Publishing Contracts – Review, Revision, and Drafting
Traditional Publishing Contracts: Protections for Book Authors
Most of us know or have known of someone who was a hoarder. My aunt collected newspapers for years, stacking them ceiling high in her living room. A friend was a shopaholic who hoarded unopened packages of new clothing in closets and drawers. A neighbor’s garage overflowed with car parts that he “might” need someday but never used or sold.
Traditional publishers are like hoarders. They frequently demand that a book author grant all publication rights to the book author’s work although the publisher offers no promise to exploit those rights. This result, whether set forth in one provision or more, is known as a “universal grant of rights.”
Without a literary attorney, most book authors do not perceive or understand the extent or impact of the universal grant on the book author’s future. But the consequences are clear. While the publisher is not penalized for hoarding rights, the book author forfeits future opportunities to profit from those same rights.
How Does a Book Author Recognize the Universal Grant of Rights?
When a book author reads a publishing contract, a universal grant of rights may appear as a sentence or in more than one provision, but it consists of the following elements.
- Term: The publishing contract term is for the life of the copyright. This grant amounts to the remainder of the book author’s life plus seventy years.
- Rights: The exploitation of all rights and in all languages is granted to the publisher.
- Media: Exploitation extends to all forms of media now known or yet to be devised.
- Territory: Worldwide.
If a publisher wants a book author to grant it rights to publish around the world, in all media and languages, and for the life of the copyright, it does not mean the publisher will exploit those rights. No publishing contract requires the publisher to exploit the rights granted and many assert that the publisher has no duty to do so.
The first and best opportunity a book author has to restrain their publisher’s hoarding instinct is to have their literary lawyer negotiate limitations on the grant prior to signing the publishing agreement. Unless confronted, the publisher has no reason to modify its demand for a universal grant.
Let Your Literary Lawyer Help You Protect Your Rights
This is where a book author’s literary lawyer can make a difference. Because the devil is in the details when it comes to traditional publishing contracts, publishing contract lawyers are used to wrestling with the universal grant of rights. Rights most easily singled out and reserved are those associated with enhanced eBooks, merchandising, and theatrical rights.
Limiting Electronic Text Editions to Verbatim eBooks
Electronic or digital rights are more difficult to reserve and for good reasons. Publishers were caught flatfooted when eBook publishing became a source of income during the 1990’s. The publishing contracts previously signed were based only on the sale of hard or soft print copies. Suddenly, published book authors demanded additional royalties for a new format that was not included in their previously negotiated and signed publishing contracts.
To avoid any other technological surprises, many traditional publishers now claim all rights to exploit electronic or digital editions “in all forms now known or yet to be devised,” i.e., in any present or future form of media.
When it comes to eBooks, your literary attorney can request that the publisher’s eBook rights be limited to “verbatim” editions, i.e., in a format that replicates a print copy. All of us commonly see verbatim eBooks for sale on eBook publishing platforms and publisher websites, as well as Barnes & Noble and Amazon. Your literary attorney can also attempt to reserve the right for you to publish or license any “enhanced” editions with sound, music, video, interactivity, or other embellishments. Publishers seldom exploit enhanced eBook rights, so it is best reserved when and if possible.
Reserving Merchandising and Theatrical Rights
Most publishers will agree to let a book author reserve particular subsidiary rights such as merchandising and theatrical rights (radio, tv, film, video).
The book publisher normally licenses subsidiary rights to third-party licensees for limited periods of time and in exchange for a licensing fee and royalties. If the book author can successfully reserve subsidiary rights that the author can exploit more effectively than the publisher, the book author or their literary agent may be able to license those rights. There are literary agents who have the necessary contacts and if successful, both agent and author may earn more than they would if the publisher had exploited the rights.
Subsidiary rights associated with translations, foreign sales, abridgment, audiobooks, book clubs, anthologies, permissions, and serials may be more difficult to reserve. Nevertheless, if the book author happens to have publishing contacts in foreign locations or particular industries, the author’s literary lawyer may be able to persuade the publisher to carve out a few of these rights.
Two Alternative Negotiation Points: Delayed Reversion and License Approval
Once the book author decides what rights they may want to reserve, their literary attorney can request reservation of those particular electronic or subsidiary rights. If the publisher refuses those requests, the literary attorney may propose one or both of the following:
- That if the publisher does not exploit one or more of the rights within a certain period (e.g., within three years of the work’s initial publication), the right or rights revert to the book author as of that later date.
- That the publisher’s licensing of certain subsidiary rights are subject to the book author’s approval. Some publishers are amenable on one condition: “approval shall not be unreasonably withheld or delayed.” Though the phrase is concerning, the book author may still benefit from this option.
There is no guarantee that the publisher will agree to either of these proposals. Nevertheless, if the book author or their literary attorney fails to seek the reservation, reversion, or approval of rights most important to the author prior to execution of the publishing agreement, they will never know what may have been possible.
The Last Exit: Termination Can Trigger Reversion
Termination of the publishing agreement will result in the reversion of all rights to the book author. However, no matter which party gives notice of termination, if there are any outstanding licenses, those licenses will remain enforceable until their individual expiration dates.
The publishing contract usually gives the publisher the opportunity to terminate the agreement for a variety of reasons or no reason at all. In the meantime, the book author’s exercise of the out-of-print provision is often the only way the book author may terminate. Prepared by the publisher’s attorney, the provision is usually drafted in a way that makes compliance difficult and, if even possible, a lengthy process. Again, the book author’s literary attorney may be able to make this provision more advantageous to the book author.
Assuming the publishing contract is not terminated by either party following execution, the next opportunity for the book author or their heirs to benefit from reversion will be thirty-five years after the book’s initial publication. Under U.S. copyright law (see 17 U.S.C., §203), a book author can terminate their publishing agreement thirty-five years after the publication of their book or forty years after the book author grants publication rights, whichever comes first.
There Is No Excuse Not to Understand What Is Above the Dotted Line
There are three popular excuses for a book author to refuse to engage a literary lawyer.
The first is the expense. Book authors tend to ignore the fact that their literary work is a form of property–intellectual property, to be exact. It is now common to pay for services and insurance to protect our homes and personal property. A book author’s ownership of intellectual property and the pending grant to a publisher to exploit that property demands comparable attention to the inspection and analysis of a publishing contract.
The cost of retaining a literary lawyer or publishing attorney to review and explain any kind of publishing contract or writing agreement before signing is minor when compared to the ramifications of signing an unexamined contract. A book author may incur thousands in legal fees to negotiate a satisfactory resolution to a dispute, let alone confront their opposition in court over a few misunderstood words or the significance of a comma. Credit cards and payment plans are acceptable to many literary lawyers.
The second excuse book authors have given me is their fear that if they attempt to negotiate the terms of a publishing agreement, the publisher will withdraw the offer to publish. In over twenty years of practicing literary law, I have never seen that occur. Obviously, that doesn’t mean it cannot, but I have reason to believe it is very unlikely. And if a publisher does withdraw an offer because the book author attempted to negotiate, the book author should be thankful they never executed the agreement.
The third excuse not to review a publishing agreement is even more irrational. Some book authors actually claim to fear that the review could be a waste of money if the publisher refuses to make the revisions the book author’s literary lawyer recommends.
Really? Think about it. Whether or not your publisher is willing to make most revisions or no revisions, a legal review of your publishing agreement, or any other agreement for that matter, will provide you with two significant pieces of information.
Your publisher’s willingness to negotiate will tell you whether your publisher is reasonable or intractable. If the latter, do you really want to sign with this publisher? Whether you decide to or not, you will understand the terms of the contract, revised or unrevised.
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It can be far more expensive and problematic
to hire an attorney to take action about a contract after you sign it
than it is to hire a literary attorney to review and explain
the contract’s terms before you sign it.