Random House Loses to Rosetta Books

On July 11th, Judge Sidney Stein of the U.S. District Court for the Southern District of New York ruled in favour of e-Publisher Rosetta Books. If you recall, Random House was trying to get a preliminary injunction against Rosetta Books from releasing in e-Book form eight titles to which Random House claims to hold the publishing rights. Random claimed that its contracts gave it the exclusive rights to publish books not only in print editions but as e-books as well. In his decision, Stein found that the clause to "print, publish and sell the work(s) in book form...does not include the right to publish the works in the format that has come to be known as the ebook." Stein ruled that according to the language in Random Houses contract, it does not own the right to publish the eight works at issue as e-Books. He also stated that he was not giving Random House the injunction because it failed to show that their publication would cause the company "irreparable harm". Random House is owned by the Bertelmann communication empire which includes BMG Music, Doubleday Books, Dell Publishing, Ballantine Books, Fawcett Books, Bantam Books, and a host of others. It is one of the largest publishers in the world.

But the most damning part of the decision was that the judge doubted that Random was likely to succeed on the merits of its infringement case. The founder of Rosetta Books, stated that this was a "test case" over who controlled e-book rights. He is obviously very pleased that the court found that the rights rested with authors and agents. Attorney for Rosetta Books Michael Boni added that the decision makes it clear that Rosetta "can continue to negotiate e-book contracts." Klebanoff speculated that the decision would speed the publication of e-books.

Authors, agents and e-Book publishers are celebrating Judge Stein's decision while traditional publishers are busy re-writing contracts. The Authors Guild, which filed a brief in support of Rosetta, was thrilled with the decision. Don Maas, president of the Association of Authors Representatives, which filed a similar brief, said he thought the ruling couldn't have been more favorable to Rosetta. "It seems to me he read Rosetta's arguments chapter and verse. It left very little room for Random House to maneuver." He said the ruling carried implications not only for past work but for the future determination of rights. "The judge has effectively said: 'When a new technology comes along, sorry, Random House, you don't automatically get the rights.'"

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