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Ownership of Work Included in a Compilation

To have a work included in a compilation is a goal eagerly sought after by authors. It is a distinction for a story or article to appear in an anthology. What should the author be alert to? The question comes up in discussing digital aggregation of compilations in the context of authors’ rights under the Copyright Act. The answer is found in sections 103 and 201(c) of the Copyright Act as construed in decisions from the United States Court of Appeals for the Second Circuit and the Supreme Court.

Compilers and authors have complementary rights. Section 103 provides in pertinent part

The copyright in a compilation … 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. (Emphasis added)

Authors typically grant exclusive first publication rights to the compiler but non-exclusive rights thereafter. A non-exclusive right is not a transfer of rights under the Copyright Act. A “compilation” is defined in Section 101 as “a work formed by the collection and assembling of preexisting materials.” It includes “collective works” which are works “in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.”

Section 201(c) of the Copyright Act is composed of two sentences. The first concerns the author; the second the compiler. The first provides: “Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution.” The second sentence defines the compiler’s rights:

In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series. (Emphasis added)

Legally, author and compiler have separate rights under the Copyright Act, but the compiler’s “privilege of reproducing and distributing the contribution” after its initial appearance is limited.

Imagine that an author has contributed a story to a compilation which is one of a series, for example a quarterly anthology of short stories. The compiler wishes to have the entire series made available to future readers by an electronic database provider. Essentially two scenarios can be envisioned. In the first, the compiler licenses the series of compilations (the archives) to a third-party who aggregates the material in electronic and CD-ROM databases without the author’s permission. The compiler assumes the “privilege” to license the individual stories in the compilation. In the second scenario, the compiler (also without permission) either creates or licenses the compilations for distribution in a format that duplicates the compilations page for page.

The first scenario was the subject of a case decided in favor of authors, Tasini v. New York Times, 206 F.3d 161 (2nd Cir. 1999), affirmed by the Supreme Court, 533 U.S. 483 (2001). The second was decided in favor of the compiler, Faulkner v. National Geographic Enterprises Inc., 409 F.3d 26 (2nd Cir. 2005). Authors win in the first case because section 201(c) does not permit the author of a collective work (the compiler) to license an individual contribution without the author’s agreement to “express[ly] transfer … [her] copyright.” The compiler wins when the medium of reproduction preserves the original format.

The author of an individual contribution to a collective work owns the copyright to that contribution. Any unauthorized reproduction and distribution generally infringes the copyright unless such use is specifically protected by the Act. There are two sides to this principle: Tasini illustrates one; Faulkner the other. In Tasini, individual contributors’ works were licensed by the compiler for inclusion in electronic databases. The presumption under section 201(c) is that the author of a short story (or article, as in Tasini) “gives the publisher the author’s permission to include the article in a collective work … [as well as] a non-assignable, non-exclusive privilege to use the article as identified in the statute.” The Court held that section 201(c) does not permit compilers (or, as in Tasini, publishers”) to license copyrighted works where they “may be retrieved individually or in combination with other pieces originally published in different editions of the periodical or in different periodicals.”

Putting its decision in context with Tasini, the Court in Faulkner emphasized the different factual circumstances between the two cases. “Crucial to our decision” (in Tasini) “was the fact that each article had to be retrieved individually from the particular database and made ‘available without any material from the rest of the periodical in which it first appeared’.” The Supreme Court held that “publishers are not sheltered by §201(c) because

the databases reproduce and distribute articles standing alone and not in context, not “as part of that particular collective work to which the author contributed, “as part of … any revision thereof, or “as part of … any later collective work in the same series.”

In contrast National Geographic did reproduce the back issues of the magazine “as part of the collective work to which the author contributed or as part of any ‘revision’ thereof’.” National Geographic is entitled to the § 201(c) “privilege” because it converted the “intact periodicals (or revisions of periodicals) from one medium to another.” The Court noted that

Each issue of the magazine was scanned two pages at a time into a computer system. As a result, the [complete digital collection] user sees exactly what he or she would see if viewing an open page of the paper version, including the fold of the magazine.

Having complete digital collections available for the reading public is valuable – individual works would otherwise be lost in the accumulation of newer works. However, to scan separate individual works into a database must be expressly agreed upon by each author to avoid exposure to liability for copyright infringement. A digital database should benefit authors as well as readers and compilers.

March 29th, 2012 | Tags: , | Category: Compilation, Copyright Act, Copyright ownership, Permissions, Publishing contract | Leave a comment

Literary Agents: Performance and Entitlement to Commissions

Literary agents are the filters to the publishing industry; the first readers; and mainly indispensable.  Acquisition editors rely on their tastes and take their calls.  In relation to authors they are like as adventurers to booty: they seek and sell. Their fee, a commission for placing an author’s work, is spread over the economic life of the publishing contracts their efforts bring into being. What exactly is promised and performed and the commission the literary agent is entitled to is set out in the parties’ agreement. A literary agent typically receives a commission of 15% of the publisher’s gross revenues from book sales or licenses of subsidiary and ancillary rights. Author/agent agreements are terminable, but an agent’s right to commissions for services performed survives.

Authors are not captive to their agents.  We stress “not captive” and “services performed” because these issues arose in Lampack Agency v. Grimes, an unreported New York case decided in October 2010, and further reviewed in an appellate decision announced on March 1, 2012 (1st Dept.) The appellate division affirmed the trial court’s judgment dismissing the literary agent’s complaint that it was entitled to commissions from contracts negotiated after the author terminated the agency. The questions raised and the answers given in this case are significant markers as to an agent’s right to share in proceeds from subsequently created production after his connection with the author has ended.

Whether or not there is a written agent/author agreement, commissions are protected through a clause incorporated into the publishing agreement, an “Agency Clause.” The agent’s theory in  Lampack rested on the inclusion in the publishing agreement negotiated by the Lampack agency of an option provision for the author’s next work of fiction. The publishing agreement for the “option” work was negotiated by the author’s new agent.

The Lampack Agency included the following “agency clause” in the publishing agreement:

The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement. . . . Such Agent is hereby fully empowered to act on behalf of the Author in all matters in any way arising out of this Agreement. . . . All sums of money due the Author under this Agreement shall be paid to and in the name of said Agent. . . . The Author does also irrevocably assign and transfer to [PLA], as an agency coupled with an interest, and [PLA] shall retain a sum equal to fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement.

If a discharged agent has negotiated a publishing agreement that includes an option on the author’s next work, is he entitled to receive a commission on the publishing agreement for the option book? Both courts in the Lampack case made it clear that if such a right exists it would have to be expressly stated in the agreement between the author and the agent.

What does it mean for the author to have “irrevocably assign[ed] and transfer[ed] to [an agent] … an agency coupled with an interest”? What an author “irrevocably assign[s] and transfer[s]” is limited to commissions paid as a percentage of the author’s earnings. “An agency coupled with an interest” (the trial judge citing a case from 1896) “[means that] as a part of the arrangement with the principal, the agent received title to all or part of the subject matter of the agency.” The trial court stated:

In this case, the commission provision grants PLA a 15% commission in the proceeds from its sale of rights in Grimes’ literary works and not an interest in those literary works themselves…. (Emphasis added).

The appellate court went a step further:

It is not reasonable to interpret the phrase “this Agreement” to include either extensions of the 1999-2003 agreements or an agreement for the future work mentioned in the 2005 agreement …. If Grimes and Penguin had meant to give plaintiff commissions on such extensions and future agreement, they would have said so, especially since the 2005 agreement had a specific Option on Next Work clause.

Indeed, to interpret otherwise (in the Court’s words) would produce an “absurd result.” Rather,

Interpreting “this Agreement” to mean only the actual contract signed by the parties, not future agreements or extensions, is consistent with the doctrine that “[a]n at-will sales representative is entitled to post-discharge commissions only if the parties’ agreement expressly provided for such compensation.” (Emphasis added).

An agent engaged for an unfixed period is entitled to commissions on future contracts only for services performed during his agency. The appellate court in Lampack reached back to a 1900 case to explain why an agent is not entitled to commissions received for contracts entered into after discharge with customers he originally secured. In that earlier case the Court held:

He was to have his commission upon all such business, not merely because he had secured these original contracts, but because he was there to aid, if necessary, in securing renewals or additional contracts, and in keeping his customers in touch with the defendant …. contracts. He was consequently entitled to commissions upon renewals or additional contracts which came in during his period of employment…. The customers were … not his when they chose to contract directly with the defendant after his connection with the latter had ceased.

The legal principle is clear. An agent’s right to commissions is for services that result in one or more contracts. The “interest” agents have which survives termination of their agency accrues from their having completed services. The expectancy, if there is any, comes from fulfilling the purpose for which the agent is engaged. The phrase “an agency coupled with an interest”, which refers to ownership of a literary property, does not belong in an Agency Clause because that is not what the agent has. In Lampack the phrase served only to invigorate a dispute. And, who wants that?

March 18th, 2012 | Tags: , , , , | Category: Collective work, Compilation, Copyright Act, Exclusive rights, Infringement, Literary agent, Publishing contract | Leave a comment

Collective Work (Compilation) (Q & A)

What do I need to know about copyright on a collective work?  One of my stories is being reprinted in an anthology?

Unless you have signed an assignment, you do not lose your copyright. I assume that this grant is non-exclusive and you are not prevented from having the story reproduced by yourself or others.

The statutory authority is section 201(c) of the Copyright Act.  It reads, “Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution.  The Act continues, “In the absence of an express transfer of the copyright … the owner of the copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work.”

October 27th, 2011 | Tags: | Category: Collective work, Copyright Act, Questions & Answers | 2 comments