Judge Harold Baer
Defendant Harlequin Enterprises Limited (HEL) is a publisher of romance novels and the parent company of defendants HBSA and HEBV (the Harlequin subsidiaries). Plaintiffs entered into publishing agreements with the Harlequin subsidiaries to publish romance novels under the Harlequin and related imprints. HEL was not a signatory to any of the contracts. E-book royalties fell under an umbrella "All Other Rights" clause, which provided that plaintiffs were entitled to 50 percent of the net amount received by the publisher for the exercise, license, or sale of the rights. After the Harlequin subsidiaries paid plaintiffs royalties of 50 percent of the license fee pursuant to that clause, plaintiffs brought claims for breach of contract, arguing that they are entitled to 50 percent of HEL’s net receipts rather than 50 percent of the license fee. The court granted the defendants’ motion to dismiss the complaint, holding that, under the contracts, plaintiffs’ royalties are properly based on the receipts of the defined "publisher" which, here, are the Harlequin subsidiaries and not HEL.
