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Authors Sue Harlequin Enterprises for eBook Royalties

A few authors have filed a class action suit against the romance publisher Harlequin Enterprises and two European corporations it created. We’ve embedded a copy of the complaint below.

UPDATE: Harlequin publisher Donna Hayes responded: “Our authors have been recompensed fairly and properly for their work, and we will be defending ourselves vigorously.” The company added that “this is the first it has heard of the proceedings and that a complaint has not yet been served.”

The suit alleges that the publisher owes some authors eBook royalties from contracts signed between 1990 and 2004. During those years, these authors “entered agreements” with a Swiss corporation created by the romance publisher.

The lawsuit outlined the problem: “However, Harlequin, before and after the signing of these agreements, performed all the publishing functions related to the agreements, including exercising, selling, licensing, or sublicensing the e-book rights granted by the authors. Instead of paying the authors a royalty of 50% of its net receipts as required by the agreements, an intercompany license was created by Harlequin with its Swiss entity resulting in authors receiving 3% to 4% of the e-books’ cover price as their 50% share instead of 50% of Harlequin Enterprises’ receipts.”

Attorney David B. Wolf (pictured), the former litigation counsel and associate general counsel at Time Inc., is the lead counsel in the case.

The suit doesn’t estimate damages, but they hope to compel the publisher to “pay authors what they are legally due according to the contracts we signed.” The legal team also seeks a jury trial to settle the matter.

If you are an author who might be affected by the suit, the legal team offered these guidelines: “If you signed a contract with Harlequin Enterprises B.V. or Harlequin Books S.A. between the years 1990-2004, you might be a member of the class.  You would need to examine your contracts from that time period and determine whether the contracts mention a specific royalty for electronic or digital rights.  This can be found under the “Royalty” section of the contract and will be listed as either 6% or 8% of cover price.  If your contract does not contain a specific percentage for electronic or digital sales, then chances are you qualify as a member of the class.” (Photo via Eric Michelson)

Here is the complete Harlequin statement:

Harlequin announced today that they have been made aware of a class action lawsuit brought against them by three former authors.

The publisher wishes to make clear that this is the first it has heard of the proceedings and that a complaint has not yet been served.

“Our authors have been recompensed fairly and properly for their work, and we will be defending ourselves vigorously,” said Donna Hayes, Publisher and Chief Executive Officer of Harlequin.

Harlequin Complaint 7.19.12

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