07-24-2012, 08:35 PM | #76 |
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Thank you all for trying to break through my confusion.
I was under the impression that royalties would be paid on the end sale (store) price, which is obviously not true and would probably be an accounting nightmare except for possibly ebook sales direct to the consumer. I do not understand why harlequin would offer a reasonable (better than many?) royalty and then go to such lengths to get some of it back. Would seem simpler to just start a subsiduary offering lower rates and recomending it to authors that they did not feel they wanted to keep. Also if I am reading the article and comments correctly, the whole thing smacks of collusion and fraud. Cannot charges be made on these grounds that would make a civil suit easier to settle? Helen |
07-25-2012, 10:55 AM | #77 | ||
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All they did was follow the contracts. The digital rights were held with a wholly owned subsidiary, and it resulted in very low royalties. This was presumably one reason why Harlequin decided in 2011 to offer a blanket 15% royalty rate on ebooks, including older ones. Odds are also pretty good that they were using the foreign subsidiary for tax reasons and/or to better handle international rights. Unlike most publishers, Harlequin operates internationally, so when you sign with them that includes all international rights. (Note: They're a Canadian company, not US.) Quote:
It's unclear at the moment who should have been paid what, let alone how many authors are genuinely affected and to what extent. (Again, I expect it's relatively small amounts.) There is no "collusion," because they were working with a subsidiary (and that's perfectly legal). There is no "fraud," because it was all in the contracts. |
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07-25-2012, 10:58 AM | #78 |
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So they could have given the rights to the subsidiary for free to avoid paying any royalties and that would be 'perfectly legal'?
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07-25-2012, 01:46 PM | #79 | |
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The authors signed with the subsidiary at the 6-8% rate. The contracts with Harlequin (not the subsidiary) said "with unspecified digital rights, you get 50% of what Harlequin receives." Since what Harlequin got was 6-8% from its subsidiary, they cut that in half for those ebook royalties. Harlequin apparently revised its contracts in 2005 to specify ebook rates. Harlequin did not take any additional steps to "avoid paying royalties." The reality is that ebooks weren't even a consideration in 2004, let alone 1999. In other words, as long as they abided by the contracts, they paid the correct royalty rates. The lawsuit doesn't allege criminality or fraud or collusion. It's merely a dispute over whether it is valid for Harlequin to treat the subsidiary as an actual company in terms of the royalty payments stipulated in the contract. |
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07-25-2012, 06:00 PM | #80 | |
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My father has published a lot of books, all print media, and his contracts for the period prior to 2004 don't specifically mention eBooks. I am just curious as to what anyone who has books published that are now out of print and who had no contractual arrangement about ePublishing would expect to gain from a law suit. Harlequin denies that a legal action has been started, not something that they would be likely to do if it wasn't true. I find the whole thing a bit dubious on several levels. |
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07-25-2012, 07:59 PM | #81 | ||
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They want to pay the authors as little as possible, because they increase their own profits that way. They want to do this through as many layers of obfuscation as possible to keep those authors signing with them, and make any action against Harlequin difficult. Whether their method of filtering the royalties paid to authors was legal, is something for the court to decide. Quote:
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07-26-2012, 07:47 AM | #82 | |
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I don't understand your math. If the author was supposed to get 6-8% from the subsidiary, and Harlequin got was 6-8% from its subsidiary, at most you can argue that the authors would get 6-8% of the 92-94%. How do you get their royalties cut in half if they didn't sign with Harlequin? |
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07-26-2012, 08:05 AM | #83 | |
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07-26-2012, 12:15 PM | #84 |
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07-26-2012, 06:37 PM | #85 | |
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In turn, Harlequin Enterprises B.V. and Harlequin Books S.A. licensed the books to the parent company. The contract supposedly says that miscellaneous digital rights get 50% of the royalty that the parent company received. I haven't seen the contracts, but I'm guessing they say that the authors get 100% of the received royalties for print. Thus for print they got 6-8%, for any unspecified digital rights they got half that. |
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07-27-2012, 09:36 AM | #86 | ||
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The contract said that they get 6-8% for print, with no parent company involved and 50% of what the subsidiary got for digital rights. The Swiss subsidiary isn't allowed to distribute ebooks so all they can do license them. And they passed the license to the parent company only asking 6-8%. The author of the article points out 4 things: Quote:
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11-26-2012, 05:39 PM | #87 | ||
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The complaint has been amended with more detail and backing for the claims:
http://legalminimum.blogspot.com/201...bring-new.html Quote:
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When a company negotiates for somebody else, they are (legally) expected to get reasonably fair terms. Courts tend to look to comparable deals in the same industry as benchmarks and there are a *lot* of other benchmarks to look at; Smashwords, Amazon, Apple... The court might decide that HE should have been paying HS something closer to 70% (netting the authors 35%) instead of 6-8% (netting the authors 3-4%). So even if the contracts between HS and HE are upheld, the authors may still have a legal path to victory. |
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11-27-2012, 07:47 AM | #88 |
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Nothing new here, the plaintiffs already made the claim about the Swiss subsidiary being controlled by the parent company.
And no, the court is not going to find that Harlequin should have paid 70%, just because Amazon offered a high payment to self-publishers. That's patently absurd. You're uncritically swallowing the plaintiffs' claims (and one legal bloggers' analysis) whole. That makes no more sense than accepting Harlequin's motion to dismiss without review or consideration. Put down the Kool-Aid, kthx. |
11-27-2012, 08:18 AM | #89 |
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I don't think one needs to take a balanced view of all situations. Sometimes one side is right and one side is wrong. I think that's the case here.
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11-27-2012, 12:39 PM | #90 | ||
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Amazon simply offer a storefront, it is up to the authors to do everything else. My guess would be that the vast majority of sales that a Harlequin author gets are due to the Harlequin branding, rather than their own person reputation. Harlequin are entitled to charge for that branding. |
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