Legal Stuff

When Good Sites Go Bad: the Growing Risk of Website Accessibility Litigation

15 August 2019

From The National Law Review:

For a growing number of companies, websites are not only a valuable asset, but also a potential liability risk. In recent years, the number of website accessibility lawsuits has significantly increased, where plaintiffs with disabilities allege that they could not access websites because they were incompatible with assistive technologies, like screen readers for the visually impaired.

If you have never asked yourself whether your website is “accessible,” or think that this issue doesn’t apply to your company, read on to learn why website accessibility litigation is on the rise, what actions lawmakers and the courts are taking to try to stem the tide, how to manage litigation risk, what steps you can take to bring your company’s website into compliance, and how to handle customer feedback on issues of accessibility.

. . . .

In recent years, there has been a nationwide explosion of website accessibility lawsuits as both individual lawsuits and class actions. Plaintiffs have brought these claims in federal court under Title III of the Americans with Disabilities Act (ADA) and, in some cases, under similar state and local laws as well. In 2018, the number of federally-filed website accessibility cases skyrocketed to 2,285, up from 815 in the year prior. In the first half of 2019, these cases have increased 51.7% over the prior year’s comparable six-month period, with total filings for 2019 on pace to break last year’s record by reaching over 3,200.

. . . .

The ADA was enacted in 1990 to prevent discrimination against people with disabilities in locations generally open to the public (known as public accommodations). The ADA specified the duties of businesses and property owners to make their locations accessible for people with disabilities, but it was enacted before conducting business transactions over the internet became commonplace. With the rapid growth of internet use, lawsuits emerged arguing that websites were places of public accommodation under the meaning of the ADA.

These claims have presented serious questions about whether, when, and how website owners must comply with the ADA. There is no legislation that directly sets out the technical requirements for website accessibility. And while the U.S. Department of Justice (DOJ) has stated that “the ADA applies to public accommodations’ websites,” it has not clarified exactly what standards websites must meet to comply with the law. In the absence of clear guidance, courts considering the question have frequently looked to the Web Content Accessibility Guidelines(WCAG), first developed by the World Wide Web Consortium (W3C) in 1999, but most recently updated in 2018.

. . . .

Knowing your level of exposure is an important first step. Individual risk is currently based on three factors:

  • Location: Brick and mortar locations, the delivery of products, or the performance of services in New York or Florida heighten a company’s exposure.
  • Industry: The present trend shows that retail, food service, hospitality, banking, entertainment industries, and educational institutions are especially at risk.
  • Current website structure: Sites with e-commerce functions or purchased from third-party developers not currently in compliance with WCAG standards are popular targets.

Unfortunately, it is often difficult to predict the cost and complexity of bringing a website into WCAG compliance based simply on viewing it. An audit of the source code is often required. That said, you can start with a review of your site and develop plans and processes for accessibility. The first steps can include:

  • Assess current compliance: Use free online tools like wave and chrome vox and/or enlist a third-party audit to help you understand your current level of accessibility.
  • Plan for future compliance: Create an overall plan for achieving accessibility on a timeline that makes business sense.
  • Take immediate action: Adopt first-step improvements that can be implemented immediately, and create a process for considering accessibility before all future implementations.

Link to the rest at The National Law Review

In general, this type of litigation is handled by attorneys on a contingency-fee basis, which means that an assessment of how large the defendant is and whether he/she/it has liability insurance to satisfy a claim are important preliminary steps counsel is likely to take.

This means that AT&T is more likely to be sued than Janet Johnson, aspiring romance author with a website, is.

PG ran the free online tool mentioned above, WAVE, on TPV, and the program reported over 100 items PG should fix so TPV is accessible. One example is that the photo of the old book at the top left of each page of TPV has no ALT tag that would tell visually-impaired visitors to the blog using a screen reader what the content of the photo is.

The other free online tool mentioned in the OP, ChromeVox, is a Chrome screen reader plugin. Once installed and activated, you can hear what a vision-impaired visitor to your website will encounter.

The OP has provided PG with added impetus to bring the WordPress Theme for TPV up to date. He ran a Google search for ada compliant WordPress themes and found an extensive list.

An Argument for the Case Act

2 August 2019

CASE = Copyright Alternative in Small-Claims Enforcement Act

From Medium:

I got an email from the Electronic Frontier Foundation, whose work I admire and mostly support. In the email the EFF asked its supporters to call their representatives and tell them not to support the CASE act.

Roughly, the CASE act would lay out a new way for copyright holders to seek payment when their work is infringed by establishing a small-claims-court-like board inside the US Copyright office. Damages would be limited to US$15,000 for each infringed work and a total of $30,000 per claim. The law is meant to protect infringers from much larger monetary claims and to give the infringed a way to obtain compensation without having to mount a prohibitively expensive lawsuit.

My work pays for my family’s shelter, food and education and for my ability to keep writing music. The CASE act would give me a simple, inexpensive way forward when someone in the US steals my work and refuses to engage with me to execute a license to use my copyrights.

The EFF says that the CASE act will spawn an industry of copyright trolls who will file frivolous claims in order to make money off innocent people. Does the threat of copyright trolling justify limiting my ability to obtain compensation when my work is stolen? As I hear it, the argument is that giving corporations the ability to collect damages from individual infringers who aren’t doing harm is so great an evil that we cannot craft legislation that would allow individuals to bring valid claims against corporate infringers who are doing real harm.

Let me tell you some of my experience as an artist who earns a living from their work and whose work is often infringed/appropriated/stolen by entities who include it in their commercial projects without permission or compensation and sometimes even try to pass it off as their own. My work is supposedly protected by copyright law but when such an infringement occurs I have little recourse beyond sending a stern letter or attempting to shame them on social media. I would like to explain why, from my perspective, the CASE act sounds like a good idea.

. . . .

When I say “stealing” I am not talking about the hobbyist who puts my music in their climbing video. I am not talking about the young dancer who posts a video of her routine to one of my songs. I am not talking about the gamer who posts videos of their gaming sessions with my music as soundtrack. I am not talking about the wedding photographer who has my music as the soundtrack to their photography slideshow. I am not talking about my work used in a meme. In fact, I am not talking about most of the 22,000 third-party videos on Youtube with my music in the background. I don’t see any of that as stealing, I see it as a compliment. It says to me “I love your work and I love it enough that I did my own work to it and here it is for the world to see”.

. . . .

While legally most of these uses of my songs and recordings are technically infringing, I do not view these uses of my music as problematic and I do not block upload of such videos to YouTube.

Every now and then I will stumble on a usage that I find offensive, like a homemade anti-abortion video. I’ve gone through the take-down process and written to the creator of a video asking them to remove my music. It’s offensive to my moral rights as an artist, which are unprotected in the US, but because the usage does infringe my master and synchronization rights, I can have it taken down. I haven’t been tested on this thankfully, but I would not bring suit against an individual unless they blatantly refused to remove my music.

So, what is the “stealing” that I would use the CASE act for?

– Stealing is when someone writes asking to use my work, doesn’t accept the fee my licensing agent quotes them and uses it anyway.

– Stealing is when my work is knowingly used inside another work and my work is passed off as someone else’s.

– Stealing is using my work in something, charging for it and not crediting me in the hope I won’t find out.

Financial losses aside, I find these last two kinds of thefts emotionally devastating. When I learn of a funded production that used my music as an integral part and didn’t credit me, I feel such incredible sadness. I feel bereft, like something I care deeply about was taken from me. I feel taken advantage of. My first response is often tears. An infringement, particularly one from a creative production — artists stealing from other artists — is profoundly shattering.

Link to the rest at Medium

Here’s a link to the proposed legislation (It’s not a law yet and may or may not become one in the future)

Although PG suspects some will misuse the CASE Act (just as some misuse a variety of other laws), as a general proposition, he thinks it’s a good idea.

For small-time infringers, an official document arriving from a government agency will, in many cases, prompt cessation of infringement, a little like a super takedown notice with teeth. Hopefully, the experience will also deter future copyright infringement by such individuals.

Since participation in proceedings under the CASE Act process is voluntary (a copyright owner can elect the CASE route instead of filing suit in federal court and the recipient of a notice that a CASE complaint has been filed can remove the matter to federal court), it’s not mandatory. As a practical matter, removing a matter that begins as a CASE complaint will require the hiring of an attorney by each side, however, so this may present an opportunity to settle the dispute.

As with any dispute resolution forum, crazy people will sometimes file CASE complaints against sane people who have committed no wrong. Judges and Hearing Officers generally have more experience than they would wish with crazy people, however, and PG would be surprised if summary dismissal of a CASE complaint brought by a crazy person would not be relatively easy to achieve.

Filing a prompt registration of the author’s copyright to a creative work is always a good idea (and probably does not require an attorney), but if CASE becomes a law, sending a copy of the author’s registered copyright to the book that allegedly infringes the work of another will likely be another way to resolve CASE complaints filed in bad faith.

Indeed, if a CASE complaint is filed in bad faith, the filing of a CASE counterclaim by the true author against the bad faith filer may serve as a deterrent against future bad behavior.

Is CASE likely to help an individual author whose work has been misappropriated by a large publisher,  motion picture studio, etc.?

PG suspects not. Such large organizations have ready access to counsel who will be competent in copyright litigation in federal court and will be quite likely to cause the CASE complaint to be removed to federal court.

Again, CASE isn’t a law and may never become the law. Those supporting CASE have tried and failed to get the legislation passed before. If CASE does become the law, the resulting law may be much different than the current bill PG linked to above and which provides the basis for PG’s commentary.

And finally, although PG is an attorney, he doesn’t provide legal advice in TPV blog posts. Those requiring legal advice will need to retain an attorney to provide such advice for them.

Lady Chatterley’s Legal Case: How the Book Changed the Meaning of Obscene

1 August 2019
Comments Off on Lady Chatterley’s Legal Case: How the Book Changed the Meaning of Obscene

From The Guardian:

The 1960 obscenity trial that lead to the acquittal of Penguin Books for publishing DH Lawrence’s novel Lady Chatterley’s Lover is a seminal case in British literary and social history.

The verdict was an important victory for freedom of expression, and saw publishing in Britain become considerably more liberal.

. . . .

The trial highlighted the gap between modern society and an out-of-touch establishment, demonstrated most tellingly in the opening remarks to the jury of the prosecutor, Mervyn Griffith-Jones: “Is it a book that you would even wish your wife or your servants to read?”

Now, almost 60 years later, the trial remains the landmark case in British obscenity law, and its wider cultural and historic significance was demonstrated earlier this year. An annotated copy of the book used by the trial judge, Sir Laurence Byrne, was sold at auction to an overseas bidder for £56,250, but the then arts minister, Michael Ellis, placed a temporary bar preventing its export.

. . . .

Philippe Sands QC, the writer, human rights barrister and president of English Pen, says that Lawrence is “unique in the annals of English literary history” and that the book “was at the heart of the struggle for freedom of expression” in the courts and beyond. Calling for support to keep the book in the UK, he says it is “a symbol of the continuing struggle to protect the rights of writers and readers at home and abroad”.

Lady Chatterley’s Lover tells the story of an affair between the young, married and upper-class Lady Chatterley and her married, working-class gamekeeper, Oliver Mellors.

. . . .

The book challenged establishment values and, although it had been published elsewhere in Europe in 1928, remained unpublished in the UK for 30 years following Lawrence’s death in 1930, as publishers were fearful of prosecution.

Penguin’s co-founder Allen Lane wanted to publish an unabridged cheap paperback version for three shillings and sixpence, the same price as 10 cigarettes, to make it affordable for the “young and the hoi polloi”.

The previous year had seen the enactment of the Obscene Publications Act 1959, which introduced a defence for publishers if they showed that a work was of literary merit and for the public good. The trial of Penguin Books was a test case of the new law.

The defence called 35 professors of literature, authors, journalists, editors, critics, publishers and child education experts, and four Anglican churchmen, who each declared that the book had sufficient literary merit to deserve publication for the public good.

Link to the rest at The Guardian

The Disinformation Age: a Revolution in Propaganda

27 July 2019

From The Guardian:

Father came out of the sea and was arrested on the beach: two men in suits standing over his clothes as he returned from his swim. They ordered him to get dressed quickly, pull his trousers over his wet trunks. On the drive the trunks were still wet, shrinking, turning cold, leaving a damp patch on his trousers and the back seat. He had to keep them on during the interrogation. There he was, trying to keep up a dignified facade, but all the time the dank trunks made him squirm. It struck him they had done it on purpose, these mid-ranking KGB men: masters of the small-time humiliation, the micro-mind game.

It was 1976, in Odessa, Soviet Ukraine, and my father, Igor, a writer and poet, had been detained for “distributing copies of harmful literature to friends and acquaintances”: books censored for telling the truth about the Soviet Gulag (Solzhenitsyn) or for being written by exiles (Nabokov). He was threatened with seven year’s prison and five in exile. One after another his friends were called in to confess whether he had ever spoken “anti-Soviet fabrications of a defamatory nature, such as that creative people cannot realise their potential in the USSR”.

Forty years have passed since my father was pursued by the KGB for exercising a citizen’s simple right to read, to listen to what they chose and to say what they wanted. Today, the world he hoped for, in which censorship would end – as the Berlin Wall would fall – can seem much closer: we live in what academics call an era of “information abundance”. But the assumptions that underlay the struggles for rights and freedoms in the 20th century – between citizens armed with truth and information and regimes with their censors and secret police – have been turned upside down. We now have more information than ever before, but it hasn’t only brought the benefits we expected.

. . . .

More information was supposed to mean more freedom to stand up to the powerful, but has also given the powerful new ways to crush and silence dissent. More information was supposed to mean a more informed debate, but we seem less capable of deliberation than ever. More information was supposed to mean mutual understanding across borders, but it has also made possible new and more subtle forms of subversion. We live in a world in which the means of manipulation have gone forth and multiplied, a world of dark ads, psy-ops, hacks, bots, soft facts, deep fakes, fake news, Putin, trolls, Trump.

Forty years after my father’s interrogation I find myself following the palest of imprints of his journey, though with none of his courage, or certainty, and none of the risk. I run a programme at a London university that researches the newer breeds of malign influence campaigns across the world – and tries to find ways to combat them. But the language, ideals, tactics and stories that sustained the struggle for democracy in the 20th century are now used by the very forces they were meant to fight.

. . . .

Consider the Philippines. As my parents were enjoying the pleasures of the KGB in the 1970s, the Philippines were ruled by Colonel Ferdinand Marcos, a US-backed military dictator, who used the army to impose censorship and indulge in spectacular forms of torture, leaving victims’ skulls stuffed with their underpants by the side of the road, so as better to intimidate passersby. Marcos’s regime fell in 1986 when millions came out on the streets demanding an end to censorship and torture.

Today Manila greets you with sudden gusts of rotting fish and popcorn smells, wafts of sewage and cooking oil. Soon you start noticing the selfies. Everyone is at it: the sweaty guy in greasy flip-flops riding the metal canister of a bus; the Chinese girls waiting for their cocktails in the malls. The Philippines has the highest use of selfies in the world, the world’s highest use of social media per capita, the highest use of text messages: 20th-century style censorship would be near impossible to impose here. But the new president, Rodrigo Duterte, is rehabilitating Marcos’s reputation; he has also found new ways of exerting oppression.

Glenda Gloria remembers the Marcos years. In the 1980s she was a student journalist covering the regime’s torture of opposition figures. Her boyfriend had been arrested for running a small independent printing press and had had electrodes connected to his balls.

“The psychological warfare that Marcos mastered is very similar to what is happening now,” Gloria told me. “The difference is, Duterte doesn’t have to use the military to attack the media … How is it made possible? With technology.”

Gloria is managing editor at Rappler, the Philippines’ first online news agency, designed not merely to report on current affairs, but to crowdfund for important causes, and gather vital information to help victims of floods and storms. Experienced journalists like Gloria and editor-in-chief Maria Ressa hired 20-year-olds who knew about social media. When you walk into Rappler’s orange, open plan office you notice how young and largely female the staff are, with a small band of older journalists overseeing them with a hint of matronly severity. In Manila they are known as “the Rapplers”.

When Duterte decided to stand in the presidential election of 2015 he and Rappler seemed made for each other. A mayor from a provincial town with a reputation for being tough on drug offences, Duterte got relatively little TV time and so focused on social media. When Rappler hosted a Facebook presidential debate, he was the only candidate to turn up. It was an overwhelming success. His message – to vanquish drug crime – was catching on. Rappler reporters found themselves repeating his soundbites about the “war on drugs”. When Duterte later went on his killing spree, they would regret using the term “war”. It helped to normalise his actions: if this was a “war”, then casualties became more acceptable.

. . . .

When Rappler began to report on Duterte’s killings the site’s carefully curated online community suddenly turned on it. At one point there were 90 messages an hour: claims that Rappler was making up the deaths, that it was in the pay of Duterte’s enemies, that it was all “fake news”. The messages were like an infestation of insects, swarming into email inboxes and descending like a scourge on to the site’s community pages. Rappler journalists were shouted at in the malls: “Hey, you – you’re fake news! Shame on you!” Hashtags calling for the arrest of Ressa began to trend. The government launched a court case against her. She walked around town with bail money on her. As soon as one case was thrown out another would appear. International human rights groups call them politically motivated.

After several months of this onslaught, the Rapplers dedicated themselves to making sense of the attacks. First to catch their eye were the Korean pop stars. They kept appearing in their online community, commenting on how great Duterte was. How likely was it that Korean pop stars would be interested in Filipino politics? When they checked out the comments the pop stars were making they matched one another word for word: obviously fake accounts, most likely controlled from the same source.

They ran a program that scoured the internet to see who else was using the same language. They found other accounts repeating the same phrases. These looked more realistic, claiming to be real Filipinos with real jobs. The Rapplers began researching each one individually, calling their purported places of employment. No one had heard of them. Altogether they found 24 well disguised but fake accounts repeating the same messages at the same time and reaching an audience of 3 million. This was a coordinated attack. But proving who was behind it was near impossible.

Gloria remembers how in Marcos’s time you could see the enemy. There was a sort of predictability: they could kill you, or you could skip town, contact a lawyer, write to a human rights group, take up arms. You knew who the agents were, who was coming for you, who your enemy was. But now? You couldn’t tell who you were up against. They were anonymous, everywhere and nowhere. How could you fight an online mob? You couldn’t even tell how many of them were real. And of course this allowed the government to claim they had nothing to do with these campaigns. Wasn’t it just a question of concerned citizens exercising their right to free speech?

. . . .

Alberto Escorcia is a social media wizard and has helped coordinate some of the largest anti-corruption protests in Mexico over the last half decade. He and his friends started with pranks to provoke the police: after students were beaten by police officers, they went on silent marches and staged lie-ins, where they stretched out supine on the street, blocking the road. In time, he realised that if he knew in advance which subjects brought people together, and which words strengthened the interconnections between people, he would be able to “summon up” and strengthen protests. He had long believed that, at its best, the internet can connect society with its deepest needs for social change. He was inspired by how Google managed to predict and nip in the bud a flu epidemic when the company saw how many people were looking up flu symptoms at the same time in one place. Something similar, Alberto argued, could be done with political issues. You can tell what people really care about from their searches and online conversations.

But by the time I met Escorcia in Mexico City he looked too tired even to be frightened any more. Someone had been ringing his doorbell then running away again so he couldn’t sleep at night, shining acid-green lasers into his bedroom, pinging online death threats with his name spelt out in bullets – thousands every day so that his phone vibrated with alerts 24/7, turning it into an instrument of psychological torture. One takes such threats seriously in Mexico. During my visit I was told the story of a social media activist who had run an anonymous Twitter account cataloguing crimes committed by narcos. When the narcos found out who she was they first shot her and then posted her blasted off face on her own Twitter feed: “TODAY MY LIFE HAS COME TO AN END. DON’T MAKE THE SAME MISTAKE AS I DID … I FOUND DEATH IN EXCHANGE FOR NOTHING.”

It wasn’t just the personal threats that Escorcia was worried about – he feared troll farms were doing something more fundamentally damaging. The government was intervening in the relationship between people and their own desire for social change, spamming the internet with messages from fake accounts impersonating support for the government, using part-automated, part-human “cyborg” accounts to distract protesters from organising, sending in social media sock-puppets who pretend to support protesters, and then encourage violence to discredit movements. For 70 years, during the 20th century, Mexico had been a one-party state in which “truth” had been dictated top down. Today bots, trolls and cyborgs could create the simulation of a climate of opinion, which was more insidious, more all-enveloping than the old broadcast media – as it wormed its way into the feeds on your phone and you couldn’t tell whether it was coming from a friend or propagandist.

Link to the rest at The Guardian

In the United States, one of the standard methods of dealing with bad speech was formulated by Supreme Court Justice Louis Brandeis, who advised, in his Whitney v. California opinion in 1927, “If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence.”

More from Brandeis:

Those who won our independence believed that the final end of the State was to make men free to develop their faculties, and that, in its government, the deliberative forces should prevail over the arbitrary. They valued liberty both as an end, and as a means. They believed liberty to be the secret of happiness, and courage to be the secret of liberty. They believed that freedom to think as you will and to speak as you think are means indispensable to the discovery and spread of political truth; that, without free speech and assembly, discussion would be futile; that, with them, discussion affords ordinarily adequate protection against the dissemination of noxious doctrine; that the greatest menace to freedom is an inert people; that public discussion is a political duty, and that this should be a fundamental principle of the American government. They recognized the risks to which all human institutions are subject. But they knew that order cannot be secured merely through fear of punishment for its infraction; that it is hazardous to discourage thought, hope and imagination; that fear breeds repression; that repression breeds hate; that hate menaces stable government; that the path of safety lies in the opportunity to discuss freely supposed grievances and proposed remedies, and that the fitting remedy for evil counsels is good ones. Believing in the power of reason as applied through public discussion, they eschewed silence coerced by law — the argument of force in its worst form. Recognizing the occasional tyrannies of governing majorities, they amended the Constitution so that free speech and assembly should be guaranteed.

It should be noted that Brandeis concurred with the unanimous opinion of the Supreme Court that the speech involved was a “clear and present danger” and, thus, could be restricted under Supreme Court precedent. This line of cases was eroded through the twentieth century until a 1969 case titled Brandenburg v. Ohio substantially modified the clear and present danger by adding the requirement that 1) such speech be “directed to inciting or producing imminent lawless action,” and 2) the speech is “likely to incite or produce such action.”

An underlying proposition of the OP is that more speech is not always a good thing when disinformation can be automated.

Plaintiff Had No Duty to “Scour” the Internet for Infringements – Statute of Limitations Did Not Bar Copyright Claim Made 7 Years After Infringement

23 July 2019

From InternetCases:

Plaintiff freelance photojournalist sued defendant website publisher for copyright infringement over photos plaintiff took of a luxury maximum security prison in Norway in 2010. Defendants posted the photos on its website in 2011 without permission, in connection with a widely-publicized story of a notorious mass shooter being relocated there. Plaintiff registered the copyright in his photos in 2015 and filed suit in 2018, claiming that he did not learn of the alleged infringement until 2016.

Each party filed motions for summary judgment. Plaintiff claimed that the court should enter summary judgment in his favor because he had a valid copyright to the photographs, and there was no dispute that defendant published several of them without authorization. Defendant asserted that plaintiff’s claims were time-barred by the Copyright Act’s three-year statute of limitations, because he knew, or should have known, of the infringement when interest in the photos spiked following the remand of the alleged mass murderer to the prison where the photos were taken.

. . . .

The court found there was no genuine issue as to any material fact concerning plaintiff’s ownership of the copyright in the photos. And defendant conceded it published the photos without authorization. Defendant had challenged whether plaintiff’s copyright registration covered the photos at issue. Plaintiff had not introduced the deposit materials, but had submitted a sworn statement saying the photos had been included in the registration. The court found the sworn statement to carry the issue – had the defendant filed a motion to compel or sought the deposit materials from the copyright office, it may have been able to show the photos were not included. But on these facts, it was clear to the court that the copyright registration covered the photos.

. . . .

The court denied defendant’s motion for summary judgment, finding that the copyright infringement claims were not barred by the statute of limitations. Civil actions for copyright infringement must be “commenced within three years after the claim accrued.” 17 U.S.C. § 507(b). The Second Circuit has stated that the “discovery rule” governs when the statute of limitations begins to run: an infringement claim does not ‘accrue’ until the copyright holder discovers, or with due diligence should have discovered, the infringement.

Link to the rest at InternetCases

Court Rules Amazon Can Be Held Liable for Third-Party Sales

3 July 2019

From The Hill:

A federal appeals court on Wednesday ruled online retail giant Amazon can be held liable for the products sold by third-party sellers on its platform.

The 3rd U.S. Circuit Court of Appeals ruled 2-1 that customers can sue Amazon when they buy defective products from its platform, even if Amazon did not make those products.

The decision could leave Amazon vulnerable to a slew of lawsuits.

The case before the appeals court, though, involved a plaintiff who was in Pennsylvania, and the appeals court carefully noted that it was finding Amazon liable under that state’s strict product liability laws.

Amazon has argued that it does not count as a “seller” because it merely provides the platform, but the appeals court on Wednesday said it disagrees.

“Amazon … plays a large role in the actual sales process,” Circuit Judge Jane Richards Roth, a Reagan appointee, wrote in the opinion. “This includes receiving customer shipping information, processing customer payments, relaying funds and information to third-party vendors, and collecting the fees it charges for providing these services.”

. . . .

The case in question involves a woman named Heather Oberdorf, who bought a leash from Amazon that turned out to be defective. During a walk with her dog in 2015, the leash malfunctioned and hit Oberdorf’s face, leaving her permanently blind in her left eye, according to the filing.

Oberdorf, who was in Pennsylvania at the time of the incident, bought the leash from a seller on Amazon called “The Furry Group,” but neither Oberdorf’s legal team nor Amazon have been able to get in touch with them since 2016.

Amazon is the country’s most valuable retail company and about half of the items sold on its online retail platform are from third-party sellers.

Two federal appeals courts have previously ruled that Amazon cannot be held liable for products from third-party sellers, but the federal appeals court in Philadelphia reversed the latest lower court decision.

Link to the rest at The Hill

The appellate court reversed the decision of the trial court in this matter. Here is the relevant portion of the trial court’s decision which relieved Amazon of any liability under Pennsylvania’s laws:

Like an auctioneer, Amazon is merely a third-party vendor’s “means of marketing,” since third-party vendors—not Amazon—”cho[o]se the products and expose[ ] them for sale by means of” the Marketplace. Because of the enormous number of third-party vendors (and, presumably, the correspondingly enormous number of goods sold by those vendors) Amazon is similarly “not equipped to pass upon the quality of the myriad of products” available on its Marketplace. And because Amazon has “no role in the selection of the goods to be sold,” it also cannot have any “direct impact upon the manufacture of the products” sold by the third-party vendors.

. . . .

The Amazon Marketplace serves as a sort of newspaper classified ad section, connecting potential consumers with eager sellers in an efficient, modern, streamlined manner. Because subjecting it to strict liability would not further the purposes of § 402A, as revealed by Musser and other Pennsylvania cases, it cannot be liable to the Oberdorfs under a strict products liability theory.

. . . .

Section 230 of the Communications Decency Act (“CDA”) states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”Amazon argues that the Oberdorfs’ claims attempt to treat Amazon “as the publisher or speaker” of information provided by The Furry Group—i.e. , “as the publisher or speaker” of the product information provided to Amazon by that third-party vendor—and are therefore barred by § 230.

. . . .

Courts have interpreted § 230 expansively, noting that the immunity provided by that section “does not depend on the form of the asserted cause of action[, but] rather … on whether the cause of action necessarily requires that the defendant be treated as the publisher or speaker of content provided by another.” In Jane Doe No. 1 v. LLC , for example, three victims of sex trafficking sued an online classified ad website, alleging that they were trafficked through ads listed on the website by third parties. The plaintiffs argued that the website was liable for their injuries because it deliberately created a forum to facilitate such ads.Rejecting this argument, the United States Court of Appeals for the First Circuit determined that the plaintiffs were attempting to hold the website liable “as the publisher or speaker” of third-party content (the sex trafficking ads), and held that the claims were therefore barred by § 230.

. . . .

Since the Oberdorfs’ claims for strict products liability, misrepresentation, and breach of warranty have all been disposed of supra , this Court need only consider Amazon’s CDA argument with respect to the Oberdorfs’ negligence and negligent undertaking claims. Although the Complaint frames those claims broadly, it is clear from the Oberdorfs’ papers that they are, in fact, attempting to hold Amazon liable for its role in publishing an advertisement for The Furry Group’s product.In other words, the Oberdorfs are attempting to “treat[ Amazon] as the publisher or speaker of … information provided by” The Furry Group. Therefore, these claims are barred by § 230 of the CDA, and summary judgment will be granted in favor of Amazon on both Counts III of the Oberdorfs’ Complaint.

Here’s a link to the entire trial court decision

Here are some of the relevant portion of the Appellate Court’s decision reversing the trial court’s decision (PG has removed all legal citations to cases and statutes to make reading the opinion easier. The original opinion is packed with them if you’re interested):

Amazon contends that, just as every item offered at an auction house can be traced to a seller who may be amenable to suit, every item on Amazon’s website can be traced to a third-party vendor. However, Amazon fails to account for the fact that under the Agreement, third-party vendors can communicate with the customer only through Amazon. This enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor. There are numerous cases in which neither Amazon nor the party injured by a defective product, sold by, were able to locate the product’s third-party vendor or manufacturer.

In this case, Amazon’s Vice President of Marketing Business admitted that Amazon generally takes no precautions to ensure that third-party vendors are in good standing under the laws of the country in which their business is registered. In addition, Amazon had no vetting process in place to ensure, for example, that third-party vendors were amenable to legal process. After Oberdorf was injured by the defective leash, neither she nor Amazon was able to locate The Furry Gang. As a result, Amazon now stands as the only member of the marketing chain available to the injured plaintiff for redress.

. . . .

The second factor we consider is whether “imposition of strict liability upon the [actor would] serve as an incentive to safety.”

In Musser, the Pennsylvania Supreme Court “fail[ed] to see how the imposition of strict liability [on the auction house] would be more than a futile gesture in promoting the manufacture and distribution of safer products,” chiefly because the auction house was “not in the business of designing and/or manufacturing any particular product or products.”

Amazon asserts that it does not have a relationship with the designers or manufacturers of products offered by third-party vendors. Therefore, it contends that imposing strict liability would not be an incentive for safer products. Again, we disagree with Amazon.

Although Amazon does not have direct influence over the design and manufacture of third-party products, Amazon exerts substantial control over third-party vendors. Third-party vendors have signed on to Amazon’s Agreement, which grants Amazon “the right in [its] sole discretion to . . . suspend, prohibit, or remov[e], any [product] listing,” “withhold any payments” to third-party vendors, “impose transaction limits,” and “terminate or suspend . . . any Service [to a third-party-vendor] for any reason at any time.”

Therefore, Amazon is fully capable, in its sole discretion, of removing unsafe products from its website.

Imposing strict liability upon Amazon would be an incentive to do so.

. . . .

In Musser, the court indicated that the auctioneer was not in a better position than the consumer to prevent the circulation of defective products because it lacked an “ongoing relationship with the manufacturer from which some financial advantage inures to [its] benefit . . ..” Similarly, in Nath v. National Equipment Leasing Corp., the Pennsylvania Supreme Court held that, because financing agencies perform only a “tangential” role in the sales process, “their relationship with a particular manufacturer does not, in the normal course, possess the continuity of transactions that would provide a basis for indirect influence over the condition and the safety of the product.” Here, while Amazon may at times lack continuous relationships with a third-party vendor, the potential for continuing sales encourages an on-going relationship between Amazon and the third-party vendors.

. . . .

Moreover, Amazon is uniquely positioned to receive reports of defective products, which in turn can lead to such products being removed from circulation. Amazon’s website, which Amazon in its sole discretion has the right to manage, serves as the public-facing forum for products listed by third party vendors. In its contract with third-party vendors, Amazon already retains the ability to collect customer feedback: “We may use mechanisms that rate, or allow shoppers to rate, Your Products and your performance as a seller and Amazon may make these ratings and feedback publicly available.”

Third-party vendors, on the other hand, are ill-equipped to fulfill this function, because Amazon specifically curtails the channels that third-party vendors may use to communicate with customers: “[Y]ou may only use tools and methods that we designate to communicate with Amazon site users regarding Your Transactions . . ..”

. . . .

The fourth factor we consider is whether Amazon can distribute the cost of compensating for injuries resulting from defects.

In Musser, the court “acknowledge[d] that it would be possible for the auctioneer to pass on the costs of imposing strict liability upon him; possibly as [the injured plaintiff] suggests, by indemnity agreements between the auctioneer and the seller.” However, although the court found that extending the meaning of “seller” to include the auctioneer would provide another remedy for injured customers, the court demurred, stating that this would “only marginally” promote the “purpose of the policy considerations” underlying § 402A.37

In this case, however, Amazon has already provided for indemnification by virtue of a provision in the Agreement:

You release us and agree to indemnify, defend, and hold harmless us, our Affiliates, and our and their respective officers, directors, employees, representatives, and agents against any claim, loss, damage, settlement, cost, expense, or other liability (including, without limitation, attorneys’ fees) . . . .

Moreover, Amazon can adjust the commission-based fees that it charges to third-party vendors based on the risk that the third-party vendor presents.

Amazon’s customers are particularly vulnerable in situations like the present case. Neither the Oberdorfs nor Amazon has been able to locate the third-party vendor, The Furry Gang. Conversely, had there been an incentive for Amazon to keep track of its third-party vendors, it might have done so.

The fourth factor also weighs in favor of imposing strict liability on Amazon. Thus, although the four-factor test yielded a different result when applied by the Musser court to an auction house, all four factors in this case weigh in favor of imposing strict liability on Amazon.

The decision of the Appeals Court was made by a panel of three judges. Two judges decided Amazon should be held liable for the injuries. One of the judges disagreed. Following are a few excerpts from that judge’s dissenting opinion:

This case implicates an important yet relatively uncharted area of law. No Pennsylvania court has yet examined the product liability of an online marketplace like Amazon’s for sales made by third parties through its platform. Our task, as a federal court applying state law, is to predict how the Pennsylvania Supreme Court would decide the case. . . .   We must take special care “to apply state law and not . . . to participate in an effort to change it.”

. . . .

In my view, well-settled Pennsylvania products liability law precludes treating Amazon as a “seller” strictly liable for any injuries caused by the defective Furry Gang collar.

. . . .

A “seller” in Pennsylvania is almost always an actor who transfers ownership from itself to the customer, something Amazon does not do for Marketplace sellers like The Furry Gang. For similar reasons, every court to consider the question thus far has found Amazon Marketplace not a “seller” for products liability or other purposes; several of those courts have done so under products liability regimes similar to Pennsylvania’s.

. . . .

Amazon is a multinational technology company. Among other ventures, it hosts online sales. Products are offered for sale at in three primary ways. First, Amazon sources, sells, and ships some products as seller of its own goods. Second, third-party sellers sell products through Amazon Marketplace “fulfilled by Amazon,” purchasing Amazon’s services in storing and shipping their products. Third, at issue here, third-party sellers sell products through Amazon Marketplace without additional “fulfillment” services. These sellers, like The Furry Gang, supply and ship products directly to consumers without ever placing the items in Amazon’s possession.

. . . .

Amazon envisions its Marketplace as an open one. It reserves the right to remove sellers’ listings or terminate Marketplace services for any reason and requires sellers to represent they are in good legal standing, but it does not apply a general vetting process to all sellers to identify those who do not in fact meet that standard. Amazon also does not narrow the Marketplace’s offerings by limiting the number of sellers who may offer each type of product: any number of sellers may register. In displaying products to customers, Amazon distinguishes products sold through the Marketplace from those sold directly by Amazon, identifying the seller responsible for the item in a “sold by” line placed prominently
next to the price and shipping information. The seller’s name also appears on the order confirmation page, before the customer clicks “place your order” to finalize the purchase. . . . Amazon’s conditions of use for customers affirm the distinction, explaining, in Amazon Marketplace purchases from third-party sellers, “you are purchasing directly from those third parties, not from Amazon. We are not responsible for examining or evaluating, and we do not warrant, the offerings of any of these businesses or individuals.” . . . citing Amazon, Conditions of Use

. . . .

A customer on Amazon Marketplace buys a product that has been chosen, sourced, and priced by the third-party seller. The seller contractually commits to “ensure that [it is] the seller of each of [its] Products” listed for sale. The relationship reflected in the agreement between Amazon and the seller is one of “independent contractors.”

. . . .

A seller under Pennsylvania product liability law is one “engaged in the business of selling . . . a product.” . . . . In nearly all cases, “selling” entails something Amazon does not do for Marketplace products: transferring ownership, or a different kind of legal right to possession, from the seller to the customer.

. . . .

Amazon Marketplace, like the auctioneer in Musser, takes an important part in assisting sales, but is “tangential” to the actual exchange between customer and third-party seller. Like an auctioneer, Amazon Marketplace provides the “means of marketing” to a third-party seller who accomplished the “fact of marketing” when it “chose the products and exposed them for sale.” Amazon Marketplace’s services to any individual seller for an individual product are not “undertaken specifically,” but rather, as with the auctioneer, provided on essentially similar terms to a large catalogue of sellers.  And like an auctioneer, Amazon Marketplace never owns, operates, or controls the product when it assists in a sale.

Here’s a link to the Appeals Court Decision

PG thinks the trial court got this right and the court of appeals became too entranced with Amazon’s size and power, thus deciding that Amazon had plenty of money to pay damages and ignoring a careful structuring of the relationship between Amazon and its Marketplace sellers which Amazon created and disclosed to customers who were contemplating a purchase from a Marketplace seller. This sort of relationship, if respected by courts, helps Amazon maintain low prices for its customers.

As one of many illustrations of the old legal maxim, “Hard cases make bad law,” PG believes the majority in the Court of Appeals focused on the size and wealth of Amazon together with the disappearance of the actual seller of the defective product and stretched more than a little to reach a decision whereby the injured plaintiff would receive some compensation from the only party available who had the money to pay such compensation.

While this may seem to result in a just outcome in a particular case, if it becomes binding precedent for determining the outcome of other cases, it is (in PG’s ineluctably humble opinion) a bad idea that will result in more companies besides Amazon being hit with damages just because they’re big instead of because they have behaved in an illegal manner (or maybe because they’re not big, but have a bit of money to pay to an injured person).

Microsoft’s Ebook Apocalypse Shows the Dark Side of DRM

2 July 2019

From Wired:

Your iTunes movies, your Kindle books—they’re not really yours. You don’t own them. You’ve just bought a license that allows you to access them, one that can be revoked at any time. And while a handful of incidents have brought that reality into sharp relief over the years, none has quite the punch of Microsoft disappearing every single ebook from every one of its customers.

Microsoft made the announcement in April that it would shutter the Microsoft Store’s books section for good. The company had made its foray into ebooks in 2017, as part of a Windows 10 Creators Update that sought to round out the software available to its Surface line. Relegated to Microsoft’s Edge browser, the digital bookstore never took off. As of April 2, it halted all ebook sales. And starting as soon as this week, it’s going to remove all purchased books from the libraries of those who bought them.

Other companies have pulled a similar trick in smaller doses. Amazon, overcome by a fit of irony in 2009, memorably vanished copies of George Orwell’s 1984 from Kindles. The year before that, Walmart shut down its own ill-fated MP3 store, at first suggesting customers burn their purchases onto CDs to salvage them before offering a download solution. But this is not a tactical strike. There is no backup plan. This is The Langoliers. And because of digital rights management—the mechanism by which platforms retain control over the digital goods they sell—you have no recourse. Microsoft will refund customers in full for what they paid, plus an extra $25 if they made annotations or markups. But that provides only the coldest comfort.

“On the one hand, at least people aren’t out the money that they paid for these books. But consumers exchange money for goods because they preferred the goods to the money. That’s what happens when you buy something,” says Aaron Perzanowski, professor at the Case Western University School of Law and coauthor of The End of Ownership: Personal Property in the Digital Economy. “I don’t think it’s sufficient to cover the harm that’s been done to consumers.”

. . . .

Presumably not many people purchased ebooks from Microsoft; that’s why it’s pulling the plug in the first place. But anyone who did now potentially has to go find those same books again on a new platform, buy them again, and maybe even find a new device to read them on. For certain types of readers, particularly lawyers and academics, markups and annotations can be worth far more than $25. And even if none of that were the case, the move rankles on principle alone.

“Once we complete a transaction you can’t just reach into my pocket and take it back, even if you do give me money,” says John Sullivan, executive director of the nonprofit Free Software Foundation. “It’s not respecting the freedom of the individual.”

. . . .

More than anything, Microsoft’s ebook rapture underscores the hidden dangers of the DRM system that underpins most digital purchases. Originally intended as an antipiracy measure, DRM now functions mostly as a way to lock customers into a given ecosystem, rather than reading or viewing or listening to their purchases wherever they want.

. . . .

“This is why we call DRM media and devices defective by design, or broken from the beginning. There’s self-destruction built into the whole concept,” Sullivan says. “This is still the prevalent way of distributing media. That companies still pull the plug is still surprising and frustrating.”

Link to the rest at Wired

PG gently suggests that any lawyer who annotates a copy-protected ebook which resides online is not terribly wise.

PG probably has a moral (but not legal) obligation to remind one and all that, in the click-to-accept license agreement they entered into when they bought their MS ebooks, purchasers almost certainly agreed to not circumvent any copy protection software locking those ebooks up.

He will also remind the same group that, regardless of whether the license specifically prohibited circumvention, hacking copy protection is still illegal under the Digital Millenium Copyright Act, specifically 17 U.S.C. 1201. Violating this prohibition carries both civil and criminal penalties.

That said, PG suspects Microsoft will turn a blind eye to any evidence those who licensed ebooks from them have hacked the copy protection in order to make copies of the text.

However, publishers of the ebooks may not react in the same way.

PG hasn’t checked into the nature of Microsoft’s ebook copy protection or the copy protection used by publishers of ebooks sold by it, but, at least some copy protection software (I’m looking at you, Adobe) has, at least in past days, collected information about ebooks residing on computers, tablets, ereaders, etc., and sent it back to the mother ship. In 2014, this included ebooks using Adobe’s copy protection software and other ebooks that did not use Adobe software. See this post and related posts on The Digital Reader for the gory details.

PC suggests that those who have purchased ebooks from Microsoft decide whether they care about losing any of them. If the answer is yes, these readers can use some or all of the money they receive from MS to buy replacement copies somewhere more reliable.

If any visitors have made more than cursory annotations to any Microsoft ebooks, PG suggests the safest route from a DMCA violation standpoint would be to contact the publishers of those ebooks and ask for their help in salvaging the text and annotations. (Go ahead and contact the authors, too. They may have more reputational capital at stake than the publishers do.)

PG thinks Microsoft deserves a lot of heat for orphaning ebooks it sold without a way for purchasers to preserve access to them. For example, did MS think to contact Amazon to see if it could provide MS book-buyers with copies of the same titles from Amazon? If not, why not?

Why not throw some brains into a solution that won’t alienate Microsoft customers instead of refunding the money the customers spent plus $25? If the customers wanted money instead of books, they probably wouldn’t have purchased any books from MS in the first place.

For PG, nothing else has so effectively communicated the message, “We’re Microsoft and you’re not,” for a long time.

For the record, PG has not ever purchased any ebooks from Microsoft and is unlikely to do so in any future life.

If anyone does attempt to salvage MS ebooks, PG would be interested in any details of their experience they might care to share. If they don’t want to leave a comment, they can email PG via the Contact link on TPV.

If PG were advising any of the publishers (particularly publishers of books for readers in various learned professions), PG would suggest that the publishers do everything possible to collect contact information regarding any of their ebook purchasers impacted by Microsoft’s decision and take affirmative steps to communicate with those readers and offer to provide replacement ebooks in one of the other ebook formats in common use.


Rethinking the Writing Business

27 June 2019

From Kristine Kathryn Rusch:

When the disruption hit the publishing industry ten years ago, I watched with a wary eye. After I finished The Freelancer’s Survival Guide in the summer of 2010, I repurposed this weekly blog to help me understand the changes the publishing industry was undergoing. It seemed, in those heady days, that everything changed daily. And there was a large contingent of brand-new writers who knew so much better than the rest of us how revolutionary this indie publishing thing would be.

Most of those writers—the hoards that used to come screaming (literally) to this site every Saturday to denounce me and tell me what an idiot I am and how wrong I was—are gone now. They quit the business not because they weren’t earning money—most of them earned a boatload—but because they couldn’t handle what they had set up.

Many of them published rapidly and followed an insane publishing schedule that couldn’t be maintained in the face of real life. Some based everything they had and everything they knew on Amazon algorithms, only to be shocked when Amazon persisted in changing up those algorithms.

Others couldn’t handle the financial ups and downs of freelancing and some, frankly, didn’t give themselves a chance to succeed. They saw others making thousands every month while they were making coffee money, and decided that they’d never succeed and quit without ever completely learning their craft or building up an audience.

. . . .

New, hot, and trendy has a shorter shelf life these days than it did, and I wasn’t sure why. There’s a lot about this new world of publishing, as I called it, that I couldn’t figure out.

. . . .

We’ve been doing this wrong.

By this, I mean the writing business post-Kindle. We’re all approaching our business like we’re still in the publishing business. But we’re not. We’re part of the entertainment industry, and that entails a lot more than we think it does.

Let me see if I can retrace some of this thinking, so that I don’t just spring my ideas on you and have you balk at them.

I signed up for the Licensing University classes connected to the [Las Vegas Licensing] Expo. I saw those last year, and felt that I would miss a huge opportunity if I failed to attend.

This year, I looked at the roster of classes, and promised myself I could leave any class that was too basic for me. The “Is Your Brand Ready For Licensing” was a case in point (although I didn’t realize it until later). That was a copyright/trademark basics course that falls into the well-duh category for me, but is probably necessary for most first-time attendees at the Expo (and for most writers as well).

But the Basics of Licensing class? Holy Crap-Poodles. I figured I’d sit there for ten minutes before going out to the floor to look around. Instead, I took 30 pages of notes. (In future posts, I will deal with much of what I learned on a detail level.)

That class laid out the basics of a licensing deal, while acknowledging that each deal is different.

Let’s back up. We writers are creators of intellectual property. We have the property to license. We are the licensors. We’re looking for licensees. Okay? Got that?

The terms of a basic licensing deal includes these elements:

  • A Royalty
  • An Advance Payment Against That Royalty
  • Net Sales Definition
  • Some Kind of Reporting Process
  • Termination
  • Insurance/Warrantees/Indemnification
  • Jurisdiction

A basic licensing deal includes a lot more than that, things like minimum royalty guarantees, an audit schedule, minimum performance threshold, quality and approvals, advertising and marketing requirements, and so on.

The licensor is a participant in all of that. An active participant, who can terminate if, for example, the quality of the product (based on the sample) doesn’t come up to snuff after several tries.

I remember thinking in the middle of that class that the publishing agreements that I signed back in the 1990s had a lot more in common with a standard licensing agreement than standard publishing contracts do now. In fact, there was a lot in the old publishing contracts that were just like a licensing agreement. In fact, the old publishing contracts were licensing agreements with the pro-licensor stuff (the stuff that benefits the licensor/writer/creator) taken out.

. . . .

Fast-forward through the afternoon to the class on How To Negotiate A Licensing Deal, which was listed as a negotiation class, without the “licensing deal” part added in. I wrote a book on negotiation, for godssake. I’m damn good at negotiating. I figured I’d be leaving this one early as well.

Nope. Another 30+ pages of notes. With two surprises added in.

First, from a passing comment on royalty rates.

In licensing, the royalty rates can vary from 2% to 20% of the net sales price (usually wholesale, but that’s changing depending on distribution). One of the instructors (an agent) mentioned that really big brands with a lot of clout like Disney can get the 20% royalty without a lot of pushback because their brand is so valuable.

. . . .

Once upon a time, I was a work-for-hire writer, and one of the properties I wrote work-for-hire was Star Wars. I got a 2% royalty on the books published (see above).

In most work-for-hire publishing projects, the royalty rate gets split between the licensor who created the intellectual property and the writer who does the actual work on writing the novel. I do not know what Bantam paid LucasFilm for those early books. It might have been 10%, it might have been 15%. I do know it was less than 20%. At the time, you see, Star Wars was considered moribund. The books, Tim Zahn’s first trilogy in particular, led the entertainment industry to realize that there was a hungry audience for more Star Wars. The revival of the brand dates from that very first publication.

So I know that, in those days, LucasFilm didn’t have the Disney-level clout that it would later achieve. Which had an impact. Because, when it came time to renegotiate the license with Bantam, LucasFilm asked for a 20% royalty.

Bantam balked. They claimed they couldn’t make a profit. They claimed they couldn’t pay their writers. They claimed they wouldn’t get writers.

So, LucasFilm threatened to pull out, and the dance began. LucasFilm came down to 19% which still didn’t give Bantam enough room to pay the writers from the royalty rate (the standard way that writers did/do business in traditional publishing).

Bantam came with a compromise. Rather than a 2% royalty, they’d pay the authors $60-90,000 for the book, which was what those books earned out at in those days. Those payments would be guaranteed, but they’d be a flat fee. So if the books sold better than that, the writers would get no more money. If the books sold less, the writers would get more than they usually would.

Business-minded writers realized this: that if they took their upfront payment (which Bantam was offering in four payments) and banked it, they’d make more than they would off the 2% royalty rate. (Money in hand is worth more than money promised. Money in hand allows things like paying down credit cards rather than charging them, and having an emergency fund, rather than borrowing, and so on.)

A bunch of us agreed, our contracts were in the works, and then the idiots at the Science Fiction Writers of America got their undies in a bundle and denounced the entire deal and faxed a protest letter to LucasFilm, naming every single Star Wars writeras agreeing, even those who didn’t agree (and had threatened them if they used our name, like me) and even those who weren’t members (like me). That piece of idiocy cost me at least $90,000 if not more, because I was slated to write a bunch of books, and LucasFilm canceled all communication with me and cut me out of everything, just like they did with all the other authors named.

The books went on without us. And I just thought it a weird deal—that LucasFilm wanted 20%–believing what Bantam put out there (that LucasFilm was greedy) and what SFWA put out there (that LucasFilm was greedy) rather than understanding that LucasFilm was treating the books as a standard licensed product.

My brain was spinning as the negotiation class went on, because I finally understood the other side—the other side not being Bantam Books, but LucasFilm. I was just a sorry little contractor caught in the middle of a negotiation for a licensing deal, with a stupid idiotic third-party organization sticking its ignorant foot into the mess.

. . . .

The royalty rates class looked at all kinds of things that can have an impact on royalty rates, including net sales.

In that discussion, one of the agents on the panel clicked the next slide in the deck, which showed Publishing. She made a face, and said, with great disbelief, In publishing, the product is 100% returnable, so you have to figure out how to cap the losses.

She went on to talk about how difficult traditional publishing was to work with because of all the quirks in its contracts.

But I sat there and found my brain spinning again. When I was a baby writer, my book agents could get a minor cap on returns, limiting them to only two or three years. After that, the publisher had to eat the returns.

A standard licensing deal has a three-year term, which meant that publishers were already set up to cap returns earlier than that.

The licensing agent also went on to talk about how she had to explain basic licensing to her publishing partners, and how she had to hold them to the fire to get them to agree to a full royalty for all the participants (meaning that if the brand was say, a star quarterback for the NFL, the NFL would get its share of the royalty and the star quarterback would get his—so maybe a 50-50 split of a 20% royalty—meaning the author would write for a flat fee).

I immediately got retroactive anger.

Licensors from outside the publishing industry—that is, nonwriters. Celebrities. Grumpy Cat—got not just an advance against a substantial royalty, but a term-limited contract, and minimum royalty payment guarantees, and guaranteed marketing/advertising budgets, and the ability to easily and routinely audit the publisher, and, and, and…

. . . .

The licensing professionals who worked for a nonwriter licensor, like LucasFilm, got a licensing deal that would make writers and their book agents fall over in stunned surprise. Simply by using industry standard.

Okay, got all of that?

In the past, writers have gone begging to book agents, to publishers, to comic companies, to gaming companies, hoping to get someone to “take a chance” on their writing.

Writers weren’t acting as brand owners, licensors, people in control of their IP, asking for a standard licensing arrangement. Writers were beggars, which put them in a terrible long-standing position with the publishers.

. . . .

The book, the published book, is not the holy grail.

The story, the thing that the writer has created, is the holy grail. Before publication of any kind.

Because publication is a license. Whether you do it yourself and upload to Amazon (Direct to Retail, is what that’s called) or whether you go through a traditional publisher (Business to Business, is what that’s called {and notice that the businesses are on equal footing in that definition}),  you are licensing a tiny portion of your copyright to make distribution of some product (in this case a book) possible.

We’ve been teaching for years that publication is a license. Not a “sale” because you don’t lose the copyright. You license it.

But Dean and I and damn near every other writer out there (with only a handful of exceptions throughout the last 100 years) have not gone any farther than that. We haven’t thought about the published book as being a single licensed product.

We’ve been conditioned by our upbringing in the business culture of the previous century to think of the published book as the be-all-and-end-all of everything we did.

. . . .

We are not in the publishing industry. We are in the entertainment industry.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

For PG, Kris is one of the most interesting commentators on the publishing business, traditional and modern, and he always appreciates her Business Musings posts.

In these posts, Kris often looks above and beyond agents and publishers, KDP, etc., etc. in a way most authors do not.

In a former legal life, PG represented some software and technology companies whose products were sometimes licensed to very large business organizations, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Fidelity Investments, Apple, IBM, Oracle, Disney, Hallmark, Intel, Hewlett-Packard, and American Express.

(For context, at an earlier stage in his legal career, PG also represented abused spouses, dairy farmers, the tenants of small-time slumlords, people who wanted a divorce and/or needed to file for bankruptcy, a couple of arsonists, drunk drivers and people who couldn’t afford to pay an attorney and got help from Legal Aid.)

PG provides the big business list not to show what a big deal he is or was, but simply to demonstrate the variety of different licensing agreements he has seen outside of the traditional publishing business.

From a legal standpoint, as Kris says, a publishing contract is not a special snowflake, it’s a license of intellectual property, specifically, the copyright to a book which is owned by the author. Copyrights to software are what Microsoft owns and licenses to everybody who buys and uses MS Word, Excel, Windows, etc.

Although PG has not seen very many publishing contracts that acknowledge the fact, a traditional publishing contract also includes a sort-of implied license to the author’s right of publicity, sometimes called personality rights (which may include individual’s image, personal data and other generally private information).

However, most publisher-provided publishing contracts don’t look much like licensing agreements used elsewhere in the business world. Publishing agreements have little quirks that would seem strange to any attorney accustomed to seeing licensing agreements for technology or almost anything else.

PG understands the principle of customs of the trade, assumptions that govern niche businesses and the agreements they make. For example, in another case from PG’s olden days, he learned all about the New York City garment business and the strange ways it operates.

However, trade publishing and, to an even greater extent, academic and professional publishing still operate as if ebooks and other epublications have never existed. Even more important for authors, many publishers operate as if the cost of publishing was still based upon the expense and compensation structure that existed when printed books and journals were the only way to disseminate knowledge and long-form writing.

PG suggests that even for traditionally-published authors, Amazon has provided a great service by offering both self-publishing and Amazon Press as alternative methods of reaching readers. Absent Amazon’s influence, publishers would still be operating as if it were 1955 and today’s authors would be earning much less and accepting it as the author’s burden in life.

Yet, from a legal and commercial viewpoint, traditional publishing is still a screwy business and authors bear most of the burden of its bizarre practices.

PG repeats the admonition of Kris in the OP –

The book, the published book, is not the holy grail. We are not in the publishing industry. We are in the entertainment industry.

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