Submit Questions Have contract or copyright questions? Drop me an e-mail. I reserve the right to edit questions to make them more broadly applicable before posting an answer.
E-Mail sheillev.aol.com
Want to follow questions and answers,
Go to Questions & Answers, Tab at top of page
|
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?
The principal legal mechanisms for protecting copyright of works recopied on the Internet without permission and in violation of an author’s copyright is laid out in the Digital Millennium Copyright Act (DMCA). The major aggregators of content have developed policies and take down forms in compliance with the DMCA. If a copyright owner finds unlawful copying of her material she can request the Googles of the world to take it down. Google and the other aggregators have developed copyright-infringement notification policies for both DRM free (digital rights management) and digitally accessible works with embedded copyright protection systems. This short note only deals with DRM free materials, § 512 of the Copyright Act. Materials embedded with copyright protection systems are covered in § 1201 et seq. of the Act.
The Google notification form asks a series of questions that match the statutory list in §512 (c)(3)(A) including whether the complained about material is a copyright infringement. The series ends with this notice:
IMPORTANT: If you knowingly misrepresent that material or activity is infringing, you may be subject to liability for damages. Accordingly, if you are not sure whether material available online infringes your copyright, we suggest that you first contact a lawyer. Please also note that your message to us may be forwarded to the party who filed the original copyright complaint.
This intimidating coda is based on § 512(f) of the Copyright Act. It provides:
Any person who knowingly materially misrepresents under this section —
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or misidentification,
shall be liable for any damages, including costs and attorneys’[] fees, incurred by the alleged infringer, by any copyright owner or copyright owner’s authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.
There is not a great deal of case-law interpreting this provision of DMCA, but federal courts that have addressed the provision have offered additional gloss on the meaning of the terms “knowing” and “material misrepresentation.” “Knowingly” has been interpreted to mean ‘that a party actually knew, should have known if it acted with reasonable care or diligence, or would have had no substantial doubt had it been acting in good faith, that it was making misrepresentations.” Online Policy Grp. v. Diebold, Inc., 337 F.Supp.2d 1195, 1204 (N.D.Cal. 2004). And “[a] material misrepresentation is one that ‘affected [the infringer or service provider's] response to a DMCA letter’.” Capitol Records, Inc. v. MP3tunes, LLC, 611 F.Supp.2d 342, 346 (S.D.N.Y. 2009) (quoting Online Policy Grp.,337 F.Supp.2d at 1204).
Let us get our bearing. Copyright protects “original work[s] of authorship fixed in any tangible medium of expression,” regardless of whether the work has been registered. As a general rule, infringement is not actionable until the author has a certificate in hand (although this may not be true for all Circuits). That is, the author cannot commence or maintain an action in federal court until the work is registered. But the DMCA is a self-help procedure. Only if the service provider refuses to take down the infringing (or alleged infringing copy) is the author authorized to proceed further with injunctive and legal relief. There are questions that courts have not yet reached in commencing an action for infringement of unregistered material. The Copyright Office provides some information on its website.
In agreeing to publish a work publishers typically demand author “grant and assign” it an exclusive license to “print, publish and sell” the work for the “term of copyright and all continuations, extensions, and renewals thereof” in stipulated languages and territories. In modern publishing agreements the language is clear that the grant extends to digital rights. However, the grant of right in 1970′s contracts typically used the phrase “in book form.” Ebooks were not imagined at that time (or, if they were) their form was not realized until the late 1990′s. There are two questions. First, did the author intend (could it have intended) to grant publisher more than print rights? If she did not then she can separately grant ebook rights to an ebook publisher. Second – an interrogative conundrum – is an ebook a book “in book form”?
It appeared that the questions were answered in Random House, Inc. V. Rosetta Books, 150 F. Supp.2d 613 (S.D.N.Y. 2001), aff’d 283 F.3d 490 (2nd Cir. 2002). In that case, the district court denied a preliminary injunction against Rosetta Books which the Second Circuit Court of Appeals affirmed. Because the parties thereafter settled the dispute the ultimate questions were never answered. But, the district court held (citing New York contract cases) that the phrase “in book form” did not “include the right to publish the works in the format that has come to be known as the ‘ebook’.” The court held that it did not because “in the publishing industry” the phrase “is understood … to be a ‘limited’ grant.” The phrase “limited grant” is anathema to publishers who believe they acquired an exclusive license to “print, publish and sell” the work in every conceivable format “now known or hereafter invented” for the term of copyright.
The unresolved issue of “in book form” has now returned to court in HarperCollins Publishers LLC. v. Open Road Integrant Media, LLP., 11 Civ 9499 (S.D.N.Y complaint filed December 23 2011). The complaint alleges that “[n]otwithstanding the … grant of rights … Open Road, a digital publisher … seeks illicitly to capitalize on HarperCollins’ four decades of publication and promotion of Julie of the Wolves [by] … publishing an electronic version of that book.” The complaint continues:
The rights that HarperCollins acquired from George plainly encompass such electronic means of distribution, which is but a technology-enabled variant for how consumers can read the Work. Open Road’s unlawful exploitation of those rights is directly competitive with sales of the Work in paper format and HarperCollins’ own plans to publish Julie of the Wolves as an e-book.
The Random House case was decided under New York contract law. In affirming the district court, the Second Circuit Court of Appeals added that “New York … has arguably adopted a restrictive view of the kinds of ‘new uses’ to which an exclusive license may apply when the contracting parties do not expressly provide for coverage of such future forms.” New York being the capital of book publishing in the United States it is not surprising that the issue are not been litigated in any of the other Circuits.
Given how the Random House case ended HarperCollins is in a position to test “whether the license extends to ebooks” by exploring the “‘evolving’ technical processes and uses of an ebook … and the reasonable expectations of the contracting parties,” Random House, 150 F.Supp.2d at 615 n. 5. Random House had argued that “the phrase ‘in book form’ means to faithfully reproduce the author’s text in its complete form as a reading experience and that, since ebooks concededly contain the complete text of the work, Rosetta cannot also possess those rights.” The court did not see it that way:
While Random House’s definition distinguishes “book form” from other formats that require separate contractual language — such as audio books and serialization rights — it does not distinguish other formats specifically mentioned in paragraph # 1 of the contracts, such as book club editions and reprint editions….
The Court continued:
Not only does the language of the contract itself lead almost ineluctably to the conclusion that Random House does not own the right to publish the works as ebooks, but also a reasonable person “cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business” … would conclude that the grant language does not include ebooks.
The Court concluded:
Employing the most important tool in the armamentarium of contract interpretation — the language of the contract itself — this Court has concluded that Random House is not the beneficial owner of the right to publish the eight works at issue as ebooks.
HarperCollins’ arguments are not different. It alleges that Open Road is seeking “to reap where … it has now sown by seeking to divert sales of the Work from HarperCollins in the rapidly expanding e-books market.” It complains that “[t]his fundamental impairment of rights ensured to HarperCollins by contract and copyright law should be enjoined and Open Road’s unlawfully gotten gains therefrom disgorged.”
The next substantive step in the HarperCollins litigation will be an application for a preliminary injunction. The same route as in Random House and the same legal questions. If the contract term “in book form” does not extend to ebooks, then Open Road’s publication is not copyright infringement. If the author only agreed to a “limited grant” (harking back to Random House) she may legally assign her right to a digital publisher to publish her work in ebook format.
One can hardly wait — breathlessly is more apt! — for the next installment on this issue. Until the grant formula “in book form” was abandoned for a more inclusive grant of rights (which is now “standard”) digital rights for works contracted for in the 1970s and on may very well be under authors’ control. Although George has not been named in the lawsuit she undoubtedly executed a publishing agreement with Open Road. That too could be an issue because the ebook will be in competition with the print book, which may violate the non-compete term in the publishing agreement.
The Copyright Clause of the U.S. Constitution provides for copyright protection to “original works of authorship.” The Supreme Court has stated that for a work to be protected it has to “possess[] at least some minimal degree of creativity.” Feist Publ’ns, Inc. V. Rural Tel. Serv., 499 U.S. 340, 345 (1991). There must be some intellectual labor involved. The Code of Federal Regulations, 37 C.F.R. §202.1(a) lists some of the material not subject to copyright protection. It includes “short phrases such as names, titles, and slogans.” Moreover, that a work (as a whole) has been registered is not conclusive that all linguistic and structural bits and pieces are equally protected. So, for example, if the alleged infringement is an unprotectible element there is no infringement even though it may be identical or substantially similar to the original. In determining infringement, the focus is on “the similarity of the expression of an idea or fact, not on the similarity of the facts, ideas, or concepts themselves.”
“Like scènes à faire, individual words and short phrases are generally not protected because they lack the requisite originality.” Prunte v. Universal Music Group, Inc., 699 F.Supp.2d 15 (D. Columbia, 2010). Plaintiff in Prunte complained that defendant copied words and phrases from his copyrighted songs. To his “Fire in the Hole” (title of the song) the defendant had “Fire in Da Hole”; to his “God, Pick Up the Phone” the defendant had “Lord, Give Me a Sign”; to his “I’m So High” the defendant had “So High.” The claim for “Fire in the Hole” was rejected for being a title. “Lyrics using cliched language – such as the equation of being high to touching the sky – ‘are too trite to warrant copyright protection’,” citing Johnson v. Gordon, 409 F.3d 12, 24 (1st Cir. 2005). The court concluded that “[a]s a whole, the similar elements listed by [plaintiff] amount to nothing more than a ‘random’ assortment of ‘similarities scattered throughout the works,’ which ‘[do] not support a finding of substantial similarity where [the] works as a whole are not substantially similar.”
If an “ordinary phrase” lacks the “minimal degree of creativity” it cannot be protected under any other statutory or common law theory. In Starobin V. King, 137 F. Supp.2d 93 (N.D.N.Y. 2001), for example, the author created a voluminous list of “correspondences” demonstrative according to the author of “literary rape.” The alleged “telling similarities” included “hearing footsteps on gravel (Blood Eternal), and hearing footsteps on black tar (Desperation)”; “driver talks on walkie-talkie (Blood Eternal), and author talks on cellular phone (Desperation)”; “tooth pulp like undigested meat (Blood Eternal), and raw tissue from mouth and nose like raw meat (Desperation)”; and “gull with blood drained out (Blood Eternal), and dog devoured by buzzards (Desperation).”
Even if the alleged infringer acknowledged familiarity with the plaintiff’s work, employing similar phrases do not add up to copyright infringement. The most recent case on titles and “ordinary phrases” is Syrus v. Bennett, et ano., ___ F.3d ___ (10th Cir. November 3, 2011). Plaintiff (appearing pro se) argued that the alleged infringed phrases, “Go Thunder” and “Let’s Go Thunder” are protected under the theory that “even a small portion of a copyrighted work may be entitled to copyright protection.” While that may be so, “[t]he mere fact that a work is copyrighted does not mean that every element of the work may be protected.” An ordinary phrase taken from a copyrighted work “may be quoted without fear of infringement,” but not one distinctive of the author’s voice. Salinger v. Random House, Inc., 811 F.2d 90, 98 (2nd Cir. 1987).
In Syrus, plaintiff argued that if individual words such as “Budweiser” and “Coors” are entitled to possession then so are his words. But (as the court pointed out) this confuses copyright and trademark protection. “Unlike copyright law, trademark rights ‘grow[] out of … use [in commerce].” That is, trademark protected words and phrases presuppose their use as the source of goods or services. That is not the case with creative works. The “brand” (if such there be one) is the author not the work.
I haven’t registered my essay. What rights do I have against someone who has copied from it?
An infringer can be sued in U.S. federal court, but only after a registration has been filed for the work. One of the privileges of registration is standing to maintain an action. If registration precedes infringement and you prevail you are also entitled to attorneys fees.
The Copyright Act has teeth. It protects the integrity of an author’s work by granting the copyright holder certain exclusive rights in both her original and derivative works. This means the author controls who may do what to her work. For example, without a license from the author no one can prepare a theatrical reading or performance based on a memoir. To do so is a copyright infringement for which the infringer is liable in damages, penalties and attorney’s fees. (I am not speaking here about fair use, to be discussed in the next Note.)
These principles have been affirmed in a number of recent cases: a District Court case in New York parsing the issue of copyrightability for a parody; a decision of the United States Court of Appeals for the Third Circuit in New Jersey involving a clipped photograph; and a recent appellate case from the 1st Circuit. In this Note I will focus on the 1st Circuit decision, Spooner v. Een, 10-2393 (1st Cir. 7-5-2011) because it exemplifies a situation in which the alleged infringer pushes back. Where the infringement is clear, pushing back has enormous consequences on the award of attorney’s fees. In Spooner, the infringement occurred when the defendants included a song composed, copyrighted, and performed by the plaintiff in a commercial advertisement prepared for television and internet display. The author had not authorized use of the work.
With tongue in cheek, the Court stated that “[i]t would serve no useful purpose to recite book and verse. It suffices to say that the parties engaged in frenetic motions practice, conducted extensive discovery, and squabbled over a plethora of issues (large and small).” It should not come as a surprise that copyright litigation is not inexpensive. One of the defendants settled and the other went to trial, and suffered the consequences of its rashness. The Court noted drolly:
After settlement negotiations fizzled, the case was tried to the court. The plaintiff prevailed: the court found that the defendants had willfully infringed the protected work and that Egan had failed to act celeritously in response to the plaintiff’s request to retire the Sugarloaf commercial.
The case came to the 1st Circuit Court of Appeals on the issue of attorney’s fees. The defendant argued that the “request was so exorbitant that it warranted an outright denial of fees.” The district court elected “not to go down that road” and neither did the appellate court. However little the award of damages, if the defendant insists on playing hardball it will pay the piper. The Court rejected the argument that there must be some proportionality in awarding attorney’s fees. Not necessarily so, held the Court:
It is obvious that the amount of fees requested by the plaintiff is quite large in relation to the statutory damages recovered (whether those damages are viewed before or after … set-off [by the settling defendant]). The law, however, does not demand strict proportionality between fees and damages….
The reason for holding to this position is that “a strict proportionality requirement would overlook entirely the value of other important litigation goals. That kind of rigidity would frustrate the core purpose that underlies many fee-shifting statutes, which are designed to afford private parties the opportunity to vindicate rights that serve some broad public good.” The “broad public good” of course is the right of authors to enjoy the fruits of their labors.
|
|
