NYTimes.com: Judge Rules Random House Can't Stop Electronic Books

[Ann Okerson <ann.okerson@yale.edu>]

>From the "isn't the news interesting lately?" corner.  Ann Okerson

___________________

Judge Rules Random House Can't Stop Electronic Books

By MICHAEL BRICK with BENJAMIN WEISER

Denying a request from Random House for a preliminary injunction, a
federal judge ruled today that an online publisher could sell electronic
versions of books by authors who had signed book contracts with Random
House.

The judge concluded that Random House did not own the rights to publish
the eight works in question as electronic books.

The ruling in a federal district court in Manhattan was based on
principles of contract law. It dealt only with four contracts signed long
before electronic books became technologically possible. But it was a
setback for conventional publishers because it further established that
they must separately negotiate electronic publishing rights.

The Supreme Court ruled on June 25 that a group of newspaper and magazine
publishers, including The New York Times Company, had violated copyright
law by using freelance material in electronic databases without the
authors' explicit permission.

In the Random House case, Judge Sidney H. Stein went to great lengths in
his opinion to avoid making a sweeping statement.

"This is neither a victory for technophiles nor a defeat for Luddites,"
Judge Stein wrote. Instead, the decision was "merely a determination,
relying on neutral principles of contract interpretation, that because
Random House is not likely to succeed on the merits of its copyright
infringement claim and cannot demonstrate irreparable harm, its motion for
a preliminary injuction should be denied."

The judge still must issue a final ruling in the case.

The ruling was a victory for RosettaBooks, the electronic publisher. The
company focuses on selling digital versions of books that are already in
print.

The case involved works by William Styron, Kurt Vonnegut and Robert B.
Parker. The agent Arthur Klebanoff, founder of the company, has said he
negotiated directly with authors' representatives.

Random House did not sue the authors. It argued that except in special
circumstances, the print publisher, not the author, automatically owns the
electronic rights to a book.

Mr. Styron sold Random House the rights to "The Confessions of Nat Turner"
in 1961 and to "Sophie's Choice" in 1977. He agreed that he would not
"publish or permit to be published any material in book or pamphlet form,
based on the material in the work, or which is reasonably likely to injure
its sale."

Mr. Vonnegut signed a contract in 1967 for "Slaughterhouse-Five" and
"Breakfast of Champions" that spelled out which party had the rights to
nearly every form of reproduction imaginable at the time. The Dell
Publishing Company, a division of Random House, took rights that included
picture books versions, microfilm and magazine condensations. Mr. Vonnegut
kept the rights to movie and broadcast versions.

He signed a similar contract for three other books in 1970, that time
including a noncompetition clause similar to the one in Mr. Styron's
contract.

Mr. Parker's agreement in 1982 with Dell to publish "Promised Land" was
similar to Mr. Vonnegut's 1970 contract.

Judge Stein's decision cited a case decided in 1968 involving the play
"Maytime." Harry Bartsch, who had obtained the rights from Rida Johnson
Young, author of the lyrics, and Sigmund Romberg, composer of the music,
signed the motion picture rights over to Warner Brothers Pictures in 1930.
Mr. Bartsch eventually sued Metro-Goldwyn-Mayer over television rights. An
appeals court ruled against Mr. Bartsch, in part because deadlocks over
the rights to a new medium might keep the work from appearing in the new
form at all.

Judge Stein said the approach taken by that court encouraged both the
development of new technologies and the creation of new artistic works.

A spokesman for Bertelsmann A.G., which owns Random House, did not
immediately return a call seeking comment.

Michael J. Boni, a lawyer for RosettaBooks, said, "This is a tremendous
day for Rosetta Books."

Because of the decision, Rosetta can "seek to enter into electronic
contracts with authors who now have a much greater degree of comfort that
they can negotiate."

Still, it was a limited victory because most publishers' contracts now
deal with electronic rights.

http://www.nytimes.com/2001/07/11/business/media/11CND-BOOK.html?ex=995889139&ei=1&en=ac47c06f41cdb543

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