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Kirsch’s Publishing Law Update

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Publishers often deal with requested changes in language when negotiating contracts with authors. The
following are two related questions recently posed by publisher members of IBPA.

Question: One of our authors has told me that she wants to change the “grant of rights” clause in
our standard publishing contract to a “license of rights.” What does this mean for the publisher?

Answer: A “grant of rights” conveys OWNERSHIP of some or all rights under copyright from the
grantor (in this case, the author) to the grantee (in this case, the publisher). For example, a grant
of print publication rights in an author’s work under a standard publishing agreement means that the
publisher is now the owner of the specified rights. A grant of rights might be for one specific right
only (i.e., “English-language book rights”) or for all rights in a work of authorship. Typically, the
grant of rights is for “the full term of copyright” or even “in perpetuity,” although US copyright law
permits the author to terminate the transfer of rights under certain narrow conditions between 35 and
40 years later.

A “license of rights,” by contrast, conveys no ownership interest in the work of authorship at
all. Instead, a license conveys only the right to USE the work in question in some specified manner,
and ownership is retained by the author. Licenses are typically limited to a specified term of years,
a specified territory, a specified medium, and so on. Thus, for example, an author might grant a
license to a French publisher to translate her work into the French language and to publish the
translation in France for a period of five years. At the end of the license period, the rights of the
publisher will terminate, and the author is free to grant a new license for the same rights to some
other publisher.

As a general proposition, US book publishers almost invariably seek a grant of rights in their
standard publishing contracts. By contrast, audio publishers, electronic publishers, and foreign book
publishers are more likely to seek only a license of rights. But these are general observations only,
and the publisher’s specific rights in an author’s work will depend on what is actually stated in the
contract. For that reason, it is always important to pay close attention to the “legalese” in the
negotiation and drafting of a publishing agreement, whether it is intended to grant rights or only
license them.

Obviously, it is vastly more beneficial to the publisher to acquire ownership of copyright rather
than a license to use a copyrighted work in some limited manner. The difference between granting and
licensing rights is roughly comparable to the difference between buying and renting a house-and most
publishers, of course, would prefer to own what they publish!

Question: We are interested in acquiring a book from an author who does business through a
corporation that he owns, and he is asking that the author-publisher agreement be written in the name
of the corporation rather than in his own name. He is also asking that advances and royalties be paid
to the corporation instead of to him. What does this mean for us as publishers?

Answer: As long as you attend to the paperwork properly, you will face no insurmountable problems
by entering into a contract with a corporation owned by the author rather than the author himself.
However, you will need to generate some additional documents, and you ought to make sure that each one
is properly signed before you pay any money or publish the book!

First, you will need to make sure that the author has entered into a contract with his corporation
so that the corporation can enter into a contract with you! Unless and until the author has granted
rights in his work to the corporation, the corporation does not own the work and cannot grant rights
in the work to you. The contract between the author and his company ought to address all legal and
logistical questions that may arise. For example, the author must obligate himself to meet the
manuscript delivery deadlines that are set forth in the contract between the corporation and the
publisher.

Second, you need to make sure that the warranties and representations in the author-publisher
agreement include additional clauses by which the corporation gives you legal assurances that it has
acquired all necessary rights in the author’s work from the author himself.

Third, as a practical matter, you will need to review and approve the contract between the author
and his corporation before you sign the contract with the corporation to make sure that all of these
points have been covered. Ideally, the signed contract between the author and his corporation will be
attached as an exhibit to the contract between the corporation and the publisher.

Finally, you can secure an additional degree of legal protection by asking the author to sign a
personal guarantee that obliges him as an individual to perform his obligations under the contract
with his corporation and to make sure that the corporation performs its obligations to the publisher.

Note: The drafting of these agreements and guarantees can be a subtle and complex process, and
this is one transaction where an attorney with publishing expertise may be necessary to make sure that
all points are covered.

Jonathan Kirsch, an attorney specializing in publishing law, serves as pro bono general counsel for
the Publishers Marketing Association. He is a partner in the firm of Kirsch & Mitchell in Los Angeles,
and author of “Kirsch’s Handbook of Publishing Law” and “Kirsch’s Guide to the Book Contract” (Acrobat
Books). Kirsch’s e-mail address is KMLEGAL@PACBELL.NET.

Contact the PMA office at <A
HREF=”mailto:pmaonline@aol.com”>pmaonline@aol.com for a copy of a brochure describing the Dispute
Resolution Program. For more information about mediation and arbitration, contact Phil Tamoush at <A
HREF=”mailto:oakwoodpub@juno.com”>oakwoodpub@juno.com.

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