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Five chances to reset the terms of your book contract (part 2)

In Part 1 of this article, we wrote about the imbalance in negotiating leverage between an author and his/her publisher early in the author’s publishing career. And we noted that there would be opportunities later for an author to retake some of the ground lost in those early negotiations. In particular, we wrote about two of these opportunities:

1) Your publisher calls for work to begin on a new edition and sends an amendment to your contract to memorialize this . . . with a few additional “updates”.

2) Your publisher says that it is replacing older contracts with a new form that reflects changes in its business practices dictated by changing markets.

We left three more opportunities for discussion in this Part 2:

3) You’re ready to scale back your participation and begin the transition to a new co-author.

4) You’ve completed an audit of your royalty account and are in the process of negotiating settlement of your underpayment claims.

5) Your termination right under US copyright law matures.

Here is a review of those additional opportunities.

You’re ready to begin scaling back your writing

Your publisher has an interest in effecting an orderly succession of the authorship of your work from you to someone younger, who can carry on after you step down. Much of the goodwill in the market, especially in higher ed, is connected to the name author rather than the publisher. So, the publisher has an interest in introducing a new author to the market while you are still involved.

But the publisher cannot force a co-author on you as long as you are ready, willing, and able to continue to revise your work. As you get older and closer to retirement, the publisher will get nervous about its ability to make a smooth transition of market recognition from your name to the name of a new co-author. Agreeing to cooperate in a transition has value to your publisher that you might use to improve certain terms in your contract, particularly those concerning the number of editions (or years, now that digital revisions may happen more frequently) over which your step down will take place and the rate at which that will happen.

Settlement of an audit

Royalties in publishing are notoriously inaccurate, and this is especially so in higher ed. Should you take advantage of an audit clause in your contract or otherwise convince your publisher to voluntarily cooperate in an audit of your royalty account, it is likely that you will find some underpayment. Some of those findings will be incontrovertible. But others of them are likely to involve disputes over the proper interpretation and application of royalty provisions in the publishing contract. These are not simple counting or calculation errors and so are ripe for compromise.

One of the things you might compromise on, apart from the settlement payment, are clearer royalty calculation terms going forward. But watch out for re-grant language in the settlement agreement . . . or an offer to terminate the existing contract and replace it with a “new” publishing agreement. Agreeing to either of these terms would push back your opportunity to take advantage of the final event that presents an opportunity for renegotiation.

Termination rights mature

US copyright law went through a fundamental overhaul in 1978. Prior to that, we had a two-term system of copyright protection – there was an initial term of 28 years, followed by an optional second 28-year term. The thinking was that creators might transfer away their first-term rights at a time when they did not fully appreciate the market value of their work, but they would have a second chance when it came time to dispose of the second-term rights. In practice, however, the buyers of these rights were obliging the sellers by contract to transfer rights to both terms at the inception of the deal.

The 1978 overhaul changed all of this. We went to a one-term system of protection and extended that term from 28 years + 28 years to the life of the author plus 50 (now 70) years. Coupled with this new one-term system was the establishment of a nonwaivable statutory right in the author to terminate any grant of rights during a 5-year window that opens 35 years after the grant for grants made in 1978 or later (or 56 years after the copyright was secured for pre-1978 works). These are called, respectively, Section 203 Termination Rights and Section 304 Termination Rights.

If you are the author of a work that first published in the middle 1980’s or, alternatively, in the middle 1960’s, you may have an opportunity to claw back rights that you granted all those years ago simply by serving on your publisher a notice of your intent to do so. Doing this would have the effect of freezing the publisher’s ability to continue to keep your work current and marketable after the effective date of termination and so avoiding this outcome has great value for the publisher of any work that has survived and thrived for this length of time. How you go about this is a complicated matter and so you will need legal assistance, but taking advantage of this legislatively granted right under US Copyright law will give you maximum leverage in negotiating new and more favorable terms with your publisher – a welcome, if unfamiliar, place to be.

Stephen GillenSteve Gillen worked for nearly 20 years in publishing prior to entering private practice in the middle 1990’s. He is presently Of Counsel at Wood Herron & Evans (a 150+ year-old Cincinnati law firm focused on intellectual property) where he concentrates his practice on publishing, media, and copyright matters. His most recent book is Guide to Rights Clearance & Permissions.