Legal Stuff

Bookstores Suffer Unintended Consequences From Mark Hamill’s Campaign Against Fake Autographs

25 May 2017

From Reason:

In a galaxy far, far away, Luke Skywalker is the ultimate hero (or is he?), but here’s a note to state lawmakers in this galaxy: maybe don’t trust him to make policy for you.

California is learning that the hard way, as a new law championed by Star Wars actor Mark Hamill has landed the state in court. In that lawsuit, the owners of a California-based book store argue that new rules governing the sale of autographed memorabilia—like books signed by authors at events hosted by their store and scores of others around the state—are overly burdensome, threaten harsh punishments for minor infractions, and above all else are poorly written.

Under the terms of the law, which passed last year and took effect in January, retailers have to provide certificates of authenticity for all autographed merchandise worth more than $5. That doesn’t sound like a difficult burden for retailers, but look at what has to be included on that certificate.

The law specifies that those certificates must contain a description of the collectible and the name of the person who signed it, the purchase price and date, and an “explicit statement” of authenticity. It must also indicate how many items were signed, whether they are numbered as part of a series, and whether any more might be sold in the future. Oh, and there has to be proof that the seller is insured. And, of course, there has to be a certificate number provided by the bureaucrats at the State Board of Equalization (a real thing, believe it or not, tasked with collecting various taxes and fees for everything from gasoline to recycled computers). There’s a separate requirement for an “identifying serial number,” which, naturally, has to match the serial number of the receipt—a receipt that must be kept by the seller for no less than seven years after the transaction. Finally, the certificate of authenticity has to say whether the author provided his John Hancock in the presence of the dealer, or another witness, and include the name of the witness. (There is no word on whether the witness’ first born must also sign the form.)

. . . .

“This law’s expensive mandates — with voluminous reporting requirements and draconian penalties — create a nightmare for independent booksellers that thrive on author events and book signings,” said Bill Petrocelli, owner of the Marin County-based Book Passage, which has three locations around the San Francisco Bay Area. Petrocelli is the plaintiff in the lawsuit seeking a permanent injunction against the enforcement of the autograph law. The Pacific Legal Foundation, a libertarian legal nonprofit, is representing him in the lawsuit. The lawsuit was filed in federal court for the Northern District of California.

Anastasia Boden, an attorney for PLF, says the law does little to protect consumers from the dangers of fraudulently autographed memorabilia. Rather, the lawsuit alleges, the law will have a chilling effect on “truthful, non-misleading speech” protected by the First Amendment, as it will reduce or eliminate book-signing events, like the ones Book Passage hosts hundreds of times each year.

. . . .

“The public is being swindled on a daily basis and the numbers are huge. I just can’t keep quiet when I see people I love being hurt,” Hamill toldThe Los Angeles Times in 2016 as the bill was working its way through the legislature.

Link to the rest at Reason and thanks to Lucy for the tip.

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California threatens to shut down book signings and therefore small booksellers

15 May 2017

From The Pacific Legal Foundation:

Today we filed this First Amendment lawsuit on behalf of beloved Bay Area bookstore Book Passage, and its co-owner, Bill Petrocelli.

Book Passage is a hub of literary activity and free expression.  In addition to selling books, it hosts over 700 author events a year—in which authors give talks, read passages, interact with readers, and autograph their books.  Bill keeps copies of these signed books to sell later—which you can see scattered down the aisles of his store.  Book Passage also curates a monthly book club, wherein readers are sent a first edition book signed by an up-and-coming author.

Book Passage doesn’t charge a premium for the autograph; all of its books are sold for their cover price. But a newly enacted California law makes it extremely risky, if not impossible, for Book Passage to continue selling autographed books or hosting author events.

Acting on purported consumer protection concerns, the legislature recently expanded its autograph law (which formerly only applied to sports memorabilia) to include any signed item worth over $5—including books.  Under that law, sellers must produce a certificate of authenticity and maintain detailed records of every sale for seven years.  Sellers must, among other things:

  1. Note the purchase price and date of sale,
  2. specify whether the item is part of a limited edition,
  3. note the size of the edition, anticipate any future editions,
  4. disclose whether the seller is bonded,
  5. divulge any previous owner’s name and address,
  6. if the book was signed in the presence of the seller, specify the date and location of the signing, and identify a witness to the autograph.

Link to the rest at Pacific Legal Foundation and thanks to Meryl and others for the tip.

PG suggests an amendment to the state constitution that limits the California legislature to a single two-week legislative session each year so it focuses on matters that really require laws.

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Stephen King Sued Over The Dark Tower

3 April 2017

From TMZ:

Stephen King stole the idea for his main man in “The Dark Tower” series from a famous comic book character also known as a gunslinger … according to a new suit.

The creator of “The Rook” comics claims King’s protagonist, Roland Deschain, is based on his main character, Restin Dane. He says Deschain has striking similarities to Dane other than just their initials — both are “time-traveling, monster-fighting, quasi-immortal, romantic adventure heroes.”

“The Rook” creator also points out King’s Deschain dresses like a cowboy despite not being from the Old West — just like Restin Dane — and the towers in both books look the same.

. . . .

According to the docs … the Restin Dane character was in more than 5 million comic magazines from 1977-1983 and King admits he read those stories. The first book in King’s ‘Dark Tower’ series was released in 1982.

 

Link to the rest at TMZ and thanks to Michael for the tip.

PG says TMZ doesn’t do a very good job of covering legal matters.

 

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Tate Publishing loses second major case

2 April 2017

From NewsOK:

A vendor that supplied printing services to vanity publisher Tate Publishing & Enterprises was awarded a summary judgment on March 31 that could cost Tate more than $2 million.

Xerox Corp. was granted the award after Tate failed to respond to the motion.

The judgment authorizes Xerox to collect $1,446,070.67 from Tate Publishing & Enterprises, and $450,308.18 from Ryan Tate, the company’s CEO.

. . . .

The vanity press, whose attorneys bowed out of the case early this year after telling a judge they hadn’t been paid, did not send a representative to attend the hearing.

A text sent to the CEO’s phone Friday asking for comment was not answered.

The March 31 decision is the second major setback Tate Publishing has encountered since it lost its attorneys.

On Feb. 9, an Oklahoma City federal judge considering a lawsuit filed against Tate by a Tennessee-based printing services firm also awarded a default judgment worth more than $2 million.

. . . .

Writers and musicians who were under contract with Tate as late as in 2016 continue to share stories about money they paid to Tate Publishing to produce their works.

One writer, Heather D. Nelson, is publishing a series of stories she has written that are based on interviews she has done with other Tate clients. She is publishing those stories on her site, heatherdnelson.com/blog.

Nelson said March 31 she understands some authors who have agreed to sign a hold-harmless release against Tate Publishing and have sent the firm $50, have been getting their manuscripts returned.

But Nelson said numerous others are seeking a return of their works without signing the release, and that she has visited with dozens of authors about their experiences with the firm.

Link to the rest at NewsOK and thanks to Meryl and others for the tip.

One of PG’s standard aphorisms when speaking to his clients about business deals is, “Don’t do business with crooks.”

No matter how carefully-crafted the contract may be, it won’t work when the counterparty is a crook.

Perhaps there is a vanity press somewhere that isn’t a crook, but PG doesn’t know who that would be.

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What Should We Do with an Artist’s Music After They Die?

22 February 2017

From Noisey:

We continue to pry open, quite literally in Prince’s case, the private works of artists to feast on their off-cuts, but is this fair?

. . . .

No one wants to think about their own death. If they do, they’re probably artists, and they tend to do so in an abstract, poetic kind of way, rather than an “I should probably file paperwork confirming the administrator of my estate and intellectual property” way. Which is perhaps why, when Prince died suddenly at the age of 57 last year, he didn’t have even the semblance of a will.
With his death, then, came months of legal complications and hearings over who should manage his estate. And because the stakes were so unusually high, the eyes of the world looked on eagerly as the mess was slowly picked apart like a ball of tangled iPhone headphone cords. Would the silver lining of Prince’s untimely end, his fans wondered, be the unveiling of the contents of his infamous vaults? The answer, it emerged last week, is yes.

After his estate was placed in the hands of bank Bremer Trust, and an extensive search for a will proved fruitless, the announcement everyone was waiting for—either hopefully or with trepidation—finally came: Prince’s vaults were to be opened, and at least some of the contents, including outtakes, demos and live recordings, were to be released to the public.

. . . .

As it turns out, the law is designed to make such a thing as easy as possible. “Celebrities’ right of privacy is extremely limited,” says James Sammataro, an entertainment lawyer and managing partner at Stroock & Stroock & Lavan. “This is the ‘price’ for being a celebrity. With the possible exception of a diary – or some comparable item in which there’s a universally recognised reasonable expectation of privacy – the rights to artists’ creations are alienable, and human nature is to attempt to monetise these creations.” The primary purpose of copyright law, Sammataro explains, is not really to protect the individual musician, but to “stimulate the progress of the arts for the intellectual enrichment of the public”.

“While it seems harsh,” Sammataro continues, “if Prince or other artists truly don’t want their works disseminated, they need to memorialise this intention in a binding document, or either not fix the work in a tangible medium or destroy the work.” In other words, if you’re a musician, and you’ve got a tape lying around of the three-chord song you wrote at 15 after getting dumped for the first time, you should probably just burn it now. It’s the only safe option.

Link to the rest at Noisey and thanks to Michael for the tip.

PG says unless you decide what you want to happen with your property, including your books, manuscripts, etc., after you die and include your decisions in something a probate court will recognize, like a will or trust, somebody else will decide what happens to your property.

While PG doesn’t do estate planning any more, there are lots and lots of lawyers who do. Call one and make an appointment.

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Amazon’s Antitrust Paradox

3 February 2017

From The Yale Law Journal:

Abstract: Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm’s structure and conduct pose anticompetitive concerns—yet it has escaped antitrust scrutiny.

This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

This Note maps out facets of Amazon’s dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon’s structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon’s power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.

Link to the rest at The Yale Law Journal and thanks to RM for the tip.

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Oculus lawsuit ends with half billion dollar judgment awarded to ZeniMax

1 February 2017
Comments Off on Oculus lawsuit ends with half billion dollar judgment awarded to ZeniMax

From Polygon:

A Dallas, Texas jury today awarded half a billion dollars to ZeniMax after finding that Oculus co-founder Palmer Luckey, and by extension Oculus [a company now owned by Facebook], failed to comply with a non-disclosure agreement he signed.

In awarding ZeniMax $500 million, the jury also said that Oculus did not misappropriate trade secrets as contended by ZeniMax.

. . . .

It remains unclear what sort of impact this will have on the daily retail sale of the Oculus Rift headsets. Facebook is expected to announced its fourth-quarter earnings after the market closes today.

. . . .

The Zenimax versus Facebook trial kicked off in January with testimony from a number of experts and those involved directly in the case including id Software co-founder John Carmack, Facebook CEO Mark Zuckerberg and Oculus co-founders Iribe and Palmer Luckey.

. . . .

During his day in court, Zuckerberg was grilled about his company’s seemingly rushed acquisition of Oculus for $2 billion. And during the first week of the trial, Carmack was questioned about his decision to copy some code from id Software computers before leaving the company to work at Facebook with Luckey.

. . . .

According to ZeniMax’s complaint, Oculus co-founder and Rift inventor Palmer Luckey — along with a half a dozen ex-ZeniMax employees who are now working at Oculus — are building the Rift based on years and millions of dollars’ worth of ZeniMax’s research and copyrighted code.

Link to the rest at Polygon

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College Accused of Monopolizing Textbook Market

30 January 2017

From Courthouse News:

The local, off-campus competitor of an Illinois community college bookstore claims in court that the school is trying to put it out of business by selling textbooks below cost and withholding course book information.

Joliet Textbooks, which owns a store selling textbooks and related items across from the entrance of Joliet Junior College’s campus in Joliet, Ill., filed a lawsuit Tuesday in Will County accusing JJC of violating the Illinois Antitrust Act.

The off-campus store claims that JJC “engaged in a concerted scheme to thwart competition in the market for the sale of used and new textbooks and to destroy competition in the marketplace by undermining plaintiff’s business through anti-competitive pricing strategies.”

The school’s official bookstore, a half-mile from Joliet Textbooks, “enjoys certain institutional advantages over a private sector competitor like plaintiff,” such as not paying rent and not needing to generate a profit to stay open, the complaint states.

Both stores purchase their new and used textbooks from the same sources, says Joliet Textbooks, and the standard practice is to charge 20 to 30 percent above cost.

However, JJC has allegedly been selling textbooks to its students below cost and is giving out rebates and calculating sales taxes on the artificially lower price.

Link to the rest at Courthouse News and thanks to Nate for the tip.

PG is not familiar with the Illinois Antitrust Act, so he can’t opine about the plaintiff’s chances in court.

He was, however, reminded, of an antitrust suit by the American Booksellers Association and a number of independent bookstores against Barnes & Noble and Borders in 2001. The principal claim was that the big bookstores received secret discounts from big publishers and distributors. The case was ultimately settled before a final verdict.

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Controversial e-book sales tactic banned in Canada

21 January 2017

From The Globe and Mail:

Apple Inc.’s long legal struggle over alleged anti-competitive e-book pricing took another turn on Friday as the company joined a consent agreement with Canada’s Competition Bureau that will ban a controversial sales tactic for three years.

Three of Canada’s four major book publishers – Hachette Book Group Inc., Macmillan (a subsidiary of Verlagsgruppe Georg Von Holtzbrinck GmbH) and Simon & Schuster Inc. – also agreed to halt a system known as most-favoured nation (MFN) pricing, which prevented competing retailers from selling e-books at a discount compared to Apple’s minimum price. A Competition Bureau investigation had found that the MFN arrangement between Apple and the publishers led to higher prices for consumers.

There was no financial component to any of the agreements.

But a fourth major publisher – HarperCollins Publishers LLC – failed to reach an agreement, prompting the watchdog to refer the case to the Competition Tribunal, a separate body that adjudicates matters of business, economics and law.

Link to the rest at The Globe and Mail and thanks to Tudor for the tip.

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Techdirt’s First Amendment Fight For Its Life

12 January 2017

From TechDirt:

As you may have heard, last week we were sued for $15 million by Shiva Ayyadurai, who claims to have invented email. We have written, at great length, about his claims and our opinion — backed up by detailed and thorough evidence — that email existed long before Ayyadurai created any software. We believe the legal claims in the lawsuit are meritless, and we intend to fight them and to win.

There is a larger point here. Defamation claims like this can force independent media companies to capitulate and shut down due to mounting legal costs. Ayyadurai’s attorney, Charles Harder, has already shown that this model can lead to exactly that result. His efforts helped put a much larger and much more well-resourced company than Techdirt completely out of business.

So, in our view, this is not a fight about who invented email. This is a fight about whether or not our legal system will silence independent publications for publishing opinions that public figures do not like.

And here’s the thing: this fight could very well be the end of Techdirt, even if we are completely on the right side of the law.

Whether or not you agree with us on our opinions about various things, I hope that you can recognize the importance of what’s at stake here. Our First Amendment is designed to enable a free and open press — a press that can investigate and dig, a press that can challenge and expose. And if prominent individuals can make use of a crippling legal process to silence that effort, or even to create chilling effects among others, we become a weaker nation and a weaker people because of it.

We are a truly small and independent media company. We do not have many resources. We intend to fight this baseless lawsuit because of the principles at stake, but we have no illusions about the costs. It will take a toll on us, even if we win. It will be a distraction, no matter what happens. It already has been — which may well have been part of Ayyadurai’s intent.

Link to the rest at TechDirt and thanks to Scott for the tip.

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