May 6, 2001 7:00 AM PDT

Copyright battle: Is an e-book a book?

A publishing giant and an upstart electronic publisher are preparing for a court battle this week that could have as much influence on the future of online publishing as Napster has had on the music industry.

On Tuesday, Random House and RosettaBooks will make their first joint court appearance since the Bertelsmann-owned publisher sued RosettaBooks in February. The suit seeks to prevent the smaller publisher from selling digital versions of Random House titles by authors William Styron, Kurt Vonnegut and Robert Parker.

The key question in the dispute is whether authors or publishers own the digital rights to books. Random House says that authors, who signed over the rights to publish their works in "book form" before the advent of the Internet, also handed the publisher e-book rights. RosettaBooks, however, contracted directly with authors for the electronic publishing rights, which it says are not included in print contracts.

Specifically, the court must decide if an e-book constitutes a "book form"--a decision that could affect a growing list of electronic publishing start-ups and the giant book companies they are competing against in a market that has been slow to take off.

"Perhaps we're going to be able to look back at this when it's said and done as a seminal case, which either entirely opens up the terrain of e-book publishing to publishers other than the big traditional publishers or shuts it down--similar to what you see on the music side with Napster," said attorney Owen Seitel, a partner at law firm Idell Berman & Seitel, which is not involved in the case.

E-books are poised to become a third branch of online copyright disputes, which have already created upheaval in the music and movie industries. Under pressure from the record industry and federal courts, Napster has added filters to its popular music file-swapping service and watched its audience drop off. Meanwhile, the movie industry has set its sights on a rival file-sharing service, Gnutella, in its latest attempt to protect film copyrights.

On the e-book front, Random House has been making an aggressive effort to stake a claim by publishing original fiction and nonfiction titles through its newly created e-book unit, AtRandom. The publishing giant also said it has invested more than $5 million in the development of e-book publishing and anticipates spending approximately $10 million more in the next three to five years.

In its suit filed in the U.S. District Court for the Southern District of New York, Random House says RosettaBooks copied backlist works, or books published more than one year earlier, for which the publishing giant holds exclusive copyrights.

"The (copyright) agreements...which, among other pertinent provisions, grant Random House the exclusive right to publish the works 'in book form,' convey to Random House the exclusive right to publish its authors' works in 'e-book' formats," the suit says.

RosettaBooks, however, says the agreements between Random House and the authors don't cover e-books. The company said it entered into contracts in October 2000 and January 2000 with authors Styron, Vonnegut and Parker for electronic publishing rights to several works over the Internet.

"We believe the authors own those rights and are free to convey them to Random House, ourselves or anyone else," said Leo Dwyer, chief operating officer for RosettaBooks. "We're confident that the facts are on our side, and if the facts prevail, we will."

RosettaBooks has also made moves to become a best seller in the market by inking deals with intellectual property management company Reciprocal and Microsoft. New York-based RosettaBooks, which launched its site in February, sells out-of-print titles, published before 1985, which can be downloaded and then read with Microsoft Reader, Adobe e-Book Reader or Adobe Acrobat Reader.

"At its heart, (the lawsuit) will clarify and define who controls the contractual rights for backlist titles," said Stuart Applebaum, a spokesman for Random House. "Is it or is it not the publisher? We contend that it is."

 

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