Is this man a thief, and just what is he making off with?
That is what publishers are wondering these days about Arthur Klebanoff, the founder of RosettaBooks, a startup with a business plan that some publishers say amounts to picking their pockets.
Klebanoff, a 53-year-old lawyer turned literary agent whose peripatetic career has included a short stint in Richard Nixon's White House and an ill-fated attempt to syndicate a column by the pope, seeks to publish some of the most perennially popular books of the 20th century in digital editions to be read on a computer screen. The catch is that those books are also the most profitable part of any publisher's business, and several say their original book contracts give them the exclusive right to publish electronic editions themselves.
Last week, however, a judge in federal district court in Manhattan declined to block Klebanoff from selling digital versions of eight novels published in print by Random House.
"I knew the publishers wouldn't be happy," Klebanoff said in his cluttered office at his firm, the Scott Meredith Literary Agency.
No one knows the extent of consumer demand for electronic books, but his victory is already encouraging imitators, including the well-financed Barnesandnoble.com.
The ruling, which Random House plans to appeal, puts Klebanoff in the middle of the second stage in the legal fight over the ground rules of media contracts and copyright law in the Internet age.
Courts have more or less settled the conflict between copyright holders and file-sharing services like Napster. Now artists, writers and performers are haggling with the traditional media companies over the application of their old-media concepts in the new media world. It is a debate that revolves around lofty questions about the meaning of the word "book" and the experience of reading pixels instead of print.
Last month, for example, the Supreme Court ruled that newspapers and magazines do not automatically have the right to sell the work of freelance writers to electronic databases like Lexis-Nexis or to consumers via the Internet. National Geographic is currently appealing to the Supreme Court a lower court ruling that it does not have the right to resell the contents of its magazines in digital form on CD-ROMs.
Next up is the music business, where several major record labels are racing to build digital music services but still have not settled the issue of how to compensate songwriters and performers. In another case filed in federal district court in Manhattan, groups representing the owners of the rights to record the songs of Irving Berlin, Elvis Presley and others are suing Vivendi-Universal for selling digital downloads of music over its Farmclub.com Web site without their permission.
Groups representing songwriters argue that transmitting the songs over the Internet entails a new right and requires their permission. Vivendi-Universal argues that it acquired those rights along with the rights to sell compact discs of the songs.
Both sides are watching Klebanoff's case closely. "The implications to the music world are very real, that digital rights, if you will, are separate and unique from other rights and our licenses," said Edward Murphy, president of the National Music Publishers Association, one of the groups suing Vivendi-Universal.
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