See Monday’s Klinger v. Conan Doyle Estate, Ltd. (7th Cir. Aug. 4, 2014); for more on the underlying litigation, see here. An excerpt from the fees opinion (some paragraph breaks added):
The Doyle estate’s business strategy is plain: charge a modest license fee for which there is no legal basis, in the hope that the “rational” writer or publisher asked for the fee will pay it rather than incur a greater cost, in legal expenses, in challenging the legality of the demand. The strategy had worked with Random House; Pegasus was ready to knuckle under; only Klinger (so far as we know) resisted. In effect he was a private attorney general, combating a disreputable business practice — a form of extortion — and he is seeking by the present motion not to obtain a reward but merely to avoid a loss. He has performed a public service — and with substantial risk to himself, for had he lost he would have been out of pocket for the $69,803.37 in fees and costs incurred at the trial and appellate levels ($30,679.93 + $39,123.44).
The willingness of someone in Klinger’s position to sue rather than pay Doyle’s estate a modest license fee is important because it injects risk into the estate’s business model. As a result of losing the suit, the estate has lost its claim to own copyrights in characters in the Sherlock Holmes stories published by Arthur Conan Doyle before 1923. For exposing the estate’s unlawful business strategy, Klinger deserves a reward but asks only to break even.
We note finally that the estate was playing with fire in asking Amazon and other booksellers to cooperate with it in enforcing its nonexistent copyright claims against Klinger. For it was enlisting those sellers in a boycott of a competitor of the estate, and boycotts of competitors violate the antitrust laws. The usual boycott is of a purchaser by his suppliers, induced by a competitor of the purchaser in order to eliminate competition from that purchaser, as in the leading case (old as it is) of Eastern States Retail Lumber Dealers’ Ass’n v. United States, 234 U.S. 600 (1914); see also JTC Petroleum Co. v. Piasa Motor Fuels, Inc., 190 F.3d 775, 777–79 (7th Cir.1999).
This case is different, in its facts but not in economic substance or legal relevance, because the boycotters enlisted by the Doyle estate were buyers from the victim, rather than sellers to it. But functionally they were suppliers — suppliers of essential distribution services to Klinger.
It’s time the estate, in its own self-interest, changed its business model.
Thanks to How Appealing for the pointer.