Earlier this fall, TAA hosted an audio conference titled “Contract Negotiation: E-books & E-rights” featuring attorney Lisa Moore, principal of The Moore Firm, LLC. Moore’s outstanding presentation culminated in a rich Q&A discussion that provided valuable insight into textbook publishing contract negotiations.

Following are abbreviated excerpts edited by TAA from the transcripts of that discussion.

Q: When e-rights are granted in a contract, what is the current norm for royalty rates? What are the best e-royalty terms you’ve negotiated for a client or know about in another context?

Lisa Moore: “I will say that 50 percent, whether it’s e-derivatives or verbatim e-reproductions, as I’ll call them, is the best that anyone can get for e-rights. And that’s becoming very, very difficult to achieve for clients — even clients with a proven track record, proven sales of X units, and an extremely wide target audience.

Most content creators, most authors in this space, are not going to get that or likely even anything close to that. You certainly shouldn’t be getting anything less than the standard book rate and if possible push them to 20 percent. But if you have a lot of leverage, or you have many people interested in the work, 50 percent is still attainable in very limited circumstances.”

Q: What’s the typical rate for a contract review?

LM: “The price of a negotiation depends on a number of things. It depends on if they send you an enhanced draft, meaning you’re getting a better offer than most people for the first draft. That is automatically going to reduce your costs, because it’s less time that your attorney has to spend making redline edits to the document before sending it back over.

There is a process of comment and review. You make your initial edit on behalf of your client and you send it over. If it’s a work that many publishers want, the great news is it’s generally very short and sweet.

If your client doesn’t have very much leverage, then you get into a more difficult situation. If you’ve been offered a poor draft, you have to make more redlines. Many more terms and conditions become the subject of discussion between you and your client as well as with opposing counsel, because they weren’t amenable to your redlines, and that can be a more expensive process.

It’s a little counterintuitive; it seems like it’s much cheaper for authors who are getting bigger deals, who have more negotiating power. You’d think it would be more expensive from the legal fees standpoint, but conversely it’s generally not.

Ultimately I think it depends on a number of factors. You can estimate somewhere for a review between $1,000 up to $5,000 if it’s a very complicated drawn out deal. But I would say somewhere between $1,000 and $3,000 being the average for a very straightforward deal with a publisher.”

Q: In an e-book contract is there anything different that one should watch for or look out for when the new contract arrives?

LM: “I think many of the most significant terms and conditions that you find in a traditional book deal are equally applicable to an e-book deal in terms of the grant of rights.

How narrowly defined, how broad is the grant of rights? Is it structured as an assignment of copyright? Is it structured as a license? Is it just a North American deal, or is it a worldwide deal? Does it involve a grant of ancillary and subsidiary rights or is it simply to publish the book in e-book form and be done with it?

Other customary concerns for many of our academic writers usually relate to the cost of permissions, releases, marketing and sales, revisions, author copies, reversion of rights, competing works, and next works. And then my academic writers’ and my professors’ speaking opportunities or workshops are generally a very, very significant issue that we will negotiate.

An e-book contract requires the same thoughtful review that a traditional book deal involves.”

Q: What are your thoughts on print royalties — for instance scaled royalties, scaled royalties tied to sales?

LM: “It’s never going to be in an initial draft from a publisher, but you should always ask for escalations. And you may start for example at 10 percent, ask for 12.5 percent upon 10,000 copies, and escalate to 18 percent or 15 percent thereafter. You may start at 15 percent or 12 percent and escalate after the first 4,000 copies.

Each publisher generally has a different way that they like to do escalations. One of the major academic publishers don’t do their escalations at 4,000 or 10,000, they do their escalations at 7,500 or 15,000 copies. So escalations are a critically important way to ensure that you are sharing in the economic upside on the success of the work.

You should always ask for escalation — always. An experienced lawyer will be able to help you understand for that particular publisher, and given your leverage and negotiating power if you will, where you can expect to fall, or the narrow range within which you can expect to fall.

For textbooks, the royalties start as low as 10 percent and they range as high as 20 percent, generally for an author that has a lot of leverage. The advances range from nothing sometimes, unfortunately, to a couple of thousand, up to several thousands of dollars. It’s a lot of money to a lot of people. On occasion, those advances can range up to $200,000 for a textbook that we know has firm placement in a school system and that will do well and has a demonstrated track record. So you should certainly ask for escalation.”

Q: Could you comment on your experience with the increased piracy risks of e-books versus traditional print copies, and whether those risks are addressed in typical e-book publication contracts?

LM: “Piracy is an intractable problem, and every time we find a new way to mitigate against it, there’s a new technological innovation that pushes it forward.

What do I recommend you do? If you have proposals on some of your academic works, don’t show them to people without:

1. Having the copyright registration on file, if there’s enough expression there to merit a copyright registration. Obviously you cannot get a copyright on ideas, or concepts, or an outline. It has to be a fleshed out treatment.
2. Use nondisclosure agreements. By contract you can keep people from disclosing anything related to your work. You should obviously be using nondisclosure agreements if you’re discussing your work with potential publishers, potential agents, potential editors, or potentially anybody that would contribute to your project, whether it’s somebody considering writing the forward, or somebody that may contribute a chapter on your particular textbook, or what have you. Using nondisclosure agreements are a good way to protect your work.
3. As noted earlier, copyright registrations are imperative. Copyright notice, which has nothing to do with registration, is also critically important so as to avoid the ‘innocent infringement defense.’

Piracy is a problem that’s bigger than all of us, but these are certainly things you can do that will mitigate against that risk.”

Q: How does one apply for copyright?

LM: “It’s very easy to apply for a copyright registration. You can do it online. The Copyright Office’s website is www.copyright.gov and it’s actually an excellent resource.

The process is changing. Back in the day, you had to fill out the form depending on what you were registering. The Copyright Office changed that, and they’re now utilizing one common form that can be done online. It’s much cheaper that way, $35 and you get your registration back much more quickly. If you mail in the old paper forms it takes somewhere between a year and two years to get it back. And if you do it online, it’s somewhere between three and six months. Copyright infringement matters have a very short statute of limitations, so it’s critically important that you register as soon as possible.

In the overwhelming majority of jurisdictions in the United States, if you don’t have a registration back from the U.S. Copyright Office you cannot institute litigation. There are only a handful of jurisdictions where simply having made application, even though you don’t have the filed, stamped registration back, they will allow you to invoke the jurisdiction of the courts.

The other benefit of doing it early is that you can register multiple unpublished works on one form and save yourself a lot of money. The copyright form in and of itself is about nine questions and half of them are your name and address. It’s very easy to do.”

The entire podcast and transcript of Moore’s audio conference is available on the TAA website under Resources-Podcast Library.