Contracts

Simon & Schuster Hit with eBook Royalties Class Action

21 May 2016

From Copylaw:

A book is a book, except when it comes to eBook royalties. That’s the premise of a class action lawsuit filed on Thursday, May 19, 2016, in New York Supreme Court by class representative  Sheldon P. Blau, MD.

The lawsuit alleges Simon & Schuster has been cheating its authors by improperly categorizing eBook transactions as “sales” rather than “licenses.”

The distinction is significant, because the royalty rate for sales is much lower than the rate for the license of rights.  If categorized as a license – rather than a sale — the author receives 50% of net receipts, rather than 25% of net typically paid to authors for the “sale” of an eBook.

. . . .

The eBook royalty class action looks back approximately six years, the statute of limitations on contract actions in New York State.  It alleges Simon & Schuster engaged in a “pattern and practice of paying Plaintiff and others similarly situated royalty payments for the distribution of licenses for electronic books, or “e-books,” at a rate for book “sales,” or some other lower rate than that required for “license” transactions.”

This issue arose, in a different context, in F.B.T. Productions v. Aftermath Records, a 2007 federal lawsuit brought by Eminem’s management company against his record label over digital royalty rate splits.  Like the music industry, publishers have taken the position that digital downloads should be accounted for as sales not licenses.

Link to the rest at Copylaw

PG is pleased to hear about this and wishes the plaintiffs well.
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Long-Term Thinking: The Non-Compete Clause

20 May 2016

From Kristine Kathryn Rusch:

I probably should have called this post Short- and Long-term Thinking, or maybe just Thinking. Because no one should ever sign a non-compete clause.

Ever.

And yet, for the past several years, traditional publishers are trying to control everything about a writer, from the rights she sells to the amount of money she makes. They also want what they’re calling “a non-compete” clause.

In reality, it’s a “do-not-do-business-without-our-permission” clause.

I first wrote about this in 2011. Then I revised the piece for 2013. And now, well, things are much worse than they were five years ago for any writer who wants to become traditionally published.

I’m going to be as blunt as I can here.

If you sign any version of a non-compete clause, you will never be a full-time professional writer. Writing will not be your career. Something else will, and you will write on the side for the rest of your life.

Got that?

Can I be any clearer?

In the past five years, publishers have gotten draconian about the non-compete clause—and they’ve also gotten sneaky about it. Many writers have gotten wise to the non-compete clause, and refuse to sign it.

But most writers don’t realize that contracts are one long document that works as a whole, not a series of linked paragraphs. Just because you whacked one mole doesn’t mean you’ve gotten rid of the moles altogether.

. . . .

Around 2012, publishers started requiring non-compete clauses in almost all of their contracts, and are making those clauses a deal breaker from the publisher’s side. In other words, the publisher will cancel the deal if you do not sign a non-compete. The choice you are given is this: either you let the publisher control your entire career just because you sold that publisher one book for $5000 or you walk.

If that’s the choice you’re given, walk. Hell, run.

You have other options now. You can go to a different traditional publisher if you want. You can publish that work yourself.

You’re even better off putting that book in a drawer and not mailing to anyone than you are signing that clause.

Got it?

Because the moment you sign that clause, you give over your entire career to a corporation that cares nothing for you. Even if the clause does not hold up in court (and quite honestly, I don’t think the clause can hold up but I am not an attorney), you’d have to spend years not writing and litigating to prove me right.

. . . .

I know of at least two mystery writers who need their publisher’s permission to put up a blog post. I know of several more who have had to get a document granting them blanket permission from their fiction publisher to write nonfiction.

. . . .

Your current publisher might not enforce that clause; the publisher/business your current publisher sells out to might enforce the clause, and make you pay damages for anything you’ve previously published after you signed the contract (and ignored the clause).

Worst case, right? Yes, it is. But before you sign a contract—any contract—, you must imagine the worst-case scenario. The contract you negotiate should protect you from bad things, but you have to realize how bad those things can actually be.

. . . .

If your publisher refuses to remove language like this from your contract and you still sign it, you will have no one to blame but yourself for your tanking writing career. Because you put your signature on a legal document giving someone else control of your output.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

What’s Driving Self-Publishing? “Company Policy.”

14 May 2016

From The Zack Company (a literary agency):

While self-publishing experienced huge growth driven by authors who could not get publishers to pay attention to them and agree to publish their books, there are now very good authors—even authors who have deals with major publishers—getting into the self-publishing game. Why? Two words: “company policy.” And, no, I don’t mean banning casual Fridays. If only. I mean insisting on certain rights or royalty rates and refusing to negotiate on those rights or rates.

I have repeatedly been informed by publishers that they must have audio rights and that there will be no offer without the inclusion of audio rights. I have also been informed that they must have World English rights or even World rights, or they will not make an offer. This is not about negotiating the best package of rights given the advance; these are firm take-it-or-leave-it positions. Yet, in most cases, the editors have not even yet read the book!

Whenever I make a submission, I specify the rights I’m offering. And what I offer US publishers is the United States, Canada, and the non-exclusive Open market, excluding Audio, Film, TV, Graphic Novel, Comic Book, and other traditionally retained rights.

All too often, the editors respond by saying, “We appreciate your position, but it’s company policy.” Really? Company policy to withhold an offer or break off a negotiation over rights the house may or may not exercise? Company policy to alienate the author you want to do business with by drawing a line in the sand not after a series of offers and counter-offers, but at the very start? Seems like a terrible way to start a relationship.

. . . .

Authors should feel excited about getting a publishing deal. Not as though they just agreed to an arranged marriage in which the terms were dictated to them. The vast number of authors who get publishing contracts do not get them after an auction or bidding war. Most are patiently waiting for editors to get to their manuscripts and make an offer. That doesn’t mean the offer won’t be for good money from a good publisher. But when the offer comes and it ignores that certain rights were on the table or it takes the position that getting World rights including Audio is company policy and those things are not negotiable, I think most authors end up feeling boxed in and bullied into giving up rights they would otherwise have hoped to license for additional advances and income elsewhere. Perhaps we should just be grateful that getting movie rights has not become “company policy” anywhere . . . yet.

And I understand authors can always walk away, but we both know that it’s not a realistic move.

Link to the rest at The Zack Company and thanks to Joseph for the tip.

Know Your Rights

23 April 2016

From Kristine Kathryn Rusch:

I recently got an email that sent a chill through me. It was a newsletter from a traditional publishing organization. This organization is geared toward publishers and editors, not toward writers.

The newsletter was essentially an ad for an upcoming seminar that will teach publishers to understand intellectual property and expand their rights business.

Why did this send a chill through me? Because the one thing that has protected writers who signed bad contracts is the fact that their traditional publishers have no idea how to exploit the rights they licensed.

. . . .

[I]n short, most publishers ask for more than they have ever used in the past. Publishers have been very short sighted in how they published books.

. . . .

Ten years ago, it was relatively easy to get the rights reverted on a book like that. Essentially both parties agreed that the terms of the contract had been met, that the parties no longer had need of the relationship, and so they severed their business relationship.

It wasn’t easy-peasy, but it wasn’t hard either. It usually took a letter or two.

By 2005, however, most agents refused to write that letter which severed the contract. The reason was simple from the agent’s perspective. Many, many, many agents used a combination of their agency agreement and a clause in the writer’s book contract to define their relationship with the writer, and determine who controlled the marketing and finances of that book.

It wasn’t in the agent’s best interest to cancel the contract. In fact, the longer the contract existed, the better it was for the agent.

Writers with agents would have to write those letters themselves—and then, publishers would often contact the agent to find out why the agent was “letting” the writer do this.

. . . .

In the last year or so, I’ve been hearing from writers who say it’s almost impossible to get their rights reverted. The publishers want to hold onto those rights as long as possible.

The main reason for this has nothing to do with reprinting the book or keeping the book in the marketplace. It has to do with the changes in accounting that have occurred in the big traditional publishing companies.

The Big 5 (4? 3? Whatever. Jeez.) are now part of international conglomerates. Those conglomerates understand that intellectual property has as much value or more value than the buildings and land that the conglomerates use to house their businesses.

Those conglomerates put all of the intellectual property on their account books as an asset. So your novel—even if it’s more or less out of print (or has a $19.99 ebook like my novel Fantasy Life)—has a value assigned to it that reflects not only its earnings right now, but its potential earnings in the future.

The command came down from on high that publishers should retain the assets as best as possible. (I’m pretty sure some of these publishing companies were purchased for their intellectual property assets, not because of their bottom lines. I have no interest in proving that, though.)

So, publishers have kept the assets, doing the minimum to retain the rights to them. But they really haven’t maximized their profits.

. . . .

In practice, publishers have started to claim rights they never had. They’re interpreting the contract terms for something negotiated in 1997 by 2016 standards, and finding ways not to pay for those uses.

Big corporations are all about profit for the corporation. The best way to maximize profit is to lower expenses.

That’s why, after these big companies merge, you see layoffs a year or so later. That gives the new company time to define itself, find employees with overlapping duties, and streamline production.

Once the layoffs are over, once the agreements with the subcontractors (like printers and distributors) end or get renegotiated, the corporations look around for other ways to cut expenses.

The easiest way is to cut the payments to the suppliers—the writers.

. . . .

Just be aware that publishers often cut payments, and they use the contract as their guide. Not necessarily the contract negotiated in good faith with a corporate entity long merged into five other corporate entities, but the corporate entity that exists now.

Link to the rest at Kristine Kathryn Rusch and thanks to Bruce for the tip.

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

As usual, Kris does an excellent job of talking about the business/legal aspects of being a successful professional writer.

PG would like to talk a bit about authors making a decision to sign a publishing contract with a particular publisher or editor.

Isn’t that a huge reason why most authors sign a publishing contract? RomancesRUs is the hottest publisher around and some of their authors are New York Times Bestsellers. And Leticia is the best romance editor who ever walked the earth plus she is so nice on the phone. (ditto for SciFiRUs, etc.)

The idea that no one will remember RomancesRUs in ten years and Leticia will be fired in six months doesn’t enter most authors’ calculations.

It is the nature of declining businesses to attempt to consolidate their way to survival. That’s what’s been happening in big and small publishing for awhile and what will continue to happen.

Many authors sign with a publisher because of that publisher’s reputation for quality books and successful authors. Some authors will sign because they’ll be working with an editor with a great reputation for excellence and success, the kind of editor that bestselling writers mention in interviews.

Similar thinking goes into an author’s decision to sign with a star agent, one with many happy authors who say nice things about the agent’s work.

These would be good business reasons to sign a contract that lasted for five years.

However, current reputations and past successes are a terrible reason to sign a contract that will tie up rights to an author’s books for the full term of the copyright. As a reminder, in the US, copyrights last for as long as the author lives plus 70 years.

In a successful business, management can last for a long time and often the original management hires new managers with similar business acumen and passes down the business principles that lead to that success through the hierarchy. Such businesses can work their way into long-term success.

When a business is declining, especially when it is part of a declining industry, management turnover and ownership changes become near-constants. Yesterday’s management practices are no longer today’s management practices. Some investors make a lot of money by acquiring problem businesses, cutting costs to the bone, then harvesting profits (pulling cash out the business) or finding someone else to buy the business because its financial statements now look better.

Traditional publishing is in decline. How long the decline might last is speculative. However, the words of Ernest Hemingway are instructive. “How did you go bankrupt? Two ways. Gradually, then suddenly.”

The Securities and Exchange Commission requires mutual funds to warn their investors that “Past performance is not a predictor of future results.”

Of course, an investor who bought into a mutual fund can sell his/her shares and have nothing further to do with that fund and its managers. A hedge fund that purchased a publisher can sell the publisher and be done with it. Since no US state permits life-time employment contracts, a publishing executive or editor can either quit immediately or wait a couple of years, then bail out on a failing publisher.

Only the authors who signed contracts that last for the full term of the copyright are tied to whatever corporate entity once called itself a publisher, but now is a hedge fund asset, for the rest of their lives plus 70 years.

(PG will note that a provision in US Copyright Law permits the creator of a copyrighted work or his/her heirs to terminate a contract 35 years after publication or 40 years after the contract was signed, but it doesn’t happen automatically and 35/40 years is also way too long. PG won’t get into the technicalities of this part of the law.)

“But it’s a contract for only one book,” an author might say. PG won’t take more space to discuss unfair non-compete clauses, option clauses, etc., can undercut the excuse that it’s only one book. Such clauses can affect a whole bunch of books.

Under current contract practices, the author is the only person who has to think in the long term while everyone else in the publishing business is focused on the short term.

Publishing contracts need to include provisions that end the contracts after a few years so the author can have the same flexibility as everyone else involved with the author’s books.

SFWA Contracts Committee Alert

22 April 2016

From The Science Fiction and Fantasy Writers Association:

The SFWA Contracts Committee believes there are serious problems for writers with the non-compete and option clauses in many science fiction and fantasy publishers’ contracts. The non-compete language in these contracts often overreaches and limits authors’ career options in unacceptable ways. Writers may choose to bring out a range of books from different publishers — science fiction from one publisher and fantasy from another publisher, for example — and may have to do so in order to earn anything like a living wage.  The problem becomes even worse for hybrid authors who self-publish works in parallel with their traditional publications. Several contracts that we have seen include overlapping restrictions that could keep the author from publishing another book for more than a year.

Authors also retain audio, foreign language, and other rights with the intention of licensing them elsewhere. Language we have seen in these clauses attempts to make authors responsible for how these other rights are used, something that clearly places an unreasonable burden on them.

Authors should think carefully about signing any contract with these restrictive clauses and should negotiate any limitations in the clauses that would interfere with their writing agendas.  There are, in fact, times when it would be best to walk away from contracts with these bad clauses.

. . . .

Any limitation on the author’s ability to write new works at any time is unacceptable and should be deleted.

“Competing work” should be defined in the contract as clearly and narrowly as possible, and preferably limited to a work in the same series (whether one is planned or not). The burden should be on the publisher to prove that another work published elsewhere by the author would reduce their sales.

Any non-compete limitation that is tied to publication of the work covered by the contract should end on a specific date.

Any reference to the author diminishing the value of rights granted to the publisher by selling rights that the author retains should be eliminated as it is vague, unenforceable, and unacceptable.

Option clauses should be crossed out or defined as narrowly as possible. If the option clause can not be struck out entirely, the committee recommends that the author amend the clause so that they only need to submit a proposal or synopsis of a work and not the completed work to satisfy the publisher’s option. In addition, we recommend that the deadline for acceptance or rejection of the work should be no longer than 30 days, starting when the proposal is submitted. Rejection or failure to respond within the time specified should end the option obligation.

Link to the rest at SWFA and thanks to Deb for the tip.

PG says this is a good beginning to removing terrible clauses from publishing contracts. There are, however, many more “standard” provisions that also need to disappear or be substantially limited.

Top 10 Things To Consider When Choosing A Publisher With The Same Care As A Jane Austen Heroine Chose A Husband

18 April 2016

From author Katherine Grubb via 10 Minute Novelists:

It is a truth universally acknowledged that a writer in possession of a good story must be in want of a publisher.

It’s the age old story. You have so many hopes and dreams. You have all these wonderful stories to tell. You know that it will take an attachment, a proposal and perhaps a big commitment to make you moderately rich and a teensy bit famous. So you, the perfect Lizzie Bennet, who will only writes for love, not necessarily £10,000 a year, will be happy just to attach yourself with a publisher who respects you.

. . . .

1. You’ll attract folks like you. If you want the best, then be the best. Before you start looking for a publisher, make your story the best it can be. I know, you’ve been working on it for a long time and it really is good. It’s not silly like Lydia or Kitty’s, and it’s not quite as good as Jane’s (but she’s being courted by the Big Six.) Your first responsibility as a writer is to write well. Take your time. Learn from the greats. If you are going to take your writing seriously and you want to attract publishers who take writing seriously, then push yourself to the most excellent level. If you want to make a fast buck, then you’ll attract publishers who want to do the same.

. . . .

3. You understand your own goals for publication. Some writers have Rosings Park ambitions. Some will be content with Longbourne. (Forget Purvis Lodge. The attics there are dreadful!) If you don’t know what you want, then it will make choosing a publisher all the more difficult. This is what I did: I tried to find books, both fiction and non-fiction, that were similar to mine in content. I looked at who published them and who represented them. I asked myself if I wanted my books to be lumped together with these kinds of books. If I did, then it was from this list of publishers and agents that I would do research. If I didn’t, then I kept looking until I found books that were a better match.

. . . .

4. You have a full understanding that an entire industry has been created to take advantage of desperate authors. And along comes your first contact with a publisher. He is tall, dark, handsome (okay maybe not in reality, but go with me, this is fun!) He is a mercenary. He may not be interested in art. He may not be interested in your long term goals. He may just want to cash in from your hard work. Legitimate publishers, who have good reputations, are, in this current economic climate, not likely to initiate relationships with writers. They don’t have to. They’re turning manuscripts away constantly. It’s the less than trustworthy who are Googling authors and trying to sign anyone. Anyone. What to do? Go to Preditors and Editors and look for the names of reputable and notorious publishers, agents and editors. This is like Consumer Reports for writers. You’ll be really glad this site warned you about that Wickham!

Link to the rest at 10 Minute Novelists

Here’s a link to Katherine Grubb’s books. If you like an author’s post, you can show your appreciation by checking out their books.

During the course of watching various adaptations of Jane Austen’s novels, Mrs. PG and PG have observed that, despite providing a wonderful setting for the romantic quandaries Austen so brilliantly depicts, both of us are happy that we didn’t actually live during the Regency. But it is a delightful place to visit via the BBC.

Fair, Compromise, Clout, and Balls

15 April 2016

From Kristine Kathryn Rusch:

Right now, traditional publishers are just beginning to realize that they can (and often do) control everything about a work of art. This should frighten you traditionally published writers, because publishers are going to exploit your works as never before. We’ll deal with that a bit next week, in a blog on copyright and permissions.

. . . .

We all know that you can’t control everything in life. That rule also applies to contracts. Some large entities do not allow negotiation on their contracts.

. . . .

Whenever you deal with contracts, you don’t negotiate the contract for the nice reasonable person sitting across from you. You negotiate the contract with the idea that the nice reasonable person will be fired and replaced with a demon from hell who will enforce every part of that contract to his own benefit.

. . . .

The best contracts are fair to both sides—at the time the contract is negotiated. However, contracts that were negotiated in 1980 are still being interpreted today, and the world had definitely changed. What might have seemed “fair” then isn’t necessarily “fair” now.

. . . .

So…you don’t have clout to negotiate a contract. You’re not James Patterson or Nora Roberts. You aren’t already a multimillionaire. You aren’t a successful businessperson. So, most people think you should slink into the background and wait for the success pixie to sprinkle you with magic dust. Once that occurs, thenand only then can you negotiate a contract.

Seriously? Please excuse me while I sigh and shake my head.

How do you think people become successful? They become successful by controlling their own interests and standing up for themselves. They become successful by learning their business. They become successful by taking risks.

One of the major risks you take in any business is that you will hear the word “no.” A lot.

What’s the worst thing that could happen in a negotiation when you ask for something you want (but may fear you don’t deserve yet)? Well, the person on the other side could say “no.”

Oh, waaaaah.…

But that person could say yes. Or they could say, I can’t do what you ask, but I can do something else that might benefit us both.

You don’t know until you ask.

And here’s the thing, people. Anyone who knows contracts, who knows business, expects you to ask. So ask.

What’s important to you might not be important to them at all, and so a yes on your most important thing might be easy to them.

It’s not all up to them, by the way. Because it’s a negotiation, which is a dialogue.

You might say, I want X.

And they might respond, I can’t do X. Sorry, no.

Then you might say, I see you want Q. But I can’t do Q if I don’t receive X.

If Q is important to them, they might cave on X. And so on.

You don’t know if you don’t try.

. . . .

[I]n traditional publishing, representatives negotiate with representatives, and the principals do not talk to each other.

What do I mean? I mean that agents negotiate with editors. Agents theoretically represent the writer and editors represent the publishing company.

Even then, the negotiation is uneven. In theory, the agent has no power to make or sign an agreement. In reality, the agent shouldn’t even be negotiating a legal document. Savvy writers use attorneys to negotiate a contract. We’ll get to all of this down the road.

Here’s the upshot: the writer’s representative should not be able to sign the documentation to make the deal. The writer’s representative is not (or was not) a principal. (Many agents are in the process of subverting this these days, which gives me the willies.)

Editors also cannot sign an agreement, and have only limited power to act within certain parameters, as the company’s representative. The editor has an offer and some wiggle room, but must get approval for almost everything.

Writers who drop their agents or handle things with their lawyers in the background often forget that the editor can be a representative. Suddenly, the writer is taking terms on the phone with an editor, and it might be a binding negotiation, not a casual discussion.

. . . .

Use a representative when you’re not certain you’ll be making a final deal or you need someone to be tougher than you can be. Let the representative put distance between you and that nice person you like a lot on the other side of the table.

. . . .

I do not let a publisher grab everything. If that’s a deal breaker for the publisher, then it’s also a deal breaker for me. I don’t want to work with someone who wants to own my intellectual property outright. I really don’t want to work with someone who wants to own my intellectual property and who tries to gain that property through subterfuge, as many new traditional publishing contracts do.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG says that in a typical first-offer business contract, there are almost always quite a number of terms that can change.

In some cases, when PG drafts such a contract, he’ll put in a few things that will be like bait for opposing counsel to change. That way, opposing counsel and the other side feel like they got some mileage out of their negotiating work and brought PG’s client around to their way of thinking.

In some cases, when the other side asks for a change in an important clause and a change in a bait clause, PG can move the deal forward by saying (always reluctantly) that the best he can do is split the difference and give in on the bait clause on the condition that the other side concedes on the important clause.

By his nature, PG is the kind of person who prefers to get down to business and get a deal done (or not) in a very efficient way. However, in the world of lawyers and clients, there are people who think they won’t get a good deal unless they go through an intense negotiation.

If you give them a contract with only important clauses, your best offer, they’ll assume that you’re willing to negotiate some of those away. So, in the interest of getting to a deal on terms that will be beneficial for your client, you set up the contract so you can do the negotiation the way the other side wants to negotiate and concede a few items.

Contract Basics (Contracts/Dealbreakers)

8 April 2016

From Kristine Kathryn Rusch:

I need to discuss the importance of contracts.

I know to some of you that sounds silly. Traditionally published writers expect to get a contract from their publisher. Hybrid writers expect the same thing, when they have a publisher other than themselves.

Indie writers often have no idea what contracts are or why they’re necessary.

In fact, all three groups rarely think about contracts at all.

. . . .

Over the years, I have become fascinated with writers’ attitudes towards contracts. Writers are so very cavalier about them. More than fifteen years ago, a former editor of mine (for a major traditional publishing house that has since vanished) told me that most writers she worked with looked at their 25-page traditional publishing contract like this:

The writer closely examined the lines covering the advance, and the advance’s payout schedule. The writer eyeballed the royalty rates, and the writer glanced at the deadlines.

That was it. Out of 25 pages, the writer looked at very little else.

I did not believe my editor. I really believed most writers were not that stupid.

I’m here to tell you now: she was right. Most writers are that stupid. Most writers pay no attention to their publishing contracts at all until some term bites them in the ass. Then the writer tries to figure out how to get out of it, not realizing that they got themselves into it by signing the contract without examining it.

. . . .

Writers in general—traditional, hybrid, and indie—do not respect their contracts. Writers don’t understand contracts, and rather than learning what a contract is and why it exists, writers let “their people” handle the contracts.

For generations now, “their people” are usually their agent and the employees of their agent, which, as you will see in future posts, is a truly terrible idea.

. . . .

Most writers expect someone else to generate a contract. Most writers want their traditional publisher or their agent or their service provider or their mortgage broker or whomever they’re in business with to provide them with a contract. Most writers have no clue that they can generate their own contracts.

Yes, you, traditional writers! You can go to your publisher with your own contract in hand. I personally know several writers who do this. That puts the contract negotiation phase on equal footing. The writer has their 10-page contract; the publisher has their 25-page contract.

The document the two end up with is neither of those contracts. It’s something unique to that particular negotiation, and probably won’t be replicated in the writer’s next negotiation with a different publisher.

There, traditional writers, did I just blow your minds? Because it certainly blew mine when I started editing over 25 years ago and some writers provided me with their standard contracts for short fiction. I didn’t know that was possible, because, at the time, I did not understand contracts or contract law.

. . . .

Contracts are extremely important. They define the relationship between the parties. Written contracts are the best, because each party can examine the terms, think them over, and decide whether or not those terms are acceptable.

You and I might discuss a proposed business plan over the phone. I might think we decided to have you do all the publishing work, from designing the covers of a book to writing cover copy, and you might think we decided that you would write the book and I would publish it. A simple misunderstanding that could happen in conversation would be solved if we had a written agreement.

With a written document, you can examine the terms and see if they’re feasible. But you must examine those terms before you accept the offer. Once you’ve accepted, the contract becomes binding.

It’s easier to take legal action over a broken contract if that contract is in writing. Taking legal action does not mean you have to go to court. You can have an attorney contact the other party, and let them know they are in breach of the contract. That’s very easy to do when the terms are spelled out.

I can’t tell you how many times I’ve taken part of a publishing contract and used that section to show the publisher that they were in breach of the contract.

Once someone is in breach, by the way, they usually have the right to cure. Meaning, if they do something wrong, they have the right to fix that problem within a reasonable amount of time.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Dealbreakers/Contracts

1 April 2016

From Kristine Kathryn Rusch:

In 2012 and 2013, I published a series of blogs on contract deal breakers for traditionally published writers. I’ve been promising to update it for years now, but I’ll be honest: The very topic discourages me.

. . . .

I mentioned above that the topic of contracts discourages me. That’s one reason I’ve put the revision of deal breakers off for so very long.

I had hoped that contracts would improve. They haven’t. They’ve gotten worse. What has happened is that predictions long-time writers, like my husband Dean Wesley Smith, made have come true: Writers are starting to split into camps. Dean predicted two camps—those who published their books traditionally, and those who published indie.

Unfortunately, we’ve divided into three camps: those who publish traditionally, those who publish indie, and those who publish through their agents.

That last clause “through their agents” is so wrong, I have trouble typing it. The agents who still represent the writer as an agent are breaking the law when they publish a writer’s books. The agents are then becoming publishers, which makes them violate all kinds of agency law. Not literary agency law, which, anyone will tell you, does not exist in most states. Agency law, which governs anyone who calls themselves an agent—from real estate agents to insurance agents to literary agents.

. . . .

Most literary agents have no idea agency law even exists—at least, I hope they have no idea, because if they do, then they are flagrantly violating the law, instead of ignorantly violating the law. Me, I prefer the ignorant to the flagrant.

. . . .

Since huge conglomerates have taken over the big traditional publishers, no one even pretends at gentility any more. Smaller publishers which were often a dice-roll (some were great for writers; some were horrible for writers) are now as bad, or worse, than the Big Five. Much of this is economic—the economics of traditional publishing, done the old-fashioned way, isn’t working as well as it once did, so traditional publishers (large and small alike) are squeezing their writers like never before.

Most writers who publish traditionally can no longer make a living at writing. If those writers only write one novel per year, they definitely can no longer make a living at writing.

Most midlist writers are lucky to get an advance of $5000. Those advances are paid in three installments—signing, acceptance, and publication. Even being charitable and assuming that the advance is paid in the traditional two installments ($2500 each) or let’s be even more charitable, all at once, a writer can’t live on that kind of money.

The writer has to be able to write something else.

But most traditional publishing contracts —negotiated by agents —have some version of this clause:

The Work [the novel] shall be the Author’s next book-length work. The Author represents that there is no outstanding commitment for publication for the first time of another book-length work written or co-written by the Author to a third party and the Author will not offer rights to another book-length work written or co-written by the Author, or accept an offer for such a work, until acceptance of the Work by the Publishers and until the Author has complied with the option in Clause 3(a)

The option clause in most contracts is another problem, which options the author’s next work, and allows the publisher to take their own sweet time in deciding if they’ll buy the next work.

But note how pernicious this clause is. I took it from an existing contract that a writer sent me over a year ago. The only thing I changed was adding [the novel] for the sake of clarity. The rest is from the contract verbatim.

The contract is for a novel, yet this clause restricts book-length works. That includes nonfiction, short story collections, novellas, anything at book-length, which is not defined at all in the contract. So that means book-length could be anything the publishing company deems it to be.

. . . .

Usually, though, there is another clause, buried in the warranty, that says the author warrants he will not publish any other book-length work that will compete with this book. And who determines that competition? The publisher, of course. Certainly not the author.

So…for a measly $5000 (minus agent fees, which actually will make this $4250), the author signed away his right to make a living. In the early 1990s, I sold eight novels before my first one was published. I also sold an anthology that I edited, and I was editing a series of hardcover anthologies that we chose to call magazines.

If my first novel contract had had that clause, I could not have done any of those things. So, instead of earning tens of thousands of dollars in those early years, I would have been left with a check for $2125—and some crappy day job.

. . . .

For years now, Publishers Marketplace has tracked publishing deals on its website. Agents, in particular, love to report their really big coups to Publishers Marketplace. Publishers Marketplace divides the deals it reports into five categories, all by the amount of the advance.

PM defines “major deal” category—the largest advance category—as $500,000 and up. In the not-so-distant past, the major deal category was often for one book. If the agent secured a three-book deal that was $500,000 per book, the agent didn’t call that a major deal, because that wasn’t impressive. Someone might misinterpret and believe the agent got “only” $500,000 for all three books.

Instead, the agents would report a 3-book deal for $500,000 per book as a 1.5 million dollar deal.

I searched major deals this afternoon, and found quite a few. But when I looked at them, they were all for mid-six figures for a lot of books—usually a three-book deal, although I did see quite a few for five books, and one “major deal” for 11 books.

Believe me, if that 11-book deal had gone to seven figures, the agent on the deal would have said “In a deal worth one million dollars…” Didn’t happen.

In the past year, searching for fiction only, I found three deals listed as million-dollar deals. They include John Scalzi’s 10-year, 13-book, $3.4 million dollar deal (which comes to roughly $225,000 per book when you subtract agent fees). Only one of the three deals was for a single book, which sold for 1.25 million. The remaining deal was for over a million per book, and that was a $7 million 5-book deal (which comes to $1.4 million per book before agent) for a self-published writer whose books sold 1.2 million all on their own.

Three million-dollar fiction deals in 2015. Only three. And none yet in 2016. There were nine in 2014, and at least one per month in 2013. In 2012, there were at least two per month.

Why is this important? Because that home-run is less possible for everyone in traditional publishing, and they’re looking for other ways to make money. One of the ways they make money is squeezing writers. Another way is to own the copyright—or at least, control the copyright.

. . . .

And here’s the really scary part: Old contract terms, some written in the 20th century before ebooks existed, are being redefined and employed as a justification for publisher behavior. These traditional publishers—particularly those that have been subsumed into a major conglomerate—are not asking permission to change the definition of the terms. They’re just doing it.

Things that were pretty innocuous in 1985 are now weapons that are being used against authors.

You’d think that agents, who are supposed to work for the writers who hire them, would prevent this whole-sale change of meaning of old contracts. But a handful of agents are complicit in this, preferring to maintain their working relationship with a big publisher than rocking the boat for a small client.

Even more agents are just plain ignorant of what the changes in the clauses mean.

Those who run the agencies, though, do understand that their income is going down, so literary agencies have become pretty draconian in their own contracts. Those agencies make agreements with their authors, usually requiring the author to give them 15% of the earnings of a particular book if the agent sold the book. That’s bad enough, especially if the agent has been fired—as two of mine have (the two who still are entitled to 15% of certain projects).

But the agency agreements are moving into a whole new, and even uglier, place in relation to their writers. Agents are demanding a piece of their writers’ copyrights as well. Some agents are blatant about it, stating in the agency agreement that they make writers sign before the writer becomes a client, that the agent will own 15% of the copyright of any book the agent sells for the writer—or in the case of one agency, 15% of the copyright of any book the agent markets for the writer.

Other agency agreements are less blatant. You have to read them in conjunction with the contracts the agent has negotiated for the writer, to see that the agent has actually slipped his hand into the writer’s pocket and legally stolen copyright. Most writers trust their agents blindly, and never believe it would happen to them—until it happens to them.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like an author’s post, you can show your appreciation by checking out their books.

The problems Kris mentions are, unfortunately, not new and will be familiar to longtime visitors to TPV.

Some authors (or their lawyers) have had those clauses removed or defanged, but authors still sign “standard contracts” in the naive belief that if a contract is “standard” most other authors must have signed the same thing. Unfortunately, they can find the writing career they envisioned substantially constrained.

PG says if you want to be a professional author, act like a professional and make certain you understand the contracts you sign.

Harvard Sues Elmore, Gets Injunction Stopping Sales of

29 March 2016

From the Maine Antique Digest:

A lawsuit filed in federal court in New Mexico in June 2015 pits Harvard University, which has about a $37 billion endowment, against Steve Elmore, an antiques dealer who patched together $36,000 to self-publish a book. The suit may hinge on the definition of the word “manuscript.”

. . . .

In 2015 Elmore of Santa Fe, New Mexico, self-published a 217-page book, In Search of Nampeyo: The Early Years, 1875-1892. It was the culmination of decades of work and research. His publication was also the result of Elmore’s being rejected by the Peabody Museum Press, the publishing arm of the Peabody Museum of Archaeology and Ethnology at Harvard University.

In its suit, Harvard claims Elmore used photos he took in the Peabody Museum after signing an agreement that specified how he would use the photos and restricted their use. Elmore counters that Harvard released all its rights to the manuscript and wants to publish his decades of research without crediting him.

According to court documents, in August 2010 Elmore signed a contract with the Peabody Museum Press to write a manuscript on Nampeyo. The contract noted that the manuscript was subject to peer review and promised “potential publication,” and Elmore was paid $1500 to conduct research at the museum.

. . . .

“The first version of my manuscript was sent out for peer review, with two out of three reviewers recommending publication with revisions. The editor asked me to revise the book for the more scholarly ‘Peabody Museum Papers’ series. She asked me to explain my methodology and to link my work to art history, which I did. The new version of my manuscript, complete with my photos, took me another year and added 100 pages to my manuscript. In November 2013 I submitted this final version…and it was rejected with little comment in January 2014 by the Peabody Museum Press board of directors,” said Elmore.

The rejection letter’s language is the subject of dispute.

In a letter dated January 21, 2014, Joan Kathryn O’Donnell, director of the Peabody Museum Press, rejected Elmore’s manuscript because it was not a fit with the Peabody’s “editorial and publishing priorities and standards.” Elmore’s approach to the material, the letter said, was “inappropriate” for the Peabody’s scholarly publication series, and it quoted a board member who leveled a stark criticism. “We are an academic press, and this is not an academic book,” the unnamed board member said.

The rejection letter stated that the Peabody Museum Press was returning to Elmore “all rights in the manuscript…including all versions of the manuscript submitted to the Peabody Museum Press.” O’Donnell encouraged Elmore to publish elsewhere, even offering ten to 15 high-quality photographs and suggesting American Indian Art Magazine as a possible venue. “We tried very hard to make this project work,” O’Donnell lamented.

Elmore took O’Donnell’s advice but didn’t go the magazine route, and he didn’t accept the Peabody’s offer of photographs; he self-published the book through Spirit Bird Press, an entity he created.

. . . .

On December 10, 2015, a federal judge granted Harvard’s motion for an injunction, stopping Elmore from advertising, selling, and distributing his book. Elmore had already sold over 900 copies of the book that cost him $36,000 to produce, had a deal with Amazon.com in place, and had media kits ready to promote his book.Maine Antique Digest reviewed the book in the April 2015 issue.

Elmore is fighting back on two fronts: he’s filed a countersuit in federal court and launched legal action in a state court in New Mexico. His countersuit alleges breach of contract, breach of covenant of good faith and fair dealing, tortious interference with contractual relations, conversion, and more.

. . . .

In an e-mail to M.A.D., Elmore states his case. “Here’s my take on the Permission to Photo agreement. First, that agreement is Harvard’s attempt to strip photographers of their copyright of their work. The intention of the agreement is for Harvard to avoid U.S. Federal Copyright law and for Harvard to assert itself between the photographer and his own copyright, thus placing itself above the law. Right now, Harvard acknowledges I own the copyright to my photos, returned in the ‘all rights’ letter, yet insists I can’t publish them. What else does copyright mean? I’m not denying I signed the agreement, and I would not have published without their returning to me in writing from the Board ‘all rights’ etc. and ‘recommending’ I publish elsewhere.

. . . .

Harvard’s lawyers claim the injunction is necessary. “It is extremely important to the Museum to have control over and approval of any published photographs of its collections, because the quality of those photographs and the way they are presented reflect directly on the Museum, and either enhance or degrade its reputation.” Harvard claims that Elmore’s photographs are blurry, washed out, or inadequately lighted.

Link to the rest at Maine Antique Digest

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