​Major Textbook Publishers Sue Follett Over Counterfeit Sales

Higher Education

​Major Textbook Publishers Sue Follett Over Counterfeit Sales

By Sydney Johnson     Jun 22, 2017

​Major Textbook Publishers Sue Follett Over Counterfeit Sales

Three of the country’s largest publishers, Pearson Education, McGraw-Hill Education and Cengage Learning, are suing Follett Corporation, a major textbook distributor, on charges of selling counterfeit textbooks in its stores.

The companies claim many of Follett’s textbooks are purchased from questionable distributors that sell illegally-copied versions. “These scurrilous dealers are no better than those selling counterfeit watches on a street corner,” the complaint reads.

Filed June 21, the lawsuit follows unsuccessful negotiations between the publishers and Follett to adopt a set of best practices to identify and eliminate counterfeit sales, Inside Higher Ed reports.

“While Defendants claim to cooperate with Plaintiffs on addressing counterfeits, their efforts are at the margins, rather than stamping out the root of the problem,” the lawsuit states. “Defendants continue to turn a blind eye to their risky practices, choosing instead to put profits over compliance with the laws that prohibit distributing counterfeits.”

Matt Oppenheim, the publishers’ lawyer, told EdSurge the case is only dealing with physical counterfeit textbooks. He argues that many of the copied texts likely come from overseas, where they are scanned and recreated, and Follett purchases these versions at a lower price.

Follett, the publishers’ largest textbook purchaser, declined to comment when contacted by EdSurge on Thursday. However, the company released a statement calling the lawsuit an attempt to “cripple the campus store’s ability to provide lower-cost course material options, leaving students little choice but to buy higher priced texts from the publishers.”

The distributor, which operates in more than 1,200 college and university bookstores and nearly 1,600 online campus stores, also wrote that the publishers had been “pressuring” the company and other retailers to implement the “ best practices” (created and endorsed by Cengage, McGraw-Hill and Pearson). “Follett believes [the best practices] would effectively restrict access to low-cost used and rental course materials on campus,” the statement reads.

Other textbook distributors, including Chegg, Inc. and Ingram Book Group, have both complied with the publishers’ guidelines, which require the distributors to thoroughly verify who they purchase from and more closely scan for counterfeit textbooks.

When asked what went sideways with the Follett negotiations, Oppenheim replied, “Some businesses understand they have to abide by ethical and legal standards, and other business like Follett believe that the laws don’t apply to them.”

Ray Griffin, CEO of Follet, says his company has been working to find and remove counterfeit materials from its library. “Counterfeits hurt everyone in the industry, and the solution requires a collaborative industry response. It's unfortunate these publishers don’t agree with that approach,” he said.

The company also defended its vetting process for materials and sourcers, writing in an email that 91 percent of its textbooks in fiscal year 2017 came directly from publishers. Tom Kline, a spokesperson for Follett, also wrote that the company’s “inspection process has identified more than 10,000 titles as suspected counterfeits and we have returned them to the three publishers.”

According to the complaint, Follett allegedly purchased illegal copies of at least 46 textbook titles in recent months, and the publishers are claiming that Follett likely sold more. “This is a mere snapshot,” the complaint reads. “The true scope of Defendant’s distribution of counterfeits is likely much greater and not precisely known to Plaintiffs, who fear that what they know to date is only the proverbial ‘tip of the iceberg.’”

In the lawsuit, publishers are asking Follett to pay for statutory damages and “all profits that Defendants have derived in connection with such counterfeiting and infringement.” The publishers are also asking that Follett remove all products, advertising and other materials that imitate or are just “confusingly similar” to the publisher's’ copyrighted work.

It’s not the first time Cengage, McGraw-Hill and Pearson have teamed up against those they claim are illegally selling their materials. In January, the three sued 100 textbook sellers on Amazon, leading to a subpoena of the online marketplace “to reveal the names and financial accounts of online vendors who allegedly sell counterfeit books at ‘too good to be true’ prices,” the Financial Times reported.

The court has issued a preliminary injunction in that case and an asset freeze on the sellers, some of which have settled, according to Oppenheim, who is the lead counsel on that case as well.

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