When is an E-Book Not A Book?
by Jerry Glover
March 12, 2012


E-books are challenging hardcover/paperback books for supremacy. A recent survey by the American Publishers Association found that in 2011 e-book sales totaled $970 million, more than double the sales from one year ago. It should be no surprise, then, that for several years companies large and small are vying to “publish” books in electronic/digital form.

Sometimes these companies approach authors about publishing electronic versions of their books that have already been published in hardcover/paperback by other publishers. Traditional book publishers are pushing back, however, claiming that contracts they signed with their authors, even before the advent of electronic books, grant the publishers the sole and exclusive right to publish those same books in electronic format.

A lawsuit was recently filed by HarperCollins, a unit of News Corp., seeking a declaration from a federal trial court in New York that it holds the e-book rights to a book entitled “Julie of the Wolves” and that the defendant, Open Road Integrated Media, LLP, has infringed HarperCollins’ copyright in and to the book by publishing an e-book version of the work. HarperCollins Publishers, LLC v. Open Road Integrated Media, LLP, Case No. 11-cv-9499 NRB (S.D.N.Y. 2012). Open Road has answered this lawsuit claiming that HarperCollins did not obtain e-book rights when it first signed the book’s author, Jean Craighead George, in 1972. Even Ms. George has issued a statement that she supports Open Road’s right to publish the e-book and that she did not grant those rights in 1972 to HarperCollins because she didn’t even know what an e-book was in those days. See http://www.publishersweekly.com/pw/by-topic/childrens/childrens-industry-news/article/50688-open-road-denies-wolves-infringement-charges.html.

HarperCollins’ court papers indicate that the 1972 contract with Ms. George granted the company the exclusive right to publish the book “in book form” (no explanation or definition of that term seems to be in the contract) including “computer, computer-stored, mechanical or other electronic means now known or hereafter invented.” Complaint at Par. 1. The publisher did not attach the contract to its complaint so it is not clear if other provisions of the George agreement modify what the publisher seems to claim.

The court’s first task is to determine if the term “book form” is ambiguous. As set out in the HarperCollins contract, New York law governs the interpretation of the agreement. Consequently, the court hearing this case will be using New York contract principles to determine whether “book form” is ambiguous. These principles were summarized in a 2001 case involving the same question raised by the HarperCollins case —whether a grant of rights to publish “in book form” included e-book rights.   Random House, Inc. v. Rosetta Books, LLC, 150 F. Supp. 2d 613 (S.D.N.Y. 2001) aff’d 283 F.3d 490 (2d Cir. 2002) (the appellate court did not express any view on the ultimate merits of the case and remanded; after remand, the case was settled). In that case, a series of contracts entered into between the publisher, Random House, and several authors between 1961 and 1982 granted Random House the right to publish their books “in book form.” The court summarized the contract interpretation rules as follows:

  • A written contract is to be interpreted so as to give effect to the intention of the parties as expressed in the contract’s language.
  • The court must consider the entire contract and reconcile all parts, if possible, to avoid an inconsistency.
  • Determining whether a contract provision is ambiguous is a question of law to be decided by the [trial judge] rather than a jury.
  • Contract language is ambiguous if it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the content of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.
  • No ambiguity exists when contract language has a definite and precise meaning, unattended by danger of misconception in the purpose of the contract itself, and concerning which there is no reasonable basis for a difference of opinion.
  • If the trial judge rules that the contract language is ambiguous, interpretation becomes a question of fact for the jury and evidence outside the contract is admissible to explain the meaning of the ambiguous provision.

Id. at 618.

Since the parties in Rosetta differed as to the meaning of “in book form”, the court first turned to the dictionary definition. Citing the 2001 edition of Webster’s Unabridged Dictionary, the court noted that “book” means “a written or printed work of fiction or nonfiction, usually on sheets of paper fastened or bound together within covers” and “form” means “external appearances of a clearly defined areas, as distinguished from color or material; the shape of a thing or person.” Id. at 620. The court also noted that the Random House contract contained provisions granting Random House the right to publish the applicable book in “book club editions, reprint editions, abridged forms and edition in Braille.” The court observed that this specific grant language would not be necessary if the term “book form” included all of these types of book. The court concluded that “[t]his [list of specific types of books] evidences an intent by these authors not to grant the publisher the broadest rights in their work.” Id.

But how can HarperCollins argue that “in book form” includes e-books when e-books had not been invented when the contract was signed in 1972? That same “new use” question that arose in the Rosetta case.

In Rosetta the court noted that an e-book is a separate medium from printed words on paper. The court explained that e-books allow users “to electronically search the text for specific words and phrases, change the font size and style, type notes into the text and electronically organize them, highlight and bookmark, hyperlink to specific parts of the text and … to other sites on related topics… and access a dictionary that pronounces words in the e-book aloud.” This court opinion was written in 2001 so today a court could add several other things to this list of what an e-book can do that a hardcover book cannot including video to illustrate the text. Since e-books are a separate medium from print books, Random House could not argue that an e-book was simply a new use within the same medium.

Courts will often try to determine if, at the time of contracting, the parties could or should have anticipated this “new use.” See Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co., 145 F.3d 481 (2d Cir. 1998) (whether home video could have been anticipated in 1939 when a contract was signed that granted the defendant use of a musical composition in a motion picture which was released on home video in the 1980’s). The Rosetta court did not discuss this point to any great extent.

Ultimately, the Rosetta court held that Random House did not hold e-book rights.

Does Rosetta doom HarperCollins’ case? Not necessarily. The Rosetta case was decided by a federal trial court just like the one hearing the HarperCollins case. Therefore, the Harper Collins court is not bound to following the Rosetta court’s ruling although the HarperCollins court may give that earlier case great deference. Since the HarperCollins complaint did not attach the author contract at issue, it may develop later that there are provisions in the agreement that differ greatly from the contracts in the Rosetta case which may mandate a different holding. Finally, the HarperCollins court will probably pay more attention to the question of whether e-books could have been anticipated in 1972 when the contract at issue was executed.

HarperCollins has anticipated the new use argument that Open Road may make: the e-book was not anticipated by events occurring prior to1972, the year HarperCollins and George entered into their publishing agreement. In its complaint HarperCollins tried to avoid this “new use” question by claiming that an e-book is a “technology-enable[d] variant for how consumers can read [a book].” HarperCollins argued in its complaint that the e-book is a “natural extension and outgrowth of technological developments that significantly predate HarperCollins’ publishing agreement with George.” The publisher noted that methods for automated text storage and retrieval (microfilm and microfiche) developed “as long as a century ago, as well as … the development of electronic document creation, storage, retrieval and output mechanism, in the 1950s and 1960s.” HarperCollins also referenced Project Gutenberg which the publisher described as the first digital library and a “collection of the full electronic texts of books” which was created in 1971, one year before the author and HarperCollins entered into the publishing agreement. HarperCollins concluded in its complaint that these events made the realization of the e-book as “forseeable.” In its answer, Open Road simply denied this interpretation of events.

We will continue to follow this case and report any substantial developments.

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