The rules on the rights in material published electronically are still developing. Lisa Boyd of Lochners Technology Solicitors looks at a US case which may affect developments.
All publishers and authors should be keeping a keen eye on developments in the case between Random House v Rosetta Books in the US. In the first round battle, the US court has ruled against Random House Publishers by rejecting its claim for a preliminary injunction to prevent an Internet start-up company, RosettaBooks, from selling electronic versions of eight books currently published in print by Random House. These include titles such as Kurt Vonnegut’s Cat’s Cradle and Slaughterhouse Five and William Styron’s Sophie’s Choice and The Confessions of Nat Turner.
This may open the door to authors who have not explicitly licensed or assigned electronic rights to retain those rights. Electronic rights covers a host of rights, including recording on any electronic, magnetic, digital or optical platform such as CD-ROM, online publishing and e-books, ie any media which allows the text to be reproduced visually, thus emulating print reproduction.
RosettaBooks claims it has acquired the electronic rights from the authors. The texts of the books are sold as digital files through online book stores, where customers can download and read them on their own computer screen. However, Random House is to appeal the US court’s decision on the basis that it claims the authors have already sold their electronic rights to Random House in their original book contracts and therefore Rosetta Books cannot now sell electronic copies.
Random House claims to have the exclusive rights to publish electronic versions of its titles because the contract with the authors in question states the authors grant ‘for the term of the copyright, the exclusive right to publish and sell the works contracted for in book form’. Random House claims e-books are simply the equivalent to printed books.
The critical issue in deciding whether electronic rights have been granted to a publisher is whether the contract specifically grants electronic rights to the publisher, allows the author to retain those rights, or is silent on the issue.
Most publishers will have ensured, over the last few years at least, that provision for electronic rights is made in contracts with authors. The standard publisher’s contract will ensure that the publisher is granted all rights, including electronic rights. Many contracts have been canny enough to state that such rights cover technology now known or devised in the future. In such cases it is unlikely to be arguable that the publisher does not own the electronic rights and in such cases the author would not have the right to license or assign those rights to a third party.
Some lucky or well-advised authors will have retained their electronic rights and will be free to license those rights to third parties such as Rosetta Books. More established and famous authors are usually better able to negotiate retention of their electronic rights as they have more power over their publishers. Many authors may wish to retain rights on the basis that they consider their print publisher is unlikely to exploit those rights as effectively as an online publisher, which is specifically set up to deal with exploiting such electronic rights.
The real problem arises in older contracts which may not make provision for electronic rights at all. At the time the publisher and author entered into the contract, electronic rights may not have been contemplated and the Internet may not have even existed. So where do the author and publisher stand if the contract is silent on electronic rights? It is the view of those such as the Society of Authors in the UK that unless rights, such as electronic rights, are specified in a contract, then the author retains those rights. Similarly in magazine and newspaper publishing, journalists take the view that unless rights are specifically granted then only ‘First British Rights’ are granted to the publisher. This gives the publisher the right to publish the first edition, in print form only, in the UK only. Obviously these views are strongly contested by publishers, who claim to have all rights, including electronic rights even when these were not in the contemplation of the parties at the time of the contract.
Whilst the outcome of this US case will not necessarily be followed by courts in the UK, it will go some way to clarifying the issues in debate and may provoke a similar test case. In the meantime all authors and publishers should be ensuring that their contracts clearly state whether the electronic rights are retained by the author or granted to the publisher – otherwise you may find you will lose extremely valuable electronic rights in the future.
Lisa Boyd is a Solicitor at Lochners Technology Solicitors (www.lochners.co.uk).
