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What Every Publisher Needs to Know to Acquire Book Rights in the Digital Age: Lessons from Tasini and Rosetta

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Jonathan KirschJonathan Kirsch, a publishing attorney based in Los Angeles, is general counsel of the Independent Book Publishers Association and a recipient of its Benjamin Franklin Award for excellence in publishing.

As far as electronic rights in publishing are concerned, the other shoe has finally dropped.

The first shoe was the so-called Tasini case, a long-running class action lawsuit by freelance writers who claimed that TheNew York Times and other major publishers engaged in copyright infringement when they posted articles from their newspapers and magazines at various online sites. Last June, some nine years after the case was filed, the United States Supreme Court finally ruled that a magazine or newspaper publisher must obtain the specific permission of a freelance writer in order to reuse an article in a digital medium like an online database.

The Tasini case addressed only magazine and newspaper articles, but the very same issue was raised and decided in the context of the book publishing industry in the recent case of Random House v. RosettaBooks. Not surprisingly, the RosettaBooks case stands for the same principle in the context of book publishing–a book publisher must specifically negotiate for and acquire electronic rights in a work of authorship in order to issue an “e-book” version as well as a print version.

Both of these cases teach the same lesson to publishers–it is crucial to review your standard contracts and to make sure that you are acquiring the rights you need!

Before the Digital Millennium

The RosettaBooks case is an illuminating example of how an entrepreneurial publisher out-md Rovered a major New York publishing house by taking advantage of obsolete contract forms, and it’s an object lesson in the importance of keeping your contracts fresh and up to date.

Rosettabooks approached more than 100 leading authors whose books were acquired by various major New York publishers under contracts that were signed in the era before the emergence of electronic publishing. The old contracts bestowed upon the publisher the right to “print, publish and sell” the works of the authors “in book form,” but they made no distinction between printed books and “e-books” for the simple reason that no one had yet heard of an e-book!

RosettaBooks took advantage of the limited scope of those musty old contracts by, for example, signing up such best-selling Random House authors as Kurt Vonnegut and William Styron and making their work available in the form of e-books. Suddenly, Random House was confronted with competing versions of Slaughterhouse Five and Sophie’s Choice and other contemporary classics.

Random House decided to challenge RosettaBooks by filing a copyright infringement case against the e-book publisher. According to Random House, the familiar phrase that was used in their old contracts–”the right to print, publish and sell the work in book form”–should be interpreted to mean all forms of book publishing, including the digital publication known popularly as an “e-book.” Thus, Random House argued, the authors had already granted e-book rights to the book publisher, and RosettaBooks had infringed the rights that belonged to Random House.

The Real Meaning of “In Book Form”

Random House promptly applied for a preliminary injunction that would have prevented RosettaBooks from approaching any of the 21,000 authors on the Random House backlist to sign up the electronic rights in their books while the case was still pending. To prevail on its motion, Random House had to persuade the judge that it was “likely to succeed on the merits of its copyright infringement claim” when a trial was held and a verdict was rendered. Thus, Random House was put to its proof at the very outset of the lawsuit.

The question before the court can be put simply and bluntly–does the phrase “in book form” in the old Random House contracts include both printed books and e-books? And Judge Sidney Stein answered the question with precision and finality: “[T]he right to ‘print, publish and sell the work[s]’ in book form in the contracts at issue,” he ruled, “does not include the right to publish the format that has come to be known as the ‘ebook.’”

Judge Stein denied the motion for preliminary injunction, which means that RosettaBooks is free to stay in business as an e-book publisher while the case proceeds to trial–and Random House is entitled to put on argument and evidence at trial in an effort to change the judge’s mind. Even if one side or the other wins at trial, the case may still be appealed to higher courts. The Tasini case, after all, bounced around the courts for nearly a decade before all appeals were exhausted.

But the Tasini case predicts a victory for RosettaBooks–the Supreme Court plainly ruled that print rights and electronic rights are separate and distinct, and publishers must carefully define what rights they are acquiring from the authors whose work they publish. And, regardless of how the RosettaBooks case turns out, it is fundamental that publishers need to freshen up their standard contracts now and make sure they are acquiring the rights they want and need.

How to Secure Book Rights in the Age of E-Books and Audiobooks

One simple and practical approach to solving the problem is to use a contract that grants to the publisher all rights in the author’s work. Here is a typical “all-rights” clause as it might appear in the “grant of rights” section in a book publishing contract:

“Author, and his or her heirs, executors, administrators, successors and assigns, exclusively grants, assigns and otherwise transfers to Publisher and its licensees, successors and assigns, all right, title and interest in and to the Work, throughout the world, in perpetuity, and in any and all media and forms of expressions now known or hereafter devised, including but not limited to all copyrights therein (and any and all extensions and renewals thereof), for the full term of such copyrights.”

Another way to acquire all rights in a work of authorship is a work-for-hire agreement, which is even more comprehensive than a grant-of-rights clause. However, the work-for-hire approach may be used only in certain limited and specific circumstances, and the publisher needs to make sure that it applies to any particular transaction. What’s more, even when the work-for-hire doctrine is applicable, the publisher needs to make sure that all of the technical requirements for a work-for-hire agreement have been satisfied.

If the author is unwilling to grant all rights to the publisher, then the book publishing contract must be carefully drafted to specify what specific rights are being conveyed to the publisher, and–as we learn from the Tasini and RosettaBooks cases–the grant of rights clause must be carefully drafted and the rights must be carefully defined.

Here is an example of a grant-of-rights clause that is intended to secure “book rights” in all of the media in which books are now published. (Be forewarned that additional clauses must also be used to secure other rights in the author’s work, including various subsidiary rights that fall outside the definition “book publishing” in the broadest sense.)

“Author, on behalf of himself or herself and his or her heirs, executors, administrators, successors and assigns, hereby exclusively grants, assigns and otherwise transfers to Publisher and its licensees, successors and assigns, the sole right to print, publish, distribute, transmit, exhibit, sell and generally exploit the Work in any and all book formats, including but not limited to (a) print-on-paper books of all kinds, (b) electronic books of all kinds, and (c) audiobooks of all kinds, for the full term of copyright in the Work (and any and all extensions and renewals thereof), in any and all languages, and throughout the world”

These are the kinds of clauses that Random House wishes it had been using when it first signed up authors like Kurt Vonnegut and William Styron, and they resemble the clauses that Random House is, and every publisher ought to be, using now.

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