On March 14, 2014, the U.S. District Court for the Southern District of New York handed down an opinion in the “Julie of the Wolves” e-book publishing case and those among us who deal with media publishing and distribution licenses, especially attorneys who draft such contracts, can now breathe a sigh of relief. One of our stock bits of standard contract language (commonly referred to as boilerplate in a metaphor borrowed from the early days of newspaper printing) which we have used in media publishing contracts for decades, has been put to the test and been found, under judicial scrutiny, to mean what we hoped that it meant all along. Whew.
The bit of boilerplate is “other electronic means now known or hereafter invented” and the case is HarperCollins Publishers LLC v. Open Road Integrated Media LLP (for background on this case, see my two earlier articles here and here). The case turned on issues of contract language interpretation in a publishing agreement signed in 1971 by Jean Craighead George for the 1972 publication of her beloved novel, which won the Newbery Medal for 1973. The central issue in the case was whether the phrase “in book form”, which appears at the beginning of the contract as a general description of the publishing rights granted by George to the publisher, when combined with and modified by the boilerplate phrase (which occurred in another section describing the publisher’s exclusive subsidiary rights) provides sufficient language to include e-book format – as we now understand it in the 21st century – as part of the publisher’s exclusive publishing license.
In the years that followed the successful publication, HarperCollins produced, with George’s permission (required under the subsidiary rights paragraph), CD-ROM versions of “Julie of the Wolves”, online teaching and examination materials for curricular use by schools and even a test version of the book for an early e-reader device in 1998. However, in 2010, when the e-book was becoming (if it had not already become) the dominant format in the literary market, Open Road approached George’s agent with an offer to publish “Julie of the Wolves” under an arrangement that would pay George twice the royalty amount that HarperCollins was willing to pay, and so George, believing that e-book format was one of the rights she had reserved to herself under the 1971 contract, struck a deal with Open Road. The lawsuit followed when Open Road sold approximately 1600 e-books over a six month period in 2011 and 2012.
The court discussed its most salient “new use” precedent cases in which it had to decide whether a new use reasonably falls within the media types described in the license, and the court emphasized that the language of the contract, rather than extrinsic evidence of the parties’ intent, is given more weight in a “new use” case because outside evidence of what the parties may have intended “is not likely to be helpful when the subject of the inquiry is something the parties were not thinking about.” The court found that, even though the contract was executed more than forty years ago, the “expansive” and “forward-looking” phrase “now known or hereafter invented” is sufficiently broad to include the format of 21st century e-books. The court also noted, and this was somewhat fatal to Open Road’s case, that the boilerplate phrase at issue was inserted into the original contract at the request of George’s literary agent.
So, with this opinion in hand, publishers and attorneys and other drafters of media licenses can boldly go into the future with the assurance that “now known or hereafter invented” is still solid contract language. We can do this even as another bit of standard license grant phrasing, “use throughout the world”, is more and more supplanted by the phrase “use throughout the universe.”