OUT OF PRINT PROVISIONS IN BOOK CONTRACTS

IVAN HOFFMAN, B.A., J.D.


        What constitutes “out of print” in the world of print books and now, with the advent of print on demand in the electronic world can often be a significant legal and business issue for both publishers and authors. This clause in a book contract is often glossed over but rights to a book that may appear to be no longer a marketable title may have important implications.

        There are some essential issues that should be covered.

        The Threshold for “Out of Print.”  When a book is out of print is a key element that must be defined and often is simply left vague and uncertain.  Initially, of course the publisher may make a voluntary decision to declare the book out of print.  It may do so at any time, subject to whatever restrictions the author may have been able to negotiate limiting such rights.  Often the agreement calls for some affirmative act on the part of the publisher to do so, such as by written notice to the author and the act of placing a notice in Publisher’s Weekly, though the latter act is not all that significant as between author and publisher but may be of some value to the distribution world.  Maybe this sort of “constructive notice” harks back to the days before instant electronic communication among databases.

        However, absent such voluntary decision on the part of the publisher, both parties should have some concrete standards by which they can determine when the book shall be deemed out of print.   By “deemed,” the law means that in the event that some defined occurrence takes place, an event shall be considered to have happened and certain legal consequences flow from that happening.  Certainty in contracts is essential if the contract is to have any real value and defining terms in the drafting is the key to this.  But it takes a thorough understanding of the actualities of how the industry works in order to draft with precision.

        In the world of traditional print book publishing, this “deemed” event is often defined as there being less than “x” units of the book available for sale to the public.  But this is not a sufficient definition since the status of how that “x” units is determined is unclear without further clarification.  Does it refer to any single edition in the case where both a soft and a hard back have been previously published or does the book remain in print if there are no soft covers but some hard covers available?  What is the impact on the author and publisher in either event?  In the best interest of the publisher, the provision should be structured in such a way as to deem the book still in print if it exists in any quantity in any edition whereas the author’s best interest is advanced to have the book deemed out of print if it falls below the defined threshold in any edition.

        In the electronic world of print on demand, including the ability to download a book from the Internet if the publisher has been granted those rights, clearly a different standard must be defined.  It is often best established on the basis of income being received by the author during any given accounting period or periods.  In other words, in the event the author does not receive $x.00 during 1 or 2 accounting periods from print on demand sources, then the book shall be deemed out of print, at least in that format.

        What Rights Attend the Determination?  If the occurrence of the event means that the rights to the book revert to the author, subject to other provisions discussed below, then the rights to the book ought to revert only to the format in which it is then deemed out of print.  So for example, if the provision is set up so that a book can be declared out of print if it falls below the defined threshold in one edition but not in another, then the rights to that edition only might revert to the author.  If that edition were say the print on demand or downloadable version, then the publisher might retain rights to the print version.

        There may be provisions included allowing the author to purchase the remaining copies, if any exist, and at a defined price (say the publisher’s cost of manufacture or wholesale price or some other version of that) and during a finite period of time and if the author fails to make that purchase during that time, the publisher may remainder or otherwise dispose of any such remaining copies.  In this regard, remaindering is almost always at a substantially discounted price and the parties should examine their agreement to see how, or if, the author has rights to purchase the books prior to remaindering or if not, whether the author participates in any income received as a result of the remaindering.

        Further, the agreement may provide that the author must notify the publisher of the author’s intent to reacquire the rights to the book or to the specified edition and then the publisher may have a certain time frame within which to reissue or re-license the book in order to defeat the out of print reversions.

        Additionally, there should be provisions stating that any reversion that does occur shall be subject to any existing third party licenses including that any income that is received by publisher from such licenses shall continue to be divided according to the provisions of the agreement for as long as such income is received.  In other words, the author takes the rights to the book or edition subject to any rights of third party licensees.  In this regard, the publisher should also have negotiated appropriate provisions in those third party licenses that deal with the issue of when any licensed book is deemed out of print so that the publisher may recapture those rights.

        Keep in mind however, that a reversion of rights is not the same as a termination of the agreement.   There are often many provisions in a publishing agreement that have nothing whatsoever to do with which party owns the rights to a work and such provisions can remain in effect even though a publisher may revert the rights to the said work to the author.   Such provisions can include rights to the next book, restrictions on competition (i.e. what the author can or cannot do), warranties and indemnities, rights to revised editions, confidentiality provisions etc. etc.

        Thus, provisions that merely provide that upon the happening of certain events, such as for example, a declaration of out of print, the rights to the work shall revert to the author, do not mean or even imply that the publisher is giving up its rights in the agreement.  If the intention of the parties is to terminate the agreement and all of the publisher’s right in the agreement if the book goes out of print, that has to be clearly specified.

Conclusion

        As with all contract provisions, the “standard,” “boiler plate” form contracts cut and pasted from a book generally are unsatisfactory in that they fail to deal with the myriad of issues that arise in the actual publisher author relationship.  A contract should solve more problems than it creates and a contract should never leave any provisions open to being interpreted by any judge or jury.  If you wish to try to avoid expensive litigation, it is advisable to take the time to have the agreement thoroughly drafted in the beginning.  Help me is almost always cheaper than fix me.

        Thus, when negotiating a new book deal, it is the visionary author and publisher that looks down the road to the time when the book is no longer the darling it started out to be.  That takes vision and you should read “The Need For Vision.

© 2000 Ivan Hoffman.  All rights reserved.

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

 

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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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