HarperCollins Publishers LLC v. Open Road Integrated Media, LLP

58 F. Supp. 3d 380, 112 U.S.P.Q. 2d (BNA) 1809, 2014 U.S. Dist. LEXIS 157238, 2014 WL 5777929
District Court, S.D. New York·Decided November 6, 2014·No. No. 11 Civ. 9499(NRB)·Published·Cited by 4 cases

Opinion

MEMORANDUM AND ORDER

NAOMI REICE BUCHWALD, District Judge.

On March 17, 2014, the Court filed a Memorandum and Order granting summary judgment to plaintiff HarperCollins Publishers LLC (“HarperCollins”) on its copyright infringement claim against defendant Open Road Integrated Media, LLP (“Open Road”), and inviting the parties either to reach a resolution or to brief the issue of remedies. No settlement having been reached, HarperCollins now moves for a permanent injunction, statutory damages, attorneys’ fees, and costs. Open Road concedes that HarperCollins is entitled to costs but opposes the other relief sought. For the reasons stated herein, the Court grants HarperCollins’ motion in part and denies it in part.

BACKGROUND

A. The Liability Opinion

We assume the reader’s familiarity with the facts and legal conclusions described in our prior opinion. HarperCollins Publishers LLC v. Open Road Integrated Media, LLP, 7 F.Supp.3d 363 (S.D.N.Y.2014) (“HarperCollins I”). To summarize, the underlying dispute involved the scope of a 1971 publishing contract (the “1971 Contract”) between the late Jean George, author of the acclaimed children’s novel Julie of the Wolves, and the publishing house Harper & Row, plaintiffs predecessor in interest. In 2010, Open Road contacted Ms. George to propose that it would publish an e-book edition of Julie of the Wolves. Although Ms. George invited HarperCollins to match the fifty percent royalty offered by Open Road, HarperCol-lins declined to publish an e-book on such generous terms. Ms. George then reached agreement with Open Road, purporting to authorize it to publish the e-book. Shortly after Open Road released its edition in 2011, HarperCollins brought this action, claiming that the e-book infringed Harper-Collins’ copyright interest in Julie of the [383] Wolves under the 1971 Contract. Open Road responded that there was no infringement because e-book publication rights were outside of the scope of the 1971 Contract. After discovery, both sides moved for summary judgment.

In support of their respective positions, the parties made arguments not only based on the terms of the 1971 Contract, but also based on, inter alia, the course of performance under that contract and expert opinions on computer technology and the publishing industry. While our prior opinion discussed those arguments, our conclusion rested on the language of the 1971 Contract. A crucial provision in that contract, Paragraph 20, reads as follows:

Anything to the contrary herein notwithstanding, the Publisher shall grant no license without the prior written consent of the Author with respect to the following rights in the work: use thereof in storage and retrieval and information systems, and/or whether through computer, computer-stored, mechanical or other electronic means now known or hereafter invented and ephemeral screen flashing or reproduction thereof, whether by print-out, phot[o] reproduction or photo copy, including punch cards, microfilm, magnetic tapes or like processes attaining similar results, and net proceeds thereof shall be divided 50% to the Author and 50% to the Publisher. However, such license shall not be deemed keeping the work in print once the work has gone out of print in all editions.

(Emphasis added.)

Interpreting the 1971 Contract in light of the so-called “new use” line of cases, which address the recurring problem of how to interpret the scope of old copyright agreements in light of later-developed technologies,1 we found that the emphasized language in Paragraph 20, “encompassing as it does the forward-looking reference to technologies ‘now known or hereafter invented,’ is sufficiently broad to draw within its ambit e-book publication.” HarperCollins I, 7 F.Supp.3d at 372. We concluded that the 1971 Contract granted HarperCollins the exclusive right to license third parties to publish e-book versions of Julie of the Wolves, subject to Ms. George’s approval, and thus that Open Road infringed HarperCollins’ copyright.

B. Subsequent Events2

Open Road has stopped selling its Julie of the Wolves e-book, but it did not stop immediately. Our opinion holding Open Road liable was filed on March 17, 2014, and Open Road’s counsel and senior executives received and reviewed the opinion that day. Davis Decl. ¶ 6; Schefler Decl. [384] ¶ 8. Open Road decided to pursue a negotiated settlement with HarperCollins, which it hoped would include a license to continue publishing the e-book. Davis Decl. ¶ 6; Schefler Decl. ¶ 8. On April 2, in a meeting between Open Road’s outside counsel Kim Schefler and HarperCollins’ general counsel Christopher Goff, Schefler proposed terms including a monetary settlement and a license for Open Road. Schefler Decl. ¶ 9.

During the April 2 meeting, Goff stated that “Harper[Collins] was surprised Open Road hadn’t yet taken the book down,” to which Open Road’s counsel replied that “Open Road would do so if we were unable to work out a license as part of the settlement.” Id. On April 7, Goff called Schefler to tell her that HarperCollins was not interested in a license and that HarperCol-lins would “like to see the book taken down.” Id. at ¶ 10 (internal quotation marks omitted). This was HarperCollins’ first explicit demand to Open Road to stop selling the e-book. Id.

On the same day, Open Road “initiated steps to cease all sales of Julie of the Wolves e-books” by contacting its retailers and by taking technological measures to indicate that the e-book had been “[wjith-drawn from [s]ale.” Davis Decl. ¶ 9 (internal quotation marks omitted). According to Open Road, the last sale took place on April 9. Id. ¶¶ 10, 14. During the entire period from March 17 through April 9, a total of 304 e-books were sold. Id. ¶ ll.3

On May 23, 2014, no settlement having been reached, HarperCollins filed the instant motion for remedies. As of that day, Open Road and at least one of its distributors were continuing to market the e-book edition of Julie of the Wolves online. Specifically, Open Road’s website contained a page dedicated to Julie of the Wolves, including links to “BUY THE E-BOOK” at several online retailers. Rich Decl. ¶ 15 & Ex. K. Further, the website of Google Play — one of Open Road’s retailers — contained a page devoted to Julie of the Wolves, listing “Open Road Media” as the “Publisher” and including an “Add to Wishlist” function. Rich Decl. ¶ 16 & Ex. L.

In late May and June 2014, after HarperCollins filed its moving papers, Open Road began to remove references to Julie of the Wolves from its website. Davis Decl. ¶ 12. In its opposition, Open Road declared that it by then had “made all reasonable efforts to remove all references to the e-book from any Open Road online or offline materials.” Id.4 Open Road also declared that it “has no intention of selling Julie of the Wolves e-books” unless it obtains a favorable judgment in this matter or a license from HarperCollins. Id. ¶ 14.

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HarperCollins Publishers LLC v. Open Road Integrated Media, LLP, 58 F. Supp. 3d 380, 112 U.S.P.Q. 2d (BNA) 1809, 2014 U.S. Dist. LEXIS 157238, 2014 WL 5777929 (S.D.N.Y. 2014).

58 F. Supp. 3d 380 (HarperCollins Publishers LLC v. Open Road Integrated Media, LLP) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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