LITERARY RIGHTS LAWYER | COPYRIGHT TERMINATION | FAIR USE | PRE-PUBLICATION LIBEL REVIEW | BOOK CONTRACT REVIEW | TRADEMARK SEARCH | FILM OPTIONS | BOOK TITLE CLEARANCE | 1501 Broadway FL 12, New York, NY 10036 | (212) 354-4442 | jassin@copylaw.org
What Jerry Garcia & Ted Turner Can Teach the Publishing Industry
A Legal Footnote to the Andrew Wylie E-Book Controversy
Penguin R
andom House has its own self to blame for the electronic pickle they find themselves in today. When drafting the original, pre-internet, publishing contracts for Cheever, Nabokov and Updike, they left out the future technology clauses. To be clear, it's not that they didn't know how to draft future technology clauses. They left them out. As such, they just weren't thinking much about the future. Likely, they were doing what was expedient, i.e., signing up books in "book form."
What Was Random House (Not) Thinking?
As early as 1909, publishing attorneys have been thinking about e-books. In 1909, they even included a "future technologies" clause in Mark Twain's publishing contract for his soon-to-be published (as in 2010) autobiography. The "future technologies” clause, which acts as a catch-all for technologies and media not yet invented, has been around for a long while. Narrowly drafted (out of respect for the author's rights and the publisher's legitimate interests), such a clause would have snagged verbatim e-book reading rights.
What the Publishing Industry Can Learn from Captain Trips & Captain Outrageous
What once seemed trivial (i.e., drafting a contract clause), is now upsetting the balance of power in the publishing industry. It's a classic case of an ounce of prevention. Happily, America has a long history of entrepreneurs taking undervalued opportunities (e.g., Turner's purchase of the old -- much undervalued -- MGM/UA film library in 1986) and leveraging them to create great value.
There's a Jerry Garcia/Phil Lesh/Robert Hunter lyric that neatly sums it up: "One man gathers what another man spills” That was Turner's modus operandi, when he acquired the pre-1986 MGM, and pre-1950 Warner movie libraries. He dusted them off, colorized them, and started profitable new media ventures. He looked for and found undervalued opportunities and created great value. That's the American way. Is Andrew Wylie a latter day Ted Turner? Is he creating value or merely nibbling away -- unfairly -- at Random's backlist? You be the judge.
This week the industry was shaken by Andrew Wylie's announcement that he was entering into an exclusive relationship with Amazon to sell Kindle versions of his author's bestselling p-books. Wylie's move is troubling. What's troubling is that Amazon becomes the exclusive e-purveyor of bestselling backlist titles -- and a direct competitor of RH and other print publishers who obtained "book form" rights under legacy agreements. From the Big-6 publishers' perspective, this disrespects both the letter of their publishing contracts (all of which contain non-competition clauses), and the spirit of them. It's Rosettta Books all over again, but different, since the digital landscape has changed since the late 90s. Today, for example, e-books are displacing mass market sales.
On the one hand, you can't fault Wylie for seeking out new digital revenue streams for his authors (and their heirs). However, Amazon is no longer just a bridge between publishers and readers. It is a competitor. You can't play both sides of the net without being called out for it. What to Do? Traditionally, bookselling was separated from publishing, with booksellers (including Amazon) realizing the benefit of combining the wares of many publishers. Now that Amazon has the ability to perform all of the activities that take place between delivery of an edited manuscript and delivery of finished books to readers, the publishing industry needs to take a long hard look at its business relationships -- and business model. The Wylie-Amazon alliance is a slippery slope that can easily decrease the diversity of books in the marketplace, as well as access to them. Like Amazon's BookSurge gambit of two years ago, Amazon is seeking to steer consumers to books that they either produce and/or control.
Two years ago, Amazon stated that they were not seeking exclusivity to indie published books (i.e., requiring POD titles be printed exclusively through Amazon's BookSurge POD service). Industry pundits claimed that was exactly what they were trying to do. Apparently, the pundits were correct. Today, public disavowels are impossible. How Amazon will deflect the wrath of the industry remains to be seen. In Joseph Esposito's excellent article entitled the "Platform Wars" [IBPA Newsletter], he wrote, "Book publishers have lost control over their own industry, and not because consumers have won. They haven't -- they will be no better off with defacto platform dominance than anyone else except the company that controls the platform."
Platforms like Amazon and Google have morphed into celestial publishers. Amazon did this by design. Google stumbled into the publishing business by scanning books without permission. For their punishment they received exclusive control over "Orphan Works" (i.e., in-copyright, but out-of-print books, whose authors have gone missing).
And so it goes. Amazon is like the abusive partner one tolerates for the benefit of the kids. However, the industry is loosing its patience. While I have a beef with John Sargent (we don't see eye to eye on the GBS), I applaud his muscular response, and RH's, to Wylie's exclusive arrangement with Amazon.
The digital meteor has hit. It will be followed by the copyright termination time bomb. To survive both, publishers need to present content in a variety of digital formats and rethink certain ways of doing business -- and who they wish to partner with. Large publisher dominance is being eroded. Change is inevitable. It cannot be stopped nor should it be. However, it would reduce my paranoia if Amazon, Apple and (especially) Google, were prevented from playing digital favoritism. Amazon is no longer just a retailer, and Google has never been a public utility. They are publicly traded companies, prone to favor their own intellectual property over the property of others.
Mr. Esposito's advice is right on the money. "[T]he best strategy is to be present on all the competing platforms, while exercising judgment as to timing and pricing." Essential parts of that strategy include, making Amazon (and Wylie) stand in the corner and apologize; taking a blue pencil to the Orphan Works provision of the GBS; and, as Joe suggests, exercising good publishing judgment as to timing and pricing. And, the industry just might want to put the Justice Department's number on speed dial. If you sleep with a mildly abusive partner, you may wake up someday and find yourself needing an order of protection.
Library Bashing, Ray Bradbury & Fox News Chicago: Opinion
Anna Davlantes, a Fox Chicago News anchor, picked a fight with librarians, book lovers, and the First Amendment, last week when she posted an editorial with the incendiary headline, "Are Libraries Necessary, or a Waste of Tax Money?" [reproduced at end of post]
"With the internet and e-books, do we really need millions for libraries?" Ms. Davlantes wrote. "[S]hould these institutions -- that date back to 1900 B.C. -- be on the way out?"
Now more than ever libraries need funding. Open access to libraries is essential to our intellectual and political freedoms. The libraries in Alexandria burned down more than four thousand years ago. What followed were the Dark Ages. While essential infotainment tools, by their very nature, television and
the internet de-emphasize the quality and provenance of information. The need for reliable and credible resources of information elevates the job of information specialists to an essential service.
If Ms. Davlantes were to get her way, books wouldn't be banned. Rather, access to them denied.Millions of Americans - children and low income families - are suffering due to the lack of affordable and reliable broadband access. Realistic choices can only be made in the light of adequate information. Public libraries, which are comprised of curated bound and digital assets, provides that light. Readers, browsers, writers, civil libertarians, republicans, democrats, and television journalists need to join together to support our public libraries - especially in this time of unprecedented unemployment and disinformation.
Ms. Davlantes is a graduate of the Medill School of Journalism at Northwestern University. She holds a Bachelor of Arts in Journalism. A native of Chicago, she grew up in Rogers Park and is a graduate of Lane Tech High School. Her favorite book, but for the wrongs reasons, is likely Fahrenheit 451. While not exactly the book burning fire captain from Bradbury's classic ("Give the people contests they win by remembering the words to more popular songs.... Don't give them slippery stuff like philosophy or sociology to tie things up with. That way lies melancholy."), she scares me.
Parenthetically, Ray Bradbury wrote Fahrenheit 451 on a rental typewriter in the basement of UCLA's Lawrence Clark Powell Library. He found refuge from his small house and two smaller children at the library. Close a library, maim a community, perhaps, render a future classic stillborn.
Ray Bradbury on Fox TV -- Boy, is this Ironic!
In a 2007 LA Weekly interview, Ray Bradbury, while sitting in front of a giant TV tuned to Fox News, talked about how Fahrenheit 451 was greatly misunderstood.
“Television gives you the dates of Napoleon, but not who he was,” Bradbury says, summarizing TV’s content with a single word that he spits out as an epithet: “factoids.” He says this while sitting in a room dominated by a gigantic flat-panel television broadcasting the Fox News Channel, muted, factoids crawling across the bottom of the screen.
His fear in 1953 that television would kill books has, he says, been partially confirmed by television’s effect on substance in the news. The front page of that day’s L.A. Times reported on the weekend box-office receipts for the third in the Spider-Man series of movies, seeming to prove his point."
Almost sixty years on, Fahrenheit 451, which was once science fiction, sadly, now appears to have been prophesy.
Are Libraries Necessary, or a Waste of Tax Money?
Updated: Wednesday, 30 Jun 2010, 1:46 PM CDT Published : Monday, 28 Jun 2010, 9:53 PM CDT
By Anna Davlantes, FOX Chicago News
Chicago - They eat up millions of your hard earned tax dollars. It's money that could be used to keep your child's school running. So with the internet and e-books, do we really need millions for libraries?
Libraries are quiet havens for the community. They take us to other worlds. They even make us laugh. But should these institutions -- that date back to 1900 B.C. -- be on the way out?
There are 799 public libraries in Illinois. And they’re busy. People borrow more than 88 million times a year.
But keeping libraries running costs big money. In Chicago, the city pumps $120 million a year into them. In fact, a full 2.5 percent of our yearly property taxes go to fund them.
That's money that could go elsewhere – like for schools, the CTA, police or pensions
One of the nation's biggest and busiest libraries is the $144-million Harold Washington Library in the Loop. It boasts a staggering 5,000 visitors a day!.
So we decided to check it out. We used an undercover camera to see how many people used the library and what were they doing.
In an hour, we counted about 300 visitors. Most of them were using the free internet. The bookshelves? Not so much.
REVENUE FROM LIBRARIES
We know we spend a lot on them. But libraries do bring in some revenue: more than $2 million in fines is collected annually by Chicago public libraries . . .
Wait for All Your Friends (and Foes) to Die Before You Publish an Autobiography
The Independent reports that the University of California, Berkeley, will release the first volume of Mark Twain's autobiography -- much of it previously unpublished. Clearly, Mark Twain could have said hundreds of unpleasant things in print about his contemporaries while he was alive, but he decided against it. Whether for the benefit of his children, or because he feared reproach (and libel lawsuits) of those he might wound, in 1909 he agreed to his publisher's plan to put his autobiography under seal for 100 years. In addition to delaying publication, he and his publisher agreed to an ingenious marketing plan to promote the book from beyond the grave.
Authors sell books. So, publishers are often stymied by the untimely (pre-publication) demise of an author. As a rule, shades of dead authors don’t do much to hand-sell their books. Not so with Mark Twain. According Eugene Exman'sThe House of Harper, Twain’s inability to promote his forthcoming autobiography may have been greatly exaggerated. In Exman’s book, he reports that one-hundred copies of Twain's memoirs were to be signed by Twain before his death. In the year 2010 they were to be redeemed by the original purchasers' heirs for an additional payment of $50.00. As an aside, if the heirs of the original purchasers are anything like you and I, this brilliant marketing plan will likely be foiled due to lost claim checks. While Twain did not want to inflict unnecessary wounds on those he wrote about, he clearly wanted to deal out justice from the other side – and make certain his memoir had maximum impact when it was published. One has to wonder if the one-hundred signed copies was a turn-of-the-century fabricated trade news story, or whether a Mark Twain time capsule with a trove of signed first editions resides somewhere in the Harper archives. Was Twain’s Publishing Contract the First to Include an Electronic Rights Clause?
Mark Twain & Nikola Tesla. circa 1894
Twain was a gadgeteer. He was an early adopter of new technology. According to his unpublishedautobiography, he claimed that he was the first person in the world to use a typewriter for writing literature. Attaining a modest competency of twelve words per minute, he abandoned the typewriter in the late 1870s because he found it was "degrading his character." Having been in several legal scrapes, Twain valued the advice of his publishing attorney, whose fingerprints are all over his forward-looking 1909 Harper Bros. agreement. Informed most likely by his dual interests in the law and novelties, Twain's publishing agreement is distinguished by what may be the first "electronic rights" or "future technology" clause to appear in a publishing contract. Under the 1909 handwritten agreement, his publisher received rights to publish his memoir “in whatever modes should then be prevalent, that is by printing as at present or by use of phonographic cylinders, or by electrical methods, or by any other method which may be in use.” [Emphasis added].
To paraphrase Twain, his autobiography is likely the last ship to leave his literary shipyard. Unlike many authors, the delay was "not purposeless, but intentional" -- right down to the the turn-of-the-century Wild Wild West-like (as in James West and Artemas Gordon) "future technology" clause.
What Legal Lessons Can the 7-Inch Single Teach the Publishing Industry?
By Lloyd J. Jassin
Why is Arthur Godfrey smiling? In 1949 the former CBS pitchman understood that each new electronic technology changed the nature of what, and how, we communicate. And, his attorney knew that advances in new technology, in this case, the recently introduced 7-inch Microgroove single, would challenge the way entertainment contracts for pre-1949 recordings would be interpreted.
Old Wine in New Bottles
Just as in the 40s and 50s, with rapid advances in new technology, old contracts are being dusted off and language scrutinized to answer the question “Who controls new rights created by recent technological developments?” Due to ambiguities and omissions in many older publishing agreements, "Who controls enhanced eBook rights?" has become a controversial topic, subject to differing interpretations.
Exemplifying the digital rights controversy is the December 11, 2009 letter from Markus Dohle, CEO of Random House, in which he boldly asserted that RH controlled the “vast majority” of digital rights to its backlist. This assertion precipitated a collective “Yeah, right!” from literary agents across the globe. This article, among other things, looks at how courts interpret pre-digital age contracts.
To be clear, Mr. Dohle’s claimed ownership of backlist digital rights is based on a very favorable (for RH) interpretation of pre-digital age contracts, in which RH received “for the term of copyright, the exclusive right to publish and sell works contracted for in book form.”
Are 360 All Rights Deals in the Our Future?
What is also significant about RH’s pronouncement, is that it likely presages a new, more muscular approach to contract negotiation by the big six publishers. Specifically, I refer to 360 deals. Increasingly common in the music industry, with a 360 deal, a publisher would receive a percentage of earnings from ALL of the author’s activities, instead of just book sales. Traditionally, motion picture, television, dramatic and merchandising rights, as well as lecture fees, were off limits to publishers. Synergy, which media monoliths CBS and New Corp claimed would transform the publishing industry when they acquired, respectively, S&S and the House of Harper, hasn't happened in a big way. In short, 360 deals are ill-advised.
Has Random House Reinvented the Way We Read Publishing Contracts?
Random House’s grab for digital rights follows a well-established pattern in the entertainment industry. Cases addressing whether older entertainment industry contracts granted rights for new uses such player piano rolls, radio, motion pictures, television, videocassettes, and even paperbacks and eBooks, are plentiful. Like Random House, motion picture studios once claimed that they already had the right to exhibit films on television, and to distribute them as home videos. While the cases are not uniform in their holdings, rest assured, basic principles of contract interpretation exist to guide us.
How to Interpret Old Contracts
When a contract is ambiguous, the job of ascertaining the parties’ intent may, ultimately, be left to a court to decide. Since contracts are not drafted in a vacuum, courts look at industry practice. In the case of eBook and enhanced eBooks, courts will ask whether distribution of books in digital form was recognized by knowledgeable people in the industry when the contract was drafted. Courts will also look for any provisions that tend to limit the “exclusive right to publish . . . in book form." For example, did the author negotiate a “reserved rights” clause? To be clear, the majority of courts have held that a grant of future technology rights cannot be inferred from an agreement, unless the technology was known at the time of the grant.
When a contract is susceptible to two reasonable interpretations, the Restatement (Second) of Contracts, states that the agreement should be construed against the party who drafted the language. Since Random House was in a stronger bargaining position, unless it could be shown that the author (or agent) had an equal hand in drafting the agreement, RH’s backlist contracts would be interpreted by courts in a light most favorable to the author.
Contract Fixes
-->Unfortunately, there are no neat definitions for what many are calling enhanced eBooks. In the old days (i.e., six months ago), so-call enhanced eBook rights fell within the meaning of the terms “interactive” or “multimedia” rights. Whereas, an eBook and a book are both linear narratives, an enhanced eBook is a horse of a different color. Since the sale of film or television rights – which are generally retained by the author -- could be impacted by a grant of multimedia rights, as a rule, agents and knowledgeable publishing attorneys, strike all reference to “interactive” or “multimedia” rights from publishing contracts. Few publishers balk at this. As an alternative, if a publisher does balk, most accept language that limits the grant, e.g., “Multimedia rights shall not include traditional motion picture, television or video rights in linear form or audio rights.” Another contract fix is written approval by the author, prior to turning their book into a multimedia derivative work.
While RH’s pronouncement does violence to federal copyright policy that protects authors from the unintentional grant of the exclusive rights to their works, under the 1909 Copyright Act, it was much easier to inadvertently transfer one’s copyright rights than it is today. Unlike today, under the old 1909 Copyright Act , which still applies to works published before 1978, an exclusive license could be implied from the conduct of the parties
Where the Random House agreements Mr. Dohle cites to contain “future technologies” clauses, RH's claim is much stronger -- although, not allcourts have enforced these provisions. For example, in Tele-Pac, Inc. v. Grainger, a New York court held that the license to distribute films for “broadcasting by television or any similar device now known or hereinafter to be made known” did not encompass videocassette rights. The Appellate Division of the New York Supreme Court, rejecting the lower court’s attempt to equate broadcasting with the grant of videocassette rights, held that distribution of a film by videocassettes was not analogous to broadcasting by television.
If a court were to adopt the Tele-Pac analysis, it might determine that an e-Book is not analogous to a bound volume, just as a film is not a videocassette. Whereas a plausible argument can be made that e-Books and books are two distinct media, a compelling argument can be made that an enhanced eBook and bound book are two very distinct media -- the latter having more in common with film and television adaptation rights, rights traditionally retained by the author. Interestingly, where an author retains enhanced eBook rights, a question exists as to what contractual limits, if any, exist on the author’s ability to synch audio, video and still images with the book’s text.
Conclusion
Whereas the display of the verbatim text of a book on a screen is an eBook, an enhanced eBook (whether an iPad, app, or website combining text, graphics, audio and/or video) is a derivative work and is a matter for informal or formal negotiation.
Today, most print publishers are only in a position to exploit non-interactive rights. Most will be satisfied to obtain what is know as either display or verbatim electronic rights, as opposed to interactive or multimedia electronic rights. Ultimately, authors will have to decide how much faith to place in their publisher’s ability to produce and market so-called enhanced eBooks. Alert authors, before taking that leap of faith, however, must modify their publishing agreements so their ability to exploit lucrative film and television rights (in partnership with others) is not inadvertently undermined.
Lloyd J. Jassin is an attorney and co-author of The Copyright Permission and Libel Handbook (John Wiley & Sons”). A former publishing executive, he has represented publishing clients for many years. He can be reached at Jassin@copylaw.com. The Offices of Lloyd J. Jassin are located at The Actors’ Equity Bldg., Suite 400, 1560 Broadway, New York, NY 10036, 212-354-4442 (tel.), 212-840-1124 (f). Follow him on Twitter at www.twitter.com/lloydjassin.