Rosetta Publishing & Random House:
Redux

(Remember them? Big, Big "David & Goliath" story- RosettaBooks went and contracted high profile authors and their equally high profile works to publish in ebook formats…major publishing houses were seriously upset and mostly mad for not thinking of it first!)

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by Jill E. Vaile©2009 All Rights Reserved


e-Rights issues sometimes settle with a whimper, rather than the headlines that first grabbed our attention...
Eleventh hour deals spell a quiet end to a media frenzied start in the e-Rights world.

RosettaBooks rattled the cages of the "sleeping dog-big boy" publishers, by cutting deals with major authors and signing their bestsellers to publish in a previously non-contracted electronic format. They took advantage of, and made a profit on, the new and separate format of "electronic books".

RosettaBooks also made good use of the (then) recent Tasini ruling, by taking the "archiving" definition one step further:that of the "electronic (or "e") book format".

Random House Publishing settled their suit against RosettaBooks in December, 2002 in a rather surprising way!

By putting an entirely new spin on the issue in question, Random House and RosettaBooks cut a deal that completely sidestepped the "right" or "wrong" question that initiated the entire suit!

No decision was arrived at in the matter of contracting authors/their works separately and the electronic publishing issue versus the original print contract.

How?

The parties agreed to collaborate on future "e" books!

Arthur Klebanoff, RosettaBooks' CEO praised the arrangement as: "a victory for all authors".The move was shrewd, and certainly influenced by the U.S. District’s Court’s initial rejection of Random House’s request for a preliminary injunction, and the subsequent Appeal’s Court upholding that decision.

U.S. District Judge Sidney H. Stein stated in his ruling that the publisher (Random House) was:

not likely to succeed on the merits of its copyright infringement claim
and added that
they [Random House]
cannot demonstrate irreparable harm.

Thus, Random House has granted the exclusive e-book Rights to Rosetta, with the use of this important phrase: "mutually agreed-upon titles."

These include old and new titles, and some works by big name authors like Anne Rice, John Grisham, Toni Morrision and Donna Tartt. In addition, while Random House played down any credence to the epublishing format, they closed their e-book imprints division of their original material, and continue to release electronic versions of the books they have published on paper.

RosettaBooks has not wavered in its efforts to acquire old titles

They have continued negotiations with authors’ representatives, Virginia Woolf being one of their recent new additions.Their catalogue is already quite impressive. The specific details of the settlement include the following:

  1. In lieu of any legal payment between the companies, they agreed to launch a licensing alliance for e-books.
  2. Random House gives RosettaBooks exclusive rights to "several dozen e-rights exclusives, from their new and backlisted titles.
  3. Rosetta pays an advance and a royalty fee to the author and the publisher of each ebook.
  4. Licenses are granted for three years, with Rosetta having the first right of refusal.

A lot is riding on Rosetta’s faith in the future development of the e-book business. Current statistics from Rosetta state that no single title has sold more than 1000 copies.

Random House is obviously feeling no threat from RosettaBooks- so they say. However, there is no denying the potential market for the e-book genre. It should be noted, as well, that RosettaBooks accomplished all of this with only five full time employees! Their achievements and ingenuity are certainly deserving of recognition on many fronts!