Penguin sues authors to recover advances

On Tuesday, Penguin decided it was finished with the book publishing business.

That's the only way I can interpret recent litigation developments from Penguin, which decided to sue a group of authors to recover advances paid for books that were never published.

The list of authors as reported includes some pretty significant names, such as Elizabeth Wurtzel, author of "Prozac Nation", and Ana Maria Cox, ex-editor in chief of the Wonkette political blog.

I've previously written a series of posts on book publishing (links below) and whether a publisher can sue authors to recover an advance is actually pretty well-traveled ground. The rules are pretty clear:

• If the author fails to deliver an acceptable manuscript the publisher can get the money back.
• If the publisher decides not to publish for other reasons even though the manuscript was acceptable the publisher can't get the money back.

(I'm trying to get a copy of the Complaint because I also can't figure out how Penguin can sue all of these same people, who would appear to have nothing in common with each other, in one lawsuit. For technical reasons that's usually not possible.)

But put aside the legalities for a second and let's just focus on the craziness. Any time a publisher pays an author an advance, the publisher is taking a risk. In one view, a publisher paying an advance is basically making the following bets:

• This person will be able to produce a manuscript that we will want to publish.
• The advance we will pay (using a calculation similar to the one I've set out in a previous post) will not exceed the amount of money we should have paid.
• If the advance does exceed the amount of money we should have paid, it's still worth it to have this person for other reasons (e.g. we become popular with authors).

Focus on that last bullet for a second. Paying good advances makes a publisher popular with authors. The more popular a publisher is with authors, the more other authors want to publish with them. So question: why would any publisher risk its reputation with the author community? Especially, as Elizabeth Wurtzel pointed out when contacted by Above the Law for comment on this litigation, when the amounts at issue are relatively small?

It just doesn't seem to make any sense.

I'll be back with more updates in the coming days and weeks, no doubt.

(Thanks to Nate Hoffelder of The Digital Reader for the tip)

LINKS:
Legal Minimum posts on book publishing including: publishers rejecting manuscripts, whether authors have to give back advances, etc.
http://bit.ly/LjV4MC
Legal Minimum post on calculating royalties and determining the right advance:
http://bit.ly/Nwz9F3
The Digital Reader (follow this!):
www.the-digital-reader.com
Smoking Gun article about Penguin lawsuit:
http://www.thesmokinggun.com/buster/penguin-group/book-publisher-sues-over-advances-657390
Above The Law article including responses from Elizabeth Wurtzel and analysis:
http://abovethelaw.com/2012/09/lawsuit-of-the-day-penguin-v-wurtzel-and-other-authors/

By settling in Europe, did Apple and the e-book publishers admit liability in the USA?

I've written a fair bit about the Apple e-books litigation, but I've focused on the US mostly. But that's not been the only place they've been called to the carpet. The EU Competition Commission had its own concerns and launched its own inquiry.

On September 19, Apple and 4 e-book publishers reached a settlement to resolve the EU issues. Similarly to the USA, the EU has opened the proposal up to public comments. And the terms of that proposed settlement are telling for what will happen in the USA as well, for one very important reason:

Four things app developers need to know about the new FTC mobile app marketing guide

On September 5, the FTC published its new guide to marketing mobile apps, and although it may not make any changes to the law, it will probably come as quite a surprise to many app developers.

The first points in the Guide deal with the general issue of misrepresentations. And although the language in the Guide is chatty, the points in there are all business. But they're also not hard to comply with, boiling down to one simple one: don't say things about your app that you can't prove to be true. This seems like common sense. Amazingly it's not. The FTC points to an app whose developers claimed it could cure acne. I'm not even sure how that could be possible. Apparently the FTC agreed, because they took action to shut it down.

But that much is easy. Where it gets a bit more involved is when the FTC turns its attention to privacy issues. The FTC is very concerned about privacy in the mobile app space. I'm even told they have mystery shoppers downloading apps and testing them out for privacy compliance issues. No surprise then that most of the Guide is dedicated to privacy. And the Guide contains three additional big points on privacy issues that app developers should consider:

Siri: is this lawsuit too clever by half? Maybe, but maybe not.

"Siri: Tell me whether you're in sales."

That may be a question that no one with an iPhone 4S has ever asked. But for at least one plaintiff in San Francisco, it's a question that Siri should answer honestly.

Three basic questions about using real people as inspirations for your characters

Authors, filmmakers, and other creatives have always built their stories from their own experiences. Being inspired by real events and real people is almost impossible to avoid. But sometimes people go a step further and build their creations directly from reality, including real people or real events that can be traced back to real people. And, when done right, this can lead to increased interest translating into increased sales. As a wise gnome once said, Step 3 is Profit!

But doing it wrong can lead to real problems.

Although there's more than just four things to consider when using real people in your creations, the questions I've gotten have revolved around three big issues.

Two easy ways to succeed on Kickstarter (and two reasons you should look for these kinds of projects)

Over the weekend, Ars Technica put up a quick post on old games getting rebooted through Kickstarter. They talk about how it's fertile ground for rebooting old games. Unfortunately, at least for creative endeavors, revisiting well-trodden ground may be one of the only profitable uses for it. But surprisingly this might be a really good thing for people looking to back Kickstarter projects.

As someone who is mentioned twice (obliquely) in the promotional video for one of the most successful Kickstarter reboots (when at Microsoft I worked on Shadowrun), I have a bit of a sentimental interest in this topic. It would seem that if you want to succeed on Kickstarter, try for one of two things:

Author's "Carnival of Souls" mark takes reviewers on a not-so-fun, and unnecessary, ride

I've spent some time this afternoon reviewing the Complaint in Jazan Ward's claim against HarperCollins over the Carnival of Souls and Enter the Carnival trademarks. And although I'm not sure he'll succeed, it's by no means the craziest thing I've ever seen. As for his complaints against the bloggers, there I'm not so convinced, and it's quite possible he may wish he had never tried anything.

For those of you who don't know what I'm talking about, an author of graphic novels named Jazan Ward has brought a claim against HarperCollins claiming that HarperCollins' new series of novels called Carnival of Souls infringes a trademark he has registered in those same words. Using various legal theories he wants to have HarperCollins change the name of the series and pay him damages for infringing his mark. Recently Ward has also started to send cease and desist (C&D) letters to various book bloggers and other reviewers telling them that they can't review the Carnival of Souls books because by doing so they're promoting a property that infringes his mark.

This claim may sound like it's crazy. It's not. At least not necessarily. And in fact, there's one particular part of the lawsuit that should be very interesting to small developers or indie authors who may find themselves up against a big media enterprise. But going after the reviewers is a different story.