FW: netlibrary update

[Andrea.Cheney at USPTO.GOV]

FYI.

--andrea cheney





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Subject:        	(Fwd) FW: From LJ Academic Newswire 11/8/01
CONCERN MOUNTS AS NETLIBRARY ROYALTY CHECKS BOUNCE
Concern is rising among university press directors this 
week, as royalty checks, issued to some university presses 
for their licensed e-books, bounced. Thomas Bacher, 
director of the Purdue University Press confirmed that his 
press's royalty check from the cash-strapped e-book 
provider failed to clear. "And the check wasn't for a large 
amount," noted Bacher. Bacher said the check was for less 
than $100. While concerned about the bounced royalty check, 
however, Bacher expressed even graver concerns about 
netLibrary's somewhat murky "escrow" agreement with OCLC to 
distribute CD-ROM copies of e-books to some libraries in 
the event of netLibrary's demise. "My content agreement 
with netLibrary allows for their distribution of our books 
via the Internet," said Bacher. "It doesn't allow for the 
burning of CD-ROMS." Bacher says he is concerned over the 
copyright implications associated with issuing CD-ROMS. "I 
understand that libraries bought these books," says Bacher, 
but added that he was uneasy over the idea of unauthorized 
CD-ROM copies of his press' books. Further complicating 
matters, noted Bacher, his netLibrary agreement affords 
Purdue University Press the option of withdrawing their 
content from netLibrary after three years. 

Marge Gammon, netLibrary senior director of marketing, said 
she was unaware of any university presses with bounced 
checks, but conceded that publishers who did not cash 
checks before October 15 might have run into trouble. "When 
our cash flow problem became apparent, the bank froze the 
company's assets," explained Gammon, who said that future 
payouts and restitution for any bounced checks would now 
need to be reviewed on a case by case basis. As for 
Bacher's concerns over the issuing of CD-ROMS in case of 
netLibrary failing to find new financing or a buyer, Gammon 
said that whatever contracts were in place with individual 
presses would be honored--meaning that if a publisher did 
not grant the right for its work to be reproduced on CD-
ROM, then that press's books would not be part of the OCLC 
plan. It was not clear how many of netLibrary's partners 
would be contractually ineligible for the OCLC back-up 
plan. 

Some of these worries may remain in the realm of the 
hypothetical. Gammon said the company was doing its best to 
continue its operations and noted that talks with an 
unnamed potential buyer could be finished as early as this 
week. "We're talking days, not weeks," said Gammon.

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