REVISED EDITION CLAUSES IN BOOK CONTRACTS

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



         There are several clauses in most author-publisher agreements that touch upon the right to do revised editions and the participation, if any, of the author therein.  Although these issues are present in all such agreements, these provisions may be of even greater significance in the computer book publishing industry due to the more frequent changes in technologies that may necessitate more frequent revisions.  It is in the interests of both author and publisher to negotiate these provisions carefully.

The Main Issue

        The basic clause is the one that gives the publisher, not the author, the right to decide whether the author is going to do the revised version.  Absent negotiating changes to the provisions, the agreement usually provides that the author has no contractual right but does suffer the contractual obligation to do the revised version.  Such decision to do a revised version, while generally belonging to the publisher, may also invest the publisher with the discretion of whether or not to engage the author of the original work to do the revised edition.

        If the original author refuses or is unable to do the revisions, the provision usually allows the publisher to bring on a new author to do the revision and the original agreement may allow the new author’s royalty and advance against that royalty to be deducted from that of the original author.   And even if the original author is engaged to do the revision, what may also be the case is that the author may not have the contractual right to substantially better terms than that negotiated relative to the original edition, despite the apparent success of that original edition.  The agreement may bind that author to the original terms and conditions applicable to the original work—perhaps negotiated at a time when the author had no marketing clout—even though the first book has been successful enough to warrant a revised edition.

A Sub Issue To The Main Issue

        The author may be subject to a “non-competition” clause that prevents the author from publishing, and perhaps writing a book or even an article that competes with and is based upon the same material as the original title.  This clause is often accompanied by a right of first negotiation and right of first refusal on the part of the publisher for the author’s next book dealing with the same subject.  (Read “Next Book Provisions in Publishing Contracts.”)  The totality of these provisions means that the publisher is in the position of controlling the next and indeed subsequent versions of any other books related to the same subject matter as the original title but the author is without any protection at all.  So the author, who has presumably some expertise on the subject matter, may find that he or she has no voice and no ability to write about the subject matter.

The Royalties Issue

        If the author has an escalating royalty, meaning that the author is paid x% up to a certain number of units and z% thereafter, then the issue arises as to how to count sales of the revised edition.  Shall they be counted as part of the continuing sales of the first version under the theory that consumers of the first book are likely to purchase the second and therefor it was the sales of the first that created the market for the second?   That would mean that the sales of the revised edition would be counted in the total sales of both editions and therefor likely put the author into the escalation portion of the royalty range.

        The publisher on the other hand, would argue that the revised edition requires another marketing effort completely and therefor the royalties on the second edition should begin again at zero copies.  And unless the author is in a bargaining position, that is frequently what occurs.

Returns

        Additionally, the parties must be aware of the handling of returns when dealing with this revised edition royalty issue.  If the author is not to receive the benefits of the escalated royalty on higher sales due to the revised edition, then the author should argue that any returns of the original version should only be charged against the author’s royalty account for the first version.  What may happen however, is that the contract may provide that returns of the original version may be charged against the author’s account on the revised version, assuming the author is the author of the revised version.  This often is the effect of provisions stating that all sums are treated as a single account.  (Read “Cross-Collateralization in Publishing Contracts.”)  The effect is that because of the first edition’s success a second edition is produced.  But because a second edition is produced, there may be extra returns of the original version when the new version hits the shelves.  And the returns of these old versions are then charged against the author’s royalties on the newer version.  So in effect the author’s success with the first version may end up costing the author money on the second version.

Multiple Authors

        When the original book has been written by more than one author, the revised edition clause has to be drafted to cover situations in which one or more of the authors agrees to do the revision but one or more do not.  See discussion below about the Flynn vs. AK Peters Ltd. case.

Other Issues

        In Flynn vs. AK Peters Ltd., these were the facts as summarized by the Court:

Plaintiff-appellant Anita M. Flynn is an electrical engineer and robotics scientist who wrote a book with a colleague, Joseph Jones, entitled Mobile Robots: From Inspiration to Implementation. The book was published in 1993 by Jones & Bartlett Publishers, Inc. Shortly after publication, Jones & Bartlett assigned its publication rights to AK Peters, a publishing house named after its principals, Alice and Klaus Peters. The book was a great success, and Klaus Peters asked Flynn and Jones to write a second edition of the book in 1997. Hoping to have the revised edition published by the next spring, Peters suggested that they invite another contributor to help them with the research and writing. Jones and Peters later agreed that Bruce Seiger, a high school teacher, would be added as a co-author and would write a chapter addressing educational applications and curriculum proposals.

To confirm this agreement, Peters wrote to Flynn on August 23, 1997, asking if she was amenable to the proposed revision with Seiger's assistance. Flynn responded in a letter dated November 16, 1997:

I received your letter as to the second edition of our book and would be happy to agree to your suggested arrangement--on one condition. That is, you send me my money for my portion of the royalties on sales from January '97 through June '97 in the next month.
Alice Peters responded via letter on December 4, 1997:
Thank you very much for your letter of November 16. I am enclosing an accounting of the sales of your book, Mobile Robots, for the period January-June 1997 along with a check for settlement of the royalty for those sales. We are pleased that you have agreed to our suggestion regarding the 2d edition of Mobile Robots. We will be forwarding a contract to you soon for the signature.
The publisher did not directly send Flynn a revised contract. However, it had previously sent Jones four copies of the author contract (one each for Jones, Flynn, Seiger, and AK Peters) and two copies of a contract for the curriculum guide (one each for Jones and Seiger) on October 3, 1997.  Jones and Seiger began revising the text even though neither of the two original authors had signed the contract. [emphasis added]
        To make a long story somewhat shorter, the revisions of Seiger were not to Flynn’s liking and when the book was published, Seiger’s name was included as a writer.  Flynn objected to the contributions of Seiger and to the inclusion of Seiger’s name as a co-author along with Flynn's name and told Peters that she [Flynn] had not signed the revised edition agreement and would not do so.  Peters countered by claiming that it had the rights to revise the book and publish the revised book under the provisions of the original agreement author agreement (which was apparently signed).  That provision read:
The Author/Editor agrees to revise the Work when the Publisher shall decide that a revision is desirable, and to deliver same within a reasonable time after such request. Should the Author/Editor be unable or unwilling to undertake such revision, or be deceased, the Publisher may arrange in agreement with the Author/Editor not to be unreasonably withheld, for the preparation of a revised manuscript, the cost of which (including such royalties or fees as the Publisher may elect to pay) shall be paid by the Publisher and charged against any first royalties that may accrue to the Author/Editor from the sale of the revised edition. All terms of this Agreement shall apply to each revision as though it were the work being published for the first time.
        Flynn notified Peters that Flynn interpreted the said provisions differently and that the said provisions did not allow Peters to have Seiger do the said revisions (read “Precise Contract Language”) and that she had not agreed to the provisions of the revised agreement (unsigned).

        In the end, Flynn filed a litigation containing several causes of action including violation of the Lanham Act, violation of California Business and Professions Code section 17200, violation of California Civil Code section 3344 and breach of contract.  Flynn lost on all aspects of her causes of action in the trial court (the precise procedural aspects of such determinations are beyond the scope of this article) and in addition, the trial court awarded $55,000.00 in attorneys fees to Peters and against Flynn.   Flynn appealed.

        For the sake of this article, I will only discuss the issues related to the Lanham Act.

The Lanham Act Claims

        The Court summarized Flynn’s claim in this regard as follows:

Flynn claims that AK Peters violated the Lanham Act by listing her as an author of the second edition of Mobile Robots without her consent. More specifically, she alleged in the district court that "[t]he misleading use of her name is likely to cause confusion by consumers as well as plaintiff's academic peers in that it will be assumed that she contributed to the revisions and approved of the changes."
        The Court stated:
Personal names are included in the class of common words that may not secure protected trademark status until secondary meaning has attached. See Donoghue v. IBC/USA (Publications), Inc., 886 F. Supp. 947, 952 (D. Mass. 1995) ("[S]urnames, when used as trademarks, are inherently indistinctive, i.e., weak [and] are permitted trademark protection only upon a showing that they have become strong marks by acquiring distinctiveness through secondary meaning."); 2 McCarthy, supra, § 13:2. According to Professor McCarthy:
Secondary meaning grows out of long association of the [personal] name with the business, and thereby becomes the name of the business as such; is acquired when the name and the business become synonymous in the public mind; and submerges the primary meaning of the name as a word identifying a person, in favor of its meaning as a word identifying that business.
In other words, personal names cannot be the subject of trademark protection, which is the essence of the Lanham Act, unless and until they have achieved a secondary meaning.  (The reader should also read “Personal Names.” )

The Court stated (citing a trademark legal treatise):

"Proof of secondary meaning entails vigorous evidentiary requirements." Boston Beer Co., 9 F.2d at 181. The plaintiff must not only show that it used a personal name as a trademark, but that a "substantial portion of the consuming public associates [the name] specifically with [its] business." Id. at 182. Furthermore, the plaintiff must show that these consumers base purchasing decisions upon seeing the trademark (i.e. the personal name) on the product:

To acquire a secondary meaning in the minds of the buying public, a labelled product, when shown to a prospective customer, must prompt the reaction, "That is the product I want because I know that all products with that label come from a single source and have the same level of quality." In other words, the article must proclaim its identity of source and quality, and not serve simply to stimulate further enquiry about it.

        The Court agreed with the trial court that Flynn had failed to demonstrate that she had any secondary meaning in regard to her name in the field of robotics.  The Court stated:
Flynn submitted for the summary judgment record a copy of her curriculum vitae and an affidavit in which she stated that she has worked in the robotics field since 1985, has given seventy invited talks and written twenty-nine papers in the field, and has founded a company that designs micro robots. Viewed in the proper light, she claims that this evidence demonstrates that "she has an esteemed reputation and a well-recognized name." This claim ignores the stringent requirements for secondary meaning evidence. "Such 'opinion' testimony by a [party] is considered self-serving and of little probative value." Fay's Drug Co., 842 F.2d at 648. It would be more important to know, for example, how likely it would be for the average consumer of books like Mobile Robots to be aware of the papers Flynn cites. It is the mindset of these likely consumers and not simply the strength of her publication record in the abstract that matters in determining whether secondary meaning has attached. Moreover, Flynn declared that the authors intended to market the book to "a wide audience" from "high school age to Ph.D. level researchers"; therefore, it is this broad class of consumers and not a select subset of academic "insiders" that matters for secondary meaning purposes. Flynn failed to produce any evidence demonstrating that this extended group of consumers is aware of her academic achievements.
Conclusion

        There may be other issues that are involved when it comes to revised editions including but not limited to the scope of the author’s warranties and the relationship of any licenses obtained to use protected material and whether they cover uses in any revised editions.  This article is not intended to be exhaustive of the issue.

        Given the potential success of any book, this revised edition issue is one to which the parties should pay careful attention.  It is neither a given nor a throwaway.
 

Copyright © 1996, 2004 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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