Legal Stuff

Freedom to Publish Advocacy: Authors Guild Wins ‘CockyGate’ Court Ruling

4 June 2018

From Publishing Perspectives:

The Authors Guild reports that it has won a court ruling that means writers can continue to sell books with titles that use the word cocky despite a trademark registration owned by author Faleena Hopkins for a romance book series titled “Cocky.”

The Authors Guild and the Romance Writers of America (RWA) worked together in this case of legal advocacy for writers, defending the principle that no one should be able to own exclusive rights to use a common word in book or book series titles.

In ruling against Hopkins—who had claimed exclusive rights to cocky for romance titles—Judge Alvin Hellerstein of the Southern District of New York, the guild tells Publishing Perspectives, stated that he did not believe that Hopkins was likely to succeed on the merits.

Earlier this year, news of Hopkins’ trademarking of the word sparked initial amusement and wise cracks, followed by growing consternation in the American author corps: ‘CockyGate,’ as it was called by writers, began to look quite serious. Not only were authors reportedly taking cocky out of their titles out of fear of expensive litigation, but it was also said that another author was working to trademark the word forever.

. . . .

The interpretation of the legal team at the Authors Guild, which is led by executive director Mary Rasenberger, is that no one author should be able to prevent others from using a commonly-used word or phrase in book titles. The law, in the guild’s reading, is clear that an individual title cannot be trademarked—only series titles can—and that common words cannot be trademarked at all unless they develop an association in the minds of the public with a particular source, in this case a single author.

Link to the rest at Publishing Perspectives

A Model Privacy Policy Courtesy of XKCD

30 May 2018

Accountant embezzled $3.4M from famed literary agency

30 May 2018

From The New York Post:

A Manhattan accountant cooked the books at a prestigious literary agency that represents top writers, including “Fight Club” author Chuck Palahniuk, bilking its clients of millions and leaving the company on the brink of bankruptcy, according to legal papers.

Darin Webb, 47, faces 20 years in jail on wire-fraud charges for embezzling $3.4 million from storied Manhattan agency Donadio & Olson, according to a recently unsealed federal criminal complaint.

Although the agency, which also represents the estates of “Godfather” writer Mario Puzo and radio legend Studs Terkel, was not named in court papers, a lawyer representing the firm confirmed to The Post that Donadio & Olson was the subject of the alleged theft.

. . . .

The stolen money — allegedly lifted between January 2011 and March of this year — was earmarked for author royalties and advances, the complaint says.

But the theft could be exponentially more, a source told The Post, noting that a forensic accountant is combing through Donadio & Olson’s books all the way back to 2001, Webb’s first year at the agency.

He allegedly fessed up to the theft in March in a videotaped interview with company executives and their attorneys at the agency’s Chelsea office, saying he filed monthly financial reports that “contained false and fraudulent representations in order to accomplish the theft and evade detection,” the complaint states.

. . . .

The alleged theft was first discovered last fall when an unidentified author who was expecting to receive a $200,000 advance from his publisher asked Webb why he had not received the payment.

According to the complaint, Webb put the author off for months.

“The author did not receive the payment because Webb had converted the funds to Webb’s own use,” says the complaint.

Link to the rest at The New York Post

For those who are new visitors to TPV, PG will repeat his previous observations about literary agencies – The agency adds no value for an author by receiving all or any portion of the royalties to which the author is entitled from the publisher.

The solution is split checks – the publisher sends 85% of the royalties directly to the author and 15% to the agency together with a royalties report to each.

Unfortunately, this is not the first time an agent or an employee of an agent has stolen money that should have been paid to the agency’s clients.

According to the OP, this alleged embezzlement has been going on for about 17 years.

What does this say about the agent’s financial management skills? Does the agency ever pay attention to its authors’ money? Does the agency have even the most rudimentary accounting systems and safeguards in place to protect authors? Does the agency care?

The Guardian has a story about Fight Club author Chuck Palahniuk who says that he is “close to broke” because of the embezzlement.

Meet Ms. Got Proof, the Lebron James of the Legal World

27 May 2018

Not exactly to do with books, but PG suspects a TV program will be coming.

From Medium:

I don’t ever network,” 28-year-old criminal defense attorney Nicole Fegan tells me on the phone, a sentiment that resonates. An attorney myself, I’ve always found “networking” unnatural and uncomfortable, particularly when other lawyers are involved, most of whom are conservative white men — not my ideal audience. But Fegan is changing the game, providing hope where not much existed before, particularly not in law, and especially not in this column.

“I just do Instagram marketing,” Fegan tells me on her client-outreach strategy. And in fact, it was after a friend alerted me to Fegan’s Instagram that I became fascinated by her. All my lawyer friends are secretive as hell on the Internet. We’re constantly monitored by our local bar associations; to pass, we must pass a “moral character” test. This renders us paranoid to share anything on the internet that might jeopardize our careers. In sharp contrast, Fegan Instagram’s feed features her posing with guns and large stacks of money — props, she assures me (“I know the best prop guy in Atlanta”) — and wearing merch promoting her trademark slogan “Got Proof” over blunt-smoking red lips. In Atlanta, Fegan is frequently known as “Ms. Got Proof” — a moniker that took off after she represented rapper Peewee Longway.

. . . .

Fegan decided to go to law school after catching her own criminal charges for “intent to distribute” in college. The experience highlighted to her the unfairness of the system. “The state prosecutor really puts your back against the wall,” she tells me. “You either have to do what they say or you fight, and if you fight there’s such a risk involved that most people don’t.”

“So you took a plea?” I ask.

“No I fought it.” She won the trial, which “fueled” her. Afterwards, she “switched it all the way up.” A self-proclaimed “bum” in college, Fegan graduated magna cum laude at John Marshall Law School. In law school, she interned for Parag Shah, a well-known Atlanta criminal defense attorney, judge, and adjunct law professor. They met when she invited him to speak at a Georgia Association for Women Lawyers event in law school, and his brazen attitude made her want to work with him. “He’s different now because he’s a judge,” Fegan told me. “But after a few drinks at the strip club, he’ll be eating chicken wings with you.”

After she graduated, Shah helped Fegan “set up shop” on her own. But first, Fegan had to join the bar, which involved being questioned about her criminal past before 10 lawyers, a psychologist, and a stenographer. When they asked her why she thought she was searched for drugs, she responded “because I had a black man with me.”

. . . .

“My client is my co-counsel,” she tells me, explaining that her firm is just her. “Two things,” she tells me regarding her decision to work closely with her clients throughout every stage of the trial. “There is nobody better to know their case than themselves. And there is nobody better to beat a criminal case than a criminal.”

She says that what separates her from the old white men who saturate the field is her passion, and the fact that she always listens to her clients. She spends hours before trial going to jail for visits, even if she has nothing specific to discuss. “I just know they wanna know that someone is thinking about them.”

. . . .

When I asked Shah about Fegan’s Instagram, he responded, simply, “I love it.” For a client to trust you, he told me, they have to know you and be able to connect with you. “Social media has allowed an avenue for clients to develop that trust with their lawyers.” Fegan’s Instagram gives her clients a glimpse at how hardworking, passionate, and charming she is.

Link to the rest at Medium and here’s a link to Ms. Fegan’s Instagram account.

Judge Clears ‘Gone Girl’ Creators in Copyright Dispute

25 May 2018

From Courthouse News Service:

A federal judge dismissed an author’s claim that the popular thriller novel and movie “Gone Girl” is based on her copyrighted screenplay, finding that the stories are considerably different.

“Overall, no ordinary observer could conclude that [Out of the Blue] and Gone Girl are substantially similar. Their common elements are standard in thrillers and at the level of particular expression they tell very ‘different stories,’” U.S. District Judge John Robert Blakey wrote in a 33-page opinion issued Monday.

Author Leslie Weller filed a lawsuit in December against “Gone Girl” author Gillian Flynn, claiming she gave a copy of her screenplay “Out of the Blue” to a script consultant linked to Flynn, who then copied several elements of it.

Weller argued both stories focus on the central theme of “how well one person can really know another person.”

. . . .

Judge Blakely wrote that Weller failed to “connect the dots.”

“She describes a chain of professional relationships—most of which have no relation to Gone Girl—and invites speculation that some unidentified intermediary, for some reason, showed Flynn—who was by then two years into her work on the novel—an unproduced screenplay by a writer whom [her agency] did not represent,” the ruling states.

The judge also found that “numerous and significant differences” between the stories “weigh against finding substantial similarity.”

Link to the rest at Courthouse News Service

Here’s a copy of the court’s decision:



Trump blocking critics on Twitter violates Constitution: U.S. judge

23 May 2018

PG understands that the following may have little to do with writing and books, but this case raises an interesting point about the use or misuse of social media, which is of increasing importance to authors.

From Reuters:

A U.S. judge in New York on Wednesday ruled that President Donald Trump may not legally block Twitter users from his account on the social media platform based on their political views.

. . . .

Trump has made his @RealDonaldTrump Twitter account an integral and controversial part of his presidency, using it to promote his agenda, announce policy and attack critics. He has blocked many critics from his account, which prevents them from directly responding to his tweets.

U.S. District Judge Naomi Reice Buchwald in Manhattan ruled that comments on the president’s account, and those of other government officials, were public forums, and that blocking Twitter users for their views violated their right to free speech under the First Amendment of Constitution.

Eugene Volokh, a University of California Los Angeles School of Law professor who specializes in First Amendment issues, said the decision’s effect would reach beyond Trump.

“It would end up applying to a wide range of government officials throughout the country,” he said.

The U.S. Department of Justice, which represents Trump in the case, said, “We respectfully disagree with the court’s decision and are considering our next steps.”

. . . .

The individual plaintiffs in the lawsuit include Philip Cohen, a sociology professor at the University of Maryland; Holly Figueroa, described in the complaint as a political organizer and songwriter in Washington state; and Brandon Neely, a Texas police officer.

Novelists Stephen King and Anne Rice, comedian Rosie O’Donnell, model Chrissy Teigen, actress Marina Sirtis and the military veterans political action committee are among those who have said on Twitter that Trump blocked them.

Link to the rest at Reuters

PG thinks this decision will be reversed on appeal.

Just as the President is not required to permit everyone who wishes to attend a White House dinner or a political rally to come to such events, he is not required to provide an electronic place at his Twitter table for those he does not wish to attend.

Twitter isn’t a public forum because it’s owned and controlled by Twitter, not the government. Twitter can ban anyone for any reason and has done so on a political basis for some former Twitter members who have posted political opinions Twitter doesn’t like.

Twitter could deactivate Trump’s account if it wanted to do so. Twitter could likewise prevent selected users from making posts on the Trump account if Twitter decided that was a good idea. Or Twitter could prevent the President from using the Twitter block feature. It’s Twitter’s online space and it can set the rules.

In this case, however, a federal judge is trying to control how the President uses Twitter. That’s an exercise of government power by the judicial branch to control who President Trump invites to his digital White House. Under the First Amendment, is the President prohibited from using a Twitter feature that 99.99999% of the rest of the users of Twitter, including ten-year-old children, are free to use without any government constraint?

Every place in which government officials desire to speak is not automatically turned into a public forum in which anyone is permitted to speak. A public park is traditionally used as a prototypical example of a public forum. In a park, anyone can start speaking and gather a crowd to listen to whatever ideas the speaker wishes to express. Others can verbally dispute what the initial speaker is expressing.

PG suggests that Twitter does not qualify as a public forum because Twitter controls access and, as part of Twitter’s control, it permits the owner of a Twitter account to block the expressions of third parties that appear on the account.

Presumably, the President created his Twitter account for the purpose of communicating his ideas in the manner he chose. The opinion in the OP essentially says that the President is not permitted to communicate electronically in the manner he chooses. An unremitting and uncontrollable wave of hostile posts would have the effect of preventing the President from such effective communication of his ideas, effectively drowning out the President’s messages with a deluge of calculated electronic assaults (which, presumably could even be automated from a variety of Twitter accounts created for that purpose).

‘Zorro’ Licensor, in Role Reversal, Faces Trial for Copyright Infringement

18 May 2018

From The Hollywood Reporter:

For nearly 70 years, Zorro Productions Inc. has controlled rights to Zorro thanks to an intellectual property assignment from author Johnston McCulley, who wrote the first story about the masked avenger in 1919. First run by literary agent Mitchell Gertz, and later by his son John Gertz, ZPI has spent decades licensing Zorro to Hollywood studios making movies of the popular character who frees oppressed masses from tyrannical villains.

However, the Zorro licensor may have lost its grip. Thanks to a court decision on Friday that represents the latest in a two-decades-long feud between two men, ZPI appears headed to trial as a copyright defendant for allegedly infringing a Zorro work.

The story begins in 1996.

That year, playwright Robert Cabell published a musical titled Z – The Musical of Zorro about the masked avenger leading a double life. The musical was based on McCulley’s first story as well as a 1920 film starring Douglas Fairbanks. Looking to get his musical off the ground, Cabell provided his script to John Gertz.

A short time after Cabell reached out to Gertz, the playwright had a change of heart. He did the math and realized that a story published in 1919 was no longer under copyright protection.

In a 1997 letter, Cabell wrote Gertz, “Though I appreciate your past support it seems in actuality, the only thing you are able to license to me is the Zorro logo, which I have absolutely no interest in. … You must understand that I will continue this project under the rights of public domain.”

. . . .

“I understand clearly that you have decided that my company’s rights are unnecessary for your project, and that you intend to proceed without our rights,” responded Gertz. “[S]ince you seem determined to proceed onwards, I will simply inform you of the obvious; any attempt to produce your play before a paying audience will result in an immediate lawsuit.”

What followed was a continued war of words. According to Cabell, Gertz interfered with various productions of his musical around the world including an early 2000s Broadway production that never materialized due to threats. Besides copyrights, Gertz also used trademarks to assert authority. That led Cabell to petition for cancellation of registered trademarks.

In 2004, the situation appeared to cool as Sony Pictures was set to release The Legend of Zorro, starring Antonio Banderas. As part of a “walk-away agreement” negotiated by Sony, Cabell withdrew his cancellation petition, and ZPI agreed not to challenge Cabell’s works.

. . . .

Around that time, ZPI entered into a license agreement with author Isabelle Allende for a book that focused on a younger version of the character titled Zorro, A Novel. Then, in 2005, ZPI authorized a new musical by a London-based company. It premiered in 2008 and was performed internationally.

As both Cabell and Gertz had stakes in Zorro musicals, they would again cross swords, especially when a German producer in 2013 became interested in mounting Cabell’s version.

Eventually, this would lead to a lawsuit from Cabell challenging ZPI’s authority over Zorro. Cabell not only looked for a declaration that his own musical didn’t infringe any copyrights and that ZPI’s trademarks were registered fraudulently, he contended that ZPI used material from his script in both Allende’s book and the follow-up musical.

. . . .

“In his original motion, Plaintiff argued that he is entitled to summary judgment of non-infringement because his musical is just a composition of elements from the public domain, it does not infringe,” writes the judge. “Defendants did not respond to these arguments. The Ninth Circuit has held that a plaintiff has ‘abandoned … claims by not raising them in opposition to [the defendant’s] motion for summary judgment.’ Accordingly, the Court deems Defendants to have abandoned the position that Plaintiff does not infringe its copyrights on the merits.”

. . . .

“Where, as here, there is no direct evidence of copying, copying can be proven circumstantially by showing a defendant had ‘access’ to a plaintiff’s copyrighted material and that the two works at issue are ‘substantially similar.'”

The judge doesn’t see access or striking similarity when it comes to the Allende novel and throws out a copyright claim directed there, accordingly.

Link to the rest at The Hollywood Reporter and thanks to Newt and others for the tip.

The dominance of Amazon needs to be addressed but it is far more attributable to natural circumstances than it is anybody’s fault

8 May 2018

From veteran publishing consultant Mike Shatzkin:

As things evolve in an era of rapid change, it is human nature to assign credit or blame for any drastic alterations in circumstances. And so we have the book business, with its last remaining chain store behemoth, Barnes & Noble, in a period of obvious decline and presenting the clear possibility that the book publishers’ single biggest brick-and-mortar account might suddenly disappear.

This is a very unpleasant notion to contemplate for all publishers and, perhaps surprisingly, to Barnes & Noble’s erstwhile competitors among independent bookstores. Today, the head of the trade association that represents bookstores (mostly independents), Oren Teicher of the American Booksellers Association, is quoted in The New York Times saying, “It’s in the interest of the book business for Barnes & Noble not just to survive but to thrive.”

The op-ed in which Teicher’s quote appears is a piece by columnist David Leonhardt basically blaming the US Department of Justice for Amazon’s growth and the consequent reduction of market share available to all other retailing competitors. There is a lot of history and context not discussed in this piece but I have a nominee for the single most glaring omission. At just about the turn of the century, Barnes & Noble made a deal to buy Ingram, the biggest book wholesaler and distributor in the world, which was shot down by an activist Department of Justice. This is not mentioned.

And, in 1998, when the purchase was announced and B&N specifically cited its need to strengthen its ability to sell online as part of the reason for the purchase, the American Booksellers Association was vigorously opposed!

. . . .

It has long appeared from here (here’s a piece from 2012) that the existential issue in the book business in the 21st century has been “when does Amazon’s share growth stop, and who will be left standing when it does?”

Although definitional and data ambiguities make this an imprecise statement, it is likely that we’ve reached a day when more than half of the printed books sold through retailers are sold online, not in stores. Ebooks added into the mix for the narrative reading portion of the published material constitute a further erosion of the brick-and-mortar store sales base.

The shift of habits from buying in stores to buying online is not restricted to books, of course. Because of Amazon, it largely started with books. But books also have other characteristics that make them better than most things for online purchase, from a consumer point of view.

. . . .

So buying a specific book that you know you want online just makes sense to most people. Of course, Barnes & Noble has had its own online bookstore operation since the 1990s. They have steadily lost online purchasing share to Amazon for decades.

It is true that Amazon cut prices below what many brick retailers charge. And I even think I identified the moment when that strategy kicked in. See the same piece linked above. If I’m right, then they did it specifically to discourage independent stores from using the same Ingram capabilities they used to launch an online sales effort. (In fact, discussing the “low price” challenge that exists for publishers in 2018 without mentioning the self-publishing world which is the primary price restraint mechanism in the market, assuming no disingenuousness, displays serious ignorance of the marketplace realities.)

But the way things looked in then 1990s, with online retail in its infancy, was that it didn’t constitute a threat to brick-and-mortar. Many physical retailers ignored the opportunities and threats of online competitors. Borders, at about the same time that the Department of Justice was killing the deal by which B&N bought Ingram, was partnering with Amazon to deliver its online offering!

With those realities, does it make sense to be blaming the DOJ for not seeing the threat?

Much is made of Amazon’s pricing practices and the possible fallacy inherent in looking at consumer prices as the be-all and end-all indicator of whether a marketplace is working right. But even that argument is just not so simple. More than a decade before Amazon was launched, the retailing chain Crown Books (not to be confused with the then-indie publisher now an imprint of PRH) was aggressively discounting bestsellers. They grew fast in the 1980s. Until the superstore era began in the late 1980s, and the massive selection in the big Borders and B&N stores became the “killer” consumer attraction, this variation of the Amazon strategy (using bestselling books as loss leaders to pull in customers, to whom Crown sold remainders and bargain books to generate the margin to operate) was upsetting the old order.

. . . .

It is not hard to support Leonhardt’s idea that Internet monopolies, even if they result at least partly from the natural power law forces of Internet economics, will have to be regulated, as I suggested in another forum recently. (I publish the stuff that is not mostly about books in other places.) Perhaps the first step with Amazon is to ban them from the publishing function. And because they are a vital path to the consumer for all publishers, it would be helpful for the government to be sure that their sales terms are fair among the publishers competing for their customers (a concept that wll get increasingly tricky as Amazon’s physical store footprint expands).

. . . .

So while it is absolutely true that Amazon is gaining a level of market share, and therefore a level of power and control, over the book business that is frightening for those of us in it and not a good thing for society, this does not make them evil or make everybody who failed to stop them stupid. Through a remarkable series of brilliant moves — the first ones putting books online with a huge master catalog and providing “promise dates” for each individual title so the customer knew when to expect delivery but then continuing onto Prime and Kindle and harnessing their own print-on-demand and, most of all, enabling self-publishing by individual authors that delivered meaningful revenue — they have achieved what sometimes looks like imminent hegemony.

Link to the rest at The Shatzkin Files

Large market share and dominance is something Amazon is developing in a variety of different fields besides books.

From MarketWatch: Inc. may already be the largest apparel retailer and could still grow to sales between $45 billion and $85 billion by fiscal 2020, according to Instinet analysts.

Instinet analysts led by Simeon Siegel estimate overall apparel and accessories sales at above $1 trillion with “above average” online penetration and “leading gross margin” compared with other categories.

“We believe Amazon has the largest [total available market] TAM (ever), doesn’t carry socio-economic retailing stigmas, can stock a limitless number of goods on its virtual shelf and knows customers better than they do,” Instinet wrote. “Amazon’s path to book dominance provides a potential road map for apparel success, with its fiscal 2007 media progress sharing similarities to its fiscal 2017 apparel achievements,” the note said.

PG notes that the “socio-economic retailing stigmas” refer to Walmart, previously the largest apparel retailer and now generally regarded as #2.

PG includes the apparel dominance Amazon has built as evidence Amazon is very good at understanding what customers want and how to deliver it to them at a reasonable price.

Amazon didn’t start selling books online with the goal in mind of becoming a publisher. However, in the face of illegal price-fixing by major publishers and other anti-Amazon activities calculated to bolster an outmoded, inefficient and expensive (for consumers and authors) publishing industry, Amazon innovated.

Prior to KDP, the self-publishing business was dominated by shady operators like Author Solutions and its companions whose business model focused on exploiting would-be authors. Instead of exploiting authors, KDP offered them much higher royalties they could earn in the traditional publishing business – 70% of the amount received by Amazon for KDP ebooks is a prime example.

Unlike traditional publishers that use a long and opaque supply chain which substantially reduces the amounts received by the publisher and thus the amounts received by authors, Amazon sold directly to consumers. Author royalties were quite close to 70% of the amount readers paid for author ebooks. (PG notes that some traditional publishing contracts {although fewer than in former days} calculate author royalties based upon the suggested retail price of the author’s printed book. Ebooks, books sold at a discount to discount retailers like Costco, Sam’s Club, etc.,  and some or all types of paperback sales are typically calculated based on the amount received by the publisher. Royalties calculated on the amounts received by publishers are virtually always much lower than royalties calculated based upon the suggested retail price of a book.)

For readers who really want to support authors they like, buying ebooks or CreateSpace books through Amazon is a much more effective means of doing so than buying books from a bookstore that takes its cut and acquires books from a wholesaler who takes its cut who acquires books from a publisher who takes its cut and passes a relatively small amount of the retail price of a book to the author.

Indeed, if we consider the annual incomes of all the people involved in the traditional publishing supply chain, it is quite likely that the author is the lowest-paid individual working in that business, even including clerks at Barnes & Noble.

PG suspects the traditional publishing practice of paying royalties to authors every six months may subtly influence authors to feel they’re earning more from their writing than they really are. Receiving a $6,000 royalty check in the mail feels psychologically like a larger amount than a $500 salary check every two weeks, particularly after taxes, social security and other deductions.

PG just did some quick calculations and discovered that a worker earning the US minimum wage of $7.25 per hour working 40 hours per week is earning more money than an author who receives a royalty check of $6,000 twice per year. If the author isn’t receiving a royalty check of over $7,500 every six months, the author would be financially better off working in a convenience store.

PG is not going to perform the calculations, but will note that the minimum-wage convenience store employee only pays 6.2% of wages for Social Security and 1.45% for Medicare (with the employer paying the same amount) while a self-employed author pays twice as much because she’s obligated for both the employee’s and the employer’s portions of those taxes.

Quick internet research didn’t disclose the average income of an author in the US, but in 2015, The Guardian calculated that the median earnings of professional authors in the UK fall below the minimum wage.

Do the median earnings of publishing executives fall below the minimum wage? Other employees working for publishers? How about median earnings of employees of book wholesalers? Delivery drivers that bring books to bookstores? Bookstore clerks?

So exactly why should the federal government take action to protect the traditional book publishing and selling industry at the expense of Amazon if that industry consistently fails to pay authors a living wage? Why penalize Amazon when it consistently pays authors more than traditional book publishing does?

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