Supreme Court to hear freelance writers' settlement

WASHINGTON (Reuters) - The U.S. Supreme Court said on Monday that it would hear an appeal by a group of publishers seeking to reinstate a settlement with freelance writers in a copyright case involving work included in online databases.

The settlement, worth as much as $18 million, was reached in 2005 after about four years of negotiations over claims by the freelance writers that their contracts did not allow for publication of their work electronically.

The publishers that appealed to the Supreme Court included Reed Elsevier, New York Times Co , Thomson Reuters Corp, News Corp's Dow Jones & Co, and Knight Ridder, which was purchased by McClatchy Co in 2006.

The writers had sued the publishers and electronic database services, saying their contracts did not grant the publishers the right to electronically reproduce their work or license it for others to do so.

A federal judge in New York approved the settlement.

But a U.S. appeals court panel, by a 2-1 vote, threw out the settlement on the grounds that the judge lacked jurisdiction over infringement claims arising from unregistered copyrights.

Attorneys for the publishers appealed to the Supreme Court and said: "This case presents an issue of exceptional importance to the nation's archival databases, newspaper and magazine publishers and freelance authors."

They said the appeals court's decision was in conflict with established law set out by the Supreme Court and other courts regarding the settlement and release of claims.

They said the Supreme Court in a 2001 ruling in a similar case expected that authors and publishers may enter into enforceable agreements allowing continued electronic publication of the authors' works.

A small group of authors had objected to the settlement for being inadequate and unfair.

The Supreme Court said in a brief order that the only question it would decide was whether the law restricted federal court jurisdiction over copyright infringement actions. Arguments in the case will take place in the court's upcoming term that begins in October.

(Reporting by James Vicini, Editing by Lisa Von Ahn)