Legal Stuff

Ellora’s Cave

16 September 2014

From author Lynne Connolly:

This is just to state my case. I’m not asking anyone to do anything or to help me, just so people are aware of where I stand in this.

As some of you know I was involved in a similar case years ago. Triskelion went bankrupt and took around 70 authors with it. Ellora’s Cave authors number in the hundreds. This is much bigger, and could potentially be nastier. If management turns the situation around, then I will be the first to applaud them, but I cannot agree with some of the methods they are employing to do that.

I joined Ellora’s Cave in 2007 and for most years since earned good money and was treated well by them. I enjoyed my time there because I was never asked to be “one of the family,” they paid on time, the cover art was lovely, and the editing was rigorous, but excellent.

This year my royalties plummeted so alarmingly that I had to make some serious decisions about working with the publisher. Also, the quality of the cover art is way down, since they fired the artistic directors earlier in the year. The prices of the books are way above the prices any of my other publishers charge.

. . . .

Now things have changed and I’ve been forced to ask for my rights back. I have 19 published books with EC. Two unpublished manuscripts are in the editing queue and have been for over twelve months. I’ve had a response on the two unpublished ones. A form response on the others.

No, I can’t have my rights back on those two. If I don’t cooperate with the editing, Ellora’s Cave will exercise its contractual right to edit and publish the books anyway. If those books do come out, I will make a statement to say I had nothing to do with the editing and the books are released without my cooperation. After that, it’s up to the reader to decide.

By “editing,” they mean “light editing.” The editors are not even allowed to alter spelling mistakes, because that would be changing the “author’s voice.” So a worse-than-spellcheck scenario.

Link to the rest at Lynne Connolly

The Curious Case of Ellora’s Cave

14 September 2014

From Dear Author:

Long before there was the Kindle, long before self publishing, long before the emergence of Fifty Shades, a digital first publisher by the name of Ellora’s Cave began to deliver sexy reads that would transform the face of romance publishing. Ellora’s Cave was established in 2000 as an outlet for Tina Engler to publish books with heavy sexy content that were romantic in nature. Because there was no “ebook” in the late 1990s, Engler would create PDFs and email them to reader who sent her money via paypal. In 2000, EC was established and soon thereafter, it would become a powerhouse selling hundreds of thousands of ebooks a year in a world where ebooks did not exist for the most part.

. . . .

As Ellora’s Cave began to flourish, arguments began to spring up about its legitimacy. There was row after online row about whether digital publishing was a legitimate career path. The Romance Writer’s of America (RWA) denounced it and refused to acknowledge digitally published authors in its Published Author Network or for its awards. In fact, it wasn’t until 2012 when a digital first book won the organization’s RITA award. (Fiona Lowe’s Boomerang Bride from Carina Press).

. . . .

As the world began to catch on to digital books and the Kindle was launched creating a second wave ebook revolution, Ellora’s Cave seemed poised to launch itself into publishing super stardom. It had thousands of backlist titles and it had launched many of the bestselling authors today–Bella Andre, Lora Leigh, Christine Warren, Beth Kery, Lauren Dane, Jaci Burton, to name a few.

Yet something strange happened. Growth stagnated. In 2010, it was revealed that EC’s revenues were $5 million but a reported $6.7 million in 2006. How on earth was a digital publisher’s income declining in the biggest boom period of digital books? (This was before self publishing took off).

Word of Ms. Engler’s increasingly erratic behavior surfaced on odd places on the internet and then came the lawsuits. In 2008, former employee Christina Brashears filed suit for unpaid monies against EC. EC countersued. Brashears, Publisher and Chief Operating Officer, left and formed Samhain. Bad blood existed which culminated with EC agreeing to a settlement of undisclosed amount. The damages were alleged to be in the high six figures to low seven figures. EC’s behavior during this lawsuit was so egregious, the judge commented on it in his ruling ordering damages to be paid to Brashears. In 2009, EC filed suit against Borders accusing them of illegal business practices. The suit went nowhere.

In the Brashears lawsuit, EC was accused of inappropriately diverting funds to Tina Engler through overpayment of rent. In 2009, the prevailing market rent for the space EC was occupying in Akron Ohio was around $40K but EC was paying Engler close to $100K per month. EC was providing loans to various officers at no interest and there was no indication those loans were ever repaid.

At the same time, court records showed repeated tax violations by Engler and Jasmine Jade Enterprises. Since 2009, Engler has had a tax lien filed against her by Ohio Department of Taxation in every year except 2010.

. . . .

Many authors and other workers associated with the production of EC books are afraid to speak out. They email me and DM me from made up accounts and beg for secrecy. They speak of a vindictive company who will be unafraid to retaliate and many of them who are owed several thousands of dollars fear that the money may never be paid to them should any outward showing of non allegiance be discovered.

But the problems within Ellora’s Cave are deep and broad and should be brought into the light of day, not only for those existing authors and creators but for future ones.

. . . .

A report from Ohio business record places Ellora’s Cave revenues at $15 million last year. So why is it that tax liens go unpaid as well as the salaries or royalties of creative individuals? It is unknown but it sounds like the money is being mismanaged at best and improperly diverted at worst.

What’s the result? Many people believe that EC will close its doors before the summer is over but at least by the end of the year. If it enters bankruptcy, author’s intellectual property rights are part of the estate and can be sold off to the highest bidder.  It could wind down and revert the rights back but it’s doubtful that will happen.

Link to the rest at Dear Author and thanks to India for the tip.

Amazon Loves Government

9 September 2014

From The Wall Street Journal:

The cold war between Amazon and publisher Hachette is said to pit readers against authors, or consumers against one corporate hegemon or another—though the fight is unfair. Hachette is a unit of the French conglomerate Lagardère  SCA with $7.2 billion in annual revenue. Its adversaries are both the $74.5 billion Amazonand the $3.65 trillion U.S. government, and the story of how the online retailer brought on this strategic political partner deserves more scrutiny.

. . . .

The current dispute is best seen as a new iteration of the same fraught business negotiations in late 2009 and early 2010 that led Justice to sue the six major publishers and Apple for antitrust violations. Then as now, the book people believed that Amazon was devaluing their products by setting retail prices too low and endangering the industry’s long-term survival.

. . . .

The publishers wanted to regain some nominal management of their own retail prices. So prior to the iPad and the creation of the tablet market, Apple proposed a switch to an “agency model” for e-books. The book producers could choose among pricing tiers in its digital bookstore, and Apple would take a fixed royalty of 30% on each sale.

Amazon could have continued with its wholesale model—but the publishers were protesting the company’s tactics by withholding popular hardback or e-book titles for several months. Thus for the first time Amazon had in Apple an e-book competitor with a potentially superior selection of books.

. . . .

So in February 2010 Amazon posed as the victim, and associate general counsel David Zapolsky submitted a confidential white paper to the Federal Trade Commission and Justice’s antitrust division on “the collective nature of the publishers’ action to take control of digital book pricing.”

DoJ then picked up Amazon’s legal argument and used it to sue Apple.

. . . .

[I]n Judge Cote’s July 2013 antitrust finding against Apple, she held that Amazon’s very dominance explained the alleged collusion. “The Publisher Defendants did not believe, however, that any one of them acting along could convince Amazon to change its pricing policy. They also feared that if they did not act as a group, Amazon would use its ever-growing power in the book distribution business to retaliate against them.”

By then the publishers had settled, without admitting wrongdoing, under threat of financial ruin. That 2013 consent decree preserved agency agreements but included a de facto prohibition on price floors for two years, allowing Amazon’s discounting practices to go on. The only reason Hachette is fighting now is that it is the first to be released from the settlement’s staggered terms. Next up is Harper Collins, which like this newspaper is a part of News Corp.

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

Passive Guy suspects the hand of News Corp in this editorial. As he has said before, the Apple/Price-fix Six collusion was a classic example of behavior prohibited under the antitrust laws.

Price-fixing is a violation of the antitrust law whether it’s directed at the corner bookstore or at Amazon.

The Heir’s Not Apparent

7 September 2014

From The New York Times:

The story of the street photographer Vivian Maier has always been tangled — she worked much of her life as a nanny, keeping her artistic life a secret, and only after she died in 2009, at the age of 83, nearly penniless and with no family, were her pictures declared to be among the most remarkable of the 20th century. Now a court case in Chicago seeking to name a previously unknown heir is threatening to tie her legacy in knots and could prevent her work from being seen again for years.

The case was filed in June by a former commercial photographer and lawyer, David C. Deal, who said he became fascinated with Maier’s life in law school and took it upon himself to try to track down an heir. He did so, he said, because he was upset that prints of her work — from more than 100,000 negatives found in a storage locker at an auction, containing images now possibly worth millions of dollars — were being sold by people who came to own the negatives but had no family connection to Maier, who spent most of her childhood in France and worked in Chicago, where she died.

. . . .

Chief among the owners of Maier’s work is John Maloof, a former real estate agent in Chicago who bought tens of thousands of the negatives for less than $400 in 2007 and has spent years tending and promoting her work through commercial galleries, museum exhibitions, books and a recent documentary,“Finding Vivian Maier,” that he helped direct. Mr. Maloof hired genealogists to find heirs to Maier in France and eventually paid an undisclosed amount for the rights to her work to a man named Sylvain Jaussaud, whom experts identified as her closest relative, a first cousin once removed.

But Mr. Deal hired his own genealogists and last year traveled to Gap, an alpine town in southeastern France, home of Francis Baille, a retired civil servant whom he believes to be another first cousin once removed.

Mr. Baille, who had no idea he was related to Maier, agreed with Mr. Deal to seek to be recognized as her heir under American law. Reached on Friday by phone in France, Mr. Baille said, “For now, I just do not want to talk about this.” But his French lawyer, Denis Compigne, said: “It’s an extraordinary situation. You can imagine what it’s like to get a telephone call about someone who died that he never knew, with this precious legacy. He is very, very surprised.”

The legal case to determine whether Mr. Baille is Maier’s closest relative has now set in motion a process that Chicago officials say could take years and could result in Maier’s works’ being pulled from gallery inventories and museum shows until a determination is made.

. . . .

The Stephen Bulger Gallery, in Toronto, which lists dozens of Maier prints on its website, received a letter on Aug. 19 from a Chicago law firm, Marshall, Gerstein & Borun, representing the estate, asking it to preserve all documents related to her work and its sale.

“We are investigating the potential misuse and infringement of copyrighted works whose rights are held by the estate,” the letter said, adding that the firm anticipated “filing litigation against the responsible parties upon completion of our investigation.” An exhibition of her work is on view at the Toronto gallery.

. . . .

Under federal copyright law, owning a photograph’s negative or a print is distinct from owning the copyright itself. The copyright owner controls whether images can be reproduced and sold.

Mr. Maloof said that he had been working for more than a year to register copyright to the images on the negatives he owns, based on his agreement with the man he believes to be Maier’s rightful heir, but that the copyright applications were still pending. (In his own research, he said, he too found the name of Mr. Baille, but he came to believe, based on the advice of his genealogists and lawyers, that Mr. Jaussaud was legally the closest heir.)

“I’ve been obsessed since the beginning with trying to find out who Vivian Maier was and whether she had heirs,” Mr. Maloof said. “I was always trying to do what was as legally and ethically aboveboard as possible.”

Link to the rest at The New York Times

PG says this story is another reminder that all creative artists, including authors, need to properly plan for what happens to their work after they die.

In the US, the people who can help are called estate planning attorneys. (PG is not one of those)

Standing Against Plagiarism – Part 2

2 September 2014

PG previously had a post about author Rachel Nunes and her claims that another author had plagiarized one of her books.

Rachel has now filed suit against the alleged plagiarist. A copy of her complaint follows:


Nunes (Text)

Thanks to Marc for the tip.

Here’s a link to Rachel Nunes’ books

Google Wins Victory in Row With German Publishers

24 August 2014

from re/code:

A German regulator handed Google a victory on Friday as it said it would not pursue a complaint brought against the Internet search engine operator by a group of publishers for giving users access to their news articles.

Several publishers including Axel Springer SE and Burda had banded together in a group called VG Media to demand Google pay them for making their online articles available to the public.

“Sufficient suspicion is always necessary to initiate an abuse procedure. The complaint from VG Media did not establish this,” Andreas Mundt, president of Germany’s Federal Cartel Office, said in a statement on Friday.

Link to the rest at re/code and thanks to Joshua for the tip.

Delaware Passes Law Which Makes eBooks and Other Digital Content Inheritable

19 August 2014

From The Digital Reader:

Do you know that clause in the TOS for the Kindle Store and many other digital content stores which says that the content is licensed to you and is nontransferable?

The state of Delaware just negated that clause (in part). Last week Governor Jack Markell signed House Bill (HB) 345, “Fiduciary Access to Digital Assets and Digital Accounts Act”, giving heirs and the executors to estates the same rights over digital content which they would have over physical property.

. . . .

Delaware is the first state to follow the latest suggestion from the Uniform Law Commission, a non-profit group that crafts model legislation and lobbies to enact it across all jurisdictions in the United States. Last month the ULC adopted a new legal standard, the Uniform Fiduciary Access to Digital Assets Act (UFADAA), which laid out what rights heirs should have over digital content belonging to the deceased.

. . . .

The new law in Delaware only affects Delaware residents and will being probated there. It does not affect the tech companies registered in the state, according to one spokesperson. “If a California resident dies and his will is governed by California law, the representative of his estate would not have access to his Twitter account under HB 345,” Kelly Bachman, a spokesperson for the Delaware governor’s office, said by email.

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

PG did a quick scan of the Delaware law and is skeptical that it permits ebooks to be inherited.

Instead, it appears to be designed to permit an executor or designated agent access to electronic accounts for things like ID’s/passwords, email, financial services, social media, domain registration, online store accounts, health insurance, etc.

The powers of the executor or agent are specifically limited to the relevant EULA’s which, in the case of ebooks, place limits on ability to transfer ebooks.

As mentioned, these conclusions are based upon a fast skimming of the legislation and PG could be wrong about his conclusions.

As Kris Rusch has mentioned, authors should pay attention to what’s going to happen to their literary properties after they die and make appropriate arrangements to avoid lots of expense and hassle after their death.

PG is not an estate planning lawyer and the laws of inheritance are state-based in the United States so they will vary from state to state.

Trusts are commonly used planning tools. The author’s assets, including copyrights and publishing contracts, are transferred to a trust, which can be created either while the author is alive or upon the death of the author, and the trustee – someone the author designates – manages those assets for the benefit of the beneficiaries of the trust – the author’s surviving spouse, children, etc.

If the author creates a corporation or limited-liability company (LLC) to operate the author’s self-publishing business, transfer of the author’s shares in the corporation to the author’s heirs will transfer all assets in the corporation and the business will continue without interruption upon the author’s death.

There are tax implications for various estate planning tools and, while there is a federal estate tax, many states also have state inheritance taxes, so estate planning also includes tax planning which will vary from state to state.

When to Attack Another Writer

12 August 2014

From NYT bestseller and former writing professor Dave Farland:

I’ve been noticing a lot of bad behavior on the part of new writers—minor squabbles motivating petty deeds. So I’ve been thinking that perhaps I should write a little guide called “How to Play Nice with Your Fellow Authors.” In fact, I was going to write the article this morning, when I heard about perhaps the single most disgusting incident that I’ve seen in thirty years as a writer.

It happened last week to a longtime acquaintance of mine, Rachel Ann Nunes. Now, I have to admit here that I know Rachel. I’ve met her at conventions for years, and my daughter happens to be one of her fans. So I’ve probably known her for a good fifteen years, and I like her.

. . . .

Last week, Rachel discovered that another author had plagiarized her book. It was one that was published fifteen years ago as a clean romance. The other “author,” writing under the pseudonym Sam Taylor Mullins, made some revisions to the published text, adding some erotica, and tried to pass it off as her own. (I’m assuming that it’s a female author, although we don’t know at this point for sure, since she won’t reveal her true name, and her accounts keep changing)

While the plagiarized book hadn’t yet been published, copies of it were sent out to reviewers. When one reviewer recognized what was going on and notified Rachel, Rachel tried unsuccessfully to get a copy of the book to see for herself. She then sent emails to six reviewers. Four of them looked at Rachel’s book and said “Yes, you’ve been plagiarized,” and then declined to review the plagiarized novel.

. . . .

This is the kind of case where it is in the best interest of all writers to see this criminal—and her cohorts, brought to justice. So I’d like to do just that.

. . . .

But I’m hoping that some of you will recognize that what is good for one writer is normally good for all. It is in your enlightened self-interest to help Rachel in this case. This particular plagiarist exhibits many of the behaviors of a sociopath, and she will just as gladly steal from you and ruin your career as she will Rachel’s.

You can help by going to GoFundMe, donating to the cause, and sharing it with others. Even if you can only donate $5, if enough people do that, we can make a difference.

Link to the rest at David Farland

Another Legal Victory Keeps Sherlock Holmes In The Public Domain

5 August 2014

From io9:

Last year, a federal judge ruled that Sherlock Holmes and Dr. Watson are no longer covered by U.S. copyright law. But, the Conan Doyle Estate continued its litigation — and today, another federal judge issued a blistering statement, saying that the estate might also be violating anti-trust laws.

“The Case of the Greedy Estate” is a story in three parts. First, in 2013, editor Leslie Klinger filed a complaint against the Conan Doyle Estate regarding an anthology of new Sherlock Holmes stories. The estate had threatened to block sales of the anthology unless it received a licensing fee for the use of elements of Sir Arthur Conan Doyle’s original stories.

. . . .

Then, in Part II of our saga, 7th Circuit Judge Richard Posner rejected an appeal made by the estate, concluding in June 2014 that, “The spectre of perpetual, or at least nearly perpetual, copyright … looms, once one realizes that the Doyle estate is seeking 135 years (1887–2022) of copyright protection for the character of Sherlock Holmes as depicted in the first Sherlock Holmes story.”

. . . .

And then came the real zinger: that the Doyle estate could be in violation of U.S. anti-trust laws:

We note finally that the estate was playing with fire in asking Amazon and other booksellers to cooperate with it in enforcing its nonexistent copyright claims against Klinger. For it was enlisting those sellers in a boycott of a competitor of the estate, and boycotts of competitors violate the anti-trust laws. The usual boycott is of a purchaser by his suppliers, induced by a competitor of the purchaser in order to eliminate competition from that purchaser…..This case is different, in its facts but not in economic substance or legal relevance, because the boycotters enlisted by the Doyle estate were buyers from the victim, rather than sellers to it. But functionally they were suppliers—suppliers of essential distribution services to Klinger.

“It’s time the estate, in its own self-interest, changed its business model,” concluded Posner.

Link to the rest at io9 and thanks to Scott for the tip.

Jesse Ventura Successfully Sues ‘American Sniper’ Author for $1.8 Million

31 July 2014

From Time:

Jesse Ventura, the wrestler, politician, and television host won $1.8 million Tuesday in a defamation lawsuit against the estate of Chris Kyle for including an inflammatory anecdote in his book “American Sniper,” prompting publisher HarperCollins to announce it will remove the passage from the book.

A federal jury ruled that Kyle, a former Navy SEAL who was shot dead at a Texas gun range last year, defamed Ventura for including a passage in his bestselling autobiography that described a man saying the Navy SEALs “deserve to lose a few.” In interviews at the time of the book’s release, Kyle identified the man as Ventura.

. . . .

“I was really backed into a corner,” Ventura said, who served in the Navy during the Vietnam War. “I was left with no choice but to continue the litigation to clear my name, because the story is fabricated. It never occurred, and it accuses me of committing treason. Treason against my own. I am part of the UDT (underwater demolition team) SEAL Community. These are my brothers. We’re a fraternity.”

Legal experts had said that Ventura’s case had to meet a high bar and prove both that Kyle intended “actual malice” toward Ventura, and that he knew that he wrote was untrue.

Link to the rest at Time

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