By way of background, most "standard" author-publisher contracts (actually there's no such thing as a standard contract in the publishing industry) prohibit the author from publishing a "competitive" book without first receiving the publisher's permission.
In its recently filed answer,Open Road neither denies nor admits that its digital version of Wolves competes directly with the sale of the book in paper form. As I wrote previously, while the grant of primary rights did not mention eBook rights, a court might find it unfair for Ms. George to collect royalties from HarperCollins, while, at the same, time enjoying a royalty stream for the same work from Open Road. There is, however, scant law on the enforceability of non-compete clauses found in publishing contracts -- and even less law on liability for deliberate or tortious interference with such contractual relationships.
Next Stop on the Long Litigation Road
What's next? Briefs will be prepared and a parade of industry experts will be asked to submit expert affidavits in support of either HarperCollins or Open Road, stating under "penalty of perjury," that the ability to read text on a screen [did] [didn't] date back to 1971 (or earlier).
If you have a sense that we've been down this road before, you are correct. Open Road and HarperCollins' lead attorneys duked it out in 2001-2002 in the Rosetta Books case. Yup, they've even taken the same sides of the issue. In 2002, Rosetta, won an appeal affirming a trial judge's decision not to enjoin Rosetta from selling eBook editions of Random House's Slaughterhouse Five, Sophie's Choice and other bestselling backlist titles.
The Rosetta Books decision reminds us that eBooks have been poised to cannibalize books in print for over decade. This time, however, traditional publishers such as HarperCollins and Random House are in a more vulnerable position, as today it is clear that you cannot remain profitable on the sale of bound books alone.
Open Road Response to HarperCollins complaint
Author Joins Fight Over eBook Rights -- Wall Street Journal (Article)
Random House v. Rosetta Books -- (2d Cir. 2002) (Court Doc)
How Controls eBook Rights? -- Copylaw (Legal Analysis)