Who owns e-books?

Random House Lays Claim to E-Book Rights

By Jeffrey A. Trachtenberg

Random House, moving to stake its claim in one of the few fast-growing areas of book publishing, sent a letter to literary agents saying it owns the digital rights to books it published before the emergence of an active marketplace for electronic books.

In the letter, dated Dec. 11, Markus Dohle, chief executive of the publishing arm of Bertelsmann AG, wrote that the "vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats." He added that many of Random House's older agreements granted it the exclusive right to publish a work "in book form" or "in any and all editions."

The letter addresses one of the most controversial issues in publishing these days: who owns digital rights to older titles, often referred to as backlist books.

Mr. Dohle argues that, much as the understanding of publishing rights has evolved to include various forms of hardcovers and paperbacks, it now includes 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."

Nat Sobel, a literary agent whose clients include James Ellroy and Richard Russo, both of whom are published by Random House's Alfred Knopf imprint, disagreed with Mr. Dohle's assertions.

Mr. Sobel said that prior to the September publication of Mr. Ellroy's novel "Blood's a Rover," the third volume in the author's Underworld USA trilogy, he received a letter from Random House asking for the release of electronic rights associated with the trilogy. He said he ignored the request because he has other plans for those rights.

"I don't accept Random House's position, and I don't think anybody else will either," Mr. Sobel said. "You are entitled to the rights stated in your contract. Contracts 20 years ago didn't cover electronic rights. And the courts have already agreed with this position."

Stuart Applebaum, a spokesman for Random House, said, "We believe Random House has the right to publish our authors' backlist titles as e-books. We think we can do the best job for our authors' e-books."

Several years ago, Random House 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 published by Random House's imprints.

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

In late 2002 Random House and RosettaBooks settled their litigation. As part of that settlement, Random House dropped its objection to RosettaBooks publishing the titles in question, and granted RosettaBooks the right to publish 51 additional titles. Those rights lasted between three and six years.

"At this point, all our Random House licenses have expired," said Arthur Klebanoff, CEO of RosettaBooks. "I am surprised by Mr. Dohle's letter. The last time Random House advanced the same position, it didn't work out so well for them. And I don't think it will work out so well for them now."

A second literary agent, Richard Curtis, who also owns E-Reads, an e-book publisher, said he would expect Random House to go to court to defend its new claims, as it once did.

"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," he said. "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."