve helped our authors get copies of their books into the hands of readers. We are extremely proud and grateful for the immense contributions and efforts our employees and interns have put in through these five amazing years—we could not have done it without them. The hard work and commitment of our creative and publicity teams, and the talents of our editors, interns, and designers are what allowed us to continue publishing quality and beautiful books thus far. But even with a collection of note-worthy and great books in our catalog and future lineup, we have not generated sufficient revenues to make the business viable.

After a long process of seeking investors who believe in our company and what we aim to achieve, we have, unfortunately, failed to secure the funds necessary to grow and move the company forward. While JFP has great propensity to becoming a serious competitor in the industry, the lack of financial investment prohibits us from reaching our potential. We have approached the point where we can no longer sustain our business.

JFP is ceasing business effective October 31, 2016. All rights to our titles will be reverted by October 31, 2016. Book production will stop effective immediately.

Link to the rest at Jolly Fish Press and thanks to Abel for the tip.

Amazon and EU in Settlement Talks Over E-Book Terms

5 October 2016
Comments Off on Amazon and EU in Settlement Talks Over E-Book Terms

From The Wall Street Journal: Inc. and European Union antitrust authorities are engaged in initial settlement discussions to resolve the regulator’s concerns the e-commerce company abuses its market power to force illegal terms on publishers that harm purchasers of electronic books, according to a person familiar with the matter.

If both sides reach a settlement deal, the commission would then need to test out the agreement’s conditions with publishers.

. . . .

The European Commission opened an in-depth probe into Amazon’s e-books business dealings last June, citing concerns the tech company designs contracts with publishers that prevent other e-books distributors from competing on the same level.

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

PG says one of the Amazon contract practices being investigated is Amazon’s “most favored nation” (MFN) clause in its contracts with publishers.

Such clauses are not uncommon in US business contracts involving one or more large companies. PG has negotiated MFN provisions dozens of times.

The purpose of an MFN clause is to make certain that a purchaser of products or services gains the benefits of lower prices for those products or services if the seller is currently selling its products or services for lower prices to someone else or, more importantly, reduces its prices in the future.

Basically MFN provisions provide that, if a seller offers a better deal (lower prices, installment payments, etc., etc.) to a third party, the selling party must offer the same improved terms to the first customer under the MFN clause.

A simple example:

  1. Andrea agrees to sell Bob 10 widgets per month at a cost of $1,000 per widget. At Bob’s insistence, the sales contract includes an MFN clause.
  2. Alexandra then sells or agrees to sell Cathy 10 widgets per month at a cost of $500 per widget.
  3. Under the MFN clause, Andrea must lower her widget prices to $500 per widget for Bob.

The EU antitrust investigation is evidently focused on whether the contracts between European publishers and Amazon that include an MFN clause guaranteeing that the publishers won’t sell books for lower prices to third parties (or other ebookstores) violate EU laws or regulations.

PG says any etailer or retailer is very interested in buying goods at the best prices offered by a vendor. Retailers like Walmart or Target will routinely include MFN provisions in their purchase agreements with all significant suppliers.

If you understand how MFN works (or is supposed to work), it’s not hard to find product offerings that are likely structured to avoid triggering MFN provisions.

For example, PG’s local Costco does not sell individual boxes of Kleenex brand tissues. If you want to purchase Kleenex at Costco, you must buy a huge package of twelve boxes of Kleenex.

Costco has likely agreed that it won’t break down the big package and sell single boxes of Kleenex.

PG suspects such packaging permits Kleenex to be sold to Costco at a lower per-box price than Kleenex is sold to Walmart and other retailers without triggering MFN provisions in the Kleenex purchasing agreements with those retailers.

Kleenex is happy to sell twelve-box packages to Walmart at the same price and terms as it does to Costco, but Walmart doesn’t want to sell Kleenex that way.

Harlequin Lawsuit’s Happy Ending

16 September 2016

From author Patricia McLinn:

Sitting in front of me is the settlement check I received from a class action lawsuit against Harlequin. Because this Harlequin lawsuit was settled out of court, there was no winner legally. That’s not how it feels. Not at all. Let me tell you, the authors won.

. . . .

In the spring of 2011 a group of authors, shepherded by Ginger Chambers and Barbara McMahon and with me part of the flock, hired Elaine English for a legal assessment of clauses governing ebook rights in various Harlequin contracts. Under contracts that spanned several years, ebook rights were lumped under “All Other Rights.” These contracts were written and signed before ebooks became truly commercially viable, but because of the length of Harlequin contracts they were still in force. The “All Other Rights” clause said Harlequin and the author split whatever monies came in from the exercise of these rights 50-50.

However, when books under those contracts eventually were digitized, it became quite clear the authors were getting way, way, way less than 50%.

What Harlequin did was say that our contracts were signed with Harlequin Switzerland, but the ebooks were published by Harlequin Toronto, and golly, gee, Harlequin Switzerland sold the rights to Harlequin Toronto for 6% of cover price. So Harlequin Toronto sent Switzerland 6%, Switzerland kept 3%, the author received 3% … and Harlequin Toronto kept all the rest. (BTW, this agreement between these Harlequins was created well after the contracts were signed. Authors were never informed about it.)

. . . .

A word about Harlequin contracts – they are essentially not negotiable, with extremely limited exceptions. You might be stunned at the major authors Harlequin could have kept if it had been willing to negotiate a bit. It chose instead to let those authors walk. You either accept the contract as Harlequin writes it or you don’t publish with Harlequin. (The latter became my choice around 2008.) They could do this because of the structure and business climate of publishing at that time.

I had a few excellent individual editors among the 34 I had for 25 books (yes, you read that right … editor turnover might lead some to suspect Harlequin didn’t treat many of its editors well, either), but my overall experience with Harlequin was … let’s say “not good.” By the end of 19 years with them I was disheartened, depressed, and done. I didn’t think I would write for publication ever again. I didn’t even want to try.

By 2011, however, I was back on track. I was publishing backlist books as an indie, I was writing again and publishing those originals as an indie. And, thanks to Harlequin’s machinations, I got a good jolt of indignation to return me to my feisty self. My reaction to what Harlequin was doing was summed up after reading one of their missives to authors that summer when I said aloud, “How stupid do you think I am?”

. . . .

David Wolf, bless his heart, took the case on as a potential class action lawsuit, which he and Michael Boni and John Sindoni of Boni & Zack, LLC, filed in July 2012. The lawsuit is Keiler v. Harlequin. The three named plaintiffs on whose behalf the suit was filed are authors Barbara Keiler (who writes asJudith Arnold), Linda Barrett, and Gay Wilson (who publishes as Gayle Wilson.)

Harlequin’s reaction? “This is the first we’ve heard of it.” That is what’s known in writing as A Big Fat Lie.

Remember, David Wolf had been talking to them for the better part of a year at that point.

The Harlequin lawsuit had plenty of twists and turns. It was completely dismissed at one point in 2013. The lawyers decided to appeal.  Mind you, they were Not Paid a Cent all this time. Once they started down the class action road it was all on contingency. (Yes, they’ve been paid out of the settlement now – getting nowhere near what they could have earned through ordinary billable hours for the years of work they put in on this.)

The appeals court upheld the most important element of the case in spring 2014 … and the next day, the sale of Harlequin to Harper Collins was announced. How would that affect things? We had no idea.

On top of that, the appeals court sent the case back to the same judge. Who hadn’t, to my unlegal eye, seemed to grasp much of anything about the issues. So how could we hope to fare better than the first time round with him?

Then that judge died unexpectedly as the result of a fall. I am not kidding you.

. . . .

The new judge took a different approach. In October 2014, the 1,200 authors affected by the contract clause were certified as a class. We were, truly, a class action lawsuit. There was champagne that day.

The work wasn’t over. There was discovery. There were depositions. Harlequin subpoenaed at least two authors groups, demanding from one all communication among its members. So much for privacy. It was an onerous effort for a volunteer-run organization to gather all the information and, as expected, it got Harlequin nowhere.

If I were writing this in a novel, I’d let the reader know that the big corporation had done it just because it could – to punish those upstart authors any way possible.

Finally, in June 2016, a settlement of the Harlequin lawsuit was announced.  While maintaining it never did anything wrong, Harlequin agreed to pay $4.1 million.

The settlement checks from the Harlequin lawsuit began arriving in authors’ mailboxes Monday, Sept. 12.

The checks are nice. Very nice.

. . . .

Most vividly, I remember tears from some of the communications from these authors. They were risking their livelihoods, but had to join the group because what Harlequin was doing was simply wrong. They had written for Harlequin for 30 years and felt betrayed and would never write for them again. They had just achieved their dream of selling their first book to Harlequin and they were scared, but this was too important to ignore. They were from all over the United States and Canada, from the U.K., Australia, and New Zealand. They couldn’t afford the $35 each of us put in to start, but would send me $5 a month until they had paid their share. They wrote a check for well over their share to help cover those who struggled to pay.

And the subgroup that first hired David Wolf became warriors. They collected, organized, and dug through contracts and correspondence. They taught themselves legal concepts. They searched corporate reports. They asked brilliant questions. They did what needed to be done.

Link to the rest at Patricia McLinn

Here’s a link to Patricia McLinn’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG can’t go into detail, but he will say that HQ is not the only publisher that is not living up to its contracts.

Going to Court

2 September 2016

From two authors who write together as Alexa Riley:

For those who are unaware, we had some trouble in April with someone (not us) selling books under the name Alexa Riley. And sadly, a number of you accidentally purchased the books thinking they were ours.

. . . .

Turns out it was a man who was posing as Alexa Riley. Long story short, we decided to pursue litigation against this person after requests to cease and desist were ignored and we were given several ever-changing excuses as to why he was using our name.

Taking someone to court wasn’t our first choice for several reasons. Number one, the cost. Number two is the time and energy that it would take away from writing. Number three is that no one likes lawsuits. There are other reasons, but after seeing how many of our readers were tricked into buying these books, we decided that we couldn’t sit idly by and allow this to happen.

Then we started to notice that not only was this happening to us, but to other authors as well. Authors who said they weren’t able to do anything to stop it. We knew then that we had to go down this road, and it’s been a long and expensive one.

But after yesterday, we can say it was worth it.

The final result was that we were able to have this “author’s” whole Amazon account banned. Furthermore, we proceeded within the full extent of the litigation and the verdict was made in our favor. We won, and have been awarded damages.

. . . .

We won’t stand by and let these people think they can get away with this. Unfortunately, we are aware of other authors already using our name, our stories, our brand to try to deceive you. We’re preparing papers to address those people as well.

Link to the rest at Alexa Riley and thanks to Shelley for the tip.

Here’s a link to Alexa Riley’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Hachette Sues Seth Grahame-Smith

29 August 2016

From Locus:

Seth Grahame-Smith, author of Pride and Prejudice and Zombies and Unholy Night (among other titles), is being sued by Hachette Book Group for breach of contract. The publisher is suing to recover the $500,000 (plus interest) they paid for a book they allege the author never delivered.

Hachette and Grahame-Smith made a $4 million deal for two new books following 2010’s Abraham Lincoln: Vampire Hunter, with $1 million paid on signing: $500,000 for each book. They published Grahame-Smith’sThe Last American Vampire in 2015, but despite offering extensions on the second book’s deadline, it never arrived.

Link to the rest at Locus and thanks to Kris for the tip.

Following is a copy of the Complaint with a copy of the publishing agreement as Exhibit A.

PG was not involved in the negotiation of the publishing agreement, but will observe it contains some provisions detrimental to the author that PG typically recommends be removed or modified.


EFF lawsuit seeks to overturn DMCA ban on breaking DRM

22 July 2016

From Chris Meadows via TeleRead:

[T]he EFF has just filed suit against the US government on the grounds that the Digital Millennium Copyright Act’s anti-circumvention provision, Section 1201, represents an unconstitutional restraint on free speech.

The suit takes aim at the practice of outlawing breaking DRM, with the Librarian of Congress permitted to make exceptions to the prohibition every three years, as well as outlawing any explanation of how to break DRM. The EFF calls this “an unconstitutional speech-licensing regime.”

“The government cannot broadly ban protected speech and then grant a government official excessive discretion to pick what speech will be permitted, particularly when the rulemaking process is so onerous,” said [EFF Staff Attorney Kit] Walsh. “If future generations are going to be able to understand and control their own machines, and to participate fully in making rather than simply consuming culture, Section 1201 has to go.”

The EFF is representing plaintiffs computer scientist Andrew “bunnie” Huang and computer security researcher Matthew Green. Huang is developing devices for editing digital video streams for his company Alphamax LLC that require the ability to break DRM in order to function properly. (Huang has previously shown up on TeleRead in connection with an open laptop he designed and successfully crowdfunded, so he’s not exactly new to advocating for open hardware.) Green is writing a book on circumventing security systems, and is investigating the security of medical record systems on a grant from the National Science Foundation—but he has had to avoid some areas of research because of concerns over Section 1201.

This is also, of course, the law that makes it illegal to crack DRM on ebooks so we can back up our purchases and convert from Kindle to ePub formats, or vice versa, or crack the DRM on DVDs or Blu-rays so we can rip the movies for mobile viewing.

Link to the rest at TeleRead

PG does not condone the pirating of copyrighted materials, including books.

However, the anti-circumvention provisions of the Digital Millennium Copyright Act were mostly written by and for the big US movie studios and record companies (yes, PG is informed they’re still called record companies). The DMCA didn’t do much for indie authors.

PG believes that a reader who wants to read ebooks that were properly purchased on that reader’s iPad as well as his/her Kindle should be legally permitted to do so. Software or services that make this possible should be legal.

Of course, some people will use such software for illegal purposes. Some people will also use baseball bats for committing crimes, not playing baseball.

PG suggests that focusing on the prosecution of criminals who are performing acts which harm creators is a much better idea than writing laws which prohibit non-criminals from doing useful work that doesn’t damage the owners of copyrights in any way.


Brought to book: when publishers go to court

22 June 2016

From The Guardian:

A writer scored a significant victory over publishers this week, when comic book giants Marvel and DC – who had tried to block Graham Jules from using “superhero” in the title of his self-help manual Business Zero to Superhero – backed down after more than two years, just before a hearing in London. Their double shame (first coming across as bullies, then failing) raises the question: how well do publishers fare when they sue or are sued – are they legal superheroes or zeroes?

Regina v Penguin, AKA the Chatterley trial (1960)
The crown sought the banning of DH Lawrence’s Lady Chatterley’s Lover under the Obscene Publications Act, and equally ill-advisedly the prosecution was led by fuddy-duddy Mervyn Griffith-Jones, who notoriously urged jurors to reject the book as one they would not wish their “wife or servants to read”. They backed Penguin’s right to publish instead, in a case seen as heralding 60s permissiveness. (or, as portrayed in Larkin’s “Annus Mirabilis”, the arrival of “sexual intercourse”).Publisher win

. . . .

Random House v Joan Collins (1996)

Unimpressed by the first novel produced by Collins (then at the height of her post-Dynasty fame) as part of a $4m two-book deal, Random House called it “unreadable” and sued for the return of the $1.2m advance. Crucially, her contract had only stipulated a “complete” text, with the usual requirement for a “satisfactory” one indulgently removed; she duly emerged the winner, with Random House (which never published the novel) exposed as embarrassingly eager to profit from shoddy celebrity blockbusters as well as failing to retrieve its money. Publisher loss

. . . .

Baigent and Leigh v Random House (2006)
Dan Brown gave evidence in London’s high court when his mega-selling The Da Vinci Code was accused by the authors of conspiracy history book The Holy Blood and the Holy Grail (published, as it happened, by another division of Random House) of having “appropriated the architecture” of their work and so infringing their copyright. The judge dismissed their claim, and they were ordered to pay costs estimated at nearly £1.3m. Publisher win

. . . .

Jennifer Pedroza v The Writer’s Coffee Shop (2016)
Pedroza, an American elementary teacher, had worked for the e-publishing outfit that first published EL James’s Fifty Shades of Grey, and argued she had been defrauded by her then business partner of her share of its total estimated royalties of $40m. An almost two-year case ended with a judge in Texas ordering the publisher (based in Sydney, Australia) to pay her $11.5m. Publisher loss

Link to the rest at The Guardian and thanks to Mark for the tip.

Apple E-book Refunds to Begin June 21

21 June 2016

From Publishers Weekly:

The book business is about to get a summer boost. Attorneys today confirmed that $400 million in refunds due readers following the end of the Apple e-book price-fixing case will begin flowing into customer accounts on June 21—with refunds for New York Times bestsellers approaching $7 per title purchased.

Similar to the prior settlements with publishers, which were paid out in 2014, the bulk of the Apple credits will be automatically delivered directly into the accounts of consumers at major book retailers, including Amazon, Barnes & Noble, Kobo, and Apple. Consumers will receive a $6.93 credit for every purchased e-book that was a New York Times bestseller, and a $1.57 credit for other e-books. The credits can be used for “any product or service” offered by the retailer, unlike the publisher settlements, which restricted refund credits to book purchases (print or digital) only. The settlement covers books that were purchased between April 1, 2010 and May 21, 2012.

Link to the rest at Publishers Weekly

PG received his refund this morning.

Thugs, Lawyers, and Writers

18 June 2016

From Kristine Kathryn Rusch:

Here’s the best and worst thing about writers:

We have fantastic imaginations. Those imaginations serve us well when we write books and stories. Those imaginations often fail us when we enter the business world.

What do I mean?

It’s rare to find a writer with a Pollyanna view of the world. Most writers are better at gloom and doom than they are at unremitting optimism.

Writers also have an inflated sense of self—we couldn’t do our jobs otherwise—and a weirdly introverted need to be the center of attention. If we screw up, we feel like the entire world knows—and the entire world will react.


For reasons I don’t understand, writers also want rules. They want to know how to write, what to write, and what to do when they’re finished writing. They cobble bits and pieces of information from blog posts to Mrs. Hanson’s Fourth Grade English class, and come up with some convoluted set of rules that they believe every writer could and would follow.

And, more so than in almost any other profession I’ve encountered, most writers are ethical to the point of self-harm. For example, in the United States, we have an annual homework assignment—our federal and state tax returns. Convoluted laws and all kinds of regulation allow for deductibles and legal ways to move income from the taxable side of the equation to the not-taxable side of the equation.

Writers often won’t use those deductibles and regulations that favor them, preferring to pay the full tax burden. Why? They believe that everyone should pay their fair share.

. . . .

But the writerly weirdness causes conflict with our careers and our businesses, in part because we are (as a group) imaginative, rule-bound, pessimistic, ethical, and the center of our own small universes.

We bring all of those things into the realm of contracts.

Be honest with yourself: What do you imagine will happen to you if you don’t follow your book contract to the letter?

Many of you imagine the Worst Case Scenario. What is that? You don’t know, because it’s never happened to you or your friends or your friends’ friends. Writers tend not to discuss what happens when they don’t follow their contracts to the letter.

But most writers imagine they know. They imagine those thugs from the old Warner Brothers cartoons showing up at their doorstep, doing bad Jimmy Cagney impressions, and threatening them with everything from bodily harm to loss of their home to—I don’t know.

. . . .

I’ve spent too much time with lawyers, businesspeople, and sales executives. To them, the entire world is negotiable.

In the past month, I found myself explaining writers to lawyers. Lawyers know that contracts are not written in stone. They’re rarely written in blood. All contracts can be changed, modified, muted, and defanged with enough effort. Sometimes that effort requires a judge and a courtroom.

Often that effort is as simple as a letter of notification, saying quite clearly that one party to the contract no longer wants to follow one particular clause in the contract. If the other party may simply accept that notification, or the other party might protest. Either way, a dialogue has been opened and the contract might end up being renegotiated.

However, lawyers—all lawyers I’ve met anyway—say something when discussing contracts that confounds most writers. Lawyers use the word “ignore” a lot.

Here’s how the conversation goes:

Kris: [flailing about, describing in great and horrid detail how upset she is about a contract clause that is ridiculous, probably unenforceable, and most likely will not stand up in court.]

Lawyer Friend: I don’t think that clause is legal.

Kris: But writers will follow it anyway.

Lawyer Friend: Tell them to ignore the clause and see what happens.

Kris: Writers would never do that.

Lawyer Friend: Why not? People ignore unenforceable clauses in contracts all the time.

Kris: Writers just won’t. They follow rules.

Lawyer Friend: What’s the worst that could happen?

Kris: I don’t know. You tell me.

Lawyer Friend: [shrugs] They’ll end up in court. Might be good for everyone involved, so that there’s clarity on that clause.

Lawyers aren’t afraid of thugs and goons and cartoon characters that go bump in the night. They’re not afraid of someone who plays the Big Dog and says, You’ll never work in this town again. Lawyers generally say, Well, let’s see.

Lawyers know there’s usually a solution—and it’s often as simple as standing up and saying to the person on the other side of the contract, I’m not playing your silly game. No. I’m not doing it. Now, what are you going to do?

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG says that litigation also costs publishers money, whether they file suit or the author does.

From his own experience, he suggests that if a publisher is owned by a large European conglomerate, the big bosses in Germany, France, etc., believe the American legal system is insane and way, way too costly.

For the American subsidiary to pay money to US lawyers instead of sending it back to headquarters seems like a waste of good dollars and the US CEO who does so better generate a good return on those legal fees or he/she will be an ex-CEO.

This doesn’t mean that litigation is something to be taken lightly or that publishers will always cave, but it’s a factor to keep in mind.

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