FOREIGN PUBLISHING DEALS-FURTHER ISSUES


IVAN HOFFMAN, B.A., J.D. 

I have previously written extensively about foreign publishing deals in which a United States publisher licenses its work for either reprint or translation in another country or territory (see "Foreign Publishing Deals" and "Foreign Publishing Deals and the European Union".)

Somewhat different issues present themselves to the American publisher when that publisher is seeking to obtain reprint or English language translation rights to a work initially published in another country. Those issues are the subject of this article.

Needless to say, as in any transaction, the original publisher wishes to give away as little as possible for the most as possible while the United States publisher wishes to obtain the most as possible for the littlest as possible. The deal is made somewhere in the middle in most instances.

The Scope Of The Rights

When the US publisher is seeking to acquire rights, the motivation is the opposite of when that publisher is seeking to license foreign rights to others. In this current instance, it is the US publisher's intent to obtain the widest possible compliment of rights in order to fully maximize the potential for the book and be in a position to make the most money. The negotiation regarding the scope of these rights should cover:

  1. the nature of the rights being granted, meaning whether the US publisher is acquiring only English language or reprint rights to only the book version or to related and ancillary rights to that book version including electronic versions and such.
  2. the territory, meaning whether the US publisher is acquiring English language or reprint rights merely for sale in the United States or whether those right shall include the right to sell the book worldwide in the English language.
  3. the right to sublicense the rights, meaning whether or not the US publisher has the right to license the rights so acquired in 1 and 2 above to others. This is especially important if the US publisher has acquired worldwide rights for it would enable the US publisher to in turn make reprint deals in the English language in other countries. However, even if the US publisher only has United States rights, the US publisher should seek to have the right to license book club editions, serialization rights, etc. as well as other rights including electronic rights in the English language including Internet rights as well as a potentially large set of rights in other media. For example, the US publisher should seek to acquire motion picture and television rights for productions that originate in the United States. This has potentially great value to the original publisher as well since most movies are made in the United States and without granting the United States publisher these rights, the book, if it is in an original indigenous language, may go unexploited in these media thereby depriving both publishers and the original author of a substantial market. The original publisher however, frequently does not wish to grant these rights to the US publisher, preferring to seek separate representation in that regard.
  4. the term of the grant. From the point of view of the American publisher, this should be expressed either in perpetuity or as an initial term of some extended duration (5 to 10 years) with an option to continue its rights subject to having paid the original publisher a stated amount in either royalties or advances during that initial term. The original publisher would want a shorter term.
The Payment to the Originating Publisher

Once it is determined what rights are being granted, the next question is to determine what shall be the payment to the original publisher for those rights. In this area, the parties must focus on 2 or more forms of transactions: sales by or on behalf of the US publisher and income received from licenses granted by the US publisher, assuming in the latter instance that such rights have been granted.

As to the first category, the US publisher will probably pay the original foreign publisher a royalty based upon publisher's net, as defined. The royalty can also be calculated on the retail or cover price of the book but it is often less advantageous from the US publisher's point of view to do so. The definition of "publisher's net" if that is the standard being used, is quite important and reductions from the gross amount that the publisher receives should be spelled out in detail.

As to income received from licenses issued by the US publisher, the parties will split this income in ranges from 50% each to either higher or lower percentages for each party depending upon the nature of the rights being granted.

Most generally, there will be some advance paid by the US publisher to the foreign publisher and the size of that advance, as with any other advance, is really an open negotiation. There are no rules of thumb here since all deals are really made on the basis of who wants who more. However, the scope of the rights, the royalty rate, the term etc. will be factors the parties can talk to in negotiating the advance.

In all instances, the agreement should clearly specify that the original foreign publisher is responsible for all payments to third parties to whom it was originally responsible including but not limited to the original author. The US publisher will generally be responsible for the payment to the English language translator. (see discussion below about ownership rights to the translation)

The parties should also cover the frequency of accountings, in what currency the accountings are to be made and who is to be responsible for currency conversion costs.

Warranties of the Original Publisher

The agreement should include the necessary warranties that the original publisher owns the rights being granted to the US publisher, that the book will not violate the rights of any third parties, and so on. In this particular form of deal, however, it is important that there be included a representation and warranty from that original publisher that the original author has waived all "moral rights" since these rights are those possessed by creators mostly in Europe that protect against alterations to their original works. The act of translating the book into English or indeed turning it into a movie etc. could raise the specter of claims by the author that such conduct was not permitted. Since the US publisher, in these examples, will be representing and warranting to the licensee that it has these rights, without a corresponding representation and warranty from the original publisher, the US publisher could be in breach without recourse. Ideally, in the US-original publisher agreement, the original author should sign his or her consent to the agreement, including the waiver above as well as that the author will look only to the original publisher for all payments. Getting the author's signature is not always possible but the US publisher should seek that.

Ownership of the English Language Copyright

In a translation deal, the parties should negotiate about who will own the English language right of copyright. This is quite important since English is the main language on the planet now and if there is a deal to be made that has its origins in the English language version, as is quite likely, the owner of those rights is in a position to capitalize on that deal. There may be a corresponding obligation from the US publisher to the original publisher for some payment for that exploitation, but the rights should initially be owned by the US publisher.

In this regard, it is vital that when the US publisher makes a deal with an English language translator, that the US publisher have an appropriate contract with that translator whereby the translator's rights are transferred to the US publisher. This is very important.

And in a related matter, since often the US publisher will create a new cover, the US publisher should specify that it will own the cover art in this English language version. Correspondingly, the US publisher must have a valid, binding, written contract with the cover artist transferring all rights to that cover to the US publisher. Also very important.

Conclusion

There are many other issues to be faced in this form of negotiation and this article is certainly not intended to be exhaustive of those issues. However, the parties to this deal must be aware that there are the above and other points that must be thoroughly covered.

And, as in all deals, the US publisher should not use a boilerplate, fill-in-the-blanks form and certainly not merely sign the agreement submitted by the original publisher. The professional publisher should seek out an attorney to advise that publisher of the best approach to making deals. It is the wise publisher that knows the difference between value and merely cost.

© 1998 Ivan Hoffman

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This article is not intended as a substitute for legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney familiar with the issues and the laws.

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No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.


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