Copyright Settlement

A. The proposed settlement was granted final approval by the Honorable George B. Daniels of the United States District Court in the Southern District of New York at the Final Fairness Hearing on Tuesday, September 27th, 2005. Click here to review the final signed judgment. However, several objectors appealed the court's order approving the settlement, and on November 29, 2007, the Second Circuit Court of Appeals vacated the lower court's order on the ground that that court lacked jurisdiction to settle claims with respect to unregistered works. The parties are presently seeking rehearing of the 2nd Circuit's decision.

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Q. What works are included in the settlement?

A. All English-language literary works that, at any time after August 14, 1997, was made available in electronic format without the copyright owner's permission by at least one of the Database Defendants or Participating Publishers. These works are referred to here as "Subject Works." Only works written in English and published in an English-language publication are included. Letters to the editor, scientific studies, or works that are not literary works are not included. If you authored a work while employed by the publication that first published it, that is a "work for hire" and is not included.

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Q. How much are the Database Defendants and Participating Publishers paying in the settlement?

A. Under the settlement, the Database Defendants and Participating Publishers have agreed to pay a minimum of $10 million (regardless of the amount of claims) and a maximum of $18 million (or more under certain circumstances), to be applied to valid claims and all Court-approved attorneys' fees and expenses and administrative costs. The amount of the payment to an individual claimant will be calculated as discussed below.

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Q. How much will I receive under the settlement?

A. If you are a Class member, you will receive a payment for each Subject Work for which you make a valid claim. The amount for each Subject Work will depend on whether and when you registered the copyright for the work, when it was originally published, and whether you choose now to now grant the Database Defendants and Participating Publishers a non-exclusive license to exploit the electronic rights for the work. Payments will be calculated as follows:

Category A Works. For each Subject Work you registered with the United States Copyright Office (a) after the Subject Work was first published but before any infringement, or (b) within three months after first publication of the work, you will receive:

•	$1,500 for each of the first fifteen Subject Works written for any one publisher;
•	$1,200 for each of the second fifteen Subject Works written for that publisher; and
•	$875 for each Subject Work written for that publisher after the first thirty.

Category B Works. If you registered your Subject Work before December 31, 2002, but after any infringement of the work and more than three months after the first publication of the Subject Work, you will receive, per Subject Work, the greater of $150 or 12.5% of the original sale price of the Subject Work.

Category C Works. For all other Subject Works (including Subject Works that were never registered), you will receive, per Subject Work:

•	$60 for each Subject Work originally sold for $3,000 or more;
•	$50 for each Subject Work originally sold for $2,000 to $2,999;
•	$40 for each Subject Work originally sold for $1,000 to $1,999;
•	$25 for each Subject Work originally sold for $250 to $999;
•	The greater of $5 or 10% of the original price of the Subject Work for all other works.

Reduced Payments For Older Subject Works. For Subject Works created before January 1, 1995, payments for Subject Works in Category B or Category C will be reduced based on the years in which the Subject Work was created, as follows:

•	Subject Works created in 1985-1994: A 5% reduction for each year beginning in 1994 and continuing through 1985, so that payments for Subject Works created in 1994 will be reduced by 5%; payments for Subject Works created in 1993 will be reduced by 10%; and so on, with payments for Subject Works created in 1985 reduced by 50%.
•	Subject Works created before 1985: Payments will be reduced by 50%.

Furthermore, please note that these are the amounts payable to you if you grant the Participating Publisher that originally published your work and the Database Defendants a license to distribute or display your Subject Works electronically after the settlement. Please see the following question and answer for the consequences of not granting the license.

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Q. When will I get paid?

A. On October 21, 2005, the following class members who objected to the settlement appealed the District Court's ruling granting final approval of the settlement: Irvin Muchnick, Charles Schwartz, Abraham Zaleznik, Jack Sands, Todd Pitock, Judith Stacey, Judith Trotsky, Christopher Goodrich, Kathy Glicken, and Anita Bartholomew. As a result of their appeal, the settlement is not final. Until the settlement is final, no claims can be paid.

On November 29, 2007, the Second Circuit Court of Appeals vacated the lower court's order on the ground that that court lacked jurisdiction to settle claims with respect to unregistered works. The parties are presently seeking rehearing of the 2nd Circuit's decision.

If the 2nd Circuit Court agrees to rehear the appeal, and if it decides the settlement should be approved after all, then, under the terms of the Settlement Agreement, the database defendants and publishers will have an opportunity to challenge claims that have been made and there will be a dispute resolution process. The parties anticipate that the process will take 3-6 months. No payments will be made until the dispute resolution process is completed for all claims and all appeals are resolved.

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Q. Will the Database Defendants or Participating Publishers be allowed to display my Subject Works electronically after the settlement?

A. 65% of each amount listed above is considered compensation for past infringement of your copyright in a Subject Work, and 35% is compensation for a non-exclusive license for future electronic use. This license permits the Participating Publisher that originally published the Subject Work and any Database Defendants that previously distributed or displayed the work to continue to do so after the settlement. If you choose to deny the license for a given Subject Work, your settlement payment for the work will be reduced to 65% of the amount you would have received if you had granted the license. If you choose to deny the license for future electronic use, not only will you receive 65% of the settlement payment you would otherwise have received, but also the Subject Work will be removed or made individually unretrievable by all Database Defendants that previously distributed or displayed the work. If you wish to deny the license for a Subject Work for which you are making a claim, please indicate your choice at the appropriate place on the claim form.

If you do not indicate that you are denying the license on the claim form, then you will be considered to have granted the license. The license does not transfer ownership of the copyright in the Subject Work at issue.

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Q. What if there is not enough money in the settlement fund to pay all claimants the amounts shown above?

A. Based on an analysis of the claims made, there will be enough money in the settlement fund to pay all valid claims in full, even assuming no claims are invalidated or reduced as a result of any challenges by the defendant publishers and databases.

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Q. What if I never registered my copyright in a Subject Work with the U.S. Copyright Office. Can I still receive a payment for the work under the settlement?

A. Under the settlement, if you did not register a Subject Work, you are still eligible for a payment for that work under Category C as described above. However, the appeals court on November 29, 2007 ruled that unregistered works may not be compensated under this class action settlement. The parties are presently appealing this ruling.

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Q. What am I giving up to receive a payment under the settlement?

A. If the settlement is granted final approval, and upheld on final appeal, the lawsuit will be dismissed, and there will be a release of all claims of all Class members against the Database Defendants and the Participating Publishers for copyright infringement and other claims, based on their electronic distribution or display of the Class members' Subject Works. For Subject Works as to which Class members do not grant the non-exclusive license for electronic use (discussed above), only claims based on past electronic use will be released. Class members will be barred from bringing a lawsuit asserting the released claims in the future.

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Q. What if I do not want to be part of the settlement?

A. You may exclude yourself from the Class and the settlement by submitting a written request for exclusion in accordance with the procedures and deadline set forth in the Notice of Class Action Settlement, which is available at www.copyrightclassaction.com. If you exclude yourself from the Class, you will not be eligible to share in the settlement proceeds should the settlement be approved. You will be able to bring your own lawsuit based on the electronic distribution or display of your Subject Works by the Database Defendants or the Participating Publishers.

If you wish to bring your own lawsuit, you should be aware that there are time limits for bringing claims against people or companies that infringe your works. If your work was a Subject Work, the time for bringing your own claim may have been tolled while this lawsuit was pending. Now that a proposed settlement of the lawsuit has been reached and disclosed, you should act promptly to protect your rights. If you do not act promptly, your claims may become time-barred. You should immediately seek the advice of an attorney of your choice to learn what time limits might apply to you.

UPDATE
THE DEADLINE TO EXCLUDE YOURSELF FROM THE CLASS WAS SEPTEMBER 12, 2005.

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Q. Does that mean I can make claims only for stories written after August 14, 1997?

A. No, you are not limited to works written after August 14, 1997. You may make a claim for any story that was made available in electronic form without the author's permission any time after August 14, 1997. The first date of publication of your story can be at any time.

UPDATE
THE CLAIMS MAKING PERIOD ENDED ON SEPTEMBER 30, 2005.

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Q. How does the date my story was first published affect my claim?