Legal Stuff

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.

Badly.

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.

Publisher Threatens Writers Association With Defamation Suit After Being Kicked Out For Not Paying Royalties

1 June 2016

From TechDirt:

Back in 2014, erotica publisher Ellora’s Cave sued the person behind the influential and respected website Dear Author for defamation in response to a post questioning the imprint’s financial stability and detailing multiple authors’ claims that the publisher wasn’t paying out royalties in a timely manner.

Dear Author based its post on statements from Ellora’s Cave writers, as well as public records, which included a handful of tax liens against EC founder Tina Engler (a.k.a. Jaid Black). The post was a balanced and sobering examination of the publisher’s financial problems and included plenty of citations for every assertion it made. Rather than address the issues raised by the post, EC/Jaid Black decided to sue.

. . . .

The RWA has basically cut Ellora’s Cave off for violating its Code of Ethics — which includes things like not paying royalties on time. It has banned EC from RWA conferences and forbidden it from using the group to recruit new writers.

The last lawsuit apparently didn’t reverse EC’s downward trend. Apparently, the publisher has enough money to fund litigation, even if it’s still having trouble paying its authors. Nate Hoffelder of the Digital Reader has rounded up comments from EC authors indicating the publisher is anywhere from 8-11 months behind on royalty payments.

Link to the rest at TechDirt

Harvard Loses Copyright Infringment Case Against Steve Elmo

25 May 2016

From Free Nampeyo:

The first entry in the Free Nampeyo blog discussed Harvard’s copyright infringement claims against Steve Elmore’s book In Search of Nampeyo: The Early Years 1875 – 1892.

. . . .

The subject of Harvard’s complaint was whether color illustrations of designs on old Hopi pottery held in the Keam collection at Harvard’s Peabody Museum violated the copyright to their black and white photographs of this pottery.  Mr. Elmore filed a motion for partial summary judgement against this claim, asking the judge to consider the law and the facts and make a ruling.  Harvard also filed a cross-motion for partial summary judgement concerning a photograph of a Kayenta or Tusayan jar that appeared on its website and also in Mr. Elmore’s book.  Both claims were decided by Judge Robert C. Brack of the United States District Court in Las Cruces, New Mexico.  Judge Brack’s ruling “Grants Defendant’s Motion for Partial Summary Judgement (Doc.92); and Denies Plaintiff’s Cross-Motion for Partial Summary Judgement that Elmore is liable for Copyright Infringement (Doc. 109). ”

. . . .

Determining whether copyright infringement has occurred can be a complex matter.  The decision depends on two basic factors.  The first is whether the underlying work is copyrightable at all and, if so, which elements of the work are subject to copyright.  The second is whether the work accused of infringing on the protected aspects of the underlying work in fact does infringe.

. . . .

Below is the photograph of the Kayenta or Tusayan jar that was the subject of Harvard’s cross-motion for partial summary judgement.  Judge Brack’s Opinion is that this is not a copyrightable photograph.

a1

Quoting from the Compendium of U. S. Copyright Practices, third edition “as with all copyrighted works, a photograph must have a sufficient amount of creative expression to be eligible for registration”.  A photograph should not be registered “if it is clear the the photographer merely used the camera to copy the source work without adding any creative expression to the photo”.   Judge Brack argues that this photograph is just such a case.  It was not taken as a study in photography or crafted by the photographer with carefully chosen lighting and background, but rather was a “conservation image” taken as part of a “condition assessment” while the jar rested on a surface with a bunch of other stuff visible behind it.

The second part of the Opinion is more complex.  It involves 41 illustrations created from designs visible in the black and white photographs of pottery that were published in the book Historic Hopi Ceramics (HHC). Below is a comparison of two of the black and white photographs and the illustrations created from them.

a1

First Judge Brack determined that, unlike the photograph of the Tusayan or Kayenta jar discussed above that is not copyrightable, the black and white photographs in HHC show “a minimal degree of creativity–if only a humble spark”.  Decisions were made to photograph each ceramic in the same way and to strip the backgrounds from each of the individual photographs “to emphasize the impact of the collection as a whole rather than the intricacies of each individual piece.”  However, just because a photograph is copyrightable does not mean that “every element of the work is protected….the less original the plaintiff’s work, the more the defendant must copy to infringe on the plaintiff’s copyright.”

Importantly. Judge Brack finds that the Native American designs on the pottery and the form of the pottery are not copyrightable elements of Harvard’s photographs: “Here the copyright of Historic Hopi Ceramics does not protect against copying the most prominent features in the works: the intricate pottery designs and forms achieved by a Hopi potter, perhaps Nampeyo.” (emphasis added).

Judge Brack notes that the protection of the HHC photographs is “incredibly limited” and only a verbatim copy would violate a copyright with such a small amount of creative input from the photographer.  He observes that Mr. Elmore’s illustrations highlight the designs, which are non-copyrightable elements, and switch the emphasis from the condition of the pots as a whole collection to these design elements.  The illustrations use line art and are in color.  They clean up and bring out elements of the designs, while eliminating aspects of the pottery itself, such as fire clouds.  Judge Brack writes: “Considering only the  protected elements in the Historic Hopi Ceramics photographs and Mr. Elmore’s images, reasonable minds could not find substantial similarity between the two.”

He also notes that Mr. Elmore picked individual ceramics to use in his illustrations and did his own arrangements of them, in order to emphasize comparison of the designs.  Mr. Elmore’s use of these ceramics to establish a novel thesis would give his work protection under the fair use doctrine.

Link to the rest at Free Nampeyo

PG says most judges see very few copyright infringement cases and sometimes the way such cases are handled feels a little loose. In this matter, however, in PG’s effervescently humble opinion, the judge seems to be doing a good job.

PG hopes that Harvard becomes increasingly humiliated if it continues this bizarre litigation. It was a terrible idea to bring the suit in the first place and, having so thoroughly lost the first round, the Peabody Museum should quit misspending its endowment by trying to interfere with Mr. Elmo’s labor of love in spreading knowledge of a little-known Hopi artist to a wider audience.

Congress May Be About to Shake Up Trade Secret Law: Is That a Good Thing?

28 April 2016

From The Wall Street Journal:

Federal civil law governing intellectual property has long been a three-legged stool: copyrights, patents and trademarks. Unless it’s tabled, legislation advancing in Congress would add a fourth one: trade secrets.

Trade secrets are like patents, but without the strict criteria for novelty and usefulness and without an expiration date. They’re basically confidential, valuable information that gives a company a competitive edge. Famous examples are the precise formula for Coca-Cola and the algorithms that Google uses to sort and filter the Internet.

But a main difference between trade secrets and other areas of IP is how legal fights over them are decided. Trade secret disputes between companies, unlike the three other legs, are brought in state courts.

. . . .

The bill has been described as the “most significant expansion of federal law in intellectual property since the Lanham Act in 1946.”

The DTSA would allow companies to sue for trade-secret theft and pursue damages in federal courts. “The DTSA would require evidence of actual or threatened misappropriation before a court may issue an injunction to prevent it,”

. . . .

Here’s Covington & Burling LLP attorney Richard A. Hertling, testifying before Congress on behalf of another business advocacy coalition in 2014:

Civil trade secret laws originated at the state level, in an era when trade secret theft was largely a local matter. State trade secret laws work well when, for instance, an employee of a local business steals a customer list and takes it to the business down the street. For companies that operate across state and national borders and have their trade secrets threatened by competitors around the globe, the array of state laws is inefficient and inadequate…

The DTSA has a lot of political support but also some critics. Some IP experts say that there’s already a lot of uniformity in state law. The addition of a whole new law, one that would be combined but not replace state law, would stretch adjudication costs and time by giving plaintiffs another forum to take their complaints.

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

This legislation passed the House of Representatives almost unanimously yesterday and the President is expected to sign it.

Here’s the definition of a trade secret from the new legislation:

The DTSA broadly defines the term “trade secret” to mean “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the another person who can obtain economic value from the disclosure or use of the information.”  Although this definition is broad and certainly includes abstract ideas and laws of nature, it might not encompass information that is only stored in the human mind.

Link to more detail at Patently-O

Got that? Information “stored” in your mind might or might not be owned by someone else.

Tech companies have been using trade secrets for some time to discourage competing companies from hiring valuable employees.

While a business may be exposed to liability for misappropriation by the actions of its overzealous employees, the risk arises more frequently in the hiring process.  New employees with knowledge of a former employer’s trade secrets, for example, may expose the new employer to liability by using or disclosing secrets in the course of their employment.  It is not necessary that the new employee actually use or disclose a former employer’s trade secrets to expose a subsequent employer to liability.  An employer can be enjoined from hiring a new employee where it is “inevitable” that the employee will use or disclose a former employer’s trade secrets in the course of subsequent employment.

Link to more detail at Fairfield & Woods

While PG has perused the occasional confidentiality clause in publishing contracts, he has never seen explicit obligations placed on an author to keep trade secrets of a publisher safe.

Unfortunately, PG predicts this new legislation will catch the attention of counsel for publishers. More verbiage will be added to the contracts publishers want authors to sign. Perhaps by claiming royalty statements or emails from editors contain trade secrets, some publishers will seek another hammer to keep their authors barefoot and pregnant.

It is in the nature of major new laws that several years are required for trial and appellate courts to apply the broad legislative language to the particular facts of individual cases. Court opinions under state law protecting trade secrets may provide some guidance, but in the face of brand new statutory language, it will be easier to argue that definitions and principles developed under state law won’t apply.

This period of some uncertainty about what is and is not protected and/or permitted will give the holders of trade secrets (who usually have more resources than individuals who are employees or contractors) an additional hammer to wave in the direction of those individuals. Inevitably, more than a few companies will overreach. Trade secrets litigation is already expensive and will become more so in the near future.

And, yes, trade secrets laws do limit the First Amendment rights of individuals to freedom of expression, but this exception is well-established under cases arising from state trade secret laws.

SFWA Contracts Committee Alert

22 April 2016

From The Science Fiction and Fantasy Writers Association:

The SFWA Contracts Committee believes there are serious problems for writers with the non-compete and option clauses in many science fiction and fantasy publishers’ contracts. The non-compete language in these contracts often overreaches and limits authors’ career options in unacceptable ways. Writers may choose to bring out a range of books from different publishers — science fiction from one publisher and fantasy from another publisher, for example — and may have to do so in order to earn anything like a living wage.  The problem becomes even worse for hybrid authors who self-publish works in parallel with their traditional publications. Several contracts that we have seen include overlapping restrictions that could keep the author from publishing another book for more than a year.

Authors also retain audio, foreign language, and other rights with the intention of licensing them elsewhere. Language we have seen in these clauses attempts to make authors responsible for how these other rights are used, something that clearly places an unreasonable burden on them.

Authors should think carefully about signing any contract with these restrictive clauses and should negotiate any limitations in the clauses that would interfere with their writing agendas.  There are, in fact, times when it would be best to walk away from contracts with these bad clauses.

. . . .

Any limitation on the author’s ability to write new works at any time is unacceptable and should be deleted.

“Competing work” should be defined in the contract as clearly and narrowly as possible, and preferably limited to a work in the same series (whether one is planned or not). The burden should be on the publisher to prove that another work published elsewhere by the author would reduce their sales.

Any non-compete limitation that is tied to publication of the work covered by the contract should end on a specific date.

Any reference to the author diminishing the value of rights granted to the publisher by selling rights that the author retains should be eliminated as it is vague, unenforceable, and unacceptable.

Option clauses should be crossed out or defined as narrowly as possible. If the option clause can not be struck out entirely, the committee recommends that the author amend the clause so that they only need to submit a proposal or synopsis of a work and not the completed work to satisfy the publisher’s option. In addition, we recommend that the deadline for acceptance or rejection of the work should be no longer than 30 days, starting when the proposal is submitted. Rejection or failure to respond within the time specified should end the option obligation.

Link to the rest at SWFA and thanks to Deb for the tip.

PG says this is a good beginning to removing terrible clauses from publishing contracts. There are, however, many more “standard” provisions that also need to disappear or be substantially limited.

Proposed Settlement in Harlequin Class Action Suit

20 April 2016

A proposed settlement of the class-action suit by Harlequin authors against Harlequin for underpayment of royalties has been released.



HQ-Settlement (Text)

For more information, go to Harlequin Settlement and thanks to JoAnn for the tip.

Next Page »