Communications of the ACM

Communications of the ACM

Viewpoint: What to Know Before Reissuing Old Titles as E-Books

By Jane C. Ginsburg
Communications of the ACM, September 2001, Vol. 44 No. 9, Page 25
10.1145/383694.383700
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E-books offer exciting opportunities for readers and tempting prospects for authors. The same electronic technology that lets readers transport a small library of books in an e-book reader, and access many more titles over the Internet, also may give new life to old, out-of-print titles, as well as to newer titles of modest appeal. Books that could not claim an audience sufficient to justify continued print runs and retail store space may well attract enough readership to warrant electronic delivery. E-books' digital search functions also facilitate study and analysis of any work, old or new.

Alongside e-books' potential attractions for authors and readers, however, there persist troubling rights ownership questions for authors of preexisting works, and for the entrepreneurs with whom those authors might wish to contract. A recent controversy, Random House v. Rosetta Books, pits the original publisher of print titles by William Styron, Kurt Vonnegut, Jr., and Robert Parker against Rosetta Books, an e-book publisher. Rosetta acquired from the authors' the rights to publish electronic versions of their works. Random House, their original publisher, claimed the authors did not have those rights to give: an e-book, said Random House, is still a book, and the authors granted to Random House the exclusive right to publish their works "in book form." Random House also asserted that even if e-books were not considered to fall within the phrase "in book form," they compete with print books, and authors signed a clause promising not to use any rights they retained in a way that competes with Random House's exercise of these rights as conveyed by the authors.

Random House v. Rosetta Books, recently the subject of a preliminary ruling by a federal district judge in Manhattan, tests the scope of authors' grants of publishing rights in contracts negotiated before the e-book era. The case is an example of what copyright lawyers call the "old license/new media" problem: when a new mode of exploitation that might or might not come within the scope of the contractual language develops after the parties enter into the contract, who gets the benefit of the new medium—the author or the grantee? Early examples of this problem arose with the arrival of motion pictures, and later, of television. Would a grant of rights made at the end of the 19th century to "dramatize" a novel be read to be limited to theater, or would it also extend to movies? Would a grant of rights made in the 1930s to "exhibit" a motion picture extend to television broadcasting? In Rosetta, would grants of rights made in the 1960s, 1970s, and 1980s to "print, publish and sell" a literary work "in book form" cover the new digital medium? If the answer is "yes," then the authors cannot sell e-book rights to someone else. Any compensation the authors receive for e-book exploitation corresponds to the terms in the original contract for book sales. If the answer is "no," then the authors are deemed to have retained new media rights and may license them on new terms to a different publisher.

In this column, I will not attempt to analyze the Random House contracts, nor will I extensively analyze the court's ruling in that case. Rather, I evoke the case for the issues it raises for authors and e-book publishers.

The safest route would be to reissue works already in the public domain. As to those works, no one owns exclusive rights, hence there can be no Rosetta-style conflict of ownership. (Of course, this also means any rights the e-book publisher may assert in that version will be limited to the digital value added; anyone else is equally free to make his or her own e-book version of the same public domain titles.) Note, however, that in 1998, Congress extended the term of copyright by 20 years, so that any work first published in 1923 or later will not fall into the public domain until 95 years following its initial publication.

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Random House v. Rosetta Books tests the scope of authors' grants of publishing rights in contracts negotiated before the e-book era.

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For those who wish to electronically republish a work first published more recently than 1923, the question becomes, "Who owns the rights?" If the book is out of print, the rights may well have reverted to the authors, depending on the terms of the publishing contract. Authors, or their heirs, may also have exercised the right conferred by the Copyright Act to terminate the publisher's rights, 28, 56, or 75 years following publication. If so, and if authors (or their heirs) did not subsequently license broad rights to another publisher, they are free to license an e-book version now.

That leaves books whose rights have not reverted to their authors (most in-print titles). As to those works, anyone seeking to create an e-book version had best consult the author's publishing contract (and a lawyer). According to statements made in Rosetta, few trade-book publishing contracts specifically covered electronic versions before the 1990s. However, this does not mean any pre-1990 agreement excludes e-books. More general language might suffice to give the electronic rights to the publisher. For example, if the contract says something to the effect that the author grants all rights to publish the work "in any medium now known or later developed," the would-be e-book publisher had best make a deal with the original publisher, or look for another book to digitize.

If the contract does not explicitly cover new media, then the issue turns on the scope of the "in book form" grant. At one level, this poses the perhaps metaphysical question: "What is a book?" Answers range from paper-dependence to disembodied narrative. In fact, it is probably unhelpful to address the issue at this level of abstraction. Rather, the contract should be read as a whole to see if other language circumscribes the meaning of "book form." For example, many publishing contracts contain distinct and closely worded subsidiary rights clauses covering paperback versions, book club versions, magazine excerpts, audio-books, and other variant presentations of the text. As the district judge stated in Rosetta, the presence of these clauses undercuts arguments that "in book form" means any format in which the narrative can be experienced. If that were the case, then the many specific clauses covering these alternative presentations would be superfluous. Applying the rule that a court "must, if possible, give effect to all contractual language in order to 'safeguard against adopting an interpretation that would render any individual provision superfluous,'" the court determined that "Random House's definition cannot be adopted."

Suppose, however, that neither the "book form" clause nor the other contractual provisions clearly tell us whether e-book rights were granted. In that case, courts will rely on default rules to construe the contract in an old license/new media controversy. Which way does the default go? Does the default rule place the burden on the publisher to be clear about what future media rights it is acquiring? Application of this approach would mean that when the scope of the grant is ambiguous, and the medium at issue is different in nature from that contracted-for, the author retains the disputed right. But the default might go the other way: when the scope of the grant is unclear, but the new medium was at least foreseeable to persons acquainted with the business, then the burden is on the author clearly to limit the contract to media known and exploited at the time of the contract. Applying this approach, the publisher would be deemed to have acquired the new media rights.

Advised to this point, the would-be e-book publisher is probably chafing to know what the default rule is already. The answer is disconsoling: it depends on what court has the case. Some courts apply the author-favorable default rule; others apply the publisher-favorable default rule.

What should be the default rule? Underlying the opposing default rules are assumptions or beliefs about which party ought to receive the benefit of the new mode of exploitation when it is not clear whether or not the author granted it. The grantee-favorable default rewards the publisher (or other intermediary distributor, as the old license/new media problem is not confined to print works) for its investment in bringing the work to the public in the original format, and for, in some sense, creating a market for the work. This default may also assume the original grantee is better suited to ensure the work gets out to the public in the new medium; authors who retain these rights and hold out may delay the new release or increase its price.

The philosophy behind the author-favorable default stresses the copyright reward should go to the work's creator, not primarily to its distributor. Hence, in empowering Congress to establish a copyright system, the Constitution states the system is designed "to promote the progress of science by securing for limited times to authors"—not to intermediaries—"the exclusive right to their writings." Just as the initial entitlement to copyright vests in authors, so, when the realm of copyright expands, the first beneficiaries of that expansion should be the authors. A corollary might therefore require specificity from publishers and other old media-grantees before an author is deemed divested of that benefit.

Finally, another reason to adopt the author-default questions the premise that old grantees are best suited to exploit the new medium to bring the work to the public. Reluctance to adopt new modes of distribution is hardly the exclusive province of authors. Rather, as current developments in music distribution reveal, when new modes threaten old business models, those distributors with entrenched interests in the old models sometimes lack enthusiasm for the new ones. A default rule that favors authors might, in fact, advance the development of the new medium, particularly if authors perceive the prospect of better payment for new, electronic uses. As the judge in Rosetta stated, courts that apply the publisher-favorable default rule have been concerned that any approach to new use problems that "tilts against licensees gives rise to antiprogressive incentives" because licensees who are not certain they have new use rights will be discouraged from investing in new media. In Rosetta, however, "the policy rationale of encouraging development in new technology is at least as well served by finding that the licensors—the authors—retain these rights to their works. In the 21st century, it cannot be said that licensees such as book publishers and movie producers are ipso facto more likely to make advances in digital technology than [are] start-up companies."

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