A Lesson In Contract Drafting: eBook Deal Violates Publisher's Copyright

Star Wars taught me the importance of contract drafting.  No, seriously!  I was reading for an Entertainment Law course two years ago when I came across a case from the 1980s involving Lucasfilm, LTD and Platinum Record, Co.  The lawsuit centered around a dispute over a contract which allowed director George Lucas to use four popular songs in his film American Graffiti, first released in 1973The issue in the case didn’t arise until almost a decade later, when MCA Distributing Corp. (an affiliate of Universal) released the film for sale and to rent on videocassette, which Platinum Record argued was in violation of their contract.
By this point, you might be wondering what this has to do with ebooks (or Star Wars, for that matter).  Well, last week U.S. District Court Judge Naomi Reice Buchwald held that a 2011 ebook distribution deal signed by author Jean George violated an earlier, 1971 contract.  The 1971 contract granted publisher HarperCollins the right to publish the children’s book Julie of the Wolves in “book form” and “electronic means now known or hereinafter invented.”  This language in the contract is what caught my eye and provides an important lesson in contract drafting: think ahead.
A well-drafted contract is written in a way that allows it to withstand the test of time.  Many deals can be ruined over the years when portions of a contract become outdated or irrelevant.  It can be timely, costly, and a pain in the butt to go back through negotiations to incorporate new considerations into a contract that wasn’t properly drafted from the beginning.  That’s why cases, such as the recent HarperCollins decision, catch my eye and provide excellent examples of simple principles to remember when drafting a contract.
Open Road Integrated Media LLP, the company attempting to sell ebook copies of Julie of the Wolves, was challenged with a lawsuit from HarperCollins.  Open Road attempted to argue that the scope of the 1971 contract did not include ebooks becuase the technology had not been invented, yet.  Judge Buchwald didn’t buy it.  Apply a theory of copyright law called “new use,”  Judge Buchwald upheld a long-established practice of extending copyright protection to include technology which might not have been invented at the time parties enter into a contract.  Therefore, despite the fact that ebooks were not around at the time HarperCollins bought the rights from George, Judge Buchwald held that HarperCollins owned the rights to publish Julie of the Wolves in ebook format, not Open Road.
Getting back to Star Wars…. The contract George Lucas had used in Platinum Records v. Lucasfilm contained a provision allowing for the use of the four popular songs in both the theatrical release of the film, as well as future releases by using the language: “methods now or hereafter known.”  I think you can figure out it didn’t end well for Platinum Records.  And, I think you can figure out I more closely associate George Lucas and Lucasfilm with Star Wars… not necessarily American Graffiti.
Read the filings: Platinum Records Co., Inc. v. Lucasfilm, Ltd. (1983); Harpercollins Publishers LLC v. Open Road Integrated Media, LLP (2014)
American Graffiti movie poster. No rights claimed.