IVAN HOFFMAN, B.A., J.D.
Issues relating to electronic rights appear in a number of places within the four corners of a book publishing agreement. Publishers and authors alike should be reviewing the agreements they use or sign respectively to make certain those agreements reflect their positions when it comes to these all-important issues.
The Grant of Rights Provisions
Clearly one of the major provisions is whether or not the author has granted the publisher so-called “electronic rights” to the work in question. I say “so-called” because I have seen many agreements that refer to such rights without defining them. What do the parties mean by “electronic rights?” Is it the right to convert the book into a derivative work such as for a CD-ROM, DVD or some form of e-book format? Is it the right to put the book, in whole or in part, on the Internet and if so, on the publisher’s web site or does the publisher have the right to sublicense these rights to other web sites? Is it the right to maintain rights to the book if it is available in only a print on demand format? Some agreements merely refer to a grant of “all rights of whatsoever nature.” Is this intended as a grant of electronic rights? The bundle of electronic rights can also be segmented into what might be called “electronic data storage,” “electronic data retrieval,” “electronic database rights” and the like.
Thus, the parties must examine their agreement to see which party has granted or retained such electronic rights and what that party can do with those rights.
The Representation and Warranty Provisions
Within virtually every publishing agreement there are provisions whereby an author represents and warrants that he or she owns the rights being granted to the publisher. Thus, the issue of whether or not the author actually owns electronic rights becomes important. Now clearly if the author is the sole author of everything in the book, the author is then the owner of all such rights. But often books contain third party materials, such as quoted materials or even artwork or photography. As to such third party material, the author only has those rights that were granted to the author by the owner of the rights in that third party material.
Thus, as to this third party material, both the author and the publisher must examine any license executed by that third party to see whether or not electronic rights, however defined, were granted to the author and whether or not such grant allows the author to assign those rights to the publisher. I have seen many situations in which there is either no written and executed assignment of rights, electronic or otherwise, to use third party material. I have seen many situations in which the written “assignment” merely allows the author to use the material “in your book.” This latter phrase is virtually worthless when it comes to the issue of electronic rights. What does “in your book” a grant to? Does it include any of the electronic rights being discussed? (As an aside, does it grant the right to translate or reprint the book, change the title, edit the book, or have the book published by another party? Etc.) Does the phrase “in your book” include the right to assign whatever rights are granted to a publisher and in turn to allow that publisher to fully exploit the book in electronic form?
Therefor, one of the more subtle issues dealing with “electronic rights” comes in the form of not only these representations and warranties but in the permission form or license obtained, if at all, for the use of third party materials. Publishers and authors alike should be quite careful in preparing such a form for submission to third parties. Read “The Permission Form.”
The Out of Print Provisions
In today’s world of electronic print on demand, how is the “if the book is out of print the rights can revert to the author” type clause to be applied if the book is available only in print on demand format? Part of the definition of what constitutes an “out of print” condition must be to include some provisions dealing with this situation. In the hard copy world, if a book was no longer “available” in a printed edition, it might be considered to be out of print (although that provision must be examined with care to see what was meant by “available”). In the world of electronic rights publishing, the agreement must redefine “available” to cover a new intention.
Given the relative newness of the business model for electronic publishing, the royalty provisions of the agreement should be examined to see whether or not they cover the potentially larger expense involved in publishing electronic versions, such as costs of conversion to electronic format. On the other hand, there may be other situations in which the costs to the publisher are in fact smaller than hard copy publishing costs, such as lack of need for inventory, storage and so on. Is the publisher paying the author the same royalties the author gets from more traditional, hard copy sales or are there provisions for some other rate of payment in this arena? In other words, if costs change, royalties should be adjusted, one way or the other.
Hold Back Provisions
If the author retains the rights to some limited exploitation of the work during either the entire term of the publisher’s rights or for some finite and defined term after say the initial print publication in the United States, do the author’s retained rights include the right to put the book up on the author’s (or some third party’s) web site?
And often there are provisions restricting the author from writing and publishing (or authorizing the publication) of a work that competes with the book being published, at least for some discrete period after initial print publication. Does this type of provision prevent the author from publishing in “electronic form” on the Internet?
If the author has previously published the book or some portion of the book in some electronic format, such as on the Internet, does this prevent the author from granting the publisher the right to first or second serial rights to the book? Read “Electronic Publishing and the Potential Loss of First Serial Rights.”
This article is intended to merely point out some, if not all of the areas of a traditional book publishing agreement in which “electronic rights” may become an issue. It is the wise publisher who examines its “standard” agreement to see if, or how, it covers these issues. It is the wise author who reads the “standard” agreement submitted to see if, or how, it covers these issues.
Clarity is in the best interests of all parties to a contract. Uncertainties are the makings of disputes and, in the worst case scenario, to expensive litigation.
Poorly drafted agreements are the fodder for such scenarios.
© 2000 Ivan Hoffman