United States District Court for the Southern District of New York · Contracts
ContractsCopyright licensingContract interpretationNew use problemsbook formebookscopyright licenseexclusive license
Facts
Rosetta Books contracted with several authors to publish eight literary works in digital format over the internet and launched its ebook business in February 2001. Random House claimed those works had already been exclusively licensed to it under contracts granting the right to 'print, publish and sell the work in book form.' The contracts also separately addressed rights such as book club editions, reprint editions, abridgments, Braille editions, and certain copying rights, and some provisions were struck out by the authors to reserve rights. Rosetta's ebooks reproduced the full text but were readable only through software and included digital features such as searching, highlighting, bookmarking, notes, hyperlinks, adjustable font, and dictionary functions.
Issue
Did the authors' grants to Random House of the right to 'print, publish and sell the work in book form' include the right to publish the works as ebooks? If not, could Random House show a likelihood of success on its copyright infringement claim sufficient to obtain a preliminary injunction?
Rule
Under New York law, a copyright license is interpreted to give effect to the parties' intent as expressed in the contract's language, read as a whole and without rendering provisions superfluous. Applying neutral principles of contract interpretation to 'new use' disputes, the scope of the grant depends on the words used; a limited grant to publish a work 'in book form' does not extend to ebooks absent broader language indicating that digital publication rights were conveyed.
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In 1984, novelist Elena Cruz signed a New York-governed agreement with Maple Street Press in Boston giving the publisher the exclusive right to "print, publish, and sell the Work in book form." The same paragraph separately granted rights for book club editions, abridgments, and Braille editions, and Elena later licensed a Seattle startup to distribute the novel through a downloadable reading app.
If Maple Street Press sues the startup for copyright infringement and seeks a preliminary injunction, which argument is strongest under the governing rule?
Explanation. Under New York contract law, the grant is interpreted from the contract language as a whole, avoiding superfluous provisions. A limited right to publish a work "in book form" does not extend to ebooks or comparable digital publication absent broader language. Separate grants for book club, abridgment, and Braille rights reinforce that "book form" is not an all-encompassing grant. Without ownership of the relevant digital publication right, the publisher cannot make a prima facie infringement showing or establish likelihood of success. (Derived from Random House, Inc. v. Rosetta Books LLC (n.d.).)