The shift from traditional print media to digital dissemination of printed publications, such as books and periodicals, is inevitable and should not be feared. This technological advance brings exciting new revenue opportunities for authors and publishers alike, and ultimately leads to significant public gain by allowing greater access to information. As with all significant social and technological changes, it is not without growing pains. This article addresses some of the legal and contractual implications that are at the forefront of this digital movement.
Our familiarity with “print rights” in publishing contracts began with the advent of the printing press, which enabled the first mass production and distribution of artistic and literary works. Every time a work was used or reproduced, it was easily tracked as one could put their hands around and hold onto each copy made. This lends itself to an easier understanding than putting the same work into an electronic database where it is unclear who will have access to it, how many copies will be made, and how it will be manipulated or used. Thus, our comfort level with this less familiar mid-1990’s contract term “electronic rights” or “e-rights” is below what it needs to be in this ever expanding digital age.
“Electronic rights” covers those rights stemming from electronic signals or pulses that when transmitted and displayed embody what traditionally has been known as printed works. In order for a user to view the work, software and hardware is needed to interface with the electronic signals. Similarly, “Electronic book” or “E-book” rights means the right to display, as a book would appear on a computer screen in some form, without the addition of significant multi- media effects.
The benefits of electronic publishing are obvious. Electronic publishing provides users with the equivalent of flipping through pages of books in a huge bookstore without the associated costs of production, inventory, and warehousing typically found in a brick and mortar business. Electronic publishing also helps small independent publishers and opens up micro-markets, which in the past were not economically feasible for large publishing houses.
Of concern to book authors, and legitimately so, is the launch of the “Search Inside the Book” feature by Amazon last fall without the author’s express permission. This feature expanded the earlier “Look Inside the Book” feature which allowed users to view predetermined pages in a book, such as the preface, index, etc. The new improved feature allows users to locate books containing search terms they choose, and then search the full texts of those selected books and access the surrounding pages to those search terms. Although Amazon has disabled the print feature so that it is more difficult for a user to download, copy, or read a book from beginning to end, printing short selections of recipes and maps from books is simple and speedy. The question is whether potential buyers of these types of books, many of whom buy a book for a particular page or two, will forgo their purchase of the printed copy and instead print out the pages for free.
Online search engine giant Google, Inc., in a competitive move to draw more web surfers to its site, has stated that it plans to scan billions of books into its search engine index. Like the feature offered by Amazon, prospective book purchasers can peek at the content of a book before or in lieu of purchasing it. Google, who has already received books from more than a dozen publishers, plans to list books related to a specific search at the top of the results page. As a safeguard, Google has stated that they will not allow surfers to read the full content online unless publishers unlock the material.
Amazon and Google have both stated that the new feature will sell more printed books. Amazon supports this belief by reporting that sales of books enrolled in the program have outpaced overall book sales. Critics question whether this increase in sales is due to other factors such as the particular books selected for the program. It remains to be seen whether the sale of reference books, as a genre, have increased in light of the new feature.
Although the individual authors were not asked for permission, permission was indeed given. The publishers, although keeping a close eye on the implications of the new feature, provided Amazon and Google with thousands of books for scanning and entry into the program. Such unilateral action makes it clear that the publishers believe they have the legal right to grant such permission of these electronic rights, although it appears that both Amazon and the publishers are cooperating with authors requests to remove their books from the program. Since it is the intent of the publishers to sell more books, it would appear that the interests of authors and publishers would be unified. However, the question remains as to who has the right to give permission to these online bookstores and other electronic publishers.
The first step is to look at the contract provisions in the publishing agreement to determine if electronic rights were given to the publisher. Every publishing house has its own forms, and there are unlimited variations, each of which need to be reviewed. Many publishing contracts pre-dating 1994 were entered into without any mention of electronic rights.
There are two landmark decisions, which provide a reference point for how these agreements may be interpreted as well as the future of electronic rights in general. The first case, Random House v. Rosetta Books, deals with the trade book industry – those books you see when you walk into a bookstore such as Barnes and Nobel. The author of the book in question had an agreement with the print publisher Random House who he granted the right to “print, publish and sell in book form.” There was no mention of electronic rights in the agreement. The author later contracted with Rosetta Books to publish the book electronically as an E-book. Random House moved to enjoin Rosetta Books from going forward with the E-book, but the court denied their motion, holding that the agreement could not be read to reach backward with respect to the old grant and apply to the new electronic medium. The lesson learned for trade book publishing houses is that they must be able to anticipate developments in technology and draft their agreements accordingly.
The second case, New York Times v. Tasini, deals with freelance writers for the periodical industry. In Tasini, various major print publishers sold freelance articles to electronic databases without providing additional compensation to the respective authors. The electronic databases included not only an Internet subscriber database, but also a CD-ROM product. The court held that print publishers do not have the right to provide copies of the author’s articles to electronic databases without the prior consent of the freelance authors.
In light of these new decisions, it is unlikely that any author will now get published by a major publisher without at least some bundling and negotiation of the electronic rights, and these publishers have now managed to write contracts that address these issues. Despite this future fix, the spirit of the above decisions clearly indicates a shift from publisher to author with respect to electronic rights retention. This will be important going forward and addressing electronic rights issues like the Amazon.com “Search Inside The Book” feature and the Google search engine index. It also means that there are a lot of rights that may be exploited by the author through renegotiation with the original publisher or by a new publisher of the author’s choosing.
Charles F. Reidelbach, Jr. is a partner and Chairman of the Intellectual Property Law Group of Higgs, Fletcher & Mack and represents clients having a wide spectrum of intellectual property-related needs, including patents, trademarks, and copyrights.