Random House, Inc. v. Rosetta Books LLC
150 F. Supp. 2d 613 (2001)
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Rule of Law:
A contractual grant to 'print, publish and sell the work in book form' is a limited license that does not convey the right to publish the work as a digital ebook, as ebooks constitute a new and distinct medium not contemplated in the original grant.
Facts:
- Between 1961 and 1982, authors William Styron, Kurt Vonnegut, and Robert B. Parker entered into licensing agreements with publisher Random House or its predecessors.
- The agreements granted the publisher the right to 'print, publish and sell the work in book form.'
- In these agreements, the authors demonstrated an intent to limit the grant of rights by crossing out certain clauses on the publisher's form contracts, thereby reserving those rights for themselves.
- Some contracts also included a clause granting the right to 'Xerox and other forms of copying, either now in use or hereafter developed.'
- In 2000 and 2001, Rosetta Books LLC entered into agreements with these same authors to publish certain of their works in digital ebook format.
- Rosetta Books' ebooks reproduce the original text but include digital features such as electronic search functions, highlighting, bookmarking, and hyperlinks.
Procedural Posture:
- Random House, Inc. filed a complaint for copyright infringement and tortious interference with contract against Rosetta Books LLC in the U.S. District Court for the Southern District of New York.
- Contemporaneously with the complaint, Random House moved for a preliminary injunction to stop Rosetta Books from selling the ebooks at issue during the litigation.
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Issue:
Does a publisher's contractual right to 'print, publish and sell the work in book form' include the exclusive right to publish that work in a digital ebook format?
Opinions:
Majority - Stein, District Judge
No. A publisher's right to 'print, publish and sell the work in book form' does not include the right to publish the work as an ebook. The court found that the contractual language is a limited grant that distinguishes between the 'work' (the content) and the format 'in book form' (the physical object). This interpretation is supported by the contract's structure, which grants rights to other book formats like reprints and book club editions in separate clauses, implying 'in book form' is not an all-encompassing term. Furthermore, the authors' specific reservations of other rights by striking through clauses in the form contracts indicated a clear intent not to grant the broadest possible license. The court distinguished this case from prior 'new use' precedents like Bartsch and Boosey, reasoning that the grant language here was much narrower and that ebooks represent an entirely new medium, not merely a new method of distributing the original medium (like showing a film on video).
Analysis:
This decision significantly impacted the publishing industry by clarifying that grants of rights for new technologies must be explicit. It established that publishers could not rely on broad interpretations of old contracts to claim rights to digital formats like ebooks, which were not contemplated when the agreements were signed. The ruling empowered authors by affirming their ownership of digital rights under such legacy contracts, allowing them to license these rights separately. As a result, publishers were compelled to revise their standard agreements to explicitly include a wide range of electronic and digital rights to avoid future disputes.
