Nook-Niks
Did Barnes & Noble pull a fast one on an e-reader supplier?
At the launch event for Barnes & Noble’s (BKS) new Nook reading device, the company made an aggressive effort to pretend the Kindle didn’t exist. Their claim was that B&N is the leading innovator in publishing, not Amazon (AMZN). That’s certainly true in terms of bookselling, but that hid the truth: B&N is scared by the success of the Kindle.
Spring Design, a California e-reader company, says B&N was hiding the truth about something else—where they got the idea for the Nook’s color-screen Android interface. Spring has developed an e-reader with patents pending on its innovative dual screen design called the Alex. In fact,the company had been working with Barnes & Noble for two years to develop a reader for the bookseller. Until the press event, Spring Design thought they were B&N’s supplier. The plan was to use the Alex as B&N’s Nook, even if there had been rumblings that B&N wanted a device in 2009, not 2010, when the Alex would be available.
Before the Nook was unveiled, Spring fired off a press release in response to the leaked Nook specs.“We wanted to lay claim to the dual screen design,” says Eric Kmiec, Spring’s VP of Sales and Marketing. Yesterday, the company decided to do more than lay claim; they filed a lawsuit in Federal court according to its press release “to protect its Alex™ e-book intellectual property. The lawsuit asserts Barnes & Noble misappropriated trade secrets and violated the parties' nondisclosure agreement when it copied Alex's features into its recently announced Nook e-book.”
What happened? It would appear that Barnes & Noble was in such a hurry to get a device on the market before the 2009 holidays that they found a Taiwanese manufacturer to create something similar faster. For publishers who’ve had experience with B&N’s heavy-handed ways, this would be no surprise.
What mystifies Spring is that Barnes & Noble never made it clear that Christmas was enough of an issue to go to another manufacturer. Moreover, Spring wonders why Barnes & Noble didn’t just step back from discussions once it was clear they needed their device faster.
As a consolation prize, Barnes & Noble has been very open to working with multiple device makers through their BN.com e-bookstore. For Spring, though, there remains an easy, more equitable resolution to the fight. Recognition of Spring’s intellectual property and an agreement to work together in 2010. “We still think,” Kmiec says, “we can work this out amicably.”
If Spring’s friendly attitude makes you think they have a weak case, don’t be so sure. (Though we have nothing to go on besides Spring’s side of the story.) Whether or not Spring is in the right, B&N is the big dog in this space. Without Amazon as an alternative, Spring has no other place to get their content. So the most they can hope for is a little cash and recognition from Barnes & Noble to soothe their wounded pride and hope that they can get back in the game next year. That might not sound like justice, but it is business.
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