Rights Snafus: Ways to Keep Authors in Tune with Contract Provisions
by Linda Carlson
How can you protect the material you’ve published from missteps by authors who exercise rights that belong to you?
Jonathan Kirsch and Lloyd Rich, two attorneys who work often with IBPA members, recommend being vigilant about monitoring both authors’ activities and competitors’ products.
Especially if you’re a small publisher wearing several hats, or a larger firm with authors all over the globe, it may be hard to know whether authors are improperly reusing copyrighted material or contracting to write competing books for other publishers. Kirsch suggests setting up a Google Alert (google.com/alerts) for the name of each of your authors and the title of each of your books. As many publishers know, this electronic clip service provides “subscribers” with the URLs of the blogs of relatively large-circulation publications that have mentioned terms the subscribers specified.
Rich has an even simpler suggestion: “Communicate with your authors occasionally. Do more than simply send out royalty statements.”
Let’s look at rights-related problems IBPA members recently encountered when authors overstepped their authority—and at how these problems might be handled or avoided.
Problem 1. A new book attracts so much publicity that a video-training firm contacts the author about creating a DVD with the material, and the author gives permission even though the author-publisher contract specifies that the publisher controls all audio, video, and electronic rights.
Problem 2. An author slightly revises the text of a training manual and advertises downloadable copies of the new version on her Web site even though the author-publisher contract doesn’t allow this.
Problem 3. An author writes a book for your press and a few years later, while that book is still in print, contracts with a much larger publisher to write a book on the same topic even though this is forbidden in the author-publisher contract.
Protective Prep Work
In all three cases, publishers would find it easier to enforce their rights if the relevant contracts were well crafted and comprehensive, and if they included noncompete, option, and right of first negotiation clauses, say both Kirsch and Rich, who advise against oral agreements, off-the-shelf templates, or unusually brief contracts, even if written by a lawyer. Kirsch points out that as an attorney, he obviously recommends lawyer-written contracts, and he warns that revising a contract into “plain English” can strip away important protection.
“Start-up publishers can be especially uneducated about what needs to go into a contract,” adds Rich, who adds that he is sometimes asked to “strip out” what publishers think of as “the gobbledygook boilerplate” in standard contracts.
As an additional precaution, a publisher can record a contract with the Library of Congress. “This cuts off the rights of any third party that the author may try to contract with,” Kirsch notes. For details, see the Copyright Office’s “Recordation of Transfers and Other Documents” (copyright.gov/circs/circ12.pdf).
Cover Letters and Other Useful Communications
To maximize the chances that rights problems won’t arise, publishers should make sure that authors understand their contracts. One way to do this, Rich suggests, is with a cover letter that uses lay language to summarize provisions about rights that have been transferred. The letter can be phrased in a positive manner with language such as, “If you receive inquiries about publishing all or part of your book in an alternate format, let us know; we’ll be glad to determine if this is a licensing opportunity.”
This letter, which ideally would be reviewed by an attorney, could be sent when a manuscript is accepted or when signed copies of a contract are sent to the author.
“I’m all for an explanatory cover letter or summary, especially when there are specifics that a publisher expects from the writer,” says Kirsch. However, he warns publishers to ensure that no such letter can be considered a legal document.
“Every contract should include an ‘integration clause,’ which is a standard clause that specifies that the contract is the sole governing contract and that other communication—whether the cover letter, any other correspondence, or a conversation—is excluded from the legal relationship,” he explains. “If this ‘integration clause’ is not included, any letter or conversation might result in conflict or ambiguity regarding the terms.”
To help authors understand their contracts and thus avoid problems like the ones described above, Kirsch also recommends that contracts include “illustrative examples,” that is, lists of permitted uses or lists of potential uses being transferred to the publisher. Publishers can specify how much of a book can be excerpted on the author’s Web site, for example, and how much can be used in a presentation. Some authors have difficulty understanding that rights to something they created now belong to a publisher, and this portion of the contract can make the assignment of rights clear.
“Draft this carefully, so that both publisher and author know if these are simply examples or if they are comprehensive lists of allowed uses,” he says. Rich also recommends that this part of the contract specify that authors cannot resell material contracted to you. Excerpts on a Web site, for example, should be intended to promote the entire book, and not sold as standalone pieces.
One of the easiest ways to avoid contract violations or conflict over contract clauses is to spell out the contract provisions early and often, and to emphasize that publishers and authors need to be partners in the sales of rights.
In addition to the plain-English “side” letter that Jonathan Kirsch and Lloyd Rich discuss above, publishers can :
Explain in author-submission information that such rights as large-print, audio, video, digital, print on demand, serial, and condensation are usually retained by the publisher, with revenue from those sales divided between publisher and author. This information could also explain that the publishers generally have the right to handle licensing of material for workbooks, teacher guides, television, motion pictures, training seminars, and other versions, with similar division of revenue.
Recommunicate this information, but with an emphasis on marketing, when a book is nearing publication and when prepublication publicity may result in the author being contacted by people interested in publishing the book in other formats or in using some part of the content. At this point, you can remind the author that you welcome the opportunity to evaluate such deals and will finalize those that you consider beneficial to the author and to you.
Contact authors periodically—perhaps twice a year—with examples of licensing or special sale opportunities, and ask each author to bring such prospects to you. This also can be done with a focus on marketing.
Jumping on Violations
Of course, following all these recommendations and the general recommendations about contracts in “Current Contract Guidelines” below can’t guarantee trouble-free relationships with your authors. As one IBPA member recently sputtered about an author who had contracted to write a competing book for another publisher, “What is it about noncompete that authors don’t understand?” Or, as Kirsch put it, “Sometimes authors just don’t get it.”
If you learn that an author is considering some kind of publication or use that would violate the terms of the author’s contract with you, it’s important to take action immediately.
“That’s the primary problem with small publishers,” says Rich. “They don’t want to negotiate or sound antagonistic.” To avoid the appearance of antagonism and to avoid the risk of being sued for “interference with contract,” Kirsch recommends making your initial action low-key.
“First, contact the author with a friendly letter explaining that the project you’ve heard about may involve a conflict with the contract, and you’d like to know more about it,” Rich advises. Then, if the author is not cooperative, you and your attorney should write a carefully worded letter to the company that the author is dealing with.
He emphasizes that it is important to address the possible contract violation before another publisher puts a book or parts of a book into production or distribution, because at that point it may be possible to solve the problem by licensing the content to this new publisher. “It’s a far greater problem to get a new book off the market,” Rich notes.
What Potential Republishers Should Do
Because most recent contracts include an option clause, a conscientious new publisher who is aware of the author’s earlier publications will ask to see the earlier contracts. Potential publishers can also check the Library of Congress Web site for any contracts with this author that have been recorded with the copyright office, although the absence of recorded contracts there does not show these contracts don’t exist. This obviously means that if you’re interested in a book an author tells you is out of print, you should ask the author to obtain a release from the first publisher before you proceed.
If the author cannot obtain a release or the original book is still in print, and you as a subsequent publisher remain committed to publication, Kirsch suggests that you “discuss the project internally and say that your firm needs to make any new book safe to publish. Look at the first contract, at the first book, and at the book the author is proposing.”
Or, he says, with your attorney’s guidance, contact the first publisher in an effort to have a friendly conversation regarding a solution to the situation, “but make it clear you aren’t considering doing anything wrong.”
Linda Carlson (lindacarlson.com) writes every month for the Independent from Seattle.
Current Contract Guidelines
Contracts written even a few years ago may now be outdated, Jonathan Kirsch points out. “‘Out-of-print,’ for example, is an obsolete phrase. Originally, that meant books no longer in inventory. Today, with digital files and print-on-demand, we need to say ‘available for sale’ to ensure that rights don’t revert to the author just because we don’t have printed copies in a warehouse.”
Publishers should carefully review their author contracts, both to ensure that they reflect recent changes in publishing and technology and to ensure that they cover all important issues.
Here are some guidelines from Kirsch and Rich.
Specify the rights the publisher is being granted. For Rich, this includes clarifying whether you as the publisher are allowed to publish in any format.
Specify how and when the manuscript is to be delivered and what delivery will include. This means the date; the format; what permissions for photos, illustrations, and interviews are to be included; how long the publisher has to review the submission; how long the author has to revise the manuscript if necessary; and what happens if the author refuses to revise or the revisions are not satisfactory.
Specify ownership of the copyright. Publishers should have contracts with people who supply all copyrightable work, Rich says, including work done by freelancers and books written on a work-for-hire basis. And, he cautions, if you contract for work-for-hire, you must identify the work as such when you file for copyright protection.
When a book has several authors—for example, when each chapter is written by a different expert—the copyright is typically owned by the publisher. If the book is illustrated, both the illustrator’s and author’s contracts should specify how the illustrations can be used by the creator and by the author. For example, the author may be granted rights to use the illustrations on Web sites and printed material promoting the book when the book title, illustrator’s name, and copyright are all included in the credit line.
Include an assignment clause. This can preclude the assignment of the contract to someone else, and it is important, because if the rights to the material are assigned to someone other than the author (as in a property settlement), the author may no longer help promote the book. What Rich suggests is a clause binding on the heirs, executors, administrators, and assigns of the author and also precluding the author’s assignment without the written permission of the publisher.
“The clause should also state that any assignment without the publisher’s permission is null and void,” he says, adding, “With this clause, the publisher may not be able to prevent the transfer of the author’s contract by operation of law, such as through a will. However, the obligations of the author are still binding on the author’s heirs, executors, and administrators. “
Include a clause regarding assignment of royalties. Although it is unusual, a contract can specify that the author cannot delegate any duties and any rights, including royalties, without the publisher’s approval. This would eliminate the possibility of royalties being assigned to the author’s spouse as part of a divorce settlement, or to someone else as part of a bankruptcy. Such a clause can be even more important than the assignment clause, because an author who is not benefiting financially is unlikely to do much promotion, and a former spouse who is receiving royalties is probably not an effective promoter. Kirsch points out, however, that some authors want to be able to assign all or part of their royalties to their children or a charity.
Explain compensation, including any advance and royalties. The contract should explain whether royalties are based on retail price or publisher’s net, whether royalties are paid on books purchased by the author, and if there is a different royalty schedule for special sales and electronic or POD formats.
Explain warranties, representation, and indemnities. Contracts should require authors to promise that they have the right to the material in their books and that it is factual and accurate. Publishers can still be at risk, though, which is why Rich says, “This is one reason for publishers to have liability insurance,” even on something as seemingly innocuous as a how-to book. “It’s no different than having homeowner’s insurance,” he declares.
And, says Kirsch, editors must remain alert as they edit manuscripts. “Anytime something is especially controversial, especially poignant, especially juicy, anytime the editor wonders how the author has this information, ask for backup.”
Include a noncompetition clause. By specifying that the author cannot sell material on the same topic to another publisher regardless of publication format, Kirsch says publishers are protected from authors who want to “repurpose” the material.
Include option and right of first negotiation clauses. Today most attorney-written contracts give the original publisher an option on the author’s next book, and sometimes on the next several books. Some such clauses specify that the next several books will be published on the same terms as the first book. Other contracts have “right of first negotiation” or “right of first negotiation, last refusal” clauses. The former means that the original publisher has the right of first refusal on new manuscripts; if the publisher and author cannot agree on a contract, the author is free to approach other publishers. The latter means that after the author approaches other publishers, the original publisher has the right to match the final offer made to the author. (This clause does not give small publishers much protection if an author wants to jump to a larger house, Kirsch points out, because it could mean that a small press would be faced with matching a large advance.)
Deal with revised editions. Contracts should specify how later editions will be handled if the author is unable or unwilling to revise the book, or if the revisions are unsatisfactory to the publisher. Typically, says Rich, the publisher has the right to have another writer revise the book and charge that expense against the original author’s royalties. The contract should also specify whose name(s) appear on revisions. In some cases, if the original author is better known than the revising writer, the publisher will want the right to retain the original author’s name on the book.