Boundless in Settlement Talks with Textbook Publishers

7/30/13Follow @curtwoodward

Boundless, a Boston-based startup that offers free online college learning materials, is working on a possible legal settlement with the textbook publishers that sued the young company for copyright infringement.

Putting the case to rest would be a big plus for Boundless, which has raised about $10 million in venture backing for its free online study materials.

The federal lawsuit was filed last year by Pearson Education, Cengage Learning, and Macmillan Higher Education. The three publishers said Boundless’ free “versions” of their textbooks were too closely patterned after the originals, violating their copyrights.

Boundless has denied violating any copyright laws, even though the company acknowledges that it “consulted” some of the textbooks at issue and produced alternatives that were “aligned” to the content of those textbooks.

Boundless also pointed out that the publishers were complaining about early versions of the startup’s online study aids, and said the textbook alternatives in question weren’t even being used anymore.

A federal judge overseeing the lawsuit sent it to mediation in April. Two weeks ago, Boundless’ lawyer indicated that a settlement could be on its way.

“The parties continue to make progress toward a resolution of this case and are currently reviewing draft settlement papers,” attorney Roger Zissu wrote in a letter to the court. “The parties plan to continue the mediation process with the hope of resolving the case.”

I’ve embedded a copy of the letter below.

Settling the case could be less expensive and less risky for the startup than a long trial. If the case were to go much further, it could force Boundless and the publishers to reveal a lot of financial and business information that they’d prefer to keep private.

While he couldn’t comment on the ongoing lawsuit, Boundless CEO Ariel Diaz did say the small company remained at work despite the legal fight.

“We’re focused on building innovative products that help students learn, and the lawsuit is not slowing us down on that front. We’ve got a lot of exciting announcements this fall,” he said in an e-mail.

Diaz is the last of three co-founders still working at the company. Co-founder Brian Balfour is now an entrepreneur-in-residence at Trinity Ventures, while co-founder Aaron White is a vice-president at Venrock. Both remain advisors to the company, according to its website.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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