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The traditional publishing process begins with an editor’s enthusiastic response to an author’s outline, proposal, and sample chapter, followed by an offer and contract from the publisher. Once the contract is signed the focus shifts to the quality of the final manuscript. The publishing contract includes a “d & a” (abbreviation for delivery and acceptance) clause, which requires the author to deliver a manuscript that is complete and satisfactory to the publisher in form and content. If the manuscript is unacceptable to the publisher for any reason it can terminate the contract and demand return of the portion of the advance already paid.
Both Federal and state courts have interpreted the unsatisfactory manuscript clause to allow publishers wide discretion to terminate contracts provided that the termination is made in good faith. Determination of the publisher’s good or bad faith is tricky. In a federal lawsuit for return of a $350,000. advance paid by Random House the judge noted that “evaluations of editorial acceptability are based on the subjective judgment of the publisher” and “[what] in good faith may be acceptable to one publisher may be, in equal good faith, not acceptable to a different publisher.” (By paying a large advance Random House had taken a calculated risk that the author’s next work would be as commercially successful as his earlier books.). At the same time, to properly reject a manuscript the publisher must demonstrate that it did not “arbitrarily change its mind.” There must be good reason other than a change of market conditions for the publisher’s decision to terminate the contract.
Following guidelines set out in several important cases, “good faith” is arrived at by examining the publisher’s efforts to provide editorial assistance to the author to produce a book the publisher believes can be profitably sold. Even if the publisher has accepted and paid for portions of the manuscript it may only terminate a book contract on the basis that the completed manuscript is unsatisfactory if it has provided editorial assistance to the author and reasonable time for the author to make revisions.
New York courts have ruled that there is an implied good faith obligation in publishing contracts “for the publisher to engage in appropriate editorial work with the author of a book”. This means giving the author editorial suggestions and an opportunity to make revisions. In a lawsuit by the publisher Harcourt Brace Jovanovich against Senator Barry Goldwater [Harcourt Brace Jovanovich, Inc. v. Goldwater, 532 F. Supp. 619, 624 (S.D.N.Y. 1982)] for return of the advance after delivery of a memoir the publisher rejected as unsatisfactory, the judge concluded
It cannot be … that the publisher has absolutely unfettered license to act or not to act in any way it wishes and to accept or reject a book for any reason whatever. If this were the case, the publisher could simply make a contract and arbitrarily change its mind and that would be an illusory contract. It is no small thing for an author to enter into a contract with a publisher and be locked in with that publisher and prevented from marketing the book elsewhere..
In an action by Random House against the novelist Herbert Gold [HBJ, Random House, Inc. v. Gold, 464 F. Supp. 1306 (S.D.N.Y.), aff'd mem., 607 F.2d 998 (2d Cir. 1979)] another judge held that “allowing unfettered license to publishers to reject a manuscript submitted under contract would permit overreaching by publishers attempting to extricate themselves from bad deals.”
The major unsatisfactory manuscript cases have had varied outcomes: Senator Goldwater was permitted to keep his $65,000. advance. In that case the publisher simply rejected the manuscript and did not work with the author. In the Random House case the publisher terminated the contract after two rewrites and the author had to return $350,000. A fundamental rule emerges: the party that breaches the contract pays, either the publisher who fails to give the author editorial guidance or the author who fails to submit an acceptable final manuscript. Both parties have rights and obligations which should be clearly expressed and acknowledged in their contract.
The legal issues I discuss are the underpinning of the delivery and acceptance clauses in publishing contracts. If you or your lawyer or literary agent is negotiating a contract, try to include the following protective provisions:
1. All communications from the publisher relating to acceptance or rejection of the manuscript will be in writing.
2. The publisher is required to either accept the manuscript or direct the author to make editorial revisions by a specified time after delivery of the complete manuscript.
3. The editor’s suggestions for revisions will be reasonably detailed and specific.
4. The author will have a reasonable time to deliver a revised manuscript; and
5. The publisher is required to make a final decision about the revised manuscript within a specified time after delivery.
6. A “first proceeds” provision. If the final manuscript is unsatisfactory the author is permitted to defer repayment of the advance until she resells the book and receives another advance. In the past some publishers would agree to limit repayment to the amount of the second advance, even if it was smaller. Most traditional publishers’ contracts now require the author to repay the entire first advance within a stipulated period after the contract is terminated, even if the author fails to resell the book.
A final point: By both industry custom and most literary agents’ agreements, if the contract is terminated the agent does not repay the 10% or 15% commission she received for making the sale to the publisher.
There are publishers and there are companies that provide printing and distribution services. The printing/distribution services contract can be misleading, first in that it is typically styled as a “publishing agreement” and second that in one way or another the business model calls for the author to pay the printing and other costs associated with the services. Some of these agreements, the one’s least advantageous to authors take exclusive rights for a stipulated period of time. The less disadvantage (but no less inexpensive) take nonexclusive rights. It is a good idea to review all contracts carefully, but with particular care with printing/distribution service contracts.
An unhappy author who contracted with PublishAmerica without considering the consequences of disadvantageous terms states on her website:
I did not research PublishAmerica thoroughly before submitting my manuscript to them. I took my information strictly from PublishAmerica’s own website. After my contract was signed and my book was well into the publication process, I decided to do a Google search just out of curiosity.
I soon found myself confused and frightened by the negatives I encountered. I really didn’t know what to think. Had I made a mistake by contracting with PublishAmerica? How was I to really know?
PublishAmerica describes itself as “the Nation’s number one book publisher!!” And as a “traditional book publisher.” It may be the first, but not the second.
The genesis of this Note on contracts is an offer from PublishAmerica to its published authors brought to my attention by one of my readers to revert rights granted in its “publishing contract.” To put the matter in context, the author granted “publisher” exclusive rights for 7 years. The contract contains no provision for reversion of rights, but provides for reassignment to author (reversion) for a fee:
24. When in the judgment of the Publisher, the public demand for the work is no longer sufficient to warrant its continued manufacture, the Publisher may discontinue further manufacture and destroy any or all plates, books, sheets and electronic files without any liability in connection therewith to the Author.
If “publisher” elects to discontinue manufacture for lack of “public demand”
the Publisher agrees to notify the Author of such decision in writing, and will offer to transfer to the Author the work and its rights in the copyrights thereon, the plates (if any), the bound copies and sheet stock (if any) on the following terms F.O.B. point of shipment: the plates at their value for old metal, the engravings (to be used only in the work) at one-half (½) their original cost, the bound stock at one-half (½) the list price, and the sheet stock at cost of gathering, folding, sewing and preparing for shipment, all without royalties.
Only if the author agrees to pay a fee for reversion will PublishAmerica “offer to transfer to the Author the work and its rights in the copyrights.” The offer is made in an e-mail:
Dear [Author]
Your book … has shown no sales for longer than a year.
At this time you may want to have your book’s publishing rights reverted back to you.
We can arrange that.
Go to http://www.publishamerica.net/service/ReturnRights.html and instruct us to return the rights to you. In the Ordering Instructions box, write your name and the title of your book. You will receive the termination documents by mail. There are no strings attached to this termination except the $199 processing fee that covers our administration costs and our de-listing obligations
to vendors and/or wholesalers. You must choose a shipping option to activate your rights return
instruction.
Thank you for having been a PublishAmerica author, or for sticking around if that’s what you
prefer!
–PublishAmerica Author Support Team
The likelihood of “public demand” is remote after an initial period. Much depends on the author’s own initiatives – a promise by someone calling itself “publisher” that “[s]ales promotion, advertising and publicity shall be at the Publisher’s election and discretion” is illusory. A promise of performance at a party’s “election and discretion” is not an enforceable. If there is continuing “public demand” it is up to the author:
17. ***The Author agrees to actively participate in promoting the sales of the said literary work in his home town area and elsewhere, by making himself available to media interviews, book readings and/or signings, and other public sales promotion appearances.
In essence, the right of reversion is transformed into a right of “publisher” to discontinue manufacture and all the other services “promised”, so “offering” reversion is simply another source of income to “publisher.”
I am planning on self publishing through an e-book service. Will my rights be transferred to the publisher by means of the terms and conditions of the agreement?
Rights granted are only those that you agree to give. The balance are retained. Think of a contract as a proposal. It is not a one-way street. Be wary of non-negotiable contracts alleged to be “standard.”
Certainly be sure to retain copyright in your own name. To take an example of what to expect. Copyright remains with the author under the Amazon “Kindle Direct Publishing.” The focus (not unexpectedly) is on distribution. Article 5.5, Grant of Rights reads that “[y]ou grant to each Amazon party, throughout the term of this Agreement, a nonexclusive, irrevocable, right and license to distribute Digital Books, directly and through third-party distributors, in all digital formats by all digital distribution means available.” This may not be true of other e-book publishers.
If you have any concerns, go to Writer Beware™ . I find this an excellent site for checking on publishers, printers and shenanigans.
Strings of effectively arranged letters, words, phrases, clauses and sentences are the essence of expression. They are owned by the author who creates them and protected by copyright law, although infringements are not actionable unless the work is registered with the Copyright Office. If an author includes in his work expressive material owned by others (compilations or derivative works) he or she must carve out in the copyright application what is not to be included in the certificate. This requirement applies whether or not the author has been granted permission to use the expressive material. Section 103 of the Copyright Act provides as follows
(a) The subject matter of copyright as specified by section 102 includes compilations and derivative works, but protection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully.
(b) The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.
The copyright application asks the applicant to state under oath the specific content both included and excluded for registration. The Copyright Office defines material to be excluded as “preexisting material”, as follows:
Material is preexisting if it has been previously registered, previously published, is in the public domain, or is not owned by this claimant. (Emphasis added).
The Application lists four categories for exclusion, “Text,” “Artwork,” Photographs,” and “Computer Program.” There is also a blank field for “Other” which can be used to more specifically particularize what is being either excluded and included for copyright registration.
In speaking about expressive material, it is not only that which is written, or if written only published, but includes verbal expression as memorialized for example in an interview. The expressive material in unpublished letters as another example is owned by the writer of the letters not the recipient who owns only the paper on which the content is written. None of this material can be copied unless it meets the criteria for fair use. Control over the reproduction of a work and derivatives, dramatic performances and other exclusive rights is reserved to the author.
Rights to unpublished material was the principal issue in a Salinger lawsuit concerning the use of the most interesting quotations from letters in an unauthorized biography of the author. “Salinger” held the Court, “has a right to protect the expressive content of his unpublished writings for the term of his copy-right, and that right prevails over a claim of fair use under ‘ordinary circumstances’,” Salinger V. Random House, Inc., 811 F.2d 90 (2nd Cir. 1987). Ideas, however, are not copyrightable (to be discussed in a later Note).
For protecting expressive material, what applies to longer works is equally true of shorter published or accepted for publication on the Internet. Internet anthologists and aggregators who publish material have the right to register their aggregations as compilations, but depending on the terms of license (exclusive or non exclusive) have no control over an author’s future use of his or her work. Separately, authors may register their own journalistic and opinion pieces and exploit them as they will. Whether to register, however, may depend on the occasion for the publication, whether independent or part of an aggregation and the value of the expressive material.
Ephemeral and generic musings pass in a blink. More thoughtful notes and essays standing independently are more likely candidates for registration. There is a line of cases that hold that expressive material may even extend to short phrases if the “sequence of thoughts, choice of words, emphasis, and arrangement … satisf[ies] the minimal threshold of required creativity.” The “minimal threshold of required creativity”, however, is a high bar. Flash fiction or flash any other genre may qualify and should be registered. Copyright registration is relatively inexpensive and can be completed online for $35.
If the purpose for writing is to provide serious material to an Internet audience and the author is not the publisher, publishing is not without bumps. In a recent contract involving contributions to a website “journal” a website publisher agreed to accept articles on a non-exclusive basis (which is fine), but its contract provided that “[i]f you choose to republish your articles, you MUST publish them either with a NoIndex HTML tag or as an image file” (which is not so fine because although it appears not to restrict it limits the author’s ability to reach audiences other than the publisher’s). So, in clicking “accept” at least pay attention to the terms and who will own the published piece.
About electronic rights” there are two fundamental questions: What are electronic rights? And, Should an author grant or retain them?
“Electronic rights” is shorthand for a basket of rights and multiplicity of products including 1) verbatim text editions delivered through multiple platforms; and 2) non-verbatim multimedia products including interactive educational or entertainment CD-ROMs and DVDs, compilations, and online databases.
In a typical Electronic Rights provision the publisher tries to control all rights for an unlimited term. However, because each right in the basket is distinct they should never be granted wholesale. And, if electronic rights are granted individually there should be no ambiguity in the publishing contract as to the extent of the grant and provisions for reversion.
Electronic Text Rights are defined in a mainstream publishing contract as
the exclusive right to publish, and to authorize others to publish, the text of the Work in whole or in part, in visual form for reading, by any electronic, electromagnetic or other means of storage, retrieval, distribution or transmission now known or hereafter devised.
Multimedia Rights are defined as
the rights to create, to publish and to use in electronic media, works in any language based on the Work (including the rights to create and to incorporate into those works, text, dialogue, sounds, music, artwork, video, animation, moving images, interactive elements, and other matter whether or not taken or derived from the Work or from the plot elements, characters, fanciful places, situations, facts, ideas and events portrayed in the Work) …
Publishers expect to receive the rights to publish electronic editions. This is appropriate when they are in a position to exploit them. However, grants of rights in sweeping terms give the publisher control of all the electronic uses of an author’s work. A boilerplate contract provision, for example, may require the author to grant the right “to exercise and license (i) the right to reproduce, publish, distribute and sell the full length Work in the English language in a product reproduced in print-on-paper or other physical media.”
The term “media” is too broad and should not be permitted to creep into a provision describing use of the text in other formats. The rights granted should be limited to reproduction of the verbatim text of the print-on-paper work in an electronic format. The electronic edition should be the entire Work, unaltered and unembellished, unless otherwise expressly set forth in the publishing contract. The provision for electronic editions should not include by default any expansion of the right granted. Advertising and hyperlinking rights should be specifically spelled out if permitted. The maximum number of words for preview on the publisher’s or bookseller’s website depends on the genre.
Traditional publishers produce, distribute and market books at their own expense. Print on demand companies offer editorial, design and publishing services or are printers disguised as publishers. Many of the companies are faux “publishers” in the business of fulfilling whatever sales demand the author is able to generate through her own marketing efforts. If you are considering using a non-traditional publisher check first with “Writer Beware” a blogging site I recommend. The bloggers on “Writer Beware” have recently discussed a number of companies authors are cautioned to avoid including faux publishers and one in particular who is a defendant in a civil fraud action commenced by the Florida Attorney General. The cautionary tale is to read before you buy.
What should an author look for? Let us look at a couple of contract provisions from a faux publisher a client recently brought to my attention. The contract included the usual boilerplate provisions expected in a publishing contract but also contained a provision that required the Author to make a substantial payment. The provision read as follows:
The Author shall receive 10 free copies of the Work and agrees to purchase 1,500 books at $9.22 per copy (payable 1/3 on signing, 1/3 30 days from delivery, and 1/3 90 days from delivery) plus the cost of shipping.
In other words, for the privelage of having her Work published the Author agrees to pay the “publisher” $13,830 plus shipping. In addition, the Author has to do her own marketing. The provision continues:
The Author is encouraged to sell copies of the Work at public speaking engagements, the Author’s website, by direct mail, including through a newsletter, as a premium … or any other manner.
The “publisher” magnanimously assures Author that it is prepared to “negotiate [with the Author] in good faith for a higher discount depending on the number of copies involved.” Unsaid, is that such an arrangement would only be suitable for authors on the lecture circuit who sell their books to audiences or over the Internet, but $9.22 per copy probably represents a significant markup over the actual cost of printing and binding.
What this Author signed was not a publishing contract but a printing contract. The Author is required to purchase books in bulk thereby relieving the “publisher” from printing at any one time more copies than the Author orders. The royalty schedule which appears typical for the kind of work involved is actually illusory since the only income (if any) come sfrom the Author’s own efforts.
Exiting contracts that contain no termination clause or reversion of rights provision is problematic because the “publisher” controls the rights and not the author. One possibility, which worked in a recent case was to put the “publisher” on notice under a termination provision that contained a definition of “in print.” A book available only on demand (a reasonable argument can be made) is not “for sale in at least one U.S. edition” as that term is understood in the publishing industry. The “publisher” agreed, the contract was mutually terminated and all rights were reverted to the author.
To be safe, negotiate changes to a “publishing” contract before you sign it. And, if the “publisher” has a policy of not negotiating changes to what it calls its “standard contract”, then better to forgo it.
A misconception about publishing agreements is that the form authors receive is “standard” in the industry. “Standard” is a myth. One imagines an editor saying to an author: “This is our standard contract.” What he means to convey – he is being very nice about it – is that the form contract is fair because it is standard. But, this is a non sequitur. One size does not fit all. “Don’t worry. We’re looking out for your interests” is nonsense. The myth is perpetuated by acquiring parties to induce insomnia. Understandably, repetition of the myth gives strength to the concept of “fairness.” And, for this reason authors may find it difficult to resist the temptation of signing what others have accepted. But, authors should surely resist. She is licensing her copyrights; the publisher or licensee is promising what it will do with them.
It is true that authors and publishers (or other licensees) have in common a desire to profit from the author’s work, but their interests are not isotropous and lawyers for the offering party are more adept in phrasing terms to promote their client’s interests than in attending to the author’s. For this reason alone, publishing (and other) agreements should not be accepted merely on faith of fairness. In every publishing agreement authors can expect to encounter “standard” subjects, such as grant of primary, subsidiary and ancillary rights, division of licensing fees, representations and warranties, compensation in the form of advances and royalties, option for future works, non-compete clauses and so on. However, the language and content of the terms – the promises made by the publisher and its demands upon the author – represent only the publisher’s offer.
The view taken here and in future postings is that authors should know what they are buying when they sign a contract. Some kicking of tires is not irrational. The fact is, publishing and licensing contracts are not drafted for the benefit of the author. They always ask for more than an author should be willing to give. Because the publisher has the advantage of being the first to state the terms of the offer. So, unless the author responds with proposed terms of her own the negotiation is controlled by the publisher’s language and demands. Don’t be placated if questions about the contract elicit the response that the provisions are “standard.” Uncertainty about what rights have been granted will only lead to trouble if the work is commercially successful. The contract should certainly include provisions expressly stating what rights the author has granted and those she retains.
Although it may be difficult for an author to resist picking up the pen and instantly agreeing to the terms offered, a publishing contract from a publisher should be regarded as an invitation to negotiate. Authors should not sign a contract without understanding what she is giving up in exchange for a publisher’s or licensee’s promises. Contract terms are merely proposals until the parties reach agreement.
Important Negotiation Points
1. The publisher should have the resources to distribute and publicize the book in the territory granted;
2. The contract should contain a clause which specifically states which rights are reserved by the author;
3. The contract should be clear about submission deadlines, acceptable manuscript, royalties and bonuses;
4. The contract should contain out of print and termination clauses which permit the author to reclaim all rights to the book or rights which the publisher has not licensed within a reasonable time after notice of demand for reversion.
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