NetLibrary and Recorded Books Come to Terms, as Lawsuits are Dismissed

Jennifer Pinkowski -- Library Journal, 11/29/2007

A once-bitter battle between NetLibrary and Recorded Books has reached a truce, as the parties have agreed to work toward a settlement, with their mutual claims dismissed. On November 12, the two sides jointly filed for the court to “dismiss without prejudice” their lawsuits. The motion was granted the next day by U.S. District Judge Deborah K. Chasanow. The parties are now working on the terms of the settlement. 

If the parties can't come to an agreement, they have until mid January to move to reopen the case in court. According to NetLibrary spokesman Bob Murphy, the details of the settlement will not be made public. However, a statement released by the e-content distributor says that NetLibrary will market Recorded Books’s audiobooks through August 2008, and will service library subscriber contracts through August 2009.

The legal battle over the three-year-old licensing and distribution deal between Recorded Books, the world’s largest provider of audiobooks, and NetLibrary, a division of OCLC, began in May, when Recorded Books sued NetLibrary for breach of contract and copyright infringement, claiming that NetLibrary had entered into agreements with other content providers, violating the exclusivity of the deal. After Recorded Books notified subscriber libraries that its content would no longer be available through NetLibrary, the latter filed a countersuit claiming defamation and unfair competition. As recently as October, documents filed with the court seemed to indicate the case was headed for a jury trial, with the parties jointly agreeing on a discovery plan, which is the formal legal process for gathering evidence for their claims. Instead, reaching a settlement apparently became the goal. “We are pleased to have this dispute behind us and look forward to servicing the market,” Brian Downing, vice president and publisher of Recorded Books, said in the NetLibrary statement.