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Monday Morning News: Timeline of the pricefixing lawsuit, Digital readers being...

I’m changing things up a little.  More and more people apparently read the news roundup that I post every day and therefore I’ve decided to post the news posts first thing in the morning.  That’s when most people read the news and thus Dear Author can be a consistent morning routine for individuals who come for the news but not the reviews.

The reviews will be posted at 8 am and 12 pm CST followed by the deals posting in the afternoon around 2 or so.  I’m still fiddling with the time.

In any event, start your day with Dear Author for a timely and interesting set of curated news links.

First up today is a review of the price fixing lawsuit.  The court has entered a trial schedule for the combined cases and denied Penguin’s request to move the cases to arbitration.  There are some interesting and important deadlines.

  • July 6, 2012 – New initial report must be filed reflecting the scheduling order.  A deadline for initial disclosures will be set. It was for July 2 but I’m not sure if that date will hold up.  The initial disclosures are mandated by Rule 26 of the Federal Rules of Civil Procedure. They were enacted to require parties to not procrastinate and move cases faster through the system.  The initial disclosures will be the only interesting thing to read until next year when summary judgment motions are filed. Each parties’ initial disclosures must include the following:
    • Witnesses:  the name and, if known, the address and telephone number of each individual likely to have discoverable information—along with the subjects of that information—that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment;
    • Exhibits:  a copy—or a description by category and location—of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment;
    • Damages:  a computation of each category of damages claimed by the disclosing party—who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered
  • July 9, 2012 – the State AGs and Class Action Plaintiffs file their initial disclosures because they do not have to file anything that duplicates the DOJ’s list of disclosures.
  • July 11, 2012 – the settling defendants have to renew their request for a stay of the proceedings.
  • July 27, 2012 – DOJ to file for entry of the proposed Judgment.
  • August 8, 2012 – Responses to the DOJ’s motion for entry of proposed judgment. Cannot exceed 5 pages. Expect the parties to wax ad naseum about Amazon although the settling defendants will likely put forward supportive statements.
  • August 15, 2012 – Response by the DOJ
  • I would expect some type of ruling to occur by September.  Then the settlement terms kick in:
    • Within 7 days, the Settling Defendants (Hachette, HarperCollins, and Simon & Schuster) will need to sever their contracts with Apple.
    • Within 30 days, contracts that restrict an ebook retailers ability to set the price of an ebook or a most favored nation clause must be broken. Amazon would be a retailer with whom publishers have an MFN clause.  This is the time that discounting will begin.
  • September 13, 2012 – Motions for summary judgment.  This will be good reading. 
  • October 4, 2012 – Responses due.
  • Nov 16, 2012 – motion to certify class must be filed.
  • April 26, 2013- Pretrial order
  • April 16, 2012 – Motions in limine (this is a motion parties file to keep evidence out)
  • May 24, 2013 – Final Pretrial
  • June 3, 2013 – Trial begins (also when BEA 2013 begins)

I think there were some errors in the docket entry and hopefully the status report filed on the 6th will clear those up.

Penguin had filed a motion to stay (halt) any proceedings against them in civil court arguing that the arbitration clauses in the nook and Kindle agreements applied to Penguin as well because Amazon and BN were agents of Penguin.  The arbitration clauses of the nook and Kindle expressly forbid class actions and direct claims to arbitration.

The court denied the motion based on two provisions.  One, an individual can’t waive right to pursue antitrust claims in civil court.  Two, the class action plaintiffs showed the court that they would not be able to “effectively vindicat[e] their federal statutory rights” in arbitration. The plaintiffs satisfied the court that individual arbitration cases would be prohibitive for one consumer to bring.

In this case, the plaintiffs have presented … detailed affidavits demonstrating that, given the complexities of proving this particular antitrust violation, plaintiffs can expect at most a median recovery of $540 in treble damages, and face several hundred thousand dollars to millions of dollars in expert expenses alone. Plaintiffs have also demonstrated that they are likely to incur significant expenses in securing, organizing, and maintaining documents, deposing witnesses, and
in attorneys’ fees, and that they face no guarantee of recovering any or all of these expenses. Plaintiffs have already expended $45,000 in expert expenses evaluating the claims and drafting the complaint. Plaintiffs’ affidavits demonstrate that it would be economically irrational for any
plaintiff to pursue his or her claims through an individual arbitration. Penguin has presented no serious argument to the contrary.

The court did leave open the door to consider whether the plaintiffs’ state law claims could be heard in arbitration but stated that Penguin was unlikely to prevail. Each state has their own individual antitrust laws. If you recall, retail price maintenance, for example, was found to be illegal in the state of Kansas according Kansas’ state antitrust laws.

One other point of interest, the State AGs sent a letter to Judge Cote agreeing that the States agree to a bench trial on liability and injunctive relief but want a jury trial on the damages.  I thought it was interesting that the letter references injunctive relief as I think that if the settlement isn’t approved, there will be a filing for injunctive relief shortly thereafter.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

28 Comments

  1. Jayne
    Jul 02, 2012 @ 04:27:05

    Data collected from Nooks reveals, for example, how far readers get in particular books, how quickly they read and how readers of particular genres engage with books.

    Okay, maybe it’s too early in the morning for me to be asking questions but what does that mean? Can they tell if we hurl a Nook against the wall, scream at the TSTL characters, groan at the overused/outdated plot?

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  2. Jess
    Jul 02, 2012 @ 06:06:12

    I’m glad Barnes and Noble cares enough about their customers to pay close attention to what they read and pass the info along to the publishers, but it would be even more awesome if they got their information in a non-creepy way. Maybe offering a B&N online/in-store survey about reading habits…

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  3. Jane
    Jul 02, 2012 @ 07:05:01

    @Jayne: Yeah, I’m not really sure but I’m guessing it is based on readers’ highlights and notes?

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  4. Julia
    Jul 02, 2012 @ 07:15:38

    That rules on giveaway link was an interesting read. I want to delve into the last link, but work is making me leave…

    And that BN thing monitoring my nook? My first thought were is this just things purchased from BN or everything I stick on there? How does it know? I can think of so many way why this is a flawed way of collecting data. I wouldn’t mind the survey thing though… then I could actually talk about the plots and stuff… things that would actually help the publishers.

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  5. Grace
    Jul 02, 2012 @ 07:16:43

    I like the new change! I’m one of the people who visits DA more for the industry news and links than the reviews.

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  6. Nadia Lee
    Jul 02, 2012 @ 07:20:03

    @Jayne: I think they also track how long it’s taken you to read a book (or if you DNF’d), how many times you’ve stopped & when you picked it up again, etc.

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  7. LG
    Jul 02, 2012 @ 08:14:56

    @Julia: I would think they’d have a hard time monitoring my reading habits because my wi-fi is rarely turned on. If they can track my reading even with the wi-fi off, then I’m even more concerned.

    If all they ever got from me is data from when my wi-fi was on and/or Nook Book reading, then the picture they’d have of me is that I never read on my Nook.

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  8. Sunita
    Jul 02, 2012 @ 08:27:36

    The full WSJ article is accessible to non-subscribers, and there’s all kinds of creepy-sounding stuff in there. I don’t want B&N to “share their insights with publishers to help them create books that better hold people’s attention.”

    Here’s what the article said about Amazon:

    Kindle users sign an agreement granting the company permission to store information from the device—including the last page you’ve read, plus your bookmarks, highlights, notes and annotations—in its data servers.

    Amazon can identify which passages of digital books are popular with readers, and shares some of this data publicly on its website through features such as its “most highlighted passages” list. Readers digitally “highlight” selections using a button on the Kindle; they can also opt to see the lines commonly highlighted by other readers as they read a book. Amazon aggregates these selections to see what gets underlined the most. Topping the list is the line from the “Hunger Games” trilogy. It is followed by the opening sentence of “Pride and Prejudice.”

    “We think of it as the collective intelligence of all the people reading on Kindle,” says Amazon spokeswoman Kinley Pearsall.

    Calling me intelligent isn’t making me feel better about this. It took me ages to figure out how to turn off other people’s highlighting when they first introduced it as a feature.

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  9. Anne V
    Jul 02, 2012 @ 09:03:47

    Ooooh, the information gathering being shared with publishers creeps me out.

    I’m decaffeinated and not properly lucid (explanation and apology for coming incoherence), but I don’t particularly want authors to write to me and whatever I expressed fondness for at a given moment. This is a very bad plan – no more surprises? Authors take notes from data-mined readers? Things are plenty formulaic already.

    Most of the stuff I’ve read that I love and re-read and would probably even pay monthly rental for is stuff I would never have predicted that I would like, and that never shows up on recommendations, be the algorithms never so genius. And that, actually, is my lone argument against ebooks – it is surprisingly challenging to find new authors and titles that are credibly recommended. I like recommendations from people who don’t have an agenda about selling me stuff. I like talking about books and sorting out what I’d like to read, and I like that to take place in a dialogue with people who read as opposed to sticking stars all over everything they can possibly find. That’s surprisingly hard to find. That is something I would merrily pay a subscription for, and am elated to routinely find at DA.

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  10. Liz Mc2
    Jul 02, 2012 @ 09:54:40

    I think a return to serial publication (though I wouldn’t want it for every book) is one of the cool things digital publishing enables. I’m not thrilled with the idea of using it to crowd source plot developments, though, for the same reasons Anne V cites above: going with the majority seems like a way to get formulaic and unsurprising stories. The tracking of digital reading makes me happy I’m still clinging to my old wifi-free e-reader, and more wary about sometimes reading Kindle books on my other devices. Ugh.

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  11. joanne
    Jul 02, 2012 @ 09:57:33

    @Sunita: Me too on trying to figure out how to get rid of other people’s highlighting which I found very annoying.

    Amazon is also out of luck if they’re looking for reader info from my highlights. All my passage highlights are things or words or people I want to look into after I finish the book and have little to nothing at all to do with the book I’m reading or the next book I’m buying.

    Hmm, Robert Burns was angry that someone thought his “obscure language” was a negative. Gosh and golly gee, nothing easier then understanding his writing.

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  12. Julia
    Jul 02, 2012 @ 10:05:33

    @LG: Yeah, my Nook is almost always in airplane mode. I wonder, though, if they store the data that they are seeking somewhere on the Nook while we do that, then when we go to sync it, it gets uploaded.

    Either way, it’s quite creepy and I would think that it will turn out to be ill effective.

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  13. Renda
    Jul 02, 2012 @ 10:20:00

    I only highlight typos, misused words, misspelled words, where I think a word is missing. They are welcome to it. Can’t help it. I am a court reporter. I find if I just go ahead and highlight the issue, I can let it go rather than obsess. Again, it is my nature.

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  14. Anne V
    Jul 02, 2012 @ 10:33:18

    @Julia – Can’t speak to B&N, but Amazon does. I had a very bad run of luck with Kindle hardware and spent a number of hours I refuse to count dealing with their support, and they were very up front about how as soon as *any* device on the account has data access, be it cell data or wifi, everything is uploaded, and that sometimes that upload process causes the apparent delay in connection.

    @LizMC – Crowdsourcing poses significant quality issues all over the place. People (including me) rarely know as much as they think they know, even about what they like. Quora is the best crowdsourcing I’ve seen, and it’s frankly amazing. I really hope they can sustain it.

    Datamining underlines and highlights and bookmarks – I can’t help thinking of the resume screening apps that started rolling out 20 years ago, and the corresponding struggles we’ve seen hiring folks who bring a fresh approach. All applicants know and use (heavily) the buzzwords, and all resumes are riddled with them and so the tool is not only useless but makes the odds of getting what we need in a new hire LOWER than if we spent 4 days sitting on the floor surrounded by paper. What’s it going to be like when authors are trying to write to datamined themes? Bad. Bad and messy. Hard to do unique worldbuilding when that world is predefined by what people already know and like, yeah?

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  15. Wahoo Suze
    Jul 02, 2012 @ 12:08:50

    So, publishers can’t be arsed to do actual market research, and realize that readers are their customer base, but they can invest $$$ into snooping on our reading micro habits so that they can find out if we skim over dialogue and re-read the sex scenes (or vice versa) so that they can put more formulaic restrictions on writers. They can’t be bothered to spend time and effort working with authors to properly edit and polish the final book, but they have no problems coming up with, I dunno, the optimal number of sentences per paragraph to appeal to some statistically average reader.

    I wonder if this data mining is going to take into account the different genres, or different authors. Some books are candy, some are meat & potatoes, some are exotic feasts. My reading speed varies, depending on what, and who, I’m reading.

    *Harumphs in mild, mostly-apathetic disgust*

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  16. Maili
    Jul 02, 2012 @ 13:11:07

    Barnes & Noble, which accounts for 25% to 30% of the e-book market through its Nook e-reader, has recently started studying customers’ digital reading behavior.

    Good thing I don’t own a Nook. Otherwise I’d have to dust off my beloved tin-foil hat.

    celebrated Scottish poet Robert Burns channelled his anger and wrote the following magnificent letter to the critic responsible.

    Shame that they didn’t name the critic who’d managed to upset our Rabbie because I want to send a bottle of good wine, some red-red roses and a written promise – that I’d name my third child after him – to his grave as a thank-you gesture.

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  17. MaryK
    Jul 02, 2012 @ 13:12:30

    Interesting that parts of the nook and Kindle agreements aren’t holding up in court.

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  18. library addict
    Jul 02, 2012 @ 15:52:41

    Makes me happy I have a Sony with no wifi.

    I wonder if Kindle and Nook can only track this info on books with DRM downloaded directly to the device. Or can they track whatever other documents, fanfic, etc you sideload to the device?

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  19. DS
    Jul 02, 2012 @ 16:16:13

    Count me also as someone who only highlights and makes notes about errors. I’ve noticed that most of the popular highlighted passages are banal.

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  20. Ridley
    Jul 02, 2012 @ 16:52:02

    Your E-Book Is Reading You

    All the more reason to own a Sony. What I do on or with my reader is transmitted to no one.

    Also: collections based on tagging. My reader would be an unholy mess without this.

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  21. Anne V
    Jul 02, 2012 @ 17:18:48

    @library addict: So my understanding (which is that of a customer and quite possibly 1000% wrong) is that anything, DRM or not, that Amazon tracks bookmarks, highlighting etc… for you can be mined. That’s a service Amazon now provides for all titles that they deliver to a device, whether purchased from Amazon directly or emailed to [email protected].

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  22. Dabney
    Jul 02, 2012 @ 21:07:18

    @Sunita: I hate that feature too. Turned it off. Also, I hate the “Tweet your review” at the end of every book.

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  23. Liz
    Jul 02, 2012 @ 21:13:04

    Count me in as another Nook user who would like to know the when, where, and how of this. Can B&N track only DMR books or absolutely everything you do? Can this only occur via a wifi connection, or also when you connect to your computer, even if the Nook application is not open? Is all of your previous activity downloaded, (even if the book files are no longer on the device), or only the activity while there is connectivity? And lastly, is an opt-out option, or any sort of law that might require there to be one. Jane, any chance someone from Dear Author can find out this info about both the Nook and the other reading devices? For me at least, this would be an important part of your Choosing An E-Reader series.

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  24. Dabney
    Jul 02, 2012 @ 21:15:09

    Where is iBooks on the highlighting? Does Apple collect the same sorts of info? They collect info like mad about your movie and music choices to use for their marketing purposes. I wonder what they do with the book info.

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  25. Edward
    Jul 02, 2012 @ 23:56:31

    therefore I’ve decided to post the news posts first thing in the morning.

    I approve this change.

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  26. Lynnd
    Jul 03, 2012 @ 08:50:16

    If they’re trying to glean any useful information from my highlights – good luck. Mine are usually a case of tapping something inadvertantly on my iPad or iPod touch. I have the wireless function turned off on my Kobo so no luck there either

    “thou pickle-herring in the puppet-show of nonsense” Ha, I think I’m going to try to work that into a sentence today :-).

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  27. Jane
    Jul 03, 2012 @ 09:36:39

    @Liz – unfortunately I don’t think that they will answer that but I’ll read up on the TOS and see what I can find out.

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  28. Lynne Connolly
    Jul 06, 2012 @ 11:29:56

    Considering my “suggestions based on what you just bought” things in Amazon, I’m not too bothered. But because I read on more than one device (nook touch by day, nook color at night, sometimes Kindle, sometimes phone) I find it more convenient to sync and load using Calibre, so my library’s all in one place.
    But every time you buy something online, they get valuable information about you. Information they can sell. Not your personal details, but you can go into a database.
    The FBI has been doing it for years. But considering the millions of emails they must have, are they really going to make use of them all?
    And considering how many people actually read “A Brief History of Time,” do they really care if we read the books we buy?

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