United States: The Right To Publish & Sell In "Book Form" Does Not Include The Right To Publish & Sell An Ebook

In a July 11, 2001 decision, Southern District of New York Judge Sidney H. Stein determined that the right to publish a work in "book form" does not include the right to publish digital versions of the work or "ebooks." Random House v. Rosetta Books, 01 Civ. 1728(SDNY July 11, 2001). As set forth in 40 year old Random House publishing contracts involving prominent authors' most famous works, including William Styron's Sophie's Choice and Kurt Vonnegut's Slaughterhouse-Five and Breakfast of Champions, Random House was granted the right to "print, publish and sell the work in book form." However, according to Judge Stein, this language cannot be interpreted to include the right to publish "ebook" versions of these author's works. Based on this ruling, the digital book publisher, Rosetta Books, may publish digital versions of a number of well-known works pursuant to license agreements with the authors entered into in 2000 and 2001. The decision addresses the contract interpretation issue known as "new use", where a court must determine if new technological developments fall within the rights granted to exploit copyrighted works in license agreements. In the '50's and '60's, this "new use" issue arose in disputes concerning whether the right to exhibit motion pictures included the right to broadcast the motion pictures on television. In the '90's, the issue arose in determining whether the right extended to video formats. Today, the "new use" issue frequently arises in the electronic media arena where "pre-digital era" copyright licenses authorizing traditional means of publishing must be interpreted to determine if the license includes digital publication. In a recent U.S. Supreme Court decision, reported in the June 27, 2001 Hughes & Luce e-Alert, the Supreme Court found that news publishers' rights to publish articles by freelance authors, do not extend to republishing these news articles in the publishers' digital online and CD-ROM databases. New York Times Co. v. Tasini, 533 U.S. __, 121 S. Ct. 2381; 2001 U.S. LEXIS 4667; 69 U.S.L.W. 4567; 59 U.S.P.Q.2D (BNA) 1001 (June 25, 2001) (No. 00-201).

In the Random House/Rosetta Books case, the Court found that "digital publication" was a "new use" not contemplated by the existing contracts which licensed the right to publish in "book form" because digital information could be manipulated to, for example, search for text, highlight and bookmark. Thus, we again see the courts distinguishing digital reproduction of copyrighted content as a new and separate right. "This trend should be taken into consideration when licensing existing and new content for use in a digital format," says Michele Schwartz, media and trademark specialist at Hughes & Luce, LLP.,Dallas,. "Moreover, as a general proposition, when licensing copyrighted works, always contemplate, as best one can, new media and technology, or use language that broadly grants or reserves rights to reproduce such works in new media formats."