Welcome to the future of publishing.

Amanda Hocking lives in Minnesota, and writes young adult paranormal romance and urban fantasy. Her My Blood Approves series is about vampires in Minneapolis. She also wrote the Trylle Trilogy, which is a paranormal romance without vampires, shifters, mermaids, fae, angels, dragons, ghosts, or ninjas.

But what’s remarkable about Ms. Hocking is that she’s experienced enormous success by self-publishing her works exclusively as electronic texts, as the Huffington Post reports:

Unknown, living paycheck to paycheck in Austin, Minnesota, rejected by publishers all over New York, Amanda Hocking decided to self-publish on ebook platforms only. She sold 100,000 of her works in December, and over 10 months she’s had more than 900,000 in sales. She’s 26 and is now making enough money to quit her day job and become a full time writer, in fact she’s a millionaire.

Paranormal romance is not precisely to my taste, but no one interested in culture can ignore the economics of popular culture. And at least this comment from the Huffington Post article, while acknowledging the fear provoked by the ongoing revolution in publishing, acknowledges what I’ve long seen as the need to embrace the inevitable:

As a long-time author it frightens me somewhat to see the industry change so much so quickly. Yet it’s also exciting to witness this kind of people power in the making. The Internet is the great equalizer. I firmly believe that those of us in the industry need to embrace the change or we will eventually go down in flames. You can’t stop progress, only delay it.

Umberto Eco 13 years ago on the Next Decade in Book Culture

A few days ago Critical Mass, the blog of the National Book Critics Circle Board of Directors, posted my piece as part of a series of guest posts on “The Next Decade in Book Culture.” In it, as a lover of literature, I expressed and called for optimism about the changes being wrought by the internet. Umberto Eco, in his 1996 lecture “From Internet to Gutenberg,” expresses well some of my reasons for suggestions that the internet will be the death of literature –in short, history tells us that technological change doesn’t kill earlier artistic forms; rather technological change transforms and enriches earlier artistic forms:

The arrival of new technological devices does not necessarily make previous device obsolete. The car goes faster than the bicycle, but cars have not rendered bicycles obsolete and no new technological improvement can make a bicycle better than it was before. The idea that a new technology abolishes a previous role is too much simplistic. After the invention of Daguerre painters did not feel obliged to serve any longer as craftsmen obliged to reproduce reality such as we believe we see it. But it does not mean that Daguerre’s invention only encouraged abstract painting. There is a whole tradition in modern painting that could not exist without the photographic model, Think for instance of hyper-realism. Reality is seen by the painter’s eye through the photographic eye.

Certainly the advent of cinema or of comic strips has made literature free from certain narrative tasks it traditionally had to perform. But if there is something like post-modern literature, it exists just because it has been largely influenced by comic strips or cinema. For the same reason today I do not need any longer a heavy portrait painted by a modest artist and I can send my sweetheart a glossy and faithful photograph, but such a change in the social functions of painting has not made painting obsolete, except that today painted portraits do not fulfill the same practical function of portraying a person (which can be done better and less expensively by a photograph), but of celebrating important personalities, so that the command, the purchasing and the exhibition of such portraits acquire aristocratic connotations.

This means that in the history if culture it has never happened that something has simply killed something else.

I do think that the 13 years that have passed since Eco’s lecture have undermined one of the points he made regarding the need for books (in codex, rather than electronic, form). Eco is convinced that a writer must print his material in order to edit it fully: “In order to re-read a text, and to correct it properly, if it is not simply a short letter, one needs to print it, then to re-read it, then to correct it at the computer and to reprint it again. I do not think that one is able to write a text of hundreds of pages and to correct it without printing it at least once.”

I now teach students who were ten years old at the time of Eco’s lecture, and they grew up writing and editing on-screen. I now write and substantially edit what I write on-screen even though in 1996 I would’ve been convinced that I would never be able to do so. And ebooks don’t cause the eyestrain Eco attributes to computer screens — he did not at all seem to anticipate that reading in electronic form would not necessarily take place in the future only on electronic devices with which he was familiar back in the previous century.

Who owns the rights to ebooks – publishers who bought the rights to publish “in book form” or the original authors? I’ll bet on the authors.

Who owns the rights to electronic versions of books governed by contracts published back in the days when there was no such thing as an e-book?

Typically, the contracts an author signed with the publishers of those books gave the publisher the exclusive right to publish “in book form” or “in any and all editions.” According to the New York Times (hyperlinks added),

In 2001, Random House sued RosettaBooks, an e-book publisher, for copyright infringement when Rosetta signed contracts with authors . . . to release digital versions of previously published novels.

In its suit, Random House relied on wording in its contracts that granted it all rights to publish the works “in book form.”. . .

In 2001, a federal judge in Manhattan denied Random House’s request for a preliminary injunction against RosettaBooks, ruling that “in book form” did not automatically include e-books. An appellate court similarly denied Random House’s request.

On Friday, however, the Times reports (hyperlinks in original) that “Markus Dohle, chief executive of Random House, sent a letter (pdf) to dozens of literary agents, writing that the company’s older agreements gave it ‘the exclusive right to publish in electronic book publishing formats.’” According to Mr. Dohle’s letter:

The vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats, as well as more traditional physical formats. At the same time, we are aware there have been some misunderstandings conceming ebook rights in older backlist titles. Our older agreements often give the exclusive right to publish “in book form” or “in any and all editions”. Many of those contracts also include enhanced language that references other forms of copying or displaying the text that might be developed in the future or other relevant language that more specifically reflects the already expansive scope of rights. Such grants are usually not limited to any specitic format, and indeed the “f0rm” of a book has evolved over the years to include variations of hardcover, paperback and other written word fonnats, all of which have been understood to be included in the grant of book publishing rights. Indeed, ebook retailers market, merchandise and sell ebooks as an alternate book format, alongside the hardcover, trade paperback, and mass market versions of a given title. Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge to discover stories, ideas and infomation through the process of reading.

Accordingly, Random House considers contracts that grant the exclusive right to publish “in book form” or.”in any and all editions” to include the exclusive right to publish in electronic book publishing formats. Our agreements also contain broad non-competition provisions. so that the author is precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained. We believe the effective exercise of electronic rights is key to the future of publishing and that the combined marketing of print and digital formats increases overall sales and creates the largest possible pool of revenues for authors and publishers, Our efforts and investments in the digital realm perfectly complement Random House’s unmatched physical sales and distribution capabilities, which remain a centerpiece of our business and relationships.

But William Styron’s family disputes Random House’s assertions that it owns the rights to publish electronic versions of Mr. Styron’s books. One problem with Random House’s position is that, despite what Mr. Dohle writes, Random House’s contract with Mr. Styron did not grant to Random House rights that refer to “forms of copying or displaying the text that might be developed in the future,” and, in further contradiction to Mr. Dohle’s words, were quite explicit in being “limited to . . . specific format[s].” As the District Court decision in the case between Random House and Rosetta Stone makes clear, Styron’s contract granted Random House “an exclusive license to ‘print, publish and sell the work in book form,’ Styron also gave it the right to ]license publication of the work by book clubs,’ ‘license publication of a reprint edition,’ ‘license after book publication the publication of the work, in whole or in part, in anthologies, school books,’ and other shortened forms, ‘license without charge publication of the work in Braille, or photographing, recording, and microfilming the work for the physically handicapped,’ and ‘publish or permit others to publish or broadcast by radio or television … selections from the work, for publicity purposes ….’”

The court reasons that the “separate grant language . . . to convey the rights to publish book club editions, reprint editions, abridged forms, and editions in Braille . . . would not be necessary if the phrase ‘in book form’ encompassed all types of books. That [language] specifies exactly which rights were being granted by the author to the publisher.”

The court further opined that “a reasonable person ‘cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business,’  would conclude that the grant language does not include ebooks. ‘To print, publish and sell the work in book form” is understood in the publishing industry to be a ‘limited’ grant.’” (citations and footnote omitted)

Finally, the court pointed out that Random House itself had acknowledged that ebooks are a new medium (and thus, presumably, not within the contemplation of the parties when they entered into their agreements to allocate their respective rights):

In this case, the “new use” – electronic digital signals sent over the internet – is a separate medium from the original use – printed words on paper. Random House’s own expert concludes that the media are distinct because information stored digitally can be manipulated in ways that analog information cannot. Ebooks take advantage of the digital medium’s ability to manipulate data by allowing ebook users to electronically search the text for specific words and phrases, change the font size and style, type notes into the text and electronically organize them, highlight and bookmark, hyperlink to specific parts of the text, and, in the future, to other sites on related topics as well, and access a dictionary that pronounces words in the ebook aloud. The need for a software program to interact with the data in order to make it usable, as well as the need for a piece of hardware to enable the reader to view the text, also distinguishes analog formats from digital formats. See Greenberg v. National Geographic Soc’y, 244 F.3d 1267, 1273 n.12 (11th Cir. 2001) (Digital format is not analogous to reproducing the magazine in microfilm or microfiche because it “requires the interaction of a computer program in order to accomplish the useful reproduction involved with the new medium.”). (citation omitted; hyperlink added).

There’s no question the publishing houses are fighting for their very existence. It’s interesting, though, that copyright holders are fighting the publishing companies over those rights. So much of the focus in this area of late has been over Google’s right to copy books to make them searchable so that they could be found and, as a result, purchased or otherwise obtained from the rightful owners of the books themselves. But now it’s the publishers who are trying to stretch the rights they contractually negotiated for decades ago to realms no one imagined at the time.

It will be interesting to see where this goes next. As a contracts professor, my first impression is that Random House isn’t exactly in the strongest of positions.

Amazon, EULAs, and Orwell’s memory hole.

Can Amazon take back from y0ur Kindle a book you thought you’d purchased? Well, it did exactly that — Kindle owners who’d obtained ebooks of George Orwell’s 1984 and Animal Farm discovered last week that Amazon had simply deleted those books from their Kindles. No one seems to have known Amazon could do that — the fact the Kindle connects electronically to the internet has until now always been considered a reason the Kindle is better than competing ebook readers.

But did Amazon have the contractual right to do what it did?

The first thing to note is that you don’t “buy” ebooks from Amazon. As the Kindle’s End User License Agreement (“EULA”) states, you merely purchase a “license” to use the ebooks. The license is the right to use the ebooks under the terms of the EULA.

But does the EULA allow Amazon to unilaterally take back a book? I’m not so sure. I think likely Amazon is in breach. Nowhere in the agreement do I see any provision that gives Amazon the right to do what it did. Moroever, the EULA states that the license is one to keep a “permanent” copy of the text you are obtaining and to view, use, and display that text an “unlimited number of times”:

Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times.

The fact Amazon refunded the price of the Orwell books would not excuse its breach. You can’t enter a contract and then unilaterally tell the other side to the deal you want to undo it.

So Amazon may indeed be in breach. But does it matter? First, it would be difficult to prove any damage over and above the “purchase” price, which Amazon has refunded. But there are two more important points. First, as I’ve written before about EULAs, anytime you enter one online you are probably agreeing that the agreement can be amended at any time without even any notice to you. Amazon may simply argue that its recall of the books was an amendment of the agreement.

Second, what are you going to do, sue? You can’t. The EULA requires any dispute arising under it to be arbitrated in Seatlle! Are you going to go to the trouble of hiring a lawyer in Seattle to start an arbitration proceeding so that you might be able to recover a few more bucks? Of course not.

Actions like these are why class actions exist — where a company engages in actions that cause small amounts of damage to many people, it’s not worth any individual’s time or money to pursue a remedy, and even if it were the remedy is so small that the company’s gains from the improper conduct are worth it. As Wikipedia explains:

[A] class action may overcome “the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 388, 344 (7th Cir. 1997)). “A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.” Amchem Prods., Inc., 521 U.S. at 617 (quoting Mace, 109 F.3d at 344). In other words, a class action ensures that a defendant who engages in widespread harm – but does so minimally against each individual plaintiff – must compensate those individuals for their injuries. For example, thousands of shareholders of a public company may have losses too small to justify separate lawsuits, but a class action can be brought efficiently on behalf of all shareholders. Perhaps even more important than compensation is that class treatment of claims may be the only way to impose the costs of wrongdoing on the wrongdoer, thus deterring future wrongdoing.

But you can’t bring a class action in arbitration. That’s why all these EULAs require arbitration — so that there’s no opportunity for a class action that would impose on the company the real damages it would be liable for to all the people it has wronged by its conduct.

Pretty clever, eh? Just remember, when you push for “tort reform,” you’re really looking to benefit wrongdoers, not to right the defects of a “broken” litigation system.

ADDENDUM: Maybe there is hope after all – in Harris v. Blockbuster, a federal district court in Texas ruling under Texas state law refused to enforce an arbitration provision precisely because the contract provided a unilateral right to amend. I’ve got to research this point more, but it seems on its face to be consistent with Texas law. I see reason, though, to think it wouldn’t be under the law of many states. The court says the agreement to arbitrate is “illusory” because it can be amended without notice. I would think that in most states the un-amended contract would be enforceable and terms that were added by amendment MIGHT be deemed illusory.

Stop those dangerous . . . er, player pianos!

Copyright legislation throughout history has primarily consisted of congressional efforts to preserve financial interests threatened by new technologies. We are, of course, living through a technological revolution right now, so we are living through copyright wars. 

But who knew the 1909 Copyright Act (in effect until the current one was enacted and signed into law in 1976) was a response to the threat posed by . . . yes, PLAYER PIANOS!

Music publishers, who had secured their rights in sheet music, were freaked out at the thought there might be mechanical reproductions of their music they wouldn’t be paid for. As Mike Masnick explains it at Techdirt

The big innovation of the 1909 copyright [Act] was compulsory licensing on mechanical rights. This was put into place for one reason: fear about player pianos and how they would dominate the market and destroy the need for musicians. Within a matter of decades, the player piano market was effectively gone… and yet, these massive changes designed solely to deal with the player piano have stuck around ever since. Now apply that same story to basically every other technological innovation, and that gets you copyright law.

You don’t have to look far to find a current example that proves Mike’s point.  Amazon’s Kindle2 ebook hit the market with the capacity to read the electronic texts loaded into it aloud in a computer-generated voice. As afterdawn reports, “the Author’s Guild saw this feature as a“performance” when used and pressured Amazon to allow publishers to decide on an eBook-by-eBook basis whether to enable the feature or not.” Whether this new technology represents a genuine threat to the existing financial interests of publishers and/or authors is pure speculation, but the Author’s Guild is adamant:

 We will not . . .  surrender our members’ economic rights to Amazon or anyone else. The leap to digital has been brutal for print media generally, and the economics of the transition from print to e-books do not look as promising as many assume. Authors can’t afford to start this transition to digital by abandoning rights.”  

Of course, the Authors Guild was the lead plaintiff in the lawsuit directed at shutting down a much vaster and more revolutionary technological advance, the Google Library Project.  As I have written, I never understood what good they possibly have been doing themselves if they’d stopped that project.  Nor can I understand their efforts to stifle the transition we plainly are going through into electronic books.  

But now I know: you see a machine that can reproduce your “property,” and all you can think is you’ve got to stop that machine.  Even if it is just a player piano.