On March 14, 2014 the District Court for the Southern District of New York granted HarperCollins Publishers’ motion for summary judgment in its 2011 case against Open Road Integrated Media, an e-book publisher (“Open Road”). The dispute arose when Jean Craighead George, author of the children’s classic Julie of the Wolves (the “Work”) entered into a publishing agreement with Open Road for an e-book version of the Work. HarperCollins Publisher argued that Open Road infringed on its rights in the Work since its 1971 publishing contract with Ms. George granted HarperCollins the “exclusive right to publish” the Work “in book form.” HarperCollins argued that this grant language, along with other language in the agreement that contemplated “electronic means now known or hereinafter invented,” gave it the exclusive right to license e-books. The same issue regarding whether e-books were contemplated by the language in an older publishing agreement was the subject of the 2001 case Random House v. Rosetta Books, 150 F. Supp. 2d 613 (S.D.N.Y. 2001) (“Rosetta Books”). In Rosetta Books, the court held that the language “to print, publish and sell” did not give Random House e-book rights.
The Court found two factors important in granting summary judgment to HarperCollins. First, the Court held that the “operative contract here differs significantly from its counterpart in Rosetta Books, which was held to be limited to paper book publication.” Id. at 620. Since the word “print” was absent from the agreement for the Work, the Court found the grant language to be broader than in Rosetta Books. Second, the Court held that the Second Circuit’s “new use” precedent governed with respect to evaluating whether the agreement for the Work covered later-developed technologies. In addition to holding that the grant language was broad, the Court also found that the subsidiary rights language giving HarperCollins the right to grant licenses to the Work for “use thereof in storage and retrieval and information systems, and/or whether through computer, computer-stored, mechanical or other electronic mean now known or hereafter invented” (emphasis added) was broad enough to include and foresee the publication of e-book.
This case is a yet another example of the importance of the specific language within an agreement and the particular scrutiny that should be given to the grant of rights in licensing arrangements. Businesses and lawyers must always keep in mind future technologies and contemplate what new uses for a Work may be down the road. While the Court acknowledged that its decision “may be of limited applicability beyond the confines of this contract and this case,” it serves as a reminder that broad language that contemplates not-yet-invented uses can have a significant impact on the value of a work or an agreement.