More than a year since the case was first filed, cross-motions for Summary Judgment were finally submitted last week in HarperCollins’ lawsuit against Open Road over the e-book publisher’s e-book edition of Julie of the Wolves, Jean Craighead George’s bestselling children’s book. In its filing, attorneys for HarperCollins argue that the case is not a replay of the 2001 Rosetta Books case, the industry’s previous benchmark lawsuit over digital rights, but the Rosetta case clearly looms large.
“In stark contrast to the contracts at issue in Rosetta Books, where there was no mention of electronic exploitations,” HarperCollins lawyers argue, “[George’s contract] explicitly grants HarperCollins the right to control uses of the Work by electronic means.”
Similarly, however, as the Rosetta case turned on the interpretation of an ambiguous phrase, “in book form” the decision in the HarperCollins suit case will likely also turn on the interpretation of a phrase: “storage and retrieval.”
The case was filed in late December, 2011, by HarperCollins, after author Jean Craighead George agreed to publish an e-book edition of her 1973 Newbery Award-winning book with Open Road. In its suit, HarperCollins argues that its contract (signed in 1971) gives HarperCollins the exclusive rights to license an electronic edition—albeit, only to be executed with the permission of George. Open Road, however, counters that no such grant exists for e-book rights.
The case harks back to 2001, when Random House sued Rosetta Books, arguing that its contracts for three works signed by Rosetta included the rights to publish the works in e-book editions. In July, 2001, however, district court judge Sidney Stein ruled that Random House’s language to “print, publish and sell the works in book form” did not include the format “that has come to be known as the e-book.” In March, 2002, the Second Circuit unanimously upheld Stein’s opinion. In 2002, Random House settled the case—although it still maintains that the contracts in question give it e-book rights.
Like the Rosetta case, the heart of the issue in the HarperCollins suit is a disputed contract clause over who owns e-book rights in contracts where the right is not expressly granted. In its motion for summary judgment, HarperCollins attorneys claim that unlike the Rosetta case, its contract with George includes both a standard subsidiary rights grant (paragraph 23), which taken with another clause (paragraph 20), explicitly gives HarperCollins e-book rights.
Specifically, paragraph 20 of the 1971 contract states that HarperCollins “shall grant no license without the prior written consent of the Author… including uses in storage and retrieval and information systems, and/or whether through computer, computer-stored, mechanical or other electronic means now known or hereafter invented…”
“In short, paragraphs 20 and 23, read in combination, require the conclusion that HarperCollins alone is authorized to exploit the rights enumerated in paragraph 20,” the HarperCollins brief argues, “subject only to George’s prior right of approval” for proposed third-party licenses. “Only through the artifice of contending that the governing publishing contract between George and HarperCollins somehow did not contemplate publication of the Work in electronic format,” the brief argues, “has Open Road so brazenly infringed upon HarperCollins’ rights.”
Open Road, however, says it is HarperCollins that is engaging in artifice—and that the language in Paragraph 23 has nothing to do with e-books. Rather, Open Road argues, the terms on which HarperCollins seizes—“computer, computer-stored, mechanical or other electronic means now known or hereafter invented”— pertains “solely to storage and retrieval systems,” and not to e-books.
“In reality, Paragraph 20 is not a publishing grant at all,” the Open Road brief argues. “It merely sets forth the conditions under which Harper may—with Ms. George’s consent—license others to use the work in systems for indexing, classifying, abstracting, and searching for information about books and periodicals. Indeed, Harper’s novel interpretation of Paragraph 20 to extend to anything beyond an information storage and retrieval system contradicts its own prior conduct.”
Among the details bolstering that claim, Open Road attorneys argue that HarperCollins’ own contracts once included electronic rights grant language, in the 1990s, that differentiated between “verbatim electronic displays” (e-books) and “information storage and retrieval systems.” In addition, the brief continues, it would be “anomalous to allow an author to veto an exclusive publishing right,” and, the lack of a royalty provision in paragraph 23 would render any claim of a "publishing grant" unenforceable. And, as both sides note, the clause was in fact added by George’s agent Curtis Brown, raising the question: would any agent ever seek to add a clause giving away an exclusive publishing grant?
“Beginning in the mid-1960’s, when Curtis Brown first inserted this clause in the contracts it negotiated for its authors, people were beginning to foresee using computers to analyze and search for information about books,” the brief explains. “Curtis Brown wanted the authors to share in the proceeds if such a market for storage and retrieval systems actually did develop.”
In addition, and also unlike the Rosetta contracts, George’s contract with HarperCollins' also contains an “explicit reservation of rights” provision: “All rights in the Work now existing, or which may hereafter come into existence, not specifically herein granted, are reserved to the Author for use at any time.”
Sadly, George, who had joined the case, passed away last May, without giving a deposition.
The court could now choose to decide the case, based on the filings, for one or the other party, or it could schedule oral argument on the matter. Or, as with Rosetta, the two parties could settle on a license arrangement to end the litigation.
