Showing posts with label contracts. Show all posts
Showing posts with label contracts. Show all posts

Thursday, May 9, 2013

Out of Sight, Out of Mind ... Out of Print?

“Out of print” status is important to authors (and publishers) because a publishing contracts should terminate - or at least allow the author termination rights (along with reversion of rights granted to the publisher in the contract) - when the Work goes “out of print” or within a stated time thereafter. Many contracts allow the publisher a stated time to return the work to "in print" status before the author can terminate, but even that clause doesn't trigger until the work is out of print.

For obvious reasons, it's important for authors to make sure all publishing contracts contain clear, unambiguous language describing when the work is "out of print." And remember: the popularity and prevalence of e-books means the contract should require more than "availability in any form and format" or you could be stuck with a work that's still "in print" even though it's only available in .pdf e-book form through the publisher's website.

When reviewing an “out of print” termination provision, the author should look for three important details:

1. How the contract defines “out of print.” If the contract merely states that the work remains in print until “no longer offered for sale” or “not offered for sale for X consecutive months,” the author may find herself trapped in perpetuity.

The contract should define “out of print” with reference to royalty-bearing sales, not "availability for sale" or amount of stock in the publisher's warehouse. Note: that's "royalty-bearing" sales - which generally doesn't include cheap sales at deep discount or copies distributed for review and promotional purposes.

Tying out of print status to "availability for sale" means the book will remain in print forever if the publisher offers the e-book version for sale through the publisher’s own website. Back in the days of print-only contracts, publishers could define “out of print” by reference to availability because sales depended upon the production of printed books. When the books all sold, the work went out of print unless the publisher opted for another print run. Now that publishing contracts include ebook rights, “out of print” status must be much more carefully defined.

2. Automatic termination vs. Notice and Revival. Does the contract automatically terminate when the work goes out of print, or does the contract contain a “notice and revival” provision requiring the author to notify the publisher of his or her intent to terminate after the work goes out of print (and then give the publisher time to produce another print run or return the book to “in print” status in order to avoid termination)?

Most publishing contracts contain a notice and revival provision, and from the publisher’s view, this makes sense. Publishers invest time and money in preparing and distributing works (and that’s without considering marketing efforts). Reasonable pre-termination notice makes business sense, and it does make sense for the author too – as long as the length of the notice period, and the publisher's time to cure, are reasonable and related to royalty bearing sales.

Unilateral author termination rights on "out of print" status have clear advantages for the author. Under this scenario, the contract states that if the work ever goes out of print, the author can terminate the contract immediately (or on some stated period, usually 60-90 days) upon written notice to the publisher. This kind of termination right is more rare than notice and right to cure, but it's something for the author and the publisher to discuss.

3. Non-ambiguous statement of rights reversion. It isn’t enough for the contract to state that the agreement terminates (or can be terminated) when the work goes out of print. The contract must also include a non-ambiguous statement of rights reversion providing that all rights granted to the publisher automatically revert to the author upon expiration or termination of the contract for any reason, including without limitation termination for out of print status. Rights reversion should not require (or worse, be tied to) a written release of rights from the publisher. Reversion should be automatic and immediate upon contract termination.

Without a clear statement of rights reversion, rights to the work could remain in limbo – or worse, remain with the publisher, even though the contract has ended and the work has gone out of print.

Read your contracts carefully, and make certain you know what the out of print language means. Don’t settle for “best guesses.” If you have any questions, get a professional opinion – even if that means paying for a specialist’s advice.

Once you sign, the contract controls your legal rights and obligations. Authors who take the time to ensure clear, acceptable and unambiguous terms up front, have a far better chance of successful long-term relationships with their publishers and greater benefits from their works.

Posted by Susan Spann

Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori. You can find her on twitter @SusanSpann 

Thursday, April 11, 2013

Derivative? Who You Callin' Derivative?

We're taking a break from our tour of John Q. Penman's contract this week to talk for a moment about Derivative Works.

The author of a copyrightable work is also the exclusive owner of the right to create derivative works based upon (copyrightable elements of) the original.

In copyright and publishing parlance, Derivative Works are any and all works (in all forms and formats) based on or arising out of an original creative work, as well as situations, themes, characters, worlds, and places featured in the original work.

This covers a lot of territory.

Sometimes, derivative works are easily spotted. Sequels, for example, are always derivative.

A screenplay about the character "Hermione Granger" (as created in J. K. Rowling's Harry Potter series) is derivative of the Harry Potter series.


A comic book about the adventures of Wesley Crusher's great-nephew is also derivative, even though Wesley Crusher never had a great-nephew in Star Trek: The Next Generation. If the comic is set in Roddenberry's world, it is derivative.

A movie about a cloned Imperial trooper who fled his battalion rather than fighting in the Clone Wars is derivative of the Star Wars saga (assuming we're talking about "those" Imperial troopers and "those" Clone Wars) even if the individual characters whose story we follow never appeared in the Star Wars universe. The reason? The world George Lucas built belongs to him - and so do all derivative works based on his creations.

Does that mean Lucas can stop anyone from creating space operas about cloned soldiers? No. (And I'm sure you'll all sleep easier for knowing it.)

Derivative works must be based upon copyrightable elements of the original work. You cannot claim that a work is "derivative" if the only shared elements are non-copyrightable archetypes.

For example:

A novel about Luke Skywalker's dentist is probably derivative.

A novel about a dentist stuck on a lonely outpost planet? Probably ok (but please don't name that planet "Tatooine")

The difference? One references a copyrighted world belonging to someone else. The other is built on archetypes to which no copyright attaches.

The concept of derivative works, by definition, raises the spectre of "fan fiction" - and the literal legal response is this: derivative fan fiction is copyright infringement if the author didn't grant permission for its creation. That's the law. It isn't "fair use" (with some rare exceptions too technical to dive into here) - even if it's done "in good fun" and even if no money is made on the endeavor. People can - and do - argue all kinds of points on this topic, but it doesn't change the law. It is what it is.

Forcing the lid back down on that particular wiggling can, let's move on to the author take-away for today:

It's vital to understand "derivative works" because most publishing contracts mention them in one context or another (and sometimes, more than one).

The bottom line for authors: retain control of your rights to derivative works. Do not give them away to the publisher, or to anyone else without adequate compensation separate from what is offered for publication of the original work.

We'll look at derivative rights again next week, but that's the short-form introduction. (And please ignore the worms peeking out of that can.)
 Posted by Susan Spann  
 
Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori. 

Thursday, March 21, 2013

Let's Not Get too Dramatic About Recording Rights...

If it's Thursday, it must be time for more subsidiary rights!

Last week's post addressed the merchandising clause, and this week we continue through John Q. Penman's fictitious publishing deal with a look at subsidiary rights clause (e):

(e) "Sound Reproduction" and "Non-Dramatic Reading" Rights, meaning the rights to create (or arrange for creation of), to publish, and to use (in all digital or electronic media) non-dramatic English language voice or digitized readings of all or any portion of the Work (including without limitation abridged and adapted editions), along with introductions, conclusions, and other narrative material, background music and/or background sounds, in all electronic media, including without limitation CDs, tape recordings, cassettes, and all other digital and electronic technologies now known or hereafter devised (individually and collectively, "Audio Editions"). 

Another dense clause, not easily parsed by unfamiliar eyes.

Let's dive right in.

Short version: the publisher is acquiring exclusive audio rights.

Longer version: this subparagraph grants the publisher the right to create (or hire someone else to create):

1. Non-dramatic readings and recordings of the Work, in all digital and electronic formats. (Note: this means "audiobooks" but also excerpts of readings for radio, etc.)

2. Introductory, concluding, and other narrative "material" - generally, this means an introduction or conclusion read by the actor doing the voice recording. (Note: the author has no right to review or approve this additional material.)

3. Background music and sounds, if desired by the publisher.

All things considered, this isn't a bad clause, though it's one John needs to remove if he's planning on selling his audio books rights separately from the book and e-book rights. 

 If the publisher has the capacity and intent to produce audiobooks, the clause itself isn't unreasonably onerous.

If John has experience with readings and voice work, he might want to ask for the chance to audition for non-dramatic readings produced by the publisher - if granted, such a clause would give John at least a chance to read for the audiobooks of his work. That said, many authors aren't the best selection for this job, so John will probably have to content himself with a chance to audition rather than a guarantee that his will be the voice on the audiobook.

Questions about the non-dramatic recording rights? Hop into the questions and let me know!




Posted by Susan Spann  
Susan Spann is a California publishing attorney and the author of Claws of the Cat (Minotaur Books, July 16, 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori. 

Thursday, February 14, 2013

Royal(ty) Pains, Part 2: Show Us the Money

Happy Valentine's Day, everyone! I hope your day is filled with love.

And since nothing says "love" like Legalese (I hope you know I'm kidding) ... let's dive back into the royalty language in John Q. Penman's deal....

You may remember John's (fictitious, and highly simplified) royalty paragraph from last week:

Royalties. Throughout the Term of this Agreement, and as long thereafter as necessary for Publisher to report all sales of the Work made prior to termination hereof, Publisher will pay Author the following royalties ("Royalties") on Publisher's sales of the Work:
        a. Hardcover. On Publisher's sales of hardcover editions of the Work, if any, except as specified elsewhere in this Agreement, ten percent (10%) of the list price on all copies sold.
        b. Paperback. On Publisher's sales of paperback editions of the Work, if any, except as specified elsewhere in this Agreement, eight percent (8%) of the
Publisher's list price on all copies sold.
        d. ebooks. On Publisher's sales of ebook editions of the Work (including without limitation all electronic, digital, and downloadable versions of the Work), if any, except as specified elsewhere in this Agreement, ten percent (10%) of the Publisher's list price of all copies sold.

        e. Audio Editions. On Publisher's Audio Editions of the Work sold in physical media form (e.g., on CD), if any, except as specified elsewhere in this Agreement,ten percent (10%) of the amount received by the Publisher on sales of the Work. With respect to exploitation of Publisher's Audio Editions by means of transmission, uploading, downloading, broadcast or similar means or methods other than sales in physical media form, if any (and except as otherwise specified in this Agreement) twenty percent (20%) of the amount received by the Publisher. 

In last week's post, we talked about the difference between gross royalties and net royalties, and how glad John is that his contract contains a gross royalty provision.

With that settled, let's look at the second point of concern: percentages.

Royalty percentages vary based on the publisher, form and format, territory, type of rights, and sometimes even the number of copies sold. 

Generally speaking: hardback and "trade paperback" pay higher than mass market paperback, and ebooks pay highest of all. Subsidiary and foreign rights pay at varying percentages, and IF you let your publisher keep subsidiary rights like film and television (Note: don't do this if you can avoid it) the author's share should be far higher than the percentages applicable to sales of books (and ebooks).

Current industry tolerances for traditional publishing deals run somewhere in the 10-15% range on hardback, slightly lower on trade paperback, 6-9% on mass-market paperback ... and 25% (or, rarely, more) on ebooks. (The numbers are higher in independent publishing - more on this in a minute.)

Do you see the problem in John's royalty language? Look again.

His publisher offered only ten percent on ebooks.

John should counter the publisher's offer by asking for at least 25% of ebook revenues.  He should also ask for language stating that if the publisher's average (or "standard") ebook royalty percentage rises above 25%, John's royalties will also increase to an amount equivalent to that higher standard percentage. (The automatic increase isn't a deal-breaker, but a publisher who won't come up to at least 25% on ebooks probably isn't one John wants to sign a deal with.)

John might also want to request escalation clauses, which increase John's royalty percentage at various sales thresholds. For example:

Hardcover. On Publisher's sales of hardcover editions of the Work, if any, except as specified elsewhere in this Agreement, ten percent (10%) of the list price on the first five thousand (5,000) copies sold, twelve percent (12%) of the list price on the next ten thousand (10,000) copies sold, and fourteen percent (14%) on all copies sold after the first fifteen thousand copies.


Not all publishers will agree to escalation (and not all escalations will be this high), but it's not a bad thing to ask for if the publisher is open to discussion.

The Indie Publishing Question: A better deal?

Some authors point to traditional royalty percentages and ask, "Can't I make more money self-publishing?"

The answer is ... Yes, and no, and maybe.

Yes, if you look only at gross royalty percentages. Self-publishing generally grants the author a higher percentage of revenues than publishing via the traditional path.

No, because self-published authors incur additional costs along the way - costs like editing, cover art, trademark registration, and the share of the marketing (even if small) which would otherwise be covered by a traditional publisher.

Also: independent authors without a platform often have a more difficult time selling books (at least initially), and a higher royalty percentage may not even out if the author's book sells fewer copies than it would with a traditional publisher's name and distribution behind it.

However, an independently published book which sells an equal number of copies at an equivalent price point will usually earn the author more money than a traditionally-published author receives.

Ultimately, the choice between traditional and independent publication has more to do with author preferences than with money. Both are viable options, and both can result in success - or failure - depending upon the author, the book, and the buzz surrounding the title. 


Note also that independent authors sign contracts too - with publishing houses, printers, and with Amazon or other publishing venues. Those contracts (sometimes disguised as "Terms of Service" - but make no mistake, it's a contract) have similar clauses to those in traditional publishing deals, so authors of all stripes have very good reason to read and understand the legalese.

What are your thoughts on royalty percentages? Do you have questions about royalties, percentage-based or otherwise? I'd love to hear your thoughts in the comments.



Posted by Susan Spann 

Susan Spann is a California publishing attorney and the author of Claws of the Cat (St. Martin's / Minotaur, July 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori.

Thursday, January 31, 2013

Advancing Through the Publishing Contract: Show Me the Money!

Welcome back to our continuing Thursday series on publishing contracts! Today, we continue our tour of John Q. Penman's publishing deal.

Immediately following the initial rights paragraph we see the following:

"Publisher will pay Author, or Author's authorized representative (if named below), the sum of _____________ dollars ($_____.00) ("Advance") as an advance against Author's earnings under this Agreement. The Advance is payable in three installments, as follows:

(a) 1/3 upon full execution of this Agreement.
(b) 1/3 upon Publisher's acceptance of the manuscript for the Work.
(c) 1/3 upon first publication of the Work in the United States."

First: congratulations to John. He's receiving an advance, which is an up-front payment from the publisher for the Work. The amount of an author's advance will vary with the size of the publisher and the type of work, and some smaller presses don't offer advances at all.

Most industry professionals agree that advances are smaller now than they were ten years ago, but that's not necessarily a reason to worry. Remember: the advance is money received against earnings - so a smaller advance just makes it easier for the author to earn out - which happens when the author's total royalties exceed the advanced amount.

Earning out makes you a success in the publisher's eyes - and that is every author's real goal.

In most cases, the advance is paid in two or three installments.  The first one is usually paid "on signing" ("on full execution of the Agreement" means when all parties have signed the contract). In a two-payment situation, the second payment is usually made when the publisher accepts the final manuscript (in a three payment situation, this is when installment 2 is made). Where, as here, the contract calls for three payments, the third one will either coincide with publication of the work or (more rarely) with completion of copy edits.

Many authors get tunnel vision about advances - to the detriment of other, more important contract provisions. While the advance is important, ultimately it's the royalty percentage, grants of rights and "out of print" (and termination) clauses that play a much larger role in the author/publisher relationship. Don't let the advance (or lack thereof) blind you to the larger picture!

Evaluate the advance like every other provision: in the context of the contract as a whole.

What are your thoughts on advances? I'd love to hear your opinions in the comments.

Posted by Susan Spann 
Susan Spann is a California publishing attorney and the author of Claws of the Cat (St. Martin's / Minotaur, July 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori.



Thursday, January 17, 2013

More Than You Bargained For: Contracts Up Close & Personal

As a publishing attorney, I hear lots of questions (and complaints) from authors about publishing contracts. One of the most common is, "I just don't understand what it says."

A problem we're going to fix here at Chiseled In Rock.

Over the next few weeks, I'll be dissecting and explaining publishing contract language in detail, to help all authors - independent and traditionally-published - better understand their publishing deals.

Whether you're a seasoned pro or still working on that all-important initial manuscript, it's a series that will help you understand your rights, your contracts, and the publishing business - it's your business, after all!

Today we'll start with a brief explanation of defined terms.

Defined terms are the often-capitalized words in a contract that have a specific or special definition. The defined term is usually set off by parentheses or quotation marks (sometimes both), and is usually a shortened form of a longer name or idea.

Defined terms are legalese shorthand, allowing attorneys and others to read a contract without repeating parties' names and redefining deal-specific terms (some of which have elaborate definitions) every time the words appear in the contract. They have the effect of simplifying contract language, but they can also be traps for the unwary, especially with complicated terms like "Royalties," "Territory," and "Option."

An example from the header of a standard publishing contract:

Fictitious Publishing Company ("Publisher") and John Q. Penman ("Author") are entering into this Publishing Agreement ("Agreement") dated January 17, 2013 ("Effective Date").

Did you spot the defined terms?

Throughout the rest of this publishing contract, the capitalized term "Publisher" means Fictitious Publishing Company and "Author" means our new friend, John Q. Penman. (We'll be seeing a lot of John, and his publishing contract, in the weeks to come. Tune in and see if he's made a good deal or a bad one.)

The term "Effective Date" will show up again, when we get to the paragraph about contract term and termination, so keep it in mind, because the contract generally won't re-define it the next time it appears.

Tune in next week when we dive right into the meat of "John's" contract - the territory and rights clause. Until then, keep it legal!

Posted by Susan Spann

Susan Spann is a California publishing attorney and the author of Claws of the Cat (St. Martin's / Minotaur, July 2013), the first novel in the Shinobi Mystery series featuring ninja detective Hiro Hattori.