Dissecting A Publishing Contract – Part 1 of 4

Did you ever wonder what exactly all that contract language actually means in your shiny new contract offer you just received from a publisher? Today I’m joined by my new friend and intellectual property lawyer, Kathryn Goldman.

Kathryn  represents writers, artists, filmmakers, and businesses, protecting them from having their work and art ripped off. Over the course of the next four weeks, she will share a series of posts explaining common provisions in traditional publishing contracts. Today’s post discusses the Grant of Publisher Rights provision.

What is the Grant of Publisher Rights in a Publishing Contract?

If you’ve come to the point in your writing journey where a traditional publishing contract is in your sights, I congratulate you. I know it has been a long and difficult road.

If you’re not there yet, stick with it, you’ll get there with a combination of hard work and some luck.

Traditional publishing contracts are written to protect the publisher. They are not etched in stone. They’re digital like just about everything else in this world and they can be changed with a couple of keystrokes.

You need to be prepared to negotiate for changes in a publishing contract if you want them. In order to do that, you need to know what it is you want to change.

We’re going to begin this series of four lessons in publishing contract law with what is usually the first provision found in most publishing contracts—Grant of Publisher Rights. This is a critical clause in the contract. It determines which rights you license and which rights you retain.

Here’s the text of a grant clause from an actual contract [my comments are in blue and not part of the contract]:

Grant of Publisher Rights.

1) The Author hereby grants, assigns, and transfers to the Publisher the following exclusive worldwide rights and privileges to and in connection with a Work, presently entitled Title of Book which Work is a book.

• What you need to know:
  • As an author, you own the copyright in the book. In the grant of rights provision, you are licensing, not selling, your copyright subject to reversion (get ‘em back) rights which come later in the contract.
  • Generally, there are two types of rights: primary publication rights and subsidiary rights.
  • This provision is a license of exclusive worldwide rights which is the broadest possible grant—the right to publish the book in all countries in all languages.
  • When licensing broad rights, such as foreign language rights, you need to consider whether this publisher is the best entity for delivering on those rights. Does this publisher actually produce foreign language books, or are they just gathering up rights they might not exploit on your behalf?
  • An exclusive grant means that the publisher intends that you cannot retain any primary publication rights for licensing elsewhere.
  • Words that are capitalized in a legal contract mean that they are a defined term. Here, “Work” means Title of Book, for instance.

2) The sole and exclusive book publishing rights in printed format, paperback and hardcover, and the right to sell copies of the Work in the open market throughout the world.

• What you need to know:
  • You can divide rights between hardcover and softcover publishers. With the consolidation of the publishing industry, that specialization has become elusive, but you could still reserve either hardcover or softcover rights to license to a publisher with a stronger presence in either one of those markets.
  • This provision repeats that the right to sell the Work in any printed format, hardcover or softcover, is theirs “throughout the world.”
  • Again, it may not be in your best interest to grant rights that a publisher is going to sit on without developing. You need to consider whether some other publisher or company is better situated to exploit a particular set of rights.

3) The sole and exclusive electronic book publishing rights including formats such as: PDF, HTML, PostScript, DjVu, ePUB (IDPF), FictionBook, Mobipocket, Kindle, eReader, TealDoc, Broadband eBook, WOLF, Tome Raider, ArghosReader, Microsoft Reader, Multimedia eBook, Repligo, and related electronic formats including any new e-book formats invented while this agreement is in effect, and the right to sell copies of the Work in open markets throughout the world.

• What you need to know:
  • You are unlikely to be able to reserve or retain ebook rights. Publishers simply aren’t issuing contracts that don’t include ebook rights.
  • This language does not include the license of mixed media rights—ebooks with pictures or with sound or both. To clarify that, this provision should specify “text only” ebook rights.
  • Here again, the publisher is insisting on “open markets throughout the world.” This means ebooks and their translations.
  • Ask your publisher about its history of successfully selling ebook translations for their authors. If they don’t really do it and are just collecting rights, this may not be something you want to license to them.
  • This language – “any new e-book formats invented while this agreement is in effect” – is a red flag. The publisher wants rights to innovative technologies that haven’t been invented or monetized yet.

4) The sole and exclusive audio publishing and performance rights including formats such as: Compact Disc (CD), MP3, M4A, M4B, WMA, and related sound formats currently available or invented while this agreement is in effect, and the right to sell copies of the Work in open markets throughout the world.

• What you need to know:
  • Is this publisher known for developing audio books? As with foreign translations, you should think about whether another publisher is better suited to exploiting audio rights on your behalf or if you want to do it yourself.
  • This provision does not take mixed media into account. I would argue that those rights have been reserved under this language, but it is better to make it clear in the contract.

5) The sole and exclusive subsidiary publication rights set forth below. These subsidiary publication rights are granted to the Publisher worldwide.
Subsidiary Rights. The rights in this agreement are hereby defined to include the rights enumerated below and are the be shared by the Author and Publisher in the percentage indicated, less only such direct expenses, including agent’s commissions, as shall be incurred by the Publisher in disposing of such rights:
     i) Abridgement, condensation, or digest 50%
     ii) Anthology or quotation 50%
     iii) Book clubs or similar organizations 50%
     iv) Reprint 50%
     v) Special Editions 50%
     vi) Second serial and syndication 50%
    (including reproduction in compilations, magazines, newspapers, or in books)

What you need to know:

• These subsidiary rights can be sliced and diced between other publishers or yourself just like any other right discussed in this post.
• You need to decide whether this apportionment of proceeds from these subsidiary rights is acceptable to you.
• Given how all encompassing this contract is, I would have expected the publisher to require a transfer of rights to publish in braille and other accessible formats.

Author hereby retains all rights to the work not specifically granted to the Publisher in this contract such as movie and screenplay rights.

• What you need to know:
  • These are the only subsidiary rights the publisher believes it has left the author in terms of the rights retained in the Work and can sell to others—movies and screenplays—probably because the publisher acknowledges that it has no expertise in these areas.
  • Like the other rights that you can license, you can divide up movie and screenplay rights further into English and foreign language rights, or live performance and film rights, for example.
  • This is where retention of mixed media and accessible format rights should be clarified.

Contracts are negotiable

What seems like a good deal today may not be a good deal by this time next year. If your publisher is not in a positon to take advantage of a particular right that is packaged in the contract, try to get that right separated out. License it to someone else, or develop it yourself. Think of each license as a separate stream of income.

Instead of putting the potential for all the income from one book into the hands of one publisher, consider creating multiple income streams for each right that can be licensed. Leverage your rights and earn more money.

Remember, when negotiating nothing is standard regardless of what your agent or the publisher tells you. A term may be non-negotiable in the sense that the publisher won’t change its position. Then it’s up to you to decide whether to take the deal or leave it.

While I am a lawyer, this post is not legal advice on any specific contract. It is an attempt to educate you as to what the terms in a publishing contract mean so you can decide whether you should negotiate for something different.

Finally, you need to know that contract law can be different from state to state. Most contracts have what are known as “Choice of Law” provisions that identify which state’s law is going to apply. This post is written in generalities. The choice of state law in each contract is going to determine the actual interpretation of the contract.

Next week we’ll discuss another provision in a traditional publishing contract.

 

Kathryn Goldman is a lawyer who protects writers, artists, filmmakers, and businesses from having their work and art ripped off. Since she’s a lawyer, she has to mention that she’s not *your* lawyer (so this article isn’t technically legal advice), but you’re still invited to download her Digital Artists Rip-Off Protection Report. You can also follow her on Twitter @KathrynGoldman

Thanks Kathryn. I look forward to next Monday!