A Boston online textbook startup has settled a major copyright infringement lawsuit brought by three of the biggest educational publishers in the business.
The confidential settlement brings to an end a 21-month legal battle for Boundless Learning Inc., which had set out to provide free Web-based versions of popular textbooks for some of the most common college courses.
That business model drew a swift legal response from Pearson Education Inc., Cengage Learning Inc., and Macmillan Higher Education. The three publishing giants essentially accused Boundless of ripping off their materials and misleading students with copycat textbook alternatives.
None of the parties would disclose terms of the settlement. But in a statement released Wednesday, Boundless said it “now has a clear path for building and marketing” its online textbooks without infringing on the intellectual property of the publishing companies.
The publishers said in a statement that they were satisfied with the settlement and would “continue to safeguard the rights of our authors and take action against the misappropriation of our content by any and all parties.”
The parties have been involved in mediation since last May, and the settlement is expected to include an injunction that has yet to be made public by the US District Court for the Southern District of New York, where the case originated.
The three publishers sued Boundless in March 2012, alleging the startup was infringing on their rights by creating Web versions of textbooks that were too similar to their own. For instance, they charged Boundless borrowed in an “undeniable and pervasive” way from a textbook called “Psychology” by presenting sections and images in similar ways.
Since the lawsuit was filed, Boundless has not been shy about defending itself. In a blog post last year, the company said “these publishers’ antiquated business models and fat margins are being threatened from all directions, and we’re the ones that caught their eye.”
Even so, Boundless has undergone quite a bit of transition. The young company lost several top executives, and has drastically changed the way it presents its textbook alternatives, which are created using freely available educational content.
Now, its online texts appear much less like traditional textbooks, and the company is focused on delivering educational content on smartphones. On the Boundless website, students can search for e-books based on typical college courses and download alternatives to the common college texts such as “Biology” or “Principles of Macroeconomics” that usually cost hundreds of dollars.
Boundless still offers some e-textbooks for free, but the vast majority of its offerings cost $20 and include interactive features, such as built-in quizzes and flash cards. “We’ve evolved on a number of fronts,” said Ariel Diaz, chief executive of Boundless Learning, which he cofounded in April 2011.
With the lawsuit out of the way, Diaz said that he can focus on growing the company, which now has about 20 employees. It has raised $10 million in venture capital funding.
Michael B. Farrell can be reached at firstname.lastname@example.org.