Legal Stuff

And then it all went “Boom”!

15 October 2014

From author Graeme Reynolds:

Since writing my blapocalypseog post two weeks ago, I have been astonished at how quickly things escalated and then blew the hell up at the press in question. Those of you that follow or are friends with any of their authors will know by now that I was talking about Permuted Press.

How things went so badly, so quickly was not even among the reasons that I listed in my last post. Not directly at least. However the reasons for the atrocious contracts, vanishing advances and production delays are very likely share the same root cause as their decision to arbitrarily cease production of print on demand paperbacks this week. Money and Greed being primary factors.

Now, pretty much every author that I know who signed with Permuted did it for one reason, and one reason alone. Permuted had a track record of being able to get books into physical book stores, in the US at least.

. . . .

Authors saw this as their golden ticket. After all, even though Amazon and the eBook trade makes up a significant portion of the market, there is nothing like being able to go into a chain book store and see your title gracing the shelves alongside the likes of Stephen King.

. . . .

Release dates, even on the ebooks were being pushed back. In some instances, one poor author who was due to have their book come out this week as told that it had now been pushed back to next year.

So, yeah. It looks very much like they over reached themselves, grew too fast, too soon. Maybe the money started drying up. Perhaps they were just not able to give those 5-7 books a week the sort of publicity and attention they needed to rise above the sea of other books that are released each week. And because their investors didn’t see the sort of immediate return they were expecting, costs started being cut. Because, lets face it, even people who are fans of a particular publisher are going to struggle to buy 30 books a month, let along read them. You take a look at the sales ranks of the books they have put out there, and they are not exactly stellar. Most are, infact languishing. No money was being spent on launch publicity. No advertising They relied on social media and word of mouth, and then deluged their target market to the extent that the books fell through the cracks and were lost.

. . . .

I hear reports that they are releasing some authors from their contracts, but with caveats. Chief among these seems to be that they are intending to recoup editing costs. Remember that blog post I did two weeks ago? Where I mentioned that they were paying some editors a percentage of sales instead of actual money? Yeah. That’s the first thing that I thought as well. And apparently there is a gagging clause in the release as well, so that people can’t talk about how badly they have been treated.

Link to the rest at Graeme Reynolds’s Blog and thanks to Al for the tip.

Please Stop Calling Amazon A Monopoly

15 October 2014

From Litigation and Trial:

I read a lot of book-related publications and blogs, and thus I have endured weeks of Hachette-versus-Amazon posts, as the publishing giant has wrangled with the online retail giant over the terms of their contract. Perhaps unsurprisingly, the writers and publications with ties to the “Big Five” in the publishing industry have sided with Hachette, whereas the commenters to the articles and the blogs (most of which are presumably customers of books) tend to wonder why a garden-variety dispute between two big companies over money is being billed as the downfall of civilization.

I ignored most of these articles until I read Steve Wasserman’s op-ed in The Nation — which argues “the time has come for closer scrutiny and regulation of a company that, like Standard Oil a century ago, provides an indispensable service for a modern economy and a healthy culture” — and I just couldn’t take it anymore. For the sake of our “modern economy” and “healthy culture,” we must stop calling Amazon a “monopoly.” 

. . . .

But we can’t be cavalier about accusations of “monopoly” or “predatory pricing,” or we risk diluting the terms and losing sight of real antitrust violations. Amazon is neither a “monopoly” nor a “monopsony.”

A “monopoly” is when one supplier of a particular product or service is able to control the market. That does not remotely describe Amazon: the vast majority of books sold by Amazon are supplied by someone else, i.e., the publisher, and those same books are available elsewhere. As Hachette’s own statement on the Amazon dispute says:

HBG’s titles are widely and immediately available on barnesandnoble.com, powells.com, booksamillion.com, walmart.com, target.com, overstock.com, and in thousands of great chain and independent bookstores across the country.

It is rather hard to have a “monopoly” over sales of something when the exactly same product is also sold online, through the largest retailers in the country, and through “thousands” of independent stores.

A “monopsony” is when one buyer of a particular productive or service is able to control the market. (Consider, for example, if there were several commercial airplane manufacturers, but only one commercial airline.) “Monopsony” is potentially a better fit for Amazon than “monopoly,” because Amazon’s real pricing power is that it can push a hard bargain with publishers when it buys the ebooks, whereas with consumers Amazon sells the books at or below the prevailing market prices. And, indeed, publishers feel obligated to deal with Amazon given its position as the largest retailer of ebooks.

But the claim just doesn’t hold up. In a monopsony, the monopsonist refrains from buying to force the suppliers to start discounting against one another (because there are no other buyers), until they are no longer making a profit. That simply isn’t the case here. First, the publishers have total control over where they sell their ebooks, and they exercise that power: the “Big Five” chose to not participate in Amazon Unlimited. Second, the ebooks are available all over the place, like Walmart and Target. Apple, for example, has used the feud as an opportunity to discount Hachette’s books. There’s nothing wrong with Apple doing that: this is competitive capitalism working for the benefit of consumers, as it should.

Even if a company is not a monopolist or monopsonist, it can engage in predatory pricing — but Amazon didn’t. Wasserman claims, “the Obama Justice Department, seemingly mesmerized by visions of a digital utopia, is oddly blind to the threat to publishing posed by Amazon’s growing monopoly,” and concludes, “A serious Justice Department investigation is past due.” But the Justice Department already investigated Amazon as part of the Apple case, and they published the results two years ago.

Back in 2012, as part of the settlement with the Big Five publishers for their admitted collusion with Apple to raise prices, the Justice Department solicited public comment, receiving hundreds of comments, including from Barnes & Noble, the Authors Guild, and the American Booksellers Association. As the Justice Department summarized in its response to the comments, the most common complaint against Amazon is that it sometimes charges too little for ebooks, and that “that lower pricing will mean reduced profits for bookstores, authors, literary agents, and publishers, and an eventual reduction in quality, service, variety, and other benefits to consumers.”

In response, the Justice Department explained — I know this is a long blockquote, but it’s the root of the issue — on page 21-22:

The United States recognizes that many of the comments reflect a concern that a firm with the heft of Amazon may harm competition through sustained low or predatory pricing. In the course of its investigation, the United States examined complaints about Amazon’s alleged predatory practices and found persuasive evidence lacking. As is alleged in the Complaint, the United States concluded, based on its investigation and review of data from Amazon and others, that “[f]rom the time of its launch, Amazon’s e-book distribution business has been consistently profitable, even when substantially discounting some newly released and bestselling titles.” Compl. ¶ 30.

Some of the criticism directed at Amazon may be attributed to a misunderstanding of the legal standard for predatory pricing. Low prices, of course, are one of the principal goals of the antitrust laws. Cf. Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 340 (1990). This is because of the unmistakable benefit to consumers when firms cut prices. Id. “Loss leaders,” two-for-one specials, deep discounting, and other aggressive price strategies are common in many industries, including among booksellers. This is to be celebrated, not outlawed. Unlawful “predatory pricing,” therefore, is something more than prices that are “too low.” Antitrust law prohibits low prices only if the price is “below an appropriate measure of . . . cost,” and there exists “a dangerous probability” that the discounter will be able to drive out competition, raise prices, and thereby “recoup[] its investment in below-cost pricing.” Brooke Group v. Brown and Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993). No objector to the proposed Final Judgment has supplied evidence that, in the dynamic and evolving e-book industry, Amazon threatens to drive out competition and obtain the monopoly pricing power which is the ultimate concern of predatory pricing law. The presence and continued investment by technology giants, multinational book publishers, and national retailers in e-books businesses renders such a prospect highly speculative. Of course, should Amazon or any other firm commit future antitrust violations, the United States (as well as private parties) will remain free to challenge that conduct.

. . . .

If you don’t like how Amazon deals with ebook publishers, then stop buying ebooks from them! A boycott is exactly the right idea — vote with your wallets! Amazon is not Bell Telephone. Amazon is not Standard Oil. Amazon is not the Hollywood studio system. If you don’t want to deal with them, you don’t have to; the fact that everyone, from publishers to consumers, continues to want to deal with Amazon is proof enough that they’re not abusing a monopoly position, they’re just doing a better job.

Link to the rest at Litigation and Trial and thanks to Pete for the tip.

Erotica publisher takes blogger to court over financial trouble allegations

14 October 2014

From The Daily Dot:

A major erotica publisher is suing a beloved one-woman blog site, and everyone from the blog’s readers to the publisher’s authors are rallying in support of the blogger.

The publishing community has done everything but hold a bake sale to help blog owner Jennifer Gerrish-Lampe, better known as Jane Litte of Dear Author, raise the money for her legal defense fund against Ellora’s Cave, the erotica publisher suing her for defamation.

Ellora’s Cave, whose storehouse of popular romance titles raked in $15 million last year, is demanding $25,000 in damages from Gerrish-Lampe after she blogged about the company’s allegedly questionable business practices.

But Gerrish-Lampe won’t be fighting the suit alone: A crowdfunding campaign to defray her legal costs created by well-known book blogger Sarah Wendell of Smart Bitches, Trashy Books has raised more than $50,000 in five days. It’s also given rise to a hashtag, spawned a charity erotica anthology, and created a strange backlash for the long list of authors who have supported the blog.

. . . .

Enter Dear Author. Dear Author is a popular publishing industry blog that has built its reputation on analyzing industry news, debunking rumors, and serving as an information resource for authors and readers. Following Ellora’s sales drop, Gerrish-Lampe, who is a lawyer by day, dug deeper into Ellora’s Cave and its financial records.

On Sept. 14, she compiled a long litany of alleged evidence that Elllora’s is on its last financial leg, including claims from authors that they had not received royalties, financial records showing years of unpaid taxes, and erratic behavior from Engler who was taken to task by a judge for “systematic delays and flagrant disrespect for the court” in a 2008 civil court case.

. . . .

Dear Author’s Attorney Marc John Randazza told the Daily Dot via email that the lawsuit was an intimidation tactic:

Clearly the plaintiff has never read Near v. Minnesota [a legal precedent in favor of allowing negative press to be published] or seen The Big Lebowski. As Walter Sobchak taught us, “the Supreme Court has roundly rejected prior restraint.”

This is clearly a SLAPP suit. Ellora’s has filed a lawsuit without any possible damages. The only thing they seem to want to accomplish is inflicting attorney’s fees on the defendant.

Speaking to the Dot by phone, Ellora’s lawyer Steven Mastrantonio insisted that it isn’t a SLAPP, or strategic lawsuit against public participation, suit, and said that although they “would love to resolve the lawsuit,” it was important to clear the air about the false claims made against the company. A SLAPP suit is intended to essentially silence critics by burying them with legal threats and fees, but that’s not what’s happening here according to Mastrantonio:

We have paid the authors, we have paid the editors. The case is not a SLAPP suit by any means. It’s not an anti-first Amendment lawsuit. It’s simply a case where Dear Author has made a malicious and false statement about my client which has caused real damage to them. It’s a defamation case. We want to set the record straight.

Allegations like they made in a public forum, and causing panic among the authors and fans, that has the unintended consequences of affecting sales of the books and actually affecting the authors who want to get paid. So if people aren’t buying the books, the royalties go down.

Link to the rest at The Daily Dot

Signing a Publishing Contract

11 October 2014

What to Do Before Signing a Publishing Contract

Column by Brandon Tietz at LitReactor

Writing a novel is damn hard. Selling one to a publisher, in its own distinct way, is even more difficult because you’re essentially convincing a company to gamble on you and your work. This is part of the reason self-publishing is booming right now. Searching for a publisher is both a hassle and a blizzard of heartbreaking rejection, so when you actually do get an offer, it’s a huge moment. So euphoric that emotion can often blind the writer to those important details on what’s on the actual contract. It amazes me how many authors took their time working on their novels only to sign a contract after skimming it once. It’s not an iTunes update, guys…read the damn thing. Here are some key things you should know before signing on the dotted line.

Who Are These People?

I will go on record and say that I have scared away authors from a publisher I went through because it was a sub-par experience. They’re out of business now, if that tells you anything. What I’m saying though is that you should know the publisher before you sign any sort of contract that binds you to them. Now I don’t recommend asking authors whether they do or don’t like the publisher while you’re querying, but after you get the offer, feel free to reach out and get a feel for how they’re handling their business. Unhappy authors are usually a good indicator that you should tread lightly.

****

Conclusion

Don’t be blinded by your contract. Signing a bad one can be the thing that ends up screwing you over for the life of the novel. Do your research, ask questions, and for the love of God, don’t be afraid to ask for changes if you don’t like something. If three author copies sound low—ask for more. If you don’t want your book assigned to a certain designer—ask for an alternative. A contract is an agreement between two parties…not one party telling the other how it’s going to be.

Read the rest here.

From guest blogger Randall

A note about confidentiality clauses

1 October 2014

From author Courtney Milan:

A brief update of what is going on:

1. Jane Litte of Dear Author was sued for defamation by Ellora’s Cave, after she signal-boosted news from Ellora’s Cave authors, editors, and cover artists saying that they were not getting paid, along with other warning signs of impending company failure.

. . . .

3. Jane has asked for people–specifically editors, cover-artists, and authors–to come forward who are willing to testify that they have not been paid.

I have seen multiple times (in emails and on the web) the statement that many people who would like to come forward feel that they are bound by the confidentiality clause in their contracts, and so cannot speak on this issue.

. . . .

(A) If you think you know something that can help, e-mail Jane (jane@dearauthor.com). If you are afraid you can’t testify because of the confidentiality clause, tell her that.

(B) I feel that with (A) you need to know that your interests and Jane’s interests do not align perfectly, and I’m sure some of you know that. So here’s an option B. If you are an author, an editor, or a cover-artist who would testify as to the truth of the statements Jane made, but for the confidentiality clause, contact me. If there is enough interest from those who would testify but are afraid for confidentiality reasons, I will look into finding a lawyer to accompany you to the hearing–someone whose job it is to represent your interests, and to make sure that you’re speaking up to the maximum allowed without putting yourselves at risk. But in order to do that, I need to know who you are. E-mail me at contact@courtneymilan.com. You do not have to tell me anything except that you would be willing to testify as to the truth of the statements Jane made, but feel that you cannot except for the confidentiality clause.

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

Here’s a link to Courtney Milan’s books

The Flush Pile – An Author’s Perspective

30 September 2014

From author Carolyn Jewel at Writer’s Diary:

I am an author who was with a publishing company that was heading toward bankruptcy. (Dorchester Publishing) This post is about what the experience was like for me. My situation ended up with a silver lining, but the outcome I had was never certain, just as it is not certain for any of the EC authors who are wondering if they’ll ever get paid or if they are going to lose their books.

If you have books with a publisher in the Flush Pile, here’s what’s quite likely:
1. No, you are never going to be paid money owed to you.
2. Yes, you could well lose your books. Gone.

Every publishing contract I’ve ever signed has had a bankruptcy clause. The clause means nothing. Zero. Zlich. It might as well not be there. If your publisher declares bankruptcy, your book is an asset of the company to be liquidated and turned into cash to pay to creditors. Authors are dead last on the list of creditors.

At Dorchester, authors talked amongst themselves. Advances and royalties due to authors were paid slowly. Some of use waited months for advances to be paid. More and more often, authors just weren’t paid. Foreign rights got sold and authors were never told. Those monies never appeared on royalty statements. I was surprised, for example, to find that one of my books had a Dutch translation. Toward the end, I also learned about other translations I was never told about and never paid for. One of them did not even have a signed contract despite being on sale. As royalties continued to be paid in haphazard fashion, there were consolidations and reductions in books, imprints and staff, and sales of rights to backlist titles of prominent authors to other publishers.

. . . .

Dorchester had not filed for bankruptcy, but there was wide speculation that they could not recover from their difficulties and a filing was felt by some to be inevitable. I was advised that it was possible that rights reversions made within the year prior to a bankruptcy filing could be deemed fraudulent and any reversions negated. I was horrified to learn there was case law to that effect.

Even before the non-payment issue was a severe problem, it was clear to me that at long last, there was a good reason (ie, self-publishing) for an author to vigorously pursue reversions for all books that met the criteria of the out of print clauses. I’d read all those clauses and had begun that process with all my titles well before this. And by the way, I was roundly ignored everywhere except for Harper-Collins, who noted the request and put it on their schedule for a decision 6 months later. Literally. The meeting was in 6 months. Let that sink in.

My reversions from Dorchester came through at the end of 2010. Other publishers were an even harder nut to crack. St. Martin’s Press was spectacularly uncooperative. Hachette — I don’t even have words. And I have loads of hind-sight advice about what reversion clauses should say.

. . . .

My advice is going to sound harsh. But, assume you will never be paid. The risk of waiting to see if your publisher rights their ship is the complete loss of your rights in your books. This is your career and you must not fail to take steps to protect your back list and front list.

Link to the rest at Writer’s Diary and thanks to C.R. for the tip.

Here’s a link to Carolyn Jewel’s books

Digital publisher Ellora’s Cave sues Dear Author blog for reporting on its financial troubles

30 September 2014

From Gigaom:

To those who follow the digital romance publishing world, it’s not exactly a secret that digital publisher Ellora’s Cave is struggling. But now the company is suing a leading romance blogger who wrote about the problems it was having.

Ellora’s Cave, launched in 2000, was a very early player in romance ebook sales and for a time was highly successful, selling romance and erotica titles that mainstream publishers had ignored to a passionate audience of female readers. Then things began falling apart, sales decreased and authors started going unpaid.

Dear Author, a romance blog that also covers a variety of digital publishing issues,reported thoroughly on Ellora’s Cave’s troubles earlier this month, citing tax violations by Tina Engler, the company’s founder, and reporting further on delayed or missing author payments. Dear Author also published an email that Ellora’s Cave sent to its authors in which it described a “quick, sharp decline of ebook sales via Amazon in recent months.”

. . . .

Litte, who is also a lawyer, plans to fight the lawsuit and tweeted Monday that she’s hired Marc Randazza, an attorney who specializes in the First Amendment and also played a key role in bringing down patent troll Righthaven.

Link to the rest at Gigaom

Our reply to Ellora’s Cave’s recent actions

29 September 2014

From The Book Pushers:

It’s been a crazy time these past few days. Jane from Dear Author is being sued by Ellora’s Cave.

Ellora’s Cave is suing Jane after she posted this very informative and well written post about Ellora’s Cave and their behaviour which has been reported by EC authors and past employees.

Ellora’s Cave, do you want to silence critics? Ellora’s Cave, do you want to silence your authors?

You won’t silence us.

. . . .

In one stroke, Ellora’s Cave have managed to evaporate all goodwill towards the company–what little they had considering some of the alleged behaviour they have directed and are directing towards their authors.

Some readers, bloggers and authors have decided not to review and buy any present or future books of Ellora’s Cave.

At the Bookpushers, we have made a decision not to review any titles of Ellora’s Cave. On a personal note, some of us have made the decision not to buy any present or future books of Ellora’s Cave.

Link to the rest at The Book Pushers

Could Ellora’s Cave Be More Pathetic and Pernicious?

29 September 2014

From Barry Eisler:

I was traveling . . .  so I missed the news that romance publisher Ellora’s Cave is suing Jane Litte and her blog Dear Author for “defamation.” Jane reported on EC’s apparent failure to pay EC authors royalties that were due, on authors calling for a boycott of EC-published books, and on related matters, and it seems EC responded the way powerful entities sometimes do when their abuses are exposed: they sued.

. . . .

I’ve opined many times that we’re living through a revolution in publishing, a revolution that promises more opportunities, freedom, and profits for authors, and better choice, convenience, and prices for readers. The publishing establishment is trying to impede that progress in a variety of ways: propaganda; marginalizing critics; calls for government intervention; and now, it seems, litigation designed to frighten and silence critics of entrenched interests.

. . . .

The post I wrote is about power dynamics in publishing. As I think should be reasonably clear from our discussions here (and my posts elsewhere), I don’t trust asymmetrical market power anywhere I see it, and despise its abuses no matter how or in what system it manifests itself.

. . . .

If EC doesn’t believe its suit is going to cause a massive backlash and result in new authors being afraid to sign with them, it can only be because: (i) they’re so desperate they think they have nothing to lose; (ii) they believe they have such asymmetrical market power that authors will submit new manuscripts to them no matter what; or (iii) both.

Link to the rest at Barry Eisler

Here’s a link to Barry Eisler’s books

Ellora’s Cave Sues Dear Author Book Blog for Defamation

27 September 2014

From The Digital Reader:

Here’s something crazy.

Romance publisher Ellora’s Cave has been having financial issues for the past year or so, but rather than sit down and fix them this publisher has decided that the best solution was a public and messy defamation lawsuit.

Court documents filed today in Ohio have revealed that Ellora’s Cave has filed suit against Jennifer Gerrish-Lampe, an Iowa lawyer who is better known as Jane Litte, the proprietor of one of the best romance book blogs (I did not know it was a pseudonym).

Ellora’s Cave alleges that a recent blog post on Dear Author defamed them, and in addition to suing the publisher also asks for a temporary restraining order – meaning that Dear Author might not be allowed to report that they are being sued.

. . . .

The lawsuit was only filed today, but Jane has indicated that she will fight this suit. She’s looking for a good attorney in the Akron, OH, area with experience in defamation.

. . . .

The cost of defending against a lawsuit can be onerous, leading some to give in. On the other hand, this type of lawsuit can also result in a Streisand effect, attracting even more attention to the story which Ellora’s Cave is trying to bury.

What’s more, even if this lawsuit doesn’t generate even more negative publicity for Ellora’s Cave, it will result in the public airing of all of that publisher’s dirty laundry during the discovery process. If even half of the rumors going around are true, we could well see many authors suing Ellora’s Cave for unpaid royalties.

Link to the rest at The Digital Reader

PG says truth is a defense in a defamation suit. This means that Jane gets to use the discovery phase of the litigation to force Ellora’s Cave to disclose all sorts of information, including information that shows what Jane wrote is true.

Here are some of the things that Jane has written that EC says are false:

1. That employees of EC are going unpaid.

2. That EC authors have not received their royalties.

3. That unpaid royalties, editors’ fees and artists’ fees amount to several thousand dollars.

Basically, Jane gets to find out if these and other statements about Ellora’s Cave are true or not.

As a general proposition, documents filed in litigation are public. Already, the contents of the original Dear Author post that EC found objectionable are included as an exhibit to the complaint. Everyone who reads the complaint will be able to see what Dear Author published about Ellora’s Cave.

Nate mentioned The Streisand Effect. Here’s a definition:

The Streisand effect is the phenomenon whereby an attempt to hide, remove, or censor a piece of information has the unintended consequence of publicizing the information more widely, usually facilitated by the Internet.

Here’s a copy of the Complaint:

 


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