From Publishers Weekly:

Calling it a case of “blatant infringement,” attorneys for HarperCollins have asked the court for a permanent injunction blocking Open Road from publishing its unauthorized e-book edition of Jean Craighead George’s Julie of the Wolves, as well as more than $1.1 million in damages and attorney costs.

The request comes after HarperCollins’s recent win in its copyright suit against Open Road, and after the parties were unable to come to a voluntary settlement to resolve the case. Under a court order, Open Road is set to file its opposition brief no later than June 20.

. . . .

HarperCollins attorneys said a meaningful damage award was necessary to “deter Open Road, and others, from arrogating to themselves the new-media publication rights of legitimate licensees like HarperCollins,” and to bolster “an orderly market” for electronic publication rights.

“This case will surely be looked to as an important precedent in this area,” the brief states. “Hence, a sizable statutory damage award, coupled with the other remedies sought in this motion, will send an appropriately strong message to digital publishers.”

. . . .

  HarperCollins also asked the court for attorneys’ fees in the amount of $1,089,371.50 and costs in the amount of $7,040.62. That figure represents 70% of HarperCollins’ total fees of $1,556,245.00.

. . . .

[T]his case is at its heart more of a contract dispute than a copyright case, driven primarily by digital royalty rates. The author opted to go with Open Road for a 50% e-book royalty, while HarperCollins is said to have offered a digital edition, but refused to match the 50% royalty.

It seems unlikely that HarperCollins would have chosen to undergo the expense and uncertainty of litigation with Open Road only to enter into a license agreement with Open Road after winning.

It also seems unlikely that George’s estate would agree to take a lesser royalty with HarperCollins. In an earlier filing in the case, George was said to have deemed HarperCollins’s e-book royalty rate “fundamentally unfair to authors.” Given the increasing industry-wide pressure to raise e-book royalties, and the apparently lackluster sales of Open Road’s digital edition, there is surely no need for George’s estate to rush into a new e-book deal.

Link to the rest at Publishers Weekly

This is a suit between HarperCollins, the original paper publisher of Jean Craighead George’s “Julie of the Wolves,” and Open Road Media, the publisher of the ebook version of the same title. Ms. George voluntarily entered the lawsuit in support of Open Road.

Even if Ms. George hadn’t formally entered into the suit, she would have been involved in interrogatories, depositions, possible testimony at trial, etc., and would have been wise to retain her own attorney to help with those.

From the pieces of the contract that have appeared in the court case, PG hopes Open Road appeals the verdict.

Pulling back, there are some lessons for other authors from this lawsuit:

1. The standard “term of the copyright” clauses in the contracts traditional publishers ask you to sign really do mean you’re stuck with your publisher forever whether you like it or not.

Ms. George signed her HarperCollins contract in 1971. She was in her 90′s when she was draw into this litigation and died before the trial court’s decision. PG didn’t know Ms. George, but he expects she wasn’t happy being in the middle of a lawsuit during the last years of her life.

2. Be very careful what you sign. As reported in various publications, the contract clause at the center of this lawsuit was written by Ms. George’s agent and, apparently, never reviewed by an attorney acting on her behalf. Based on the court records and published accounts, the clause in question was very poorly written.

As you can see by the Publishers Weekly excerpt above, Harper Collins has spent $1.5 million (which is inexpensive for New York City litigation) litigating this poorly-written clause. PG expects Open Road has spent a similar amount.

Bad contract clauses can cost a lot of money.

3. Warranties in publishing contracts can cost real money. According to published reports, Open Road agreed that it would pay for costs arising from any suits against it by HarperCollins, so Ms. George doesn’t appear to be on the hook for Open Road’s attorneys fees.

However, this is most definitely not typical in virtually all contracts from traditional publishers. Normally, under Warranty and Indemnity clauses that nobody but lawyers ever read and understand, the author must pay for everything if the publisher is sued because of the author’s book.

Under a typical publishing contract, Open Road would be asking Ms. George to pay its damages and attorneys fees. If Open Road were required to pay HarperCollins’ attorneys fees, under a typical publishing contract, Open Road would be asking Ms. George to pay those as well.

And, unless Open Road decides to give up and pay up, the case is far from over at this point and there will be a lot more attorneys fees.

From The Telegraph:

Scarlett Johansson is suing for €50,000 (£41,000) in damages the author and publisher of a novel that features a character who closely resembles her.

The American actress claims that La Première Chose qu’On Regarde (The First Thing We Look At) violates her privacy and constitutes a “fraudulent and illicit use of her name, her fame and her image” for commercial gain – allegations the book’s publisher has dismissed as “crazy”.

. . . .

“The freedom of expression that she defends as an artist is not in question,” said the actress’s lawyer. “Such activities for purely mercantile ends have nothing to do with creativity,” he said.

. . . .

“This is a literary, not commercial, approach. She has not been used as a product,” said Miss Veil. “Grégory Delacourt is not a paparazzo, he’s a writer!”

The heroine of La Première Chose qu’On Regarde is Janine Foucamprez, a small-time model from northern France whose life is blighted by her resemblance to Miss Johansson.

Women are jealous of her, men see her as a sex object, and she ends up dying in a car crash.

. . . .

“We have never known anything like it. It is all the more surprising for the fact that the novel is not even about Scarlett Johansson.

“It is about a woman who is Scarlet Johansson’s double. This writ seems crazy to us.”

Mr Delacourt is one of France’s most successful modern writers. His previous novel, My List of Desires, sold 450,000 copies, was translated into 47 languages and is to be adapted as a film in France.

. . . .

“It freaks me out to think that when you talk of a character in a novel, judges can get involved. It’s rather sad.

“If an author can no longer mention the things that surround us, a brand of beer, a monument, an actor … it’s going to be complicated to produce fiction.

“It’s stupefying, especially as I’m not sure she’s even read the novel since it hasn’t been translated yet.”

Link to the rest at The Telegraph and thanks to Meryl for the tip.

PG is most definitely not an expert on French law, but this action sounds like what US law would call a right of publicity claim. PG wrote about that here.

From The Volokh Conspiracy:

So holds the Connecticut Appellate Court in Vazquez v. Buhl (Conn. App. Ct. May 13, 2014), applying the federal 47 U.S.C. § 230 statute. Here’s what apparently happened:

The complaint alleges the following facts. In December, 2011, and January, 2012, Teri Buhl published several online news articles containing defamatory statements about the plaintiff on her website. On January 6, 2012, John Carney, a senior editor for cnbc.com, published an online article entitled, “The Sex and Money Scandal Rocking Hedge Fund Land” on www.cnbc.com, a website owned and operated by the defendant. Carney’s article referred to Buhl as a “veteran financial reporter” who “knows her way around the Connecticut hedge fund beat,” and urged viewers to read Buhl’s articles by stating, “I don’t want to steal Buhl’s thunder, so click on her report for the big reveal.” The word “report” was a hyperlink to Buhl’s online articles containing the defamatory statements.

Plaintiff sued Buhl and NBC, but the Connecticut Appellate Court held that the lawsuit against NBC was barred by 47 U.S.C. § 230, which states,

No 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.

Link to the rest at The Volokh Conspiracy

From The Wall Street Journal:

Individuals can ask Google Inc. to remove links to news articles, court judgments and other documents in search results for their name, the European Union’s highest court said Tuesday—a surprise decision that could significantly disrupt how Google and other search-engine operators work across Europe.

The case centered on the so-called right to be forgotten, which plaintiffs argued before the court gives individuals the opportunity to request old information about them be removed from search engines. The ruling means that individuals can request operators remove links that come up during searches. It doesn’t mean that the original article or website has to be removed or altered—it would only affect search results.

. . . .

The decision “makes grim reading for Google and will delight privacy advocates in the EU,” said Richard Cumbley, information-management and data-protection partner at U.K. law firm Linklaters.

The European Court of Justice said Tuesday that search companies are responsible for personal data that shows up on Web pages they link to in search results. The decision allows individuals to request Google or other search operators to take down links to Web pages that are published by third parties, such as newspapers, containing information relating them when searched by name—such as coverage of court cases or legal announcements.

. . . .

“This balance may however depend, in specific cases, on the nature of the information in question and its sensitivity for the data subject’s private life,” it said, as well as the public interest, “which may vary, in particular, according to the role played by the data subject in public life.”

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

PG says removing links from search results are an excellent way of burying information. The larger the total amount of information, the more critical it is to have a robust search capability.

PG wonders whether this decision might at some point give authors or publishers leverage to remove adverse book reviews.

From The Mail:

A woman who invented a wild tale of survival during the holocaust has been ordered to forfeit the $22.5 million judgement she won from her publishers by a Massachusetts court.

Published in 1997, Misha: A Mémoire of the Holocaust Years is about a Jewish girl from Brussels who walked across Europe by herself after her parents were seized by Nazis.

Misha Defonseca, 76, and her ghostwriter Vera Lee won $32.4 million from publisher Jane Daniel and Mt Ivy Press in a copyright registration claim in 1998 in which Daniel was found to have conducted ‘highly improper representations and activities.’

. . . .

[D]uring the appeal process, inconsistencies in Defonseca’s outlandish tale began to attract the suspicion of Daniel, journalists[and] forensic genealogists.

. . . .

In her memoir, Defonseca wrote that she trekked 1,900 miles across Europe in search of her parents. She spent months living in the forest with a pack of wolves, hiding from Nazis and in one encounter, stabbed a Nazi rapist to death.

These events all occurred when she was aged between seven and 11 years old, according to the book.

. . . .

Her real name, Daniel found, was Monica Ernestine Josephine De Wael, and she was not Jewish.

During the time she was supposed to have been communing with wolves and killing Nazis, Defonseca was in actual fact enrolled in a Brussels school.

Defonseca, now living in Massachusetts, has admitted that her best-selling book was an elaborate fantasy she kept repeating, even as the book was translated into 18 languages and made into a feature film in France.

‘This story is mine. It is not actually reality, but my reality, my way of surviving,’ Defonseca said in a statement given by her lawyers to The Associated Press.

Link to the rest at The Mail and thanks to PD for the tip.

From Ars Technica:

Lawyers for Mediabridge Products, a wireless network device manufacturer, sent ascathing letter to a redditor on Monday, threatening to sue him unless he deletes his negative reviewof one of the company’s products on Amazon.com.

After posting the negative review of a Medialink Wireless Router product—which became the “most helpful” negative review on Amazon.com—an attorney for Mediabridge sent him a letter explaining that the company “zealously guards its hard-earned reputation” and that “you have harmed Mediabridge and we intend to hold you liable for all damages sustained.”

The reviewer, who goes by “trevely,” posted the letter to reddit, soliciting responses (and receiving lots of them) and requesting help with his legal fees. “If you want to contribute to my legal fees, just message me for a link. I haven’t been served yet, so hopefully it won’t come to that,” the redditor explained.

“Never in my life have I been so relentlessly bullied by a company,” he wrote on Amazon. “Please keep that in mind when considering whether to purchase any products from Medialink. And if you decide to leave a negative review, don’t use your real name like I did.”

. . . .

On Thursday, Mediabridge Products posted an official statement about this incident to its Facebook page, clarifying its position and saying that Amazon has revoked its selling privileges. However, Mediabridge subsequently deleted the statement and its entire Facebook presence after receiving negative comments.

In the statement, the company says that it did not actually sue the Amazon reviewer, but that it did insist that the reviewer’s “untrue, damaging, and disparaging statements” be taken down. “It’s our sincere belief that reasonable people understand that not only is it within our rights to take steps to protect our integrity, but that it should be expected that we would do so when it is recklessly attacked,” Mediabridge Products wrote. “The reviewer has since changed his review completely to remove the libelous statements, but unfortunately not before having an army attack us on the internet.”

The company did not give any clue as to the terms of Amazon’s rescinding of Mediabridge’s selling license, but only said at the end of its statement, “Unfortunately, as a result of our attempt to get this reviewer to do the right thing & remove his untrue statements about our company, Amazon has revoked our selling privileges. Many hard-working employees whose livelihood depended on that business will likely be put out of a job, by a situation that has been distorted & blown out of proportion.”

Link to the rest at Ars Technica and thanks to Pete for the tip.

PG says this was a great move by Amazon to defend someone who posted a review on its site.

As far as Mediabridge is concerned, millions of people now know their name and and that name has received far, far more negative publicity from the company’s stupid threat than it ever would have from an Amazon review. PG knows he’s never going to purchase a Mediabridge product.

PG also wonders why no one at the attorney’s office informed executives at Mediabridge that sending a threatening letter was a terrible idea.

From The New York Times:

If Steve Jobs were alive today, should he be in jail?

That’s the provocative question being debated in antitrust circles in the wake of revelations that Mr. Jobs, the co-founder of Apple, who is deeply revered in Silicon Valley, was the driving force in a conspiracy to prevent competitors from poaching employees. Mr. Jobs seems never to have read, or may have chosen to ignore, the first paragraph of the Sherman Antitrust Act:

Every “conspiracy, in restraint of trade or commerce” is illegal, the act says. “Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine” or “by imprisonment not exceeding three years, or by both said punishments.”

Mr. Jobs “was a walking antitrust violation,” said Herbert Hovenkamp, a professor at the University of Iowa College of Law and an expert in antitrust law. “I’m simply astounded by the risks he seemed willing to take.”

. . . .

 The anti-poaching pact was hardly Mr. Jobs’s only post-mortem brush with the law. His behavior was at the center of an e-book price-fixing conspiracy with major publishers. After a lengthy trial, a federal judge ruled last summer that “Apple played a central role in facilitating and executing that conspiracy.” (Apple has appealed the decision. The publishers all settled the case.)

. . . .

 Despite the strict language of the Sherman Act, the Justice Department tends to file criminal antitrust charges only in the most egregious cases, and by that standard, Mr. Jobs would probably never have been charged. Still, Mr. Jobs’s conduct is a reminder that the difference between genius and potentially criminal behavior can be a fine line. Mr. Jobs “always believed that the rules that applied to ordinary people didn’t apply to him,” Walter Isaacson, author of the best-selling biography “Steve Jobs,” told me this week. “That was Steve’s genius but also his oddness. He believed he could bend the laws of physics and distort reality. That allowed him to do some amazing things, but also led him to push the envelope.”

. . . .

 Professor Hovenkamp characterized both the e-book agreements and the anti-poaching pact as “blatant restraints of trade.” Mr. Jobs, he said, “was so casual about it, so bold. Didn’t he have lawyers advising him? You see this kind of behavior sometimes in small, private or family-run companies, but almost never in large public companies like Apple.”

. . . .

Mr. Jobs was certainly brazen. Testimony in the e-books case suggested that Mr. Jobs was eager, even frantic, to have an e-book agreement in place in time for his announcement of Apple’s latest product, the iPad. There’s no indication that any lawyers put the brakes on. (On the contrary, the chief architect of the scheme inside Apple was a lawyer.) In an email to James Murdoch, then an executive at News Corporation, which owned the publisher HarperCollins, Mr. Jobs offered what amounted to a classic case in price fixing: “Our proposal does set the upper limit for e-book retail pricing based on the hardcover price of each book” and urged HarperCollins to “throw in with Apple.”

HarperCollins did, along with other major publishers. Judge Denise L. Cote of Federal District Court for the Southern District of New York ruled that “Apple is liable here for facilitating and encouraging the publisher defendants’ collective, illegal restraint of trade,” adding: “Through their conspiracy, they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail e-book prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant.”

Why were no criminal charges filed? The Justice Department’s antitrust division chief, William J. Baer, recently noted that the department had filed 339 criminal antitrust cases since President Obama took office, many of them on charges of price-fixing. The issue is, of course, moot with Mr. Jobs, who died in 2011. But his co-conspirators in the publishing industry may have benefited from the relative novelty of e-books. “There’s a traditional reluctance to go for criminal liability over novel practices,” Professor Hovenkamp said. “There was probably some thinking that with e-books, the technology was so new, and it was disruptive. It’s tough to prove mens rea,” or criminal state of mind.

Link to the rest at The New York Times and thanks to Patricia for the tip.

From Canadian law firm Affleck, Green, McMurty:

Ebook retailer Kobo is challenging a settlement entered into by the Competition Bureau with ebook publishers. The settlement has been stayed pending this challenge. Kobo‘s challenge may have major implications for competition law enforcement in Canada. Kobo‘s case also highlights a little-known area of risk that Canadian businesses face.

Canadians have taken to ebooks and ebook readers. They have many advantages, such as portability and the ability to buy and immediately download new books from nearly anywhere, at any time. But ebook customers cannot have failed to notice that ebooks are not much cheaper paperback books or sometimes even harcover books, even though the ebookscost less to produce and distribute than physical books.

Competition authorities in Canada, the United States, and Europe noticed this as well and investigated. They found that the replacement of a traditional wholesale price model with an “agency” model, where the publisher sets the retail price and charges a percentage of that price as the wholesale price, led to higher prices for ebooks.

. . . .

In Canada, ebook retailer Kobo is challenging the settlement. Kobo claims that the settlement changes the contracts that underpin its business and profitability. The Competition Tribunal has stayed the Canadian ebooks settlement pending Kobo’s challenge.

. . . .

Under the wholesale model, the publisher sells the book to the retailer, who then sells it for whatever price it wants. When ebooks were first introduced, publishers typically set wholesale prices about 20% lower than for physical books. Amazon then started selling ebooks for $9.99. Publishers saw this as too low, and they said so. Some of them began to act in concert to protect the higher prices they charged for hardcover books, notably by releasing books in hardcover before releasing the ebook version, a tactic called “windowing”.

. . . .

Even before the case against Apple went to trial in the US, the publishers reached settlements with US and EU competition authorities. Apple settled in the EU but not in the US.

The settlements, broadly speaking, were substantially the same on both sides of the Atlantic: the publishers agreed to end retail price restrictions and MFN clauses.

The Canadian settlement is also similar. The consent agreement prohibits the publishers from imposing retail prices on retailers. Publishers can still set suggested retail prices, but, with one narrow exception, cannot prevent retailers from selling below the suggested retail prices.

A key feature of the ebooks case is that it involves both horizontal and vertical restraints. The horizontal restraint is the agreement between ebook publishers to impose vertical restraints on retailers. The vertical restraints prevent price competition by retailers, a practice known as price maintenance. The ebooks settlements attack the vertical restraints that flow from the horizontal agreement. The anti-competitive conduct that provides the basis for the enforcement action appears to be the horizontal agreement, however.

The Canadian ebooks settlement is based on an anti-competitive horizontal agreement. The settlement recites an allegation by the Competition Bureau that ebook publishers entered into an agreement that lessened or prevented competition substantially in the market for ebooks.

. . . .

Kobo argues that its contracts with the four publishers, Hachette Book Group, HarperCollins, Macmillan, and Simon & Schuster, will be fundamentally altered or terminated because of the settlement, and that it will lose money. Kobo claims that a similar settlement in the US led it to close a US office and refocus on other markets. Kobo claims that it also led another ebook company, Sony, to exit the market, and caused Barnes & Nobles’ “NOOK” ebook division to become unprofitable.

The settlements led publishers to replace the agency model with the so-called “agency lite” model. The agency lite model is essentially the same as the agency model with most of the restrictions on retail price reductions removed. Thus publishers continue to establish a retail price, and are paid a wholesale price based on a discount from the retail price. The key difference is that retailers are free to price below the suggested retail price. The wholesale price does not change, however, even if retailers decrease retail prices. This, Kobo complains, means that retailers bear the losses associated with competition in the marketplace, while publishers’ margins remain protected.

Kobo says that unlike in the US, the shift to agency in Canada was not driven by a conspiracy among publishers, but rather, by Kobo itself in its negotiations with publishers.

Link to the rest at Affleck, Green, McMurty and thanks to Felix, who suggests this may indicate that Kobo was involved in a Canadian price-fixing conspiracy, for the tip.

Keiler v. Harlequin is a proposed class-action lawsuit by Harlequin authors against Harlequin for actions by the publisher that resulted in massive underpayment of royalties to authors for ebooks. Some authors report receiving as little as six cents in royalties for sales of each of their ebooks by Harlequin. PG has posted about the case previously here, here and here.

The trial court ended up giving HQ a win, but the authors appealed. Today, the Second Circuit Court of Appeals reversed the trial court on one count, allowing the HQ authors a chance to move forward with their case at the trial level. Here’s the appellate court’s summary of its decision:

The United States District Court for the Southern District of New York (Baer, J.) concluded that plaintiffs’ allegations failed to state claims and dismissed the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).  See Keiler v. Harlequin Enters. Ltd., No. 12-5558, 2013 WL 1324093 (S.D.N.Y. Apr. 2, 2013). For the reasons set forth below, we hold that plaintiffs’ claims based on agency, assignment, and alter ego theories cannot serve to modify the terms of the Publishing Agreements and were properly dismissed.  We also conclude that the amended complaint set forth sufficient facts to plead a breach of the Publishing Agreements on the theory that defendants calculated their e-book royalties based on an unreasonable license fee.  Accordingly, we affirm the judgment in part, reverse it in part, and remand for further proceedings consistent with this Opinion.

The appellate court’s decision to partially reinstate the suit is based upon contentions by the authors that the license from Harlequin Switzerland to Harlequin Enterprise in return for a royalty of 6-8% of the cover price of the books is not “equivalent to the amount reasonably obtainable by Publisher from an Unrelated Licensee for the license or sale of the said rights.”

The court further  found that the authors had contended that such royalties should be at least 50% of net receipts. The decision gives the opportunity for the HQ authors to prove such a contention.

This is not a final win for the authors, but it does open the door for them to proceed with their suit on the theory that the royalty rates between one HQ company and another were substantially lower than HQ would have received from an unrelated licensee.

While today’s ruling doesn’t bring the suit to a close, PG believes this is an important decision that appears to provide the authors a path to a trial on the merits of their claims.

The long path forward would involve moving through the preliminaries for such a trial, the trial itself and then appeals from the trial court’s decision, no matter which way it goes.

The shorter path would be a negotiated settlement between the authors and HQ that would likely involve some substantial additional royalty payments to HQ authors.

PG says HQ authors shouldn’t spend any money they don’t already have, but they may wish to hoist a glass to the Second Circuit.

Here’s the full opinion:

From Publishers Weekly:

HarperCollins and Open Road were back in court last week. According to court filings, the parties have apparently not worked out a final resolution to their copyright dispute over Open Road’s e-book edition of Jean Craighead George’s 1973 bestselling children’s book Julie of the Wolves.

. . . .

The appearance comes after judge Naomi Reice Buchwald ruled last month that Open Road infringed HarperCollins’s copyright in publishing its e-book edition. Buchwald held that a clause, inserted by agent Curtis Brown in the 1971 contract, which encompassed digital technologies “now known or hereafter invented” was “sufficiently broad to draw within its ambit e-book publication.”

Link to the rest at Publishers Weekly