In August 2000, 21 authors and three author professional associations—the National Writers Union (http://www.nwu.org), American Society of Journalists and Authors (http://www.asja.org), and the Authors Guild (http://www.authorsguild.org)—filed a class action suit. On March 29, 2005, plaintiffs filed a final motion for court approval of a settlement in the suit against database services and publishers, to which the court gave preliminary approval on March 31. The settlement totals a minimum of $10 million and a maximum of $18 million, less $3.8 million for lawyer's fees and administrative costs. After the 120-day claim period ends (start date to be scheduled by the final court approval hearing on July 28), no further claims by any freelance writers can be made against the database companies or publishers named for covered infringement of electronic rights.

The settlement was filed under "In re Literary Works in Electronic Databases Copyright Litigation," MDL No. 1379, in federal court in the Southern District of New York with U.S. District Judge George M. Daniels presiding. Originally there were three cases, but the court ordered the cases consolidated into one complaint and one group of payments in September 2001 after the Supreme Court's decision in the Tasini case.

The amount to be paid to writers under the settlement plan depends on a number of factors, including copyright registration, the original fee paid, the year published, and whether the writer permits future use of articles in databases. The "class" in this class action suit is defined as "all persons who hold the copyright to an English language written work that, at any time after August 14, 1997, was made available in electronic format (e.g., online, on CD-ROM, or in any other electronic format) without the person's permission by at least one of the defendant databases or participating publishers."

The settlement establishes three categories of claimants. Category A covers claimants who registered copyright with the U.S. Copyright Office after publication but before infringement or within 3 months after first publication. These claimants will receive $1,500 for each of the first 15 eligible works written for any single publisher, $1,200 each for the next 15, and $875 for each article over 30. Category B covers claimants who published from 1995 through 2002 and who did not register copyright until after 3 months past first publication. They will receive $150 per eligible work or 12.5 percent of the original sale price, whichever is greater. Category C covers claimants who did not register their copyright at all. Category C payments for each eligible work would run up to $60 for a work that originally sold for $3,000 or more and down to $5 for one sold for less than $249.

For all these categories, 65 percent of the payment compensates for past infringement and 35 percent for future electronic use. If claimants decide not to grant future electronic rights, they only receive 65 percent of the compensation amounts. The same reduction applies to those authors who have signed retrospective approvals but still want recompense for past infringement. Works created before 1985 have reductions ranging from 5 to 50 percent.

Claimants queue for the money in category order. For example, the Category C rate schedule could become moot if the Category A and Category B claimants use up all the settlement money. (The higher payments to authors registering their copyrights within 3 months stems from statutory language in copyright laws.) Kay Murray, general counsel for the Authors Guild, believes that, by far, most writers will fall into Category C.
Getting the word out to all affected members of the class is part of the settlement, as Murray described it. Many publishers participating in the suit have agreed to publish notices in their publications for cost (no advertising fees) as part of the settlement. Many thousands of authors will receive notices in the mail, according to Murray. A claims administrator will handle the notification process and the check-cutting—at last.

Database companies involved in the lawsuit include Reed Elsevier (operating LexisNexis), Thomson Corp. (Dialog, Gale Group, West Group), Dow Jones (Factiva), Knight-Ridder (former owner of Dialog), Mediastream, NewsBank, ProQuest, and EBSCO. Some 36 publishers were listed in the suit, most from the news and trade press arena, e.g., The New York Times Co., McClatchy Co., The Washington Post Company, Forbes, Gannett Co., etc.

The three associations representing writers in the lengthy litigation were the National Writers Union, a United Auto Workers local with 3,400 members; the American Society of Journalists and Authors (ASJA) with more than 1,100 members; and the Authors Guild, oldest and largest of the three, with more than 8,000 members. Writers seeking compensation from the settlement can go to http://www.freelancerights.com, a joint Web site set up by the three organizations that worked out the terms of the Class Notice sent to the court, to review the complex settlement terms and to file claims. The Class Notice describes benefits under the settlement, identifies included and excluded articles, and explains authors' rights. (Details of the settlement appear in the FAQ section of the site, located at http://www.freelancerights.com/disc.htm.)

Once claims for the settlement have been paid, no freelance author can sue either the database firms or the 36 publishers named in the suit for the material covered. Failure to take advantage of the claim process in the 120-day time period will vitiate the rights of any writers to further legal action against those parties. However, as Murray pointed out, publishers not named in the suit would still be vulnerable.