A former Simon & Schuster author has filed a class action suit alleging that the publisher is cheating authors on e-book sales. But is the plaintiff suing the wrong publisher?

As first reported by Law 360 (and picked up by Copylaw and the Digital Reader) the suit, filed in the Supreme Court of the State of New York by Sheldon Blau, M.D., author of the 1997 book How to Get Out of the Hospital Alive, argues that since e-books are in fact “licensed” to end users, the publisher is cheating authors by treating e-book transactions as "sales."

The difference between a license and a sale matters, the plaintiffs argue because by contract income derived from a “license" is generally paid at a higher rate than the standard e-book royalty. In court documents, attorneys allege that S&S has been paying Blau and other authors an improper royalty on e-books dating back to 2010. And attorneys are seeking to certify a class to represent all authors being underpaid.

There appears to be one glaring problem with the lawsuit, however: Blau’s book was published by Simon & Schuster’s Macmillan professional and reference division, which S&S officials told PW was sold in 1998. The book’s current publisher is now listed as Wiley. Furthermore, S&S officials said they have never published a digital edition of Blau’s book.

So why was the case filed against S&S? At press time Monday morning, a call to Blau’s attorneys had not been returned. But even if the case against S&S is dropped it could be re-filed against Blau’s current publisher, as it hits at an issue that has been simmering in the e-book era for some backlist books: should digital sales be counted as license income, or as sales?

For most books published in the digital era, however, this is generally not an issue. Even though the end-user transaction is generally a license, language in most modern publishing contracts specifically define e-book transactions as sales for purposes of author payments, usually with defined royalty rates for digital sales.