E-book rights for older books become newest battleground in publishing

Any publisher worth its salt will tell you that the real money in the business doesn't come from the current bestsellers by Stephanie Meyer and James Patterson, but the backlist: that deep catalog of books that were published years ago. Titles like J.D. Salinger's 1951 novel The Catcher in the Rye help Bertelsmann Media's Random House division attract and keep today's marquee authors. Nielsen Bookscan, which measures approximately 75% of total retail sales, says Joseph Heller's 1961 Catch-22 has sold about 85,000 copies this year.
But the books of the past are becoming grounds for a turf war between publishers and authors (and authors' estates), over who, exactly, owns the rights to these classics' e-book editions.

Who Owns the Rights?

On Friday, Random House sent a memo to literary agents outlining its plans to preclude authors "from granting publishing rights to third parties that would compromise the rights for which Random House has bargained," according to one agent, E-Reads owner Richard Curtis. To Random House, a book is a book, regardless of format -- and with e-books' market share growing far faster than that of traditional books, the publisher is staking out its territory.

By that definition, old contracts with language concerning "exclusive rights to publish 'in book form' or 'in any and all editions'" unequivocally includes digital editions -- including books that still sell well or have the potential to sell well again. While authors like Ray Bradbury have steadfastly refused to license e-book editions to his publishers, the fate of other authors' books is still uncertain.

One author whose backlist is very much in dispute is William Styron, author of Sophie's Choice, as The New York Times reported Saturday. Styron's estate brokered a deal last fall with Open Road Media, the e-book startup founded by former HarperCollins CEO Jane Friedman, to sell e-book editions of eight Styron titles published before 1994. But a Random House representative says it still expects to publish its Styron catalog in all formats, including e-books.

A Precedent From 2001

But the publisher has tried that tactic in the past -- and lost. In 2001, Random House sued RosettaBooks, an e-book publisher founded by literary agent Arthur Klebanoff, for releasing digital editions of books by Styron, Kurt Vonnegut, Robert B. Parker, and other writers.

In an affidavit, Richard Sarnoff, now president of Bertelsmann's Digital Media Investments, argued that RosettaBooks, which obtained the license to publish from the authors' estates or literary representatives, did not have the right to do so because "book forms" now included electronic editions: "As technology has continued to evolve and be applied to the book publishing process, it has begun to be economically viable to deliver books to readers in electronic, versus paper, format."

After several appeals, by March 2002, the Federal Southern District Court in Manhattan and the Second Circuit appellate court denied Random House's bid for a preliminary injunction against RosettaBooks. The e-book publisher released digital versions of 51 titles, including two by Styron. The licenses lasted for between three and six years and have expired.

Klebanoff expressed surprise about Random House's position to The Wall Street Journal: "The last time Random House advanced the same position, it didn't work out so well for them. And I don't think it will work out so well for them now."

Another Lawsuit to Come?

Random House may decide that another costly lawsuit is necessary, because the stakes in digital rights today are far higher than they were less than a decade ago. In its 2001 affidavit, Sarnoff pointed to projections by Forrester Research that e-books would comprise 17.5% of book publishing sales by 2006. That hasn't happened, but more promising data for digital books, as well as the hype surrounding e-readers and smartphones around the holiday season, has publishers hoping for similar exponential growth within the next five years. And they're loath to cede this growth back to the authors.

But, as top literary agent Andrew Wylie cautioned in the Times, if publishers are too militant and unyielding, "They will be excluded from e-book rights in a significant way." And then the battle will really begin.
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