[drwowe]

An analogy could be helpful here.

Suppose you wanted to startup a video store. You got some funding, opened a store and bought 10,000 DVDs from a small distributor. The videos arrived, you ran your business and all was well.

Then, at some point it came to your attention that the DVDs were actually pirate copies. They are _quality_ counterfeits, the factory that made them made professional looking DVDs and boxes to put them in, and you had no reason when you bought them to believe they were illegal, yet there it is.

The law doesn't make any distinction between "good faith" or the fact that you are $100,000 in debt because you bought these DVDs. It is illegal for you to sell them, period, because you have no license from the copyright owners.

The law is quite clear. The only legal recourse you have is to stop selling them immediately, and file a lawsuit against your distributor for damages caused by their illegal actions. Actually you're quite screwed. I of course can understand that the average business in this position might rather try to stay in business and justify their illegal actions as business necessities. But I repeat, the law is quite clear. Selling someone's intellectual property which you don't have a license to is illegal, full stop, regardless of the circumstances, period. Can I be any more clear?

And by the way, companies are supposed to have lawyers on staff who vet agreements to avoid problems like this. Bookeen should fire their legal staff for incompetence if they failed to notice this.