Melville House Books

While the center of action last week was over confronting Amazon over its slash-and-burn attitude over price discounting (as per this Moby story), over the weekend it shifted to whether publishers controlled the rights to ebooks made from books originally contracted in the years before contracts had any language about digital rights in them. That conversation started Friday when Random House CEO Markus Dohle sent a letter “to literary agents claiming the digital rights to books it published before the emergence of a thriving electronic-book marketplace,” as Jeffrey A. Trachtenberg reported in this Wall Street Journal story.

As Trachtenberg summarizes, Dohle

writes that the “vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats.” Mr. Dohle writes that many of the older agreements “often give the exclusive right to publish ‘in book form’ or ‘in any and all editions.’ ”

He argues that, much as the understanding of publishing rights has evolved to include various forms of hardcovers and paperbacks, so too does it now include digital rights, since “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 information through the process of reading.”

But as Trachtenberg also noted, many were likely to disagree with Dohle’s point of view because of a particular legal case:

Random House years ago sued e-book publisher RosettaBooks LLC to prevent it from selling the e-book editions of three authors–William Styron, Kurt Vonnegut Jr. and Robert Parker–whose books had been earlier published by Random House’s imprints.

In a key ruling, the U.S. District Court for the Southern District of New York in 2001 denied a Random House petition for a preliminary injunction against RosettaBooks, stating that Random House’s contracts were limited to print books and didn’t cover e-books. A federal court of appeals subsequently affirmed the federal district court’s opinion.

Nonetheless, Random is likely to defend those rights again, and as agent Richard Curtis tells Trachtenberg “Someone would have to have a lot at stake to be willing to spend hundreds of thousands of dollars to go up against Random House in court. I don’t know whether anybody will feel they want those rights so badly they are willing to spend like that to prosecute a claim right up to what could be the Supreme Court.”

The story moved beyond Random House and onto big publishing in general late yesterday, however, when one of the biggest bestselling authors of the last two decades, Stephen R. Covey, announced he was moving e-rights for his two biggest books, The 7 Habits of Highly Effective People and Principle-Centered Leadership, from his long-time publisher, Simon & Schuster, not to another publisher but to the world’s biggest book retailer: Amazon.com.

As a New York Times report by Motoko Rich and Brad Stone details, Covey is making his books available to Amazon through none other than RosettaBooks. What’s more,

Arthur Klebanoff, chief executive of RosettaBooks, said that Mr. Covey would receive more than half of the net proceeds that RosettaBooks took in from Amazon on these e-book sales. In contrast, the standard digital royalty from mainstream publishers is 25 percent of net proceeds.

“There are superstars, and superstars are entitled to more,” Mr. Klebanoff said.

But it may not be so simple. A spokesman for S&S had little to say except this: “Our position is that electronic editions of our backlist titles belong in the Simon & Schuster catalog, and we intend to protect our interests in those publications.”

Which brings us back to where we started last week — with the story of Simon & Schuster standing up to Amazon.

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.