OpenAI’s admission it needs copyright material is a gift to the publishing industry

From The New Publishing Standard:

The Writers Union of Canada is among the latest to, rightly, calls for legislation to regulate the excesses of AI companies as this sector evolves.

But as with so many of these calls for legislation, we need to be clear whether these are reasoned arguments looking to harness AI’s potential to benefit the long-term interests of the publishing industry, or knee-jerk reactions pandering to member’s short-term interests with meaningless soundbites.

In the US we’ve seen the Writers Guild embrace AI as a force for good, fully accepting the AI genie will never go back in the bottle, and so looking for the best ways to work with AI companies to benefit Writers Guild members.

“We have to be proactive because generative AI is here to stay,” said Mary Rasenberger, Authors Guild CEO, explaining, “They need high-quality books. Our position is that there’s nothing wrong with the tech, but it has to be legal and licensed.“

SAG-AFTRA, the US actors union, has taken the same approach.

Proactive rather than endlessly reactive.

While at the other end of the spectrum the outgoing head of the UK’s Society of Authors, Nicola Solomon, is peddling nonsense about how 43% of writers jobs will be devoured by the AI bogeyman.

The Writers Union of Canada has tried to find a mid-way path, and acknowledges AI can bring benefits to writers, but cannot help but seize on statement by OpenAI’s CEO Sam Altman saying that AI needs to use copyrighted material as some kind of admission the company is stealing writers’ IPs.

Given the current legal interpretation of what constitutes fair use, that assertion may or may not have legs, but for the AI opponents such details are neither here nor there. As and when the law on fair use is clarified one way or the other, then we can fling mud.

Similarly, demanding creators be paid for their efforts is right, but suggesting this is not happening is wrong.

The fact that Altman and his company have, since at least May 1923 at the White House AI summit, been talking about ways to pay for the use of copyrighted material, and since mid-summer have been signing deals with content-producers to do just that (American Journalism Project, Associated Press in July 2024, Axel-Springer in December), is being conveniently ignored.

Bloomberg last week reported that Thomson Reuters is looking to sign a deal with AI companies.

Tom Rubin, OpenAI’s chief of intellectual property and content, told Bloomberg News: “We are in the middle of many negotiations and discussions with many publishers. They are active. They are very positive. They’re progressing well. You’ve seen deals announced, and there will be more in the future.”

So these opponents of AI are missing opportunities to do deals that will favour creatives, for the sake of a sound-tough soundbite.

And in this context, we should be clear that the New York Times law suit against OpenAI is happening because negotiations with OpenAI failed, not because OpenAI was unwilling to pay.

In any case, Altman has made clear OpenAI can manage just fine without NYT data if necessary.

We are open to training [AI] on The New York Times, but it’s not our priority. We actually don’t need to train on their data. “I think this is something that people don’t understand. Any one particular training source, it doesn’t move the needle for us that much.”

But this is not the only flaw in the Canada Writers Union case. The CWU has also gone down the “humans-only” road with its interpretation of copyright law.

Copyright is an exclusive right of human creators. Existing copyright legislation protects human creativity and originality, by virtue of requiring the exercise of skill and judgment to obtain copyright in a work. This should not be changed to grant copyright protection to AI generated products or to allow copyrighted works to train models without permission.

And again we have the juggling act with different issues mixed into a pot and violently stirred for the sake of a sound-tough soundbite.

No-one is asking for copyright law “be changed to allow copyrighted works to train models without permission.

And the other part of the soundbite – The law “should not be changed to grant copyright protection to AI generated products” – falls into the other classic Luddite’s Weekly trap.

On the one hand they are claiming, and Altman himself agrees, that AI cannot do its work without copyrighted material, which as of now is defined as human-produced. And at the same time they are claiming copyright “is an exclusive right of human creators.”

Link to the rest at The New Publishing Standard

Who is going to receive the cash if a large publisher signs a license to utilize their books, magazine articles, photographs, etc.?

PG can’t speak for magazines and photographic publications, but, at least for ebooks, the authors are licensing their rights to publishers, not selling those rights. Arguably, under a standard trade publishing agreement, the author hasn’t given her/his publisher the right to use their books as grist for an AI mill. The traditional publisher typically has the right to print, publish, and sell the author’s works.

Granting permission for the author’s books to be utilized as fuel for an AI is something that was not foreseen when the author signed a publishing agreement. It is common for a publishing agreement that reserve rights not granted to the publisher for the author’s use so long as the exercise of those rights doesn’t interfere with the publisher printing, publishing, and selling the manuscript as a book of some sort or another.

Another issue that a great many large publishers will likely have is publishing agreements that were written and signed long before the internet, digital publishing, or anything except print, publish in a printed serial form, licensing as a Book-of-the-Month edition, etc.

And, of course, does the author’s literary agent get 15%?

Taylor-made deals: how artists are following Swift’s rights example

From The Guardian:

A revolution is brewing in the music business as a new generation of female acts, following the example of Taylor Swift, are seizing ownership of their music rights and refusing to sign deals that cede complete control to music companies.

Swift is nearing the end of her project to re-record her first six albums – the ones originally made for Big Machine Records – as a putsch to highlight her claim that the originals had been sold out from under her: creative and commercial revenge served up album by album. Her public fight for ownership carried over to her 2018 deal with Republic Records, part of Universal Music Group (UMG), where an immovable condition was her owning her future master recordings and licensing them to the label.

It is a power-play template for younger acts who are now rising up – especially female pop stars, historically among the most exploited figures in music – alert to the fact that owning their recordings and songwriting is everything. Olivia Rodrigo made ownership of her own masters a precondition of signing with Geffen Records (also part of UMG) in 2020, citing Swift as a direct inspiration. In 2022, Zara Larsson bought back her recorded music catalogue and set up her own label, Sommer House. And in November 2023, Dua Lipa acquired her publishing from TaP Music Publishing, a division of the management company she left in early 2022.

At Glastonbury last summer, Rina Sawayama made a veiled jibe at the 1975’s Matty Healy for laughing at racist comments on a podcast and for the fact that he “owns my masters”, due to his directorship at Dirty Hit Limited (although his directorship was in fact terminated in April 2023). This claim about ownership skips over the complexities of contract law – Sawayama presumably having signed over the rights to her recordings in exchange for the label’s financial investment – but emotionally it plays to a fanbase who increasingly see “the industry” as the inherent enemy of art and creative autonomy. “The artists were creating those works, so really they should be owning them from an emotional point of view,” says Brian Message, a partner at Courtyard Management.

Artists today are more industry-literate and aware of the pitfalls and bear traps of the past, simply because they have to be. A multitude of older acts – perhaps most notably George Michael and Prince – had to take legal action over, in their eyes, being ripped off or badly exploited, while others such as Radiohead have made ownership of their rights in renegotiations an economic and moral mission. Some acts had prescient management on their side, with Bono recounting in his Surrender memoirs in 2022 that band manager Paul McGuinness negotiated with Island Records for U2 to take a lower advance and lower royalties as “it meant that at the end of a period of time we’d get back our rights and regain ownership of our recordings”.

Prince and George Michael are bleak warnings from history, but the moves by Swift, Rodrigo and others can stand as roadmaps for the future. It also means the music industry has had to adapt away from contracts based on ownership. There are two kinds of rights at stake here: the rights to the master recordings of an artist’s work, and songwriting rights, known as publishing. One senior music publishing executive says their part of the business was ahead of the curve, explaining that publishing deals tend to work on exclusive licensing terms or retention periods. “Publishers pivoted from a rights-ownership business to the servicing of rights,” they say. Those retention periods are getting shorter, they add, down from about 25 years three decades ago to between 12 and 15 years today.

David Martin, CEO of the Featured Artists Coalition, says there is “a propensity towards owning rights” for artists, but some acts are still prepared to sign away ownership for what they think might be their only shot at the big time. “We have members who are still signing major label deals,” he says. “Some of the terms in some of those deals are terms that we’d expect artists to be thinking very carefully about.”

Message says he steers acts away from ownership-based contracts. “We have a default position that we won’t advise our artists to do life-of-copyright deals,” he says. “It’s not that we wouldn’t do them, but our strong advice would always be to come up with a licence arrangement of some description.”

This is the ideological underpinning of BMG and AWAL (Artists Without a Label), which is now under the ownership of Sony Music Entertainment. “The philosophy is flipping the relationship,” says Alistair Norbury, president of repertoire and marketing at BMG UK. “There had to be a fairer and more transparent way to work with the creative community.”

Acts on BMG’s roster – notably Kylie Minogue, Suede, Sigur Rós and Louis Tomlinson – are on licensing or assignment deals, so ownership of the recordings eventually reverts to them. “They want to be with a record label where they have creative control and ownership coming back to them at some point,” says Norbury.

Link to the rest at The Guardian and thanks to C. for the tip.

PG says three cheers for musical artists who don’t give up rights forever.

Memorandum of Agreement for The 2023 WGA Theatrical and Television Basic Agreement

PG introductory explanation: The following is an excerpt between a couple of chapters of the Writers Guild of America and The Alliance of Motion Picture and Television Producers. The producers contract with writers for movie and television scripts.

Basically, this is a union contract with management. The original document is 94 pages long, and you should be able to review the entire document at the link if you’re into that sort of activity.

PG is excerpting a portion of the agreement that governs the use of Artificial Intelligence programs. He apologizes for the formatting, which he has tweaked a bit for readability but is, unfortunately, still used in far more than a few contracts negotiated by lawyers and keyboarded by legal secretaries. Additionally, PG could see no need for the use of quote marks here and there.

Note also that PG’s excerpt begins with Article 72 of the contract. PG reads these sorts of documents so you don’t have to.

From WGAcontract2023.org:

ARTICLE 72 GENERATIVE ARTIFICIAL INTELLIGENCE

A. The parties acknowledge that definitions of generative artificial intelligence
(‘GAI’) vary, but agree that the term generally refers to a subset of artificial
intelligence that learns patterns from data and produces content, including written
material, based on those patterns, and may employ algorithmic methods (e.g.,
ChatGPT, Llama, MidJourney, Dall-E). It does not include ‘traditional AI’
technologies such as those used in CGI and VFX and those programmed to
perform operational and analytical functions.

B. The Companies agree that because neither traditional AI nor GAI is a person,
neither is a ‘writer’ or ‘professional writer’ as defined in Articles 1.B.1.a.,
1.B.1.b., 1.C.1.a. and 1.C.1.b. of this MBA, and, therefore, written material
produced by traditional AI or GAI shall not be considered literary material under
this or any prior MBA.

C. Should a Company furnish a writer with written material produced by GAI which
has not been previously published or exploited, and instruct the writer to use the
GAI-produced material as the basis for writing literary material:

1. The Company shall disclose to that writer that the written material was
produced by GAI.

2. The GAI-produced written material shall not be considered assigned
material for purposes of determining the writer’s compensation.

3. The GAI-produced written material shall not be considered source material
for purposes of determining writing credit.

4. The GAI-produced written material shall not be the basis for disqualifying
a writer from eligibility for separated rights.

This subparagraph C. also applies when a writer, with the consent of the
Company, uses GAI in the course of preparing literary material. Company agrees
that it will not publish or exploit GAI written material for the purposes of evading
this provision.

“When a writer, with the consent of the Company, uses GAI in the course of
preparing written material or incorporates GAI-produced material in written
material, such written material shall be considered literary material and not
material ‘produced’ by GAI.

The following examples illustrate application of this subparagraph C.:

EXAMPLE 1:

“Company furnishes Writer A with written material substantially in the
form of a screenplay produced by GAI which has not been previously
published or exploited and assigns no other materials. Company instructs
Writer A to rewrite the GAI-produced written material. Company must
pay Writer A no less than the minimum compensation for a screenplay
under Article 13.A.1.a.(2), as well as no less than the amount specified in
Article 13.A.1.a.(9), ‘Additional Compensation Screenplay – No Assigned
Material.’ The GAI-produced written material is not considered source
material when determining writing credit to Writer A and will not
disqualify Writer A from eligibility for separated rights.

“Company later assigns the screenplay rewritten by Writer A to Writer B
and instructs Writer B to rewrite the screenplay rewritten by Writer A.
Company must pay Writer B no less than the minimum compensation for a
rewrite under Article 13.A.1.a.(3). Writer A’s rewritten screenplay must be
considered when determining writing credit to Writer B and eligibility for
separated rights.

EXAMPLE 2:

“Company furnishes Writer A with written material substantially in the
form of a story produced by GAI which has not been previously published
or exploited and assigns no other materials. Company instructs Writer A to
write a teleplay based on the GAI-produced written material. Company
must pay Writer A no less than the minimum compensation for a story and
teleplay. The GAI-produced story is not considered source material when
determining writing credit to Writer A and will not disqualify Writer A
from eligibility for separated rights.
“Company later assigns the teleplay written by Writer A to Writer B and
instructs Writer B to rewrite the teleplay written by Writer A. Company
must pay Writer B no less than the minimum compensation for a rewrite.
Writer A’s teleplay must be considered when determining writing credit to
Writer B and eligibility for separated rights.

“D. A writer will be required to adhere to the Company’s policies regarding the use of
GAI (e.g., policies related to ethics, privacy, security, copyrightability or other
protection of intellectual property rights). Any purchase of literary material from
a professional writer is also subject to such policies. A writer must obtain the
Company’s consent before using GAI. The Company retains the right to reject the
use of GAI, including the right to reject a use of GAI that could adversely affect
the copyrightability or exploitation of the work.

“E. A Company may not require, as a condition of employment, that a writer use a
GAI program which generates written material that would otherwise be ‘literary
material’ (as defined in Article 1.A.5.) if written by a writer (as defined in Article
1.B.1.a. and Article 1.C.1.a.) (e.g., a Company may not require a writer to use
ChatGPT to write literary material). The preceding sentence does not prohibit a
Company from requiring a writer to use a GAI program that does not generate
written material, such as a GAI program that detects potential copyright
infringement or plagiarism.

“F. The parties acknowledge that the legal landscape around the use of GAI is
uncertain and rapidly developing and each party is reserving all rights relating
thereto unless otherwise expressly addressed in this Article 72. For example,
nothing in this Article 72 restricts any writer who has retained reserved rights
under Article 16.B., or the WGA on behalf of any such writer, from asserting that
the exploitation of their literary material to train, inform, or in any other way
develop GAI software or systems, is within such rights and is not otherwise
permitted under applicable law.

“G. Each Company agrees to meet with the Guild during the term of this Agreement at
least semi-annually at the request of the Guild and subject to appropriate
confidentiality agreements to discuss and review information related to the
Company’s use and intended use of GAI in motion picture development and
production. The foregoing provision shall not be construed to waive any right of
the Guild under the National Labor Relations Act, including but not limited to the
right to seek information necessary and relevant to the administration and enforcement of this Article 72.”

Link to the rest at WGA Contract 2023

The brutal truth about earning out

From Blake Atwood:

What does earning out mean?

When an author signs a book deal with a publisher, the publisher pays the author in the form of an advance on future sales, aka an advance against royalties, aka an advance.

Let’s be optimistic and say that your literary agent sold your book to a publisher for $100,000. That means that prior to your book having gone on sale, you will have made $85,000.

Don’t forget: your lit agent gets 15 percent of what you earn. That number isn’t always the same for every agent, but 15 percent is typical.

That advance money may be paid in a lump sum, but it may also be doled out to you at specific publishing milestones, e.g., when you sign the contract, when you submit your manuscript to the publisher, and when the book is published.

Let’s assume that it takes approximately two years for those three events to happen. At that rate, you’re paid $28,333 three times over two years. Can you already see how even a sizable advance may not mean an author can quit their day job? We haven’t even accounted for taxes yet!

To “earn out” means that a publisher sells enough of that author’s book so that the publisher recoups their investment in the author.

In other words, the publisher needs to earn $100,000 before the author will ever see more money as a result of sales of their book.

Considering that an author stands to earn maybe $2.50 per hardcover book and less for other editions, at best, the publisher will have to sell 40,000 books for the author to earn out their $100,000 advance.

. . . .

According to Jane Friedman, 70 percent of authors don’t earn out their advance.

In other words, a majority of authors are paid anywhere between $5,000 and $1,000,000 in an advance and their book sales never match how many the publisher thought they could sell.

Fortunately for these authors, they don’t have to pay the advance back to the publisher. The advance is a calculated financial risk that publishers take on their authors.

. . . .

Literary agent Jeff Kleinman shared an apt visual for advances and royalties: Imagine a jar filled with 100,000 marbles. When you sign a book deal, you and your agent are given those 100,000 marbles. The publisher takes the jar back. Once they fill it back up with 100,000 marbles made through book sales, then the jar overflows and the author (and agent) “earn out” and begin to see royalty checks on top of what they’ve already been paid through the advance.

But that only happens 30 percent of the time.

Link to the rest at Blake Atwood

Here’s a link to Blake Atwood’s Author Page on Amazon. If you appreciate Blake’s insights, you might want to check out his books.

PG notes that it’s not unusual for a wide variety of little nibbles that some publishers and agents sometimes take from the author’s royalties. Some publishers and some agents add little fees for this and that, which can add up. Fedex fees charged by the agent to send you your royalty statements and royalty checks are one small example.

PG regards items such as these as part of the cost of doing business as a literary agent and, as such, the costs should be borne by the agency.

(Note: For simplicity’s sake, the following hypothetical does not include book wholesalers that all large and many small publishers use to warehouse and ship orders to individual bookstores and book chains and whoever else wants to purchase them.)

And don’t forget the notorious reserve against returns. For those who are unfamiliar with this process and how it is sometimes manipulated, PG will provide a quick overview.

  1. Publishers are happy to ship bookstores as many printed copies as the store is willing to accept. How can you expect the bookstore to make towering stacks of a book unless they have lots and lots of copies?
  2. All big bookstores and most small bookstores have the right to return any unsold hardcopies of a book the publisher has shipped to them and receive for full credit of the wholesale price the publisher charged them for the books in the first place.
  3. As an example, Bob’s Big Books orders 200,000 printed copies of Lucky Anna’s first book at the wholesale price of of $10 per book. To spare you any arithmetic, this means that Bob is receiving books with a retail price of Two Million Dollars. If Bob sells all 200,000 copies of the books at the suggested retail price, Bob will be depositing Two Million Dollars into his bank account. Of course, out of the two million, he’ll be paying rent, salaries, taxes, etc., but if Bob is a good manager, he’ll make a bunch of money after paying the related expenses involved with selling 200,000 copies of the book.
  4. However, although Bob has plenty of Lucky Anna’s books to stack up in his bookstore, he sells only 25,000 copies of the book.
  5. What is Bob going to do with 175,000 unsold copies?
  6. Under a long-standing system used by traditional publishing in the US, Bob can send his unsold 175,000 copies of Lucky Anna’s book back to the publisher for full credit.
  7. Bob only has to pay for the 25,000 books he sells for a total of $250,000
  8. The publisher then has 175,000 more hardcopy books sitting copies sitting in a warehouse somewhere.

What’s a Publisher to Do?

1. In a reasonable-sounding accounting manner, the Publisher holds a financial reserve against book returns. Lucky Anna is only paid a royalty for amounts the publisher has actually received, less a reserve for returns.

2. Let’s assume hypothetically that a salesperson for a traditional publisher makes a two million dollar sale of a single title written by Lucky Anna to Bob’s Bookstore. The Publisher determined that setting a return against reserves of $1,900,000 would be prudent.

3. Conveniently, even though the Publisher shipped Two Million Dollars worth of one of Lucky Anna’s books to Bob’s Bookstore, after subtracting the $1,900,000, the reserve amount the Publisher set, The Publisher is required to pay Lucky Anna royalties only on the $100,000 remaining after subtracting the $1,900,000, the amount the publisher has set as a reserve against returns.

4. Multiply the calculations for Bob’s Books by 1,000 other bookstores, and you can see the calculations getting very sticky.

5. When Bob’s Bookstore returns $1,750,000 worth of Lucky Anna’s books to the Publisher, theoretically, the Publisher should pay Lucky Anna royalties on the $150,000 Bob sold beyond the amount the Publisher estimated that Bob would return for credit.

6. “However,” the Publisher thinks, “not every bookstore is like Bob’s. Some of the other bookstores will certainly return a higher percentage of books they didn’t sell than Bob did.”

7. Traditional publishing contracts allow the Publisher to withhold “a reasonable reserve for returns.”

8. “Reasonable” is, of course, in the mind of the Publisher.

9. Back to our hypothetical, the Publisher has sold books to a zillion other bookstores. The Publisher reasonably decides that not every bookstore is exactly like Bob’s. Some will sell a higher percentage of the books shipped to them than Bob did and others will sell a much smaller portion of the books shipped to them than Bob did.

10. Theoretically, a smart and highly computerized publisher would have track records on what the rate of returns each bookstore demonstrated for at least a few hundred of the titles the Publisher had released. But that would require the Publisher to spend a lot of money on analysts and statisticians to examine the data and calculate probable return rates for fiction, non-fiction, various genres, etc. And what English major wants to walk into that bramblebush?

11. PG’s understanding is that, to the extent traditional publishers think about the number or percentage of books that will be returned for credit, they either use intuition and listen to the music of the publishing spheres or they just lump almost all books into a big bucket. Rules of thumb prevail to the extent anyone thinks about accurate forecasting.

12. Given this fundamental truth, PG understands that most traditional publishers hold a higher amount of reserves against returns than they expect they will ever need.

13. Whether anyone does an accurate job of recalculating Lucky Anna’s past royalties should reserves for returns be much higher than the number of actual returns would justify, PG doesn’t know. He has his suspicions, however.

14. However, PG is certain that mistakes will be made by the Publisher and its underlings. He suspects that, on occasion, a mistake will be identified and remedied. On other occasions, a mistake will go unidentified or be ignored on the theory that the Lucky Anna will never ask about it.

15. Theoretically, Lucky Anna’s literary agent is double-checking the publisher’s reports for errors and jumping on the publisher when she locates one. Or, more often than not, the agent is out pushing for new business and delegates the arithmetic to the agent’s underpaid staff. This brings in more English majors earning low salaries into the mix.

16. More than a few agents have lots of turnover of back-office staff and not a lot of time to train newbies thoroughly. Or they have close to no back-office staff.

17. In the United States, there is no official set of requirements that must be met before an individual hangs out a shingle saying they’re a literary agent and are accepting new submissions.

18. Someone can get out of prison after serving a ten-year sentence for accounting fraud on one day and open up shop as a literary agent the next day.

19. What could go wrong?

20. PG acknowledges that there are some very hard-working and dedicated employees in at least some publishers and at least some literary agencies. He has no intention of slandering such individuals. However, he will say that for most authors, accurately assessing who will do a good job on their books and who will not is effectively impossible.

Willingham Sends Fables Into the Public Domain

From These Foolish Games:

Fables Press Release

Subject: Fables Enters the Public Domain

15 September 2023

By Bill Willingham

For Immediate Release

The Lede

As of now, 15 September 2023, the comic book property called Fables, including all related Fables spin-offs and characters, is now in the public domain. What was once wholly owned by Bill Willingham is now owned by everyone, for all time. It’s done, and as most experts will tell you, once done it cannot be undone. Take-backs are neither contemplated nor possible.

Q: Why Did You Do This?

A number of reasons. I’ve thought this over for some time. In no particular order they are:

1) Practicality: When I first signed my creator-owned publishing contract with DC Comics, the company was run by honest men and women of integrity, who (for the most part) interpreted the details of that agreement fairly and above-board. When problems inevitably came up we worked it out, like reasonable men and women. Since then, over the span of twenty years or so, those people have left or been fired, to be replaced by a revolving door of strangers, of no measurable integrity, who now choose to interpret every facet of our contract in ways that only benefit DC Comics and its owner companies. At one time the Fables properties were in good hands, and now, by virtue of attrition and employee replacement, the Fables properties have fallen into bad hands.

            Since I can’t afford to sue DC, to force them to live up to the letter and the spirit of our long-time agreements; since even winning such a suit would take ridiculous amounts of money out of my pocket and years out of my life (I’m 67 years old, and don’t have the years to spare), I’ve decided to take a different approach, and fight them in a different arena, inspired by the principles of asymmetric warfare. The one thing in our contract the DC lawyers can’t contest, or reinterpret to their own benefit, is that I am the sole owner of the intellectual property. I can sell it or give it away to whomever I want.

            I chose to give it away to everyone. If I couldn’t prevent Fables from falling into bad hands, at least this is a way I can arrange that it also falls into many good hands. Since I truly believe there are still more good people in the world than bad ones, I count it as a form of victory.

2) Philosophy: In the past decade or so, my thoughts on how to reform the trademark and copyright laws in this country (and others, I suppose) have undergone something of a radical transformation. The current laws are a mishmash of unethical backroom deals to keep trademarks and copyrights in the hands of large corporations, who can largely afford to buy the outcomes they want.

In my template for radical reform of those laws I would like it if any IP is owned by its original creator for up to twenty years from the point of first publication, and then goes into the public domain for any and all to use. However, at any time before that twenty year span bleeds out, you the IP owner can sell it to another person or corporate entity, who can have exclusive use of it for up to a maximum of ten years. That’s it. Then it cannot be resold. It goes into the public domain. So then, at the most, any intellectual property can be kept for exclusive use for up to about thirty years, and no longer, without exception.

Of course, if I’m going to believe such radical ideas, what kind of hypocrite would I be if I didn’t practice them? Fables has been my baby for about twenty years now. It’s time to let it go. This is my first test of this process. If it works, and I see no legal reason why it won’t, look for other properties to follow in the future. Since DC, or any other corporate entity, doesn’t actually own the property, they don’t get a say in this decision.

Q: What Exactly Has DC Comics Done to Provoke This?

Too many things to list exhaustively, but here are some highlights: Throughout the years of my business relationship with DC, with Fables and with other intellectual properties, DC has always been in violation of their agreements with me. Usually it’s in smaller matters, like forgetting to seek my opinion on artists for new stories, or for covers, or formats of new collections and such. In those times, when called on it, they automatically said, “Sorry, we overlooked you again. It just fell through the cracks.” They use the “fell through the cracks” line so often, and so reflexively, that I eventually had to bar them from using it ever again. They are often late reporting royalties, and often under-report said royalties, forcing me to go after them to pay the rest of what’s owed.

            Lately though their practices have grown beyond these mere annoyances, prompting some sort of showdown. First they tried to strong arm the ownership of Fables from me. When Mark Doyle and Dan Didio first approached me with the idea of bringing Fables back for its 20th anniversary (both gentlemen since fired from DC), during the contract negotiations for the new issues, their legal negotiators tried to make it a condition of the deal that the work be done as work for hire, effectively throwing the property irrevocably into the hands of DC. When that didn’t work their excuse was, “Sorry, we didn’t read your contract going into these negotiations. We thought we owned it.”

            More recently, during talks to try to work out our many differences, DC officers admitted that their interpretation of our publishing agreement, and the following media rights agreement, is that they could do whatever they wanted with the property. They could change stories or characters in any way they wanted. They had no obligation whatsoever to protect the integrity and value of the IP, either from themselves, or from third parties (Telltale Games, for instance) who want to radically alter the characters, settings, history and premises of the story (I’ve seen the script they tried to hide from me for a couple of years). Nor did they owe me any money for licensing the Fables rights to third parties, since such a license wasn’t anticipated in our original publishing agreement.

            When they capitulated on some of the points in a later conference call, promising on the phone to pay me back monies owed for licensing Fables to Telltale Games, for example, in the execution of the new agreement, they reneged on their word and offered the promised amount instead as a “consulting fee,” which avoided the precedent of admitting this was money owed, and included a non-disclosure agreement that would prevent me from saying anything but nice things about Telltale or the license.

            And so on. There’s so much more, but these, as I said, are some of the highlights. At that point, since I disagreed on all of their new interpretations of our longstanding agreements, we were in conflict. They practically dared me to sue them to enforce my rights, knowing it would be a long and debilitating process. Instead I began to consider other ways to go.

Q: Are You Concerned at What DC Will Do Now?

No. I gave them years to do the right thing. I tried to reason with them, but you can’t reason with the unreasonable. They used these years to make soothing promises, tell lies about how dedicated they were towards working this out, and keep dragging things out as long as possible. I gave them an opportunity to renegotiate the contracts from the ground up, putting everything in unambiguous language, and they ignored that offer. I gave them the opportunity, twice, to simply tear up our contracts, and we each go our separate ways, and they ignored those offers. I tried to go over their heads, to deal directly with their new corporate masters, and maybe find someone willing to deal in good faith, and they blocked all attempts to do so. (Try getting any officer of DC Comics to identify who they report to up the company ladder. I dare you.) In any case, without giving them details, I warned them months in advance that this moment was coming. I told them what I was about to do would be “both legal and ethical.” Now it’s happened.

            Note that my contracts with DC Comics are still in force. I did nothing to break them, and cannot unilaterally end them. I still can’t publish Fables comics through anyone but them. I still can’t authorize a Fables movie through anyone but them. Nor can I license Fables toys nor lunchboxes, nor anything else. And they still have to pay me for the books they publish. And I’m not giving up on the other money they owe. One way or another, I intend to get my 50% of the money they’ve owed me for years for the Telltale Game and other things.

However, you, the new 100% owner of Fables never signed such agreements. For better or worse, DC and I are still locked together in this unhappy marriage, perhaps for all time.

But you aren’t.

If I understand the law correctly (and be advised that copyright law is a mess; purposely vague and murky, and no two lawyers – not even those specializing in copyright and trademark law – agree on anything), you have the rights to make your Fables movies, and cartoons, and publish your Fables books, and manufacture your Fables toys, and do anything you want with your property, because it’s your property.

Mark Buckingham is free to do his version of Fables (and I dearly hope he does). Steve Leialoha is free to do his version of Fables (which I’d love to see). And so on. You don’t have to get my permission (but you might get my blessing, depending on your plans). You don’t have to get DC’s permission, or the permission of anyone else. You never signed the same agreements I did with DC Comics.

Link to the rest at These Foolish Games and thanks to B. for the tip

PG notes that, absent a provision that specifically prohibits them from being sold, assigned or transferred, most publishing agreements can be assigned/sold to someone the author doesn’t know.

The promises made by employees of publishers regarding ambiguous language in publishing contracts that “we don’t believe that provision means what you think it might mean” or “we would never use this provision in the way you’re suggesting because that wouldn’t be fair to our authors and that’s something we won’t ever do,” while having been accepted by a huge number of traditionally-published authors, are no protection for the author.

As described in the OP, new management or new owners will look to the contract language and, often, give no effect to understandings between the publisher and the author that are not spelled out clearly in the written contracts.

There is an argument to be made that, by the publisher’s earlier voluntary actions, the previous bunch effectively modified the written words of the contract and the former publisher’s purchasers/assignees should be bound by the acts of the previous publisher. However, speaking generally, that’s a desperate legal tactic that may or may not fly, depending on how a judge is feeling on the day she/he hears the case.

That said, most judges on most days will default to looking to the language of the written contract to determine whether the author granted the publisher the right to do what the latest owners of the publisher want to do.

The actions taken by Mr. Willingham, the author of the OP and the creator of the intellectual property under new and unfriendly management, while emotionally understandable, end up trashing the value of Mr. Willingham’s creations.

PG has mentioned the following suggestions far more than once on TPV:

  1. Read every word of the contract. If you don’t understand any portion of the contract, you need to contact a competent attorney who has spent enough time with copyright licenses to know what she/he is doing. (PG used to fall into that category, but he has permanently taken down his shingle and doesn’t practice law any more.)
  2. If you or your attorney objects to any portion of the contract language and the counter-party says something like, “We would never do that” or “We don’t think that provision means what you think it means,” your unfailing response should be some variation of “I’m so pleased to know that. Let’s change the contract language to state the actual ways we’re going to do business with each other to avoid any possible future misunderstandings and keep our business relationship on an amicable basis.”

There are more than a few other things to consider/fix, but the two paragraphs above are the bones of making certain an author signs a fair contract and doesn’t have any nasty surprises with the publisher or whoever manages or buys the publisher in the future.

Imbalance of Power

From Publishers Weekly:

Mary Abigail Dodge (1833–1896), known by the pen name Gail Hamilton, was hailed in a national newspaper after her death as “the most brilliant woman of her generation.” Author of numerous essays and more than 25 books on religion, politics, travel, rural life, and the rights of women, Hamilton also played a key role in the evolution of publishing when she sued her publisher, James T. Fields (of the house Ticknor & Fields), for underpaying her. With the issue of how writers are valued and paid still raging today, the legal battle waged by this writer is a reminder of how little things have changed.

At 23, Hamilton had an essay run in National Era, an abolitionist magazine edited by Gamaliel Bailey, best known as the editor of Uncle Tom’s Cabin. She began to write regularly for him, and he invited her to move to Washington, D.C., to be governess for his children. While this arrangement would be considered inappropriate today, it afforded Hamilton opportunities to rub elbows with politicians and thought leaders that fed her writing. (Later in her career, however, she was a vocal critic of paternalist publishers.)

In her essays and books, Hamilton urged women not to conform to societal expectations and instead become what she called “androgynous,” by which she meant they should develop the side of themselves she felt most resembled men, giving up any tendency to remain ignorant of, or above, worldly, commercial dealings. She felt that women’s spiritual and artistic tendencies should be tamped down in favor of male decisiveness and firmer attitudes. She especially advised this for women writers, saying, “a certain prejudice against female writers ‘still lives.’ It is fine, subtle, impalpable, but real.”

Her assessment that women writers weren’t treated as equal to men was confirmed when she discovered that her publisher, whether by accident or design, had cheated her out of her royalties. Fields published Hamilton’s first book in 1862 and subsequently published seven more. Theirs was a friendly relationship until 1867, when Hamilton learned that most beginning authors received a 10% royalty, while she received only 6% and 7%. For her subsequent books, Fields had convinced her to accept 15¢ per copy. When they sold for $1.50 each, the arrangement was fair, but as the price of her books rose, her earnings didn’t.

Hamilton and Fields had no written contract, merely a congenial relationship that benefitted the publisher more than the author. When she approached him about the discrepancy, instead of acknowledging the error, he dismissed her complaint, calling her “aggressive” and “unwomanly.”

Hamilton pursued legal arbitration, gathering a sizable amount of data from other publishers and authors in an attempt to prove that the entire royalty system was arbitrary and capricious. Nathaniel Hawthorne’s widow shared that at the start of her husband’s career, he had received 15% from Fields but was later knocked down to 10%. Other authors received 20%, while Harriet Beecher Stowe received a full 50% of the profits from her highly successful books. It galled Hamilton that writers seemed grateful to accept whatever rates publishers chose for them.

Though she worked with a lawyer, Hamilton presented her own case in the hearing and petitioned for the 10% she had never received, plus an additional 7%, and legal expenses of $3,000. In their ruling, the arbitrators determined that neither party had intended to defraud the other—a decision that treated the two parties as equals, when clearly they were not.

. . . .

(T)he literary community took notice, and the veneer of gentlemen publishers was forever tarnished. Hamilton successfully warned writers to be wary of the supposed benevolence of the gentlemen’s business. Her case made it obvious that authors assigned too much importance to publishers’ reputations and not enough to their own financial interests.

In Hamilton’s opinion, a writer’s relationship to his or her publisher was too much like that of a submissive wife in a traditional marriage.

Link to the rest at Publishers Weekly

Book Origins and the Ongoing Journey

From Women Writers, Women’s Books:

New Story, New Power: A Woman’s Guide to Negotiation, took a few years to research and write, but it was a lifetime in the making. I have been working in the area of negotiation for more than 30 years, with its origins in my experience in intercultural communications. I lived and worked in Japan for 13 years, and being an independent, New York woman, meeting this very different culture head on was a rude awakening. Those encounters naturally led to my interest in cross-cultural conflict, partly from my own personal experiences and partly from observing what was around me. I put gender in the classification of being a culture.

Cultures socialize those born into them about how to be in that world. We are socialized to be a certain way, with a particular set of values and beliefs, habits, and ways of thinking and behaving that create the stories by which we live. We have our family stories that we carry and we have our own personal stories that guide us over time. Some of these stories are generative and lead us to where we want to be and others get in the way of us progressing. I was curious to know more about why some women carried stories that helped them at the negotiating table, while others carried stories that inhibited them, caused them stress, and got in the way of being effective negotiators. I wondered about the specific origins of these stories and how they influenced women negotiating?

As a scholar-practitioner, a large part of my world is in the academy and there is an orientation to grounding what I have to say in evidence-based research. I support this in the world of practice, as well: the difference is in how we gather data, what we are looking for, and how we use what we find. I interviewed hundreds of women, to find out more about they bring the stories they carry and by which they live to the negotiation table: women from across industries, with one study being solely focused on women in the STEM professions; women who were junior in their career, with five or less years of experience; mid-career women with 10-15 years of experience; and women who had more than 25 years of experience.

The findings from these studies matched what I was seeing in my coaching sessions with women and in the workshops I conducted on negotiation, leadership, and communication. Some of the findings showed that women carry stories from when they were very young to present times and these stories influenced how they prepared for and conducted themselves during their negotiations. I became curious about why some stories stuck with them more than others and how they manifested in their particular behaviors at the negotiating table, in their everyday interactions, and in their career advancement.

I also wanted to explore beyond the workplace and see how these stories appeared in their families, in their interpersonal dynamics with friends and romantic partners, in their everyday interactions. For me, research and practice inform one another, so that what I discover in research I apply in practice, and what I see showing up in practice I explore through research.

And I am certainly not immune to these same stories! I often say that I was born over confident and I have been managing it ever since. I grew up hearing stories about how I could be anything I wanted to be and I took those stories to heart. However, there were also stories of not being good enough, pretty enough, smart enough, and so on, that dampened the confidence-building stories. Even while writing this book, every now and then I would stop and question myself about whether I had the knowledge, experience, and credentials to be writing it. Then I would take a step back, fascinated that I was experiencing the same things I was writing about. Our narratives are so strong!

That meta-awareness amused me and helped me recalibrate. I reviewed the sources of the information I gathered from hundreds of women, many research studies, my own observations, and reassured myself I could and should continue. I was sharing with others what a collective of women find useful. Sharing this information and having otters learn, practice, and make it their own is the value. It builds confidence, while developing negotiation skills.

Link to the rest at Women Writers, Women’s Books

The word negotiation is derived from two Latin terms, negare otium; they translate literally as “to deny leisure.” In French and Spanish, “deny leisure” becomes “business.” Yet, while the word is Latin-derived, the behavior predates that culture by roughly 200,000 years, dating back to ever since Homo sapiens developed as a species.

Going Forward to the Past: A Brief History of Negotiation

PG first became interested in negotiation as a field of study about 7-8 years into his legal career. He stumbled across a publication from something called The Harvard Negotiation Project, which included both the law school and the business school. He read severa; papers the Project had published and was very intrigued.

Many lawyers and business people felt negotiation was a talent which an individual did or didn’t possess. Among those who possessed a talent for negotiation, some were better than others.

The Harvard Project (now a well-established department, primarily in the Law and Business Schools, but stretching into other domains as well) was one of the earlier attempts to study the way that individuals negotiated with each other.

Some accepted techniques included putting forward a proposal for an agreement and sticking to it regardless of how the other party to the negotiation responded. This was often accompanied by a tough-guy persona that basically communicated, “My way or no way.”

While elements of this approach could be useful, the negotiation researchers found that this approach lead to quite a number of failed negotiations with neither party agreeind. In legal terms, this approach was likely to end with, “Let the judge decide.”

Other approaches involved being so anxious to reach an agreement that one side of a negotiation conceded a lot more than would have been necessary to come to an agreement – paying more money than necessary, accepting less money than the other side was willing to offer, etc., etc.

Some styles of negotiation involved hiding what concessions one party was willing to make vs. making concessions so quickly that the other side thought that there would be many more concessions available if they just kept saying no.

One of the lessons from the studies was that planning ahead for a negotiation tended to make a negotiations more successful for both parties. Another lesson was that preparing for not being able to come to an agreement and what alternative paths might be available.

The acronym was BATNA – Best Alternative to a Negotiated Agreement.

If a party had a good idea for a path that would allow it to meet at least some of its important goals if the contract negotiation didn’t work out because the other side wanted more than the party was willing to give.

In the author/publisher world, an example of BATNA for an author is to self-publish her/his book instead of agreeing to a traditional publishing agreement which involved paying a literary agent 15% of all money the publisher paid in royalties.

How Bad Publishers Hurt Authors

From Jane Friedman:

It began with that heart-fluttering feeling of acceptance after so many rejections. My second novel was going to be published!

It was the end of August 2020. The world as we knew it had been upended. We were getting deeper into the pandemic, with fear, illness, death, and uncertainty ravaging the world. When New York City–based Adelaide Books offered me a contract to publish Painting Through the Dark, it set my heart racing in a good way. It was a promise.

The contract looked good: 20% royalties, paperback and ebook, quarterly reports, approval over the design and cover art. The marketing plan also sounded excellent: pre-publishing editorial review, all pre- and post-print marketing tools and services, design and maintenance of author’s website, magazine promotion and interview with author, social and blog posts, book video trailer, book giveaways to bloggers, and consideration for various literary competitions. Plus two free books for the author, and further books could be purchased at a 30% discount.

Then came this sentence: “All we ask of you is to pre-purchase 45 copies of your book (at 30% discount) upon signing the contract as a token of your support for our publishing endeavor.”

That’s when the happy heart flutter turned anxious. Was this legit?

I knew that after publication I’d order at least that many books for private events, but still. I checked the company out. They had been in business for several years and had offices in New York and Lisbon. They listed a large number of titles on their website. They attended the Frankfurt Book Fair every year, in addition to the Lisbon and Brooklyn book festivals. I asked around—friends who were published authors, others with knowledge of independent publishing. In their opinion it wasn’t a red flag. Several said it wasn’t unusual to ask authors to buy a certain number of copies up front. I was thrilled. This was the answer I wanted. I didn’t relish the long, soul-killing process of querying all over again. I squelched any remaining doubts and signed.

After finalizing the contract, communication was sketchy. Weeks would go by between emails. I knew Adelaide was a small company, and I was concerned about the large number of books on their roster. I finally requested a Zoom meeting and was reassured by a pleasurable, hour-long, wide-ranging conversation with the publisher. He clearly loved and believed in books. We talked about what to expect when my book came out—I was definitely coming to New York for the Brooklyn Book Festival, and he told me he would book me at the Strand bookstore and other NYC locations. Distribution was through Ingram. This was all working out.

After that call, the publisher wasn’t responsive to emails, but I convinced myself all was well. The dates for publication were pushed back a few times due to COVID, but I was fine waiting until it might be safe to do in-person readings. I thrive on meeting readers, having conversations, signing books.

After a couple of rounds of editing, Adelaide fell off the radar again. Even when I put URGENT, CONCERNED, PLEASE RESPOND, in the subject line of my emails, I got no response. I tried not to sound desperate, but I was. The publisher never answered the phone or replied to voicemail messages. My book suddenly appeared on Amazon in July 2022. No advance reader copies, no reviews, none of the publicity promised in the contract.

I approached local bookstores in Portland, Oregon, where I live, so I could set up readings. They all told me they couldn’t find my book on Ingram. I was embarrassed. I told them there must be some hold up as my books were definitely on Ingram. I said I’d get back to them after I spoke with my publisher.

. . . .

When I reached out to Authors Guild, they informed me that their lawyers had been sending letters to Adelaide since June with no response. They said they would add my name to the next letter naming authors seeking reversion of rights. They set up a Zoom meeting for Adelaide orphans and suggested we all file with the New York Better Business Bureau and New York State Attorney General. They requested we send our stories, and they would pitch to Publishers Weekly. I filed complaints with NYBBB and the Attorney General. I received replies saying they had attempted to contact Adelaide but received no response. The NYBBB added, “A firm’s rating may be affected by its failure to answer even one complaint. Your experience may, therefore, alert other inquirers seeking information through the BBB.” Hopefully filing complaints would help someone.

Link to the rest at Jane Friedman

When Your Publishing Contract Flies a Red Flag: Clauses to Watch Out For

From Writer Unboxed:

After the excitement of a “yes” from a publisher comes the job of assessing your publishing contract.

Facing down ten pages of dense legalese can be a daunting task, especially for new and inexperienced writers, who may not have the resources to hire a literary lawyer, or have access to a knowledgeable person who can help de-mystify the offer terms.

And it is really, really important to assess and understand those terms, because publishing contracts are written to the advantage of publishers. While a good contract should strike a reasonable balance between the publisher’s interests and the writer’s benefit, a bad contract…not so much.

. . . .

After the excitement of a “yes” from a publisher comes the job of assessing your publishing contract.

Facing down ten pages of dense legalese can be a daunting task, especially for new and inexperienced writers, who may not have the resources to hire a literary lawyer, or have access to a knowledgeable person who can help de-mystify the offer terms.

And it is really, really important to assess and understand those terms, because publishing contracts are written to the advantage of publishers. While a good contract should strike a reasonable balance between the publisher’s interests and the writer’s benefit, a bad contract…not so much.

In this article, I’m going to focus on contract language that gives too much benefit to the publisher, and too little to the author. Consider these contract clauses to be red flags wherever you encounter them. (All of the images below are taken from contracts that have been shared with me by authors.)

Copyright Transfer

Unless you are doing work-for-hire, such as writing for a media tie-in franchise, a publisher should not take ownership of your copyright. For most publishers, copyright ownership doesn’t provide any meaningful advantage over a conventional grant of rights, and there’s no reason to require it. Even where the transfer is temporary, with rights reverting back to you at some point, it doesn’t change the fact that for as long as the contract is in force, your copyright does not belong to you.

Copyright transfers usually appear in the Grant of Rights clause. Look for phrases like “all right, title and interest in and to the Work” and “including but not limited to all copyrights therein.”

Watch out also for contracts where a copyright transfer in the Grant of Rights clause is contradicted by language later on–such as requiring the publisher to print a copyright notice in the name of the author (which shouldn’t be possible if the author no longer owns the copyright). For one thing, you don’t want your contract to be internally contradictory, which could pose legal issues down the road. For another, such contradictions suggest that the publisher doesn’t understand its own contract language, which is never a good thing.

There’s more on the not-uncommon problem of internal contradictions here.

Life of Copyright Grant Without Adequate Reversion Language

Big publishers routinely require you to grant rights for the full term of copyright (in the US, Canada, and most of Europe, your lifetime plus 70 years). Although they’re more likely to offer time-limited contracts, many smaller presses do as well.

Contrary to much popular belief, this is not necessarily a red flag…as long it’s balanced by clear, detailed language that ensures you can request contract termination and rights reversion once sales drop below specific benchmarks: for example, fewer than 100 copies sold during the previous 12 months, or less than $250 in royalties paid in each of two prior royalty periods. Publishers like to sit on rights, because they can make money from even low-selling books if they have a big enough catalog. Authors, on the other hand, don’t benefit from a book that’s selling only a handful of copies and getting no promotional support. At that point, it’s better to be able to revert your rights and do something else with them.

If you’re offered a contract with a life of copyright grant term, the first thing you should look at is the termination and reversion clause. A good clause will be specific about when and how the book will go “out of print” or “out of publication”, and what the author can do to terminate the contract once that happens.

In the clause below, the definition of “in publication” is tied to objective standards, including minimum sales numbers, and there’s a clear procedure for both the author and publisher to follow to request and grant rights reversion once falling sales take the book “out of publication”.

By contrast, here’s an example of a poor reversion clause.

Defining “in print” as “on sale by the Publisher” (similar problematic terminology: “available for sale in any edition” or “available for sale through the ordinary channels of the book trade”) means that an ebook edition available only on the publisher’s website would qualify as “in print”, even if it was barely selling or not selling at all. Since it costs little or nothing to keep a book “available” this way, the publisher has no incentive ever to take the book “out of print”, and the author has no leverage to compel the return of rights.

. . . .

Claiming Copyright on Edits

Can a publisher claim that it owns the copyright on the editing it provides?

As far as I know there’s no legal precedent for such a claim, and the very limited legal discussion I’ve seen leans toward the view that editing process doesn’t give the publisher—or the editor—any copyright ownership. After all, other than copy editing, most editing is a collaboration between author and editor, with the bulk of the work done by the author.

Claiming copyright on edits is not standard publishing practice. Nevertheless, some publishers do attempt it, either with an outright claim of copyright on the final version of the work…

…or simply a claim on the edits themselves (telltale language: “original, unedited manuscript”):

It’s unlikely that either of these clauses would hold up in court—especially the first one: among other things, the presence of a copyright notice in the author’s name inside the book would certainly seem to indicate the publisher’s acknowledgment of the author’s ownership of the finished product. What good does it do the publisher to hoard edits on a book it doesn’t own, anyway? What difference does it make if an author re-publishes their fully-edited book once rights have reverted? Claiming copyright on edits is simply pointless and greedy.

Editing copyright claims can occur throughout a contract: I’ve seen them in the grant of rights section, the termination section, and the editing section. So keep a sharp eye out.

Net Profit Royalties

While larger publishing houses tend to pay royalties as a percentage of a book’s list price, smaller publishers often pay based on net revenue or net sales income: list price less wholesalers’ and retailers’ discounts and channel fees.

Less common are royalty payments on net profit: list price less discounts less some or all of the expense of publishing.

Net profit royalty clauses are always a contract red flag. Even at higher royalty percentages, expense deductions can drastically reduce the amount on which your royalties are based: that 50% royalty may seem generous, but depending on what’s taken out before it’s calculated, what you actually receive may turn out to be much less than you expected. Additionally, net profit royalties are a temptation for publishers manipulate expenses to make author payments as small as possible.

Here’s a fairly straightforward example of a net profit royalty: sales receipts less printing and shipping.

Here’s a clause that deducts much more, including ISBN, cover art, layout and formatting, author copies, and possibly other costs. Not only does this have the potential to reduce your royalty to a pittance, you won’t have any idea of why you were paid what you were paid unless the publisher provides an itemized accounting.

Some publishers with net profit royalties confuse the issue by claiming to pay on “gross income” or “net sales price” or similar terms that don’t include the word “profit”. This is why you always want to see a precise definition of whatever terminology the publisher uses to describe its royalty payments, so you can be sure exactly how your royalties will be calculated. The absence of such a definition is another red flag.

Link to the rest at Writer Unboxed

Long-time visitors will recall these and many other items from PG’s posts from a long time ago.

The bottom line is:

  • Read any Publishing Contract, regardless of whether it’s from a small publisher or a very large one.
  • Don’t sign a contract that contains any provisions you don’t understand.
  • Don’t trust a contract that someone on the other side of the contract or your agent says is “a Standard Contract.”

Unlike many contracts that individuals are asked to sign, book publishing contracts are not regulated in any meaningful way.

If you want to get a new Visa credit card, there are lots of laws that limit what terms may be included in the credit card contract.

This is definitely Not the case with a publishing contract.

It costs much, much less to hire a literary attorney to examine the contract before you sign it than it does to hire that same attorney to get you and your book(s) out of a publishing contract after you’ve signed it.

PG knows because that those two services occupied much of his professional time before he pulled down his shingle. Examining a contract before it was signed cost hundreds of dollars. After it was signed, getting an author out of that contract cost thousands of dollars.

(No, PG is not coming our of retirement. Been there, done that, quit paying for malpractice insurance.)

Arbitration Agreements

PG updated a post he put up a few days ago with a short discussion of arbitration in contracts, including literary contracts.

He decided to expand it a bit and make it it’s own post because he thinks it may benefit authors in a variety of ways.

Arbitration is one form of Alternative Dispute Resolution (ADR) that is frequently used by businesses. It’s Alternative because it’s an alternative to locating an attorney to file a lawsuit in one of the many the civil courts which, at least in parts of the US, are massively backlogged. It’s not quite Jarndyce and Jarndyce, but in many places, we’re talking about a years-long process.

ADR has flourished in the last 30-40 years because commercial businesses have wanted to get disputes resolved promptly so they can move forward with the real business of the company.

To avoid this backlog in the United States (and a number of other Western nations), a competently-drafted arbitration clause will govern the resolution of any disputes between the parties. Arbitration sidesteps the courts entirely and uses a far more efficient alternative. Arbitration is generally a better way and virtually always a much faster way of resolving business disputes than the civil court system.

For one thing, most judges have never had dealings with publishing disputes (or disputes in other specialized commercial businesses). Depending upon the jurisdiction, a trial judge may try a criminal case involving a theft from a convenience store one day, a contested divorce the next day and a dispute between two adjacent landowners about where the property line should be on the third day.

Many trial judges, particularly those who decide commercial disputes, are generalists. Most have never tried a case involving an author and a publisher or a group of authors.

Arbitration allows the parties in a publishing dispute to have an experienced literary attorney to act as an arbiter (for a fee) and they won’t have to educate the arbiter about publishing law.

You can find knowledgeable arbitrators in a variety of different ways. The American Arbitration Association is designated to choose an arbitrator and set the arbitration rules in the large majority of business contracts PG has viewed that include arbitration provisions.

The AAA website even provides a variety of arbitration clauses you can cut and paste into your contract. Here’s an example:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial [or other] Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

While US civil and criminal courts are typically open to the public (you can go watch a divorce trial or a criminal trial on virtually any weekday in any large or medium-sized American city), arbitration is typically private. You can specify confidential arbitration in your arbitration clause if you like, but the arbiter isn’t required to announce the time and place of arbitration to anyone but the parties and their attorneys.

While he was practicing, PG never attended an arbitration that wasn’t set in a law firm’s conference room. Typically, a supply of water bottles was provided for any who desired one. An arbitrator will have read all the written materials provided by the parties beforehand (judges sometimes don’t have the time to do so) and often has asked the parties in advance to agree upon facts that are not in dispute.

While the arbitrator is there to resolve disputes, an arbitrator has an ability to get to the bottom of the core disputes by using any reasonable shortcut. “Ms. Jones, does your client agree that the other driver entered the intersection before she did?” is an example.

Another might be, “Is there any dispute or question that the royalty reports are accurate information about how many books the publisher shipped during the period of time we’re talking about? That we’re only looking at a dispute about how many books were returned during that period and whether the publisher accurately reported and charged back those returns on the royalty statements or whether the publisher charged back a number of books in excess of the number returned or failed to report the later sales of some or all of those returned books?”

A typical trial judge would likely not know how some publishers mishandle accounting of books returned.

If two or more attorneys are charging by the hour for the parties involved, in addition to getting a dispute resolved quickly, the parties might be paying less for legal counsel via arbitration rather than educating a trial judge about the details of the traditional publishing business.

IBPA Hybrid Publisher Criteria

From Independent Book Publishers Association:

Hybrid publishing companies behave just like traditional publishing companies in all respects, except that they publish books using an author-subsidized business model, as opposed to financing all costs themselves and, in exchange, return a higher-than-industry-standard share of sales proceeds to the author. A hybrid publisher makes income from a combination of publishing services and book sales.

Although hybrid publishing companies are author-subsidized, they are different from other author-subsidized models (i.e., self-publishing service providers) in that hybrid publishers adhere—without exception—to the following set of professional publishing criteria.

For the avoidance of doubt, this means organizations that do not adhere to the entirety of IBPA’s Hybrid Publisher Criteria—or adhere to most, but not all of the criteria—are not hybrid publishers as IBPA would define them and should not be calling themselves “hybrid.” These organizations are better categorized as self-publishing service providers. In a self-publishing service provider/author relationship, it is the author who plays the publisher role.

Self-publishing service providers mislabeling themselves as hybrid publishers, whether knowingly or unknowingly, are contributing to the confusion and exploitation of authors and are rightly called out for doing so.

A hybrid publisher must:

  1. Define a mission and vision for its publishing program. A hybrid publisher has a publishing mission and a vision. In a traditional publishing company, the published work often reflects the interests and values of its publisher, whether that’s a passion for poetry or a specialization in business books. Good hybrid publishers are no different.
  2. Vet submissions. A hybrid publisher vets submissions, publishing only those titles that meet the mission and vision of the company, as well as a defined quality level set by the publisher. Good hybrid publishers don’t publish everything that comes over the transom and often decline to publish.
  3. Commit to truth and transparency in business practices. It should go without saying, but like any reputable business, a hybrid publisher must commit to transparency in its business practices. This includes being clear about the cost of services and providing an honest estimation of each book’s potential for success. A hybrid publisher is also fair and transparent in its financial dealings, writes contracts in understandable language, and resolves any disputes promptly and fairly. A hybrid publisher never misleads potential authors with false promises, inflated sales data, or manipulated reviews.
  4. Provide a negotiable, easy-to-understand contract for each book published. A hybrid publisher supplies a clear, negotiable contract at the start of every negotiation which sets out—in understandable language—the exact scope of the arrangement, including term limits and compensation. All contracts should include regular reviews and updates as needed. A clear rights-reversion clause must be included in every contract. A hybrid publisher should be clear that it welcomes potential authors to discuss the proposed contract with neutral third-party advisors, such as a legal advisor or authors guild.
  5. Publish under its own imprint(s) and ISBNs. A hybrid publisher is a true publishing house, with either a publisher or a publishing team developing and distributing books using the hybrid publisher’s own imprint(s) and ISBNs.
  6. Publish to industry standards. A hybrid publisher accepts full responsibility for the quality of the titles it publishes. Books released by a hybrid publisher should be on par with traditionally published books in terms of adherence to industry standards, which are detailed in IBPA’s Industry Standards Checklist for a Professionally Published Book.
  7. Ensure editorial, design, and production quality. A hybrid publisher is responsible for producing books edited, designed, and produced to a professional degree. This includes assigning editors for developmental editing, copyediting, and proofreading, as needed, together with following traditional standards for a professionally designed book. All editors and designers must be publisher approved; they can be part of the publisher’s internal staff or outsourced, or a mix of both options.
  8. Pursue and manage a range of publishing rights. A hybrid publisher normally publishes in both print and digital formats, as appropriate, and perhaps pursues other rights, in order to reach the widest possible readership. As with a traditional publisher, authors may negotiate to keep their subsidiary rights, such as foreign language, audio, and other derivative rights.
  9. Provide distribution services. A hybrid publisher has a strategic approach to making books available to consumers beyond the simple mechanism of uploading files to online retailers and making books available for purchase online. Depending on the hybrid publisher, this may mean partnering with a traditional distributor that has a team of sales representatives who actively market and sell books to retailers, libraries, wholesalers, etc., or it may mean publisher outreach to a network of specialty retailers, clubs, or other niche-interest organizations. At minimum, a hybrid publisher has a marketing and sales strategy for each book it publishes, inclusive of appropriate sales channels for that book, and provides assistance and/or education to the author seeking to execute or understand this strategy in order to get his or her book in front of its target audience. This is in addition to listing books with at least one industry-recognized wholesaler.
  10. Demonstrate respectable sales. A hybrid publisher should have a record of producing several books that sell in respectable quantities for the book’s niche with a demonstrated sales track record with like titles. This varies from niche to niche; small niches, such as poetry and literary fiction, may see sales of less than a couple thousand copies, while mass-market books require more.
  11. Pay authors a higher-than-standard royalty. When compensation is based on royalties, a hybrid publisher pays its authors more than the industry-standard* royalty range on print and digital books in exchange for the author’s personal investment. Although royalties are generally negotiable, the author’s share must be laid out transparently and must be commensurate with the author’s investment. In most cases, the author’s royalty should be greater than 50% of net on both print and digital books.

Link to the rest at Independent Book Publishers Association

PG says good luck enforcing that. PG has heard just as many complaints about Hybrid Publishers as he has about traditional publishers.

 Long-term IP Management

From Kristine Kathryn Rusch:

[W]riters should consider their IP a living breathing entity that has a lifespan all its own; IP is not something to be easily discarded or sold for a quick buck.

Writers who do that will live to regret it.

In the previous post, I discussed how the most valuable intellectual properties are the ones with longevity, even if they’re not the most famous properties. A property with a long history also has a long relationship with its fan base, something that businesses which license intellectual property for things like games and toys truly value.

. . . .

In May, Authentic Brands Group issued threatening cease-and-desist letters to wedding chapels around Las Vegas. The reason? ABG told the chapels that they were using Elvis Presley’s image, music, and iconography without permission.

I’d often wondered about some of these places. I live in wedding chapel central, not far from several chapels that have a silhouette of Elvis as part of their logo. Not a week goes by in my neighborhood without an Elvis getting into a Cadillac or a group of Elvises (Elvi?) standing around a fake grass lawn or Elvis hits wafting from the cupola of a nearby wedding chapel.

If I’d given this anything—and I really hadn’t—I’d assumed that these Elvis appearances were licensed. I do recall discussing Elvis impersonators in my recent Entertainment Law class in regards to some music copyrights: the Elvis estate routinely denies Elvis impersonators synch licenses, licenses that allow the impersonator to marry their video to Elvis’s music. I get that; the estate wants videos of Elvis singing to be Elvis, not someone else.

. . . .

When Elvis died, in 1977, there were no impersonators, no Vegas Elvis weddings, nothing like that. There were no laws on the rights of celebrities to control their own images. All of that—what little there is—was developed long after Elvis died, and is still changing and growing.

The Elvis impersonator industry, including the wedding chapels, evolved over decades, and the Elvis estate did not actively pursue imitators. So the industry flourished.

The Elvis estate fascinates me, because of its management history. Elvis essentially died broke, and when his ex-wife Priscilla took over, the estate had little ability to generate revenue. Priscilla, with the help of advisors, created Elvis Presley Enterprises “to manage all Elvis image rights and remaining royalties, which primarily included turning Graceland into a tourist attraction. Between Graceland profits, merchandising, image deals, and royalties from songs recorded after the RCA deal, Priscilla and her co-executors of the Elvis Estate helped grow its value to a reported $100 million by 1993” according to Forbes.

That year, Lisa Marie Presley turned 25, and was able to claim her part of the estate. Then things got messy.

I’m not going to go into the mess here, but suffice to say that Lisa Marie got her father’s business acumen, not her mother’s. She appointed a business guy, one Barry Siegel, to handle the financial affairs. He sold 85% of Presley’s interest in EPE and invested some part (this is murky to me) in a holding company that included American Idol and eventually went bankrupt.

. . . .

During this great financial upheaval, Authentic Brands Group acquired the rights to license and merchandise all things Elvis. ABG calls itself “an intellectual property corporation,” and it handles the images of Marilyn Monroe and Muhammad Ali, among others. The details of the deal aren’t easy to find, but suffice to say that this deal was made for money, not because EPE wanted to lose control of its cash cow.

. . . .

Bullying often works in IP cases because the costs of going to court are so very high. If a company like ABG comes after a small business like a wedding chapel, then the small business usually has no recourse but to cave. A long-term lawsuit on these issues can cost upwards of $100,000 or more. Very few small businesses can absorb that.

But ABG made a biiiiiiig mistake going after wedding chapels in Las Vegas. The wedding industry in this city is a two billion dollar industry, and Elvis-themed weddings are a big part of it.

So, when ABG went after the chapels (and not all of them, either), it screwed up. Within days, the chapels had banded together to fight this overreach, and had the entire city behind them. Eighteen-thousand jobs were suddenly at risk, not to mention all the other Elvis themed products.

ABG didn’t randomly pick this spring to go after the chapels. There’s a big Elvis movie coming out on June 24, and some person at ABG figured that would increase interest in Elvis. They sent these letters so that no one would profit off the Elvis revival but them.

Big problem, though. People have been profiting off Elvis for decades. Yes, EPE and the estate have occasionally gone after trademark infringers, but not in any organized way. Neither has ABG.

. . . .

This has serious implications for potential lawsuits. ABG expected the wedding chapels to roll over and either give up their work or pay hundreds of thousands without a fight. ABG did not want a legal fight, because they have not correctly defended the Elvis brand.

No one has. It would take years, but there’s a strong possibility that lawsuits over the IP could result in ABG and EPE losing their trademarks over Elvis. To maintain a trademark, you need to vigilantly defend it. EPE and ABG did not defend much at all. In fact, for years, EPE and ABG allowed this to go on, and so to try to shut it all down now might be impossible.  (Lawyers, feel free to correct if I’m wrong.)

Given the fact that ABG reversed course the moment the wedding chapels and the city got involved tells me that some higher up in the company blinked. I’m sure some junior lawyer has been fired and now ABG is trying to clean up its mess.

The clean-up is ugly as well. ABG is now trying to charge for a license, which they should have done in the first place. The charge went (in less than a week) from tens of thousands to $500 per year. No one has signed anything or agreed to anything, and if the chapels are getting advice from some of the good IP attorneys in this city, I doubt anyone will pay for a license.

. . . .

Why am I telling you this? Because Elvis Presley is the 7th highest earning dead celebrity, according to Forbes. The estate earned $30 million last year. Yes, some of that was Graceland, but it also included licensing a TV channel and a Netflix animated alternate history series in which (I’m not kidding) “Elvis will explore an alternate history where he faked his own death to fight crime with a secret government spy program.”

As I mentioned before, long-term IP is worth a lot of money. Even when it’s badly mismanaged, as the Elvis estate has been since Priscilla stepped away from it all. The dang thing keeps earning money. Clearly a lot of that money is going into the pockets of people who have no connection to the long-dead King, but that’s because of the mismanagement.

Had Lisa Marie handled everything—or let her mom remain in charge—that $30 million would go directly to the estate instead of others. And clearly, someone would have known better than to mess with the wedding chapels and Vegas, which have done more to keep Elvis’s legacy alive than almost any other group.

. . . .

Story number two is one many of you sent to me. Each one of you sent a different article, and all of those articles were different from the one I initially saw.

Yep, there’s a copyright lawsuit over the new Top Gun: Maverick movie. A lawsuit so serious that should some judge really want to, the judge could pull the movie from the theaters.

The lawsuit was filed in early June, and so far, the movie is still playing well, so I doubt that any injunction will happen. But what’s going on here is almost the exact opposite of what happened with Elvis.

In 1983, Ehud Yonay published an article in California Magazine called “Top Guns.” The original movie, Top Gun, was based on this article. In fact, Ehud Yonay received a single card credit in the movie, which I noticed when I rewatched the movie in late May.

Yonay’s involvement wasn’t hidden, like the involvement of so many writers. It was there for everyone to see.

Yonay died in 2012. In 2018, Yonay’s widow and son filed a notice to reclaim the full copyright…and notified Paramount Pictures that it was doing so. The rights reverted to the Yonays in 2020, and in January of 2020, they filed a notice of termination of the copyright with Paramount Pictures, knowing full well that the Maverick movie was in development.

The Yonays claim that Paramount needed to reacquire the film and ancillary rights to the article. In other words, they needed a new agreement.

Paramount claims they do not need to do that, since the movie was more or less complete before the notice of termination hit. The pandemic messed everything up, including timing here. The Yonays claim that the movie wasn’t completed until May of 2021, long after Paramount received notice.

This will be up to a court to decide. What’s happened in most of these 35-year reclamation cases is that ultimately the licensing agreements are renewed, with a boatload of money going to the copyright holder. Most of these cases are settled and the terms are not disclosed.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Publishing Contracts 101: Beware Internal Contradictions

From Writer Beware:

It should probably go without saying that you don’t want your publishing contract to include clauses that contradict one another.

Beyond any potential legal implications, internal contradictions suggest a publisher that either doesn’t understand its own contract language well enough to spot the problem–or a publisher that simply doesn’t care. Neither is a good sign for what lies ahead.

Contradictions can be tricky to spot, especially for first-time authors who aren’t experienced in contract legalese. Here’s an example that came across my desk recently: an anthology contract from Dark Lake Publishing that provides for rights reversion 12 months after publication:

(Side note: this is a crap reversion clause, since it not only allows the publisher to keep publishing indefinitely, but doesn’t say anything about paying for that privilege. That’s not the issue I’m highlighting in this post, however.)

The wording of the clause seems pretty clear, right? All rights other than publishing rights–and this is an all-rights contract, with the publisher laying claim to “all Intellectual Property Rights subsisting, either in present or in the future, in the Book in all formats”–return to the author 12 months after the contract’s effective date, which is the date of publication. But just a few clauses down, there’s this:

But…but…if all rights other than publishing rights revert after 12 months, how can the publisher lay claim to dramatic rights for two more years? It’s a clear internal contradiction.

In practical terms, there’s probably no impact: this particular publisher has about as much ability to exploit dramatic rights as I do of space touristing to Mars. But what does it say about a publisher that it either hasn’t spotted the cognitive dissonance, or is perfectly fine with it?

Another example I’ve seen recently involves royalties. This contract from Fractured Mirror Publishing appears to be planning to pay both twice a year and once a year:

Here’s more confusing royalties language from Beacon Publishing Group, which first promises to pay based on Net Receipts, but then cites percentages of retail price (guess which one will appear in your royalty check):

Another example: serial reading/writing app Popink, whose contract appears to extend for a limited term, but includes a Power of Attorney clause at the end of the contract that claims rights for the duration of copyright (you can read more about Popink’s awful contract here).

But the internal contradiction that I see most often, and most consistently, involves copyright: contracts where the grant of rights explicitly transfers copyright to the publisher, while further clauses acknowledge copyright retention by the author.

Here’s what I’m talking about. These clauses are from the contract of Histria Books.

The key wording here is “exclusively grants, assigns, and otherwise transfers to the Publisher…all right, title, and interest in and to the Work…including but not limited to all copyrights therein”. Whenever you see language like this, it means that you are agreeing to give up ownership of your copyright.

Histria’s contract includes language allowing for termination by the author under certain circumstances, so the copyright transfer is temporary rather than permanent (which doesn’t necessarily make it a better deal). However, when you transfer your copyright to someone else–even temporarily–that someone becomes the owner of all your intellectual property rights, without exception, for as long as the transfer is in force, and can do anything it wants with them, from licensing rights to third parties to creating sequels, spinoffs, and derivative works.

So you have to wonder why Histria’s copyright transfer language is followed by this:

In a contract with a conventional grant of rights–one that does not include a copyright transfer–you want to see such a clause, to make clear that the publisher can’t claim any rights that haven’t been specifically mentioned. But Histria’s contract does include a copyright transfer, which means that there are no rights remaining that can be reserved to the author. If not outright contradictory, this clause is certainly inconsistent. But then there’s this:

But wait–didn’t the Grant of Rights make Histria the owner of the copyright? So why would it register in the author’s name? To do so would be to acknowledge the author as the copyright holder, since copyright registration is made in the name of the copyright owner.

(Side note: what the hell is meant by “material contributed by the author to the Work”? Wouldn’t that be, hmmm, the work itself, given that the author wrote it? Even if nothing else in this contract were problematic, this bizarre wording would demand an explanation.)

Finally, there’s this–a pretty unambiguous acknowledgment of the author’s copyright ownership:

Bottom line: multiple clauses in Histria’s contract are inconsistent with or directly contradict the copyright transfer in Clause 1.

I have no idea what the legal ramifications are here. If there’s a dispute, whose ownership would prevail: Histria’s, per Clause 1, or the author’s, for which registration in their name provides prima facie evidence? Regardless, such inconsistencies really should not exist in a publishing contract, and their presence raises the questions posed above: does the publisher not understand its own contract? (Not a good sign of professionalism or expertise.) Does it just not care? (Ditto, and you have to wonder what else it doesn’t care about). Worth noting: I’ve heard from authors who contacted Histria about the copyright contradictions, and were brushed off.

Link to the rest at Writer Beware

The author of the OP is Victoria Strauss. Her bio doesn’t mention anything about law school, but PG’s assessment is that she’s smarter about contracts than quite a few of the attorneys he has dealt with over the years.

While a single blog post could not cover all of the dishonest/stupid/evil/clumsy provisions that have appeared/currently appear/will appear in publishing contracts, all authors should read the entire post by Ms. Strauss, save a copy of it for future reference, and review the contents of the post if they receive a publishing contract, solicited or unsolicited. No single post could possibly contain all the gotcha’s that appear in the universe of business contracts, the post demonstrates some good techniques for examining a contract.

Although PG doesn’t review contracts any more (except for Mrs. PG), during his centuries-long legal career, he examined contracts from the largest tech companies, the largest banks and the largest publishers from various parts of the globe. Ditto for medium-sized and small techs, banks and publishers. Plus contracts from a whole bunch of other business organizations and a few non-profits.

Publishing (and a few literary agency) contracts stand out for their audacious mistreatment of the counterparties (authors). In PG’s experience, the only industry that approaches the nastiness of publishing contracts is the movie/TV/music business.

PG notes that traditional publishing and the entertainment industry share some common traits, including the practice of the talent employing agents, only a few of which have any legal training or experience at all.

Both publishing and entertainment feature:

  • quite a few insecure individuals among the talent
  • a business in which most of the would-be talent does not find success
  • a talent pool which is full of people who hold down some sort of job to support themselves and pursue their artistic dreams on the side
  • a few superstars that haven’t learned much about managing their finances
  • a good chance of a boom-and-bust career path, e.g.one-hit wonders

Freelance Isn’t Free Act Passes in New York State

From Publishers Weekly:

After being introduced as a bill back in February by Democratic New York state senator Andrew Gounardes and assembly member Harry Bronson, the Freelance Isn’t Free Act has been passed in New York State. The law is intended to establish and enhance the rights of freelance workers including authors, journalists, and other writers on contract.

S8369 will build upon the law previously instated in New York City, expanding the protections for freelancers state-wide. The law is intended to “protect contract and freelance workers from wage theft by ensuring all freelancers receive appropriate contracts for their work, are paid in a timely manner, and have state support to recoup unpaid wages.”

The law requires employers to provide written contracts for all freelance workers and that those freelancers be paid by the agreed-upon date or within 30 days of the completion of the work. It also permits freelancers to collect double the agreed-upon fee if employers do not satisfy those requirements. The law also lowers the threshold for mandating additional financial remediation from contractors to contract workers, and makes the New York State Labor Department the regulatory agency for freelancers in the state.

Link to the rest at Publishers Weekly

Music Streaming and The EU Digital Single Market Copyright Directive

From The IPKat:

Readers may have followed the IPKat reports on the UK Music Streaming Inquiry, which focused on musicians and performers’ remuneration from streaming, or lack thereof, amongst other things. However, this conversation is not solely a national matter. It is clear that these issues are global and that there is a need for change at an international level in the music industry.

In May 2021, the French government gave organisations representing performers and phonographic producers 12 months to negotiate an agreement guaranteeing “an appropriate and proportional minimum remuneration for artists” whose works are broadcast by streaming services. The deadline came after a 2015 initiative that sought an industry-led solution for a fair online music industry. The negotiations were mediated and no doubt the EU Digital Single Market Copyright Directive – which requires “appropriate and proportionate” remuneration for performers – also impacted on those ongoing talks.

Now, in May 2022, – much like most of us these days who only meet our deadlines in the eleventh hour– a historic agreement was reached between France’s main organisations representing record labels and performers/musicians. The agreement ensures that all performers will receive a minimum remuneration for the exploitation of their recordings by streaming services and provide a minimum royalty rate. It also embraces the principle of a minimum advance for featured artists, as well as, for non-featured musicians, a specific package for streaming with automatic additional remuneration when listening thresholds are reached.

In particular, the agreement includes the following,: 

• A minimum rate of royalties due to featured performers for the broadcast of their work via streaming; 

• A guaranteed minimum advance of €1,000; 

• A profit-sharing mechanism for the benefit of musicians when musical works reach a certain level of success; 

• A fixed remuneration for the benefit of all musicians; 

• A strengthening of FONPEPS – a private/public fund supporting employment 

• Increasing minimum fees for session musicians 

• Additional remuneration for artists, paid for by their record label, for every 7.5 million plays their song receives

Currently, revenue from streaming for featured artists depends on their recording or distribution contract. Non-featured performers – i.e., session musicians – are usually paid a one-off fee for their time and so do not usually receive anything more when the song is streamed. Therefore, these agreed changes will change the remuneration framework for both featured and non-featured artists from streaming.

Link to the rest at The IPKat and thanks to C. for the tip.

PG notes that both authors and musicians have a long history of being badly treated
by the entities that have traditionally published their work. Despite the
differences between US and French intellectual property laws, unsurprisingly,
the same historic pattern appears to have been established in France.

While PG instinctively comes down on the side of the
author/performer/artist/musician, etc., in matters such as are discussed in the
OP, he wonders whether music producers might dodge this agreement by putting
all the performers onto an airplane and flying them to a destination outside of
France for recording sessions paid for by a non-French (or even non-EU)
corporate entity.

In PG’s hazy memory, he thinks this may have happened with California-based
production companies flying everyone to Mexico for performance and recording
purposes. But, as always, PG could be wrong about that.

One of the fundamental problems in these sorts of situations is that there
are always far more starving artists/authors/musicians, etc., than there are
publishers/producers, etc.

The established stars of any field of creative endeavor have the clout to
negotiate favorable agreements and payments – think author James Patterson in
the US – but those creators farther down the food and power chain are often
faced with take-it-or-leave-it choices due to the substantial power differences
that limit negotiation opportunities.

PG has no idea of how many negotiations he has been involved in for clients,
and although power differences between the negotiating parties are always in
play, competent negotiators can almost always improve the contract provisions
in favor of the parties they represent.

A long time ago, PG was appointed to represent various indigent defendants
who had been charged with a comprehensive and colorful variety of crimes. Here,
the power differences were substantial – the state with a group of salaried law
enforcement officers with access to many other resources the state and federal
governments could provide on one side and PG with a semi-literate impoverished
client on the other. (With a small handful of exceptions, crime does not pay
very well in the real world.)

The only alternative to a negotiated settlement – a plea bargain – was a
criminal trial either in front of a judge (whose predilections were either
known to PG or could be ascertained by a few calls to attorney friends) or a
jury trial in front of twelve randomly-selected adults who happened to live in
the county where the crime had been committed and the criminal charges were
filed. (PG will skip change of venue possibilities in this discussion because,
in 99% of the cases, jurors from one county were, for practical purposes,
indistinguishable from jurors from any nearby county.)

After a jury verdict, PG attempted to chat with as many jurors as possible
to determine what elements had influenced their decision. It was a very
interesting experience because the jurors had sometimes intuited some
additional elements to the case that could not be included in the evidence they
had received for one reason or another. They were also quite good at
identifying a witness who was lying, even if that witness was a law enforcement
officer (a rare occurrence in PG’s experience, but not out of the question).

Juries are relevant to copyright issues because, although almost all
copyright cases are tried without a jury, the Supreme Court has held that the
parties have a right to a jury trial if a defendant in a copyright lawsuit for
statutory damages demands a jury trial. See Feltner v. Columbia
Pictures
, 523 US 340 (1998). Click
here for a summary of that opinion
.

 

Copyright Fun Part 2

From Kristine Kathryn Rus ch:

What I want all of you blog readers to do is to think about possibilities. The possibilities exist on two fronts:

  1. What can you do before signing a contract to protect yourself and your copyright?

And

  1. What can you do after you signed a (bad) contract to protect yourself and your copyright?

Copyright law is a constantly changing beast, particularly here in the U.S. How we make money, as artists, is through the licensing of our copyright, not by “selling” our books. If you don’t understand copyright, guaranteed you will get screwed, maybe many times, throughout your writing career. This is why I recommend that writers buy The Copyright Handbook and read it.

I would also suggest that you learn to become a copyright geek, like Dean and I are, excited about the things you learn about copyright each and every year. Take a look at Part One of this series to see some ways to make your copyrights work for you.

This post, and the other two in this limited series, come from the copyright coolness that occurred in 2021. I was going to put this information in my year in review, but there’s simply too much of it. (If you want to read the year in review, start here.)

Copyright law in the United States comes from our founding document, the Constitution of the United States. Lawmakers have made significant changes to that original law throughout our history. Some of the changes are major. Others are minor until they’re used properly (or improperly) by someone.

We’re going to step outside of the book writing sphere to examine a few cases that have sent shivers through the spines of major corporations in 2021.

First, let’s talk about current law. The Copyright Act of 1976 gave creators the ability to reclaim their copyright, lost to a contract or some kind of agreement, 35 years after the agreement was signed.

This 35-year rule, as some call it, nearly upended the music industry as creator after creator tried to reclaim their copyrights from the music industry’s egregious contracts. Some major players in the industry stood to lose entire catalogs of works from artists like Billy Joel.

There were a lot of speculative articles written about 10 years ago, talking about the death of the larger music industry because of this. That was before the industry fought back, with all kinds of expensive lawsuits. The fight ended up being major, especially for artists who did not have the financial (or emotional) wherewithal to handle protracted litigation.

Billy Joel lost his case. Duran Duran lost theirs in 2016 and it made major international news, because the courts held that the British contract governed their copyrights, not the U.S. contracts.

After a bunch of high profile cases, the lawsuits went underground. No company wanted to be known as a company that would allow artists to reclaim their rights. So there are non-disclosures involved with artists who have sued and won, and no major press releases for artists who sued and lost.

(I went deep down a copyright rabbit hole as I was looking at these, and found a bunch of fascinating cases, including one between Cher and Mary Bono, Sonny Bono’s widow. Mary Bono is trying to use the copyright termination to stop paying Cher 50% of the Sonny and Cher royalties. It’s a complicated and probably bitter mess, and one worth keeping an eye on.)

Other industries have either fearfully watched the music industry grapple with this or chuckled behind their hands as they saw the lawsuits going by. But, they shouldn’t have chuckled, because they’re facing some serious issues on their own.

Under U.S. law, there’s a difference between works made for hire, and works that are independently created. Both can become, say, the basis of a movie or a comic book, but the question becomes who owns the copyright to the work.

A work made for hire is owned by the person who employed a writer to create the work. The word “employed” is essential here, and has specific definitions under copyright law.

Quite frankly, some of the book work that Dean and I did in the 1990s does not meet the standard for work-made-for-hire, even though the contract said the books we created were work for hire. That would take a lawsuit to settle, and there’s not enough money in that.

Some of the other books we did as work for hire (which we’ll now discuss as wfh) did fall under that definition.

Works made for hire do not (generally) fall under the 35-year rule, because the writer never owned the copyright in the first place. The writer was playing in someone else’s universe, under the guidance of the universe’s owner (or one of their employees).

But, wfh is not always easy to determine. And sometimes, big corporations just claimed product was wfh when it was not.

With that in mind…

In September of 2021, the 2nd Circuit Court of Appeals decided a case concerning the Friday The 13th franchise based on both the termination clause and California labor law. The 2nd Circuit upheld a lower court’s decision that the screenplay that Victor Miller wrote was not work for hire.

The decision had to delve into the various ways that employment was defined in California, not just the way it was defined under copyright law. In other words, the court had to determine whether or not Miller was an independent contractor when he wrote the screenplay.

If he was, then he could reclaim his rights to that screenplay.

The 2nd Circuit determined that Miller was an independent contractor. He could reclaim the rights to the Friday the 13th screenplay and the way that screenplay was used under U.S. law.

What does this mean? Well, for the franchise, it’s a scary moment (pun intended). Because he could pull their right to use that screenplay, which means they might not be able to distribute the movie any longer.

It’s doubtful that will happen, for a variety of reasons, most of them financial. As The Hollywood Reporter wrote in its coverage of the case:

And there’s still reason for settlement given that the producer retains (nonexclusive) foreign rights as well as intellectual property derived from Friday the 13th sequels, including maybe the monstrous “Jason” character that showed up later in the franchise

In other words, if there is no settlement, then someone would have to figure out how to keep the movies out there, how to handle the foreign rights that probably do not belong to Miller (or maybe that’s a separate lawsuit) and how to handle all the derivative rights to characters, merchandise, sequels and more.

I couldn’t find much on the state of the case at the moment I write this. I’d be surprised if the Friday the 13th franchise lawyers fail to settle this.

I actually hope they do settle, because that’s the best way to handle something this complicated. But the settlement will benefit Miller, because he’ll be asking for a new (and probably much bigger) payday for his 40-year-old work on the franchise.

Link to the rest at Kristine Kathryn Rusch

As regular visitors to TPV know, PG usually doesn’t include the links in the OP from which he excerpts his posts here. PG has followed this practice for many years for a couple of reasons:

  1. He would like it if his excerpts sent visitors to the location of the original post if the excerpts tweak their curiosity. PG has received more than a few emails over the life of TPV that say something like, “I couldn’t figure out why my blog traffic went crazy until I learned that you linked to a post I made there. Thanks!”
  2. He works to to be confident that his excerpts will fall under the Fair Use provisions of the United States copyright laws and similar laws in other nations.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Requesting Rights Reversion From Your Publisher

From Writer Beware:

This is an update of a post I wrote some years ago. Since I’ve been getting a lot of questions lately from writers wondering how to request contract termination and rights reversion, I thought it would be useful to take another look.

There’s no “right” or “official” procedure for a rights reversion request. If you do a websearch on “rights reversion request” you can find various pieces of advice from authors and others. That said, here are some common-sense suggestions for how to go about this (Obligatory disclaimer: I’m not a lawyer, so what follows is not legal advice.)

First of all, if you have a competent agent, discuss the situation with your agent and ask them to approach the publisher on your behalf. Especially if you’re with a larger publisher, your agent is more likely to know whom to contact, and in a better position to push for a response.

The advice below is primarily aimed at authors who don’t have agents, and/or who are with smaller publishers.

1. Look through your contract to find the clause or clauses dealing with termination and rights reversion. Typically this will be a separate clause, but some contracts bury termination/reversion language in other and even unrelated clauses.

Hopefully there will be stipulations for when and how you can request your rights back–for example, a book may become eligible for rights reversion once sales numbers or royalty income fall below a stated minimum.

The ideal reversion language is precise (“Fewer than 100 copies sold in the previous 12 consecutive months” or “Fewer than 50 copies sold in each of two consecutive royalty periods”) and makes reversion automatic on the author’s request, as long as those benchmarks are met. (For more on why reversion language needs to be precise–including examples–see my post on The Importance of Reversion Clauses in Book Contracts.)

Unfortunately, reversion language is often far from ideal. Your contract may impose a blackout period (you can’t request reversion until X amount of time after your pub date), a waiting period after the reversion request (the publisher has X number of months to comply, during which time your book remains on sale), or provide the publisher with an escape mechanism (it may only allow you to request reversion, leaving the publisher the latitude to refuse, or may make your request moot if the publisher issues or licenses a new edition within 6 months of your request).

Worse, your contract may not include objective standards for termination, leaving the decision entirely to the publisher’s discretion; or it may include antiquated standards, such as this: “The book shall not be considered out of print as long as it is available for sale through the regular channels of the book trade”. Such language was meaningful in the days when books existed only in print, and print runs could be exhausted, but it’s useless for today’s digital reality.

It’s also possible that your contract may not include any reversion language at all. This is often the case with limited-term contracts, so if your contract is one of those, you may just have to wait things out. Unfortunately, I’ve also seen life-of-copyright contracts with no reversion clause. This is a big red flag: a life-of copyright contract should always be balanced with precise reversion language.

. . . .

6. DO: be polite, businesslike, and succinct.

7. DON’T: mention the problems the publisher may be having, the problems you’ve had with the publisher, problems other authors have had, online chatter, news coverage, lawsuits, or anything else that could be construed as negative.

As much as you may be tempted to vent your anger, resentment, or righteous indignation, rubbing the publisher’s nose in its own mistakes and failures will alienate it, and could cause it to decide to penalize you by refusing your request, or just refusing to respond. This is a real risk: I can’t count the number of stories I’ve heard over the years about vindictive publishers who decided to punish authors they deemed troublemakers by holding a death-grip on the authors’ rights.

Again: keep it professional, businesslike, and unemotional.

Link to the rest at Writer Beware

PG notes that it is not uncommon for publishers large and small to do all sorts of things with an author’s books that aren’t mentioned in the contract. Look for those as well.

While PG doesn’t do that sort of work any more, on more than one occasion he found errors and omissions in publishing contracts, including from the largest of publishers, which would get a first-year lawyer fired from any reputable law firm if she/he had made a similar error.

The type of people who do well in law school don’t have the slightest desire to go to work for a big publisher because the pay is terrible and management doesn’t like lawyers very much anyway. A publisher won’t hire a law firm with serious attorneys until the publisher gets itself into serious trouble because they didn’t hire a good lawyer in the first place.

Creation from imagination is the basis of intellectual property

From The Creative Penn:

How can you future-proof your author career by being careful with the publishing clauses you sign? Why are NFTs so interesting for intellectual property? How might DAOs help authors with estate planning? Copyright and trademark attorney Kathryn Goldman talks about these things and more.

. . . .

Transcript

Joanna: Kathryn Goldman is a copyright and trademark attorney, and has worked in intellectual property for over 30 years. She runs creativelawcenter.com, which offers resources, workshops, and advice for creative professionals, including authors, artists, designers, and more.

. . . .

Joanna: I’m so excited to talk to you about this. Let’s start with more of an attitude question.

Let’s say metaverse/web3/whatever we’re going to call it in the future. What do you mean around that? What do you mean by given up their rights?

Kathryn: Publishing contracts are license agreements between an author and a publisher, and in that license agreement, the author grants to the publisher a group, a bundle of, or part of their copyrights in their creative work. And publishing contracts are dense with language.

In those grants of rights, there are these broad provisions that encompass future technologies. And so, if there is a publishing contract that was drafted and signed 10 years ago, that includes language that encompasses future technologies unknown at the time, then the author may have already agreed, with that language, to allow a publisher to mint an NFT of her work without even knowing what an NFT was at the time.

So it’s possible that there’s language embedded in the contract already, covering future technologies, that would give the publisher control over the creative’s NFTs.

. . . .

Joanna: Why are you so interested in this intersection between web3 and intellectual property?
Because I’ve seen so many people shying away from it and saying it’s just not happening. But you embrace the change. So, why is that?

Kathryn: I embrace watching the change. It is happening. You cannot turn your back on it right now, but mostly what’s intriguing me is that people’s imaginations have caught fire in a way we really haven’t seen for a couple of decades, or maybe a decade.

People are taking this technology and doing things with it that are just limited only by their imaginations, and that is what is fun to watch. It’s the creation, from imagination, that is the basis of intellectual property. That’s why I am just loving what’s going on these days.

[Joanna: You have written:]

“Authors who have signed publishing contracts may have already given up their right to control their work in the metaverse.”

Let’s say metaverse/web3/whatever we’re going to call it in the future. What do you mean around that? What do you mean by given up their rights?

Kathryn: Publishing contracts are license agreements between an author and a publisher, and in that license agreement, the author grants to the publisher a group, a bundle of, or part of their copyrights in their creative work. And publishing contracts are dense with language.

In those grants of rights, there are these broad provisions that encompass future technologies. And so, if there is a publishing contract that was drafted and signed 10 years ago, that includes language that encompasses future technologies unknown at the time, then the author may have already agreed, with that language, to allow a publisher to mint an NFT of her work without even knowing what an NFT was at the time.

So it’s possible that there’s language embedded in the contract already, covering future technologies, that would give the publisher control over the creative’s NFTs.

This analysis, this concept, is not without precedent. The same thing happened with e-books. Before e-books were commonplace, there was language in publishing contracts that gave publishers the right to control the creative work in unknown or yet-to-be-known technology. So, about 10, 20 years ago, the battle over can a publisher publish the e-book of a work was fought.

Link to the rest at The Creative Penn

PG will comment that, some time ago, he was involved in many more than one argument regarding whether a publishing agreement covered ebooks or not. Without compromising any client confidences or violating any client obligations to keep these sorts of matters confidential, PG can say that on frequent occasion, the publisher had done such a bad job on its standard publishing contract that PG was able to convince publisher’s counsel that the publisher didn’t actually have the right to license ebooks because the contract only talked about selling ebooks and ebooks are always licensed by those whose business is to find people to acquire ebooks.

For the record, PG isn’t doing anything in this sphere any more.

How sensitivity readers corrupt literature

From UnHerd:

What did the sensitivity readers say? And did I care? Of all the aspects of the recent attempt to cancel my work, the one that seems to fascinate most people is the moment when my publishers sent my Orwell Prize-winning memoir, Some Kids I Taught and What They Taught Me, to be assessed by experts who would detect and reform its problematic racism and ableism.

Of course I cared. I’m horrified that people found prejudice and cruelty in my book. And I went into the process willingly: I’ve always enjoyed and benefited from editing and saw this as an extension. I did an initial rewrite — there were many things I was eager to change — in the autumn of 2021 and sent it off full of interest and optimism. I received the reports on it before Christmas. They were never formally used and I share the content here — anonymously, of course — because sensitivity reads are being used more and more widely, and mine gives a valuable insight into how they might work with non-fiction and memoir.

There are several reports — Picador did a thorough job — and they are varied. The novelty of the whole field is reflected in the fact that the Readers use different titles — sensitivity and authenticity — and different methods, too. Some write A4 reports, others use the comment button on Microsoft Word or an Excel sheet, still another presents a simple list of headings, done very possibly with a word search. More than one grades infractions, 1-3. They have of course special areas of expertise — Islam, blackness, disability — but these emerge through inference, not announcement.

Their scopes vary, too. One Reader fusspots around single words: I should not use “disfigure” of a landscape (infraction level 3, as presumably comparing bings — spoil heaps — to boils might be harmful to acne sufferers). Nor should I use “handicap” in its ordinary sense of “impede” (infraction level 2, serious); and I should prefer the acronym “SEN” to its origin phrase, special educational needs, because it is more inclusive (infraction level 2).

Others have grander ambitions: paragraphs, sub-sections and even entire chapters should be revised. Still others focus on issues around the presentation of the book. One suggests the authors of endorsements containing the words “love” and “humanity” might want to “rethink their stance”. To add to the cacophony, the Readers contradict each other freely, even praising and disparaging the same passages.

Given this diversity, it seems reasonable to start with areas of agreement. These mostly occur in the first part of my book, which is set in the Nineties. Perhaps this is because all of the Readers seem to be experts on sexuality and gender, and resisting homophobia is one of my themes. There is even a particular passage, the only one in the book, on which the whole Reader crowd comments and concurs.

The setting is London, 1992. After end-of-term drinks, a favourite student, Liam, comes out to me and then asks me to take him to G.A.Y — because, he says, no one else in his world would know where it was. I was very worried about doing this at the time; even though Liam had just left school, I still felt like his teacher, and I worry even more now, when teachers no longer take 18-year-olds to the pub and are much more aware of influence and consent.

None of these sensitive issues, though — raised at length in the book — worry the Readers. They are concerned, rather, that I might be boasting about helping a young gay person: “Straight white saviour trope”, suggests Wordsearch List, “could be problematic”. And they set up a chorus about what I feel and say after Liam hits the dance floor and I note:

… a new kind of pain, a physical, chesty anxiety that I was not to experience again until I watched my own children walk along ledges or cross a busy road. What would happen to Liam among all those strong bodies? What would happen to his body? He was too young to understand you only got one. Fortunately, it was only twenty minutes or so before he came back out of the crowd and grasped his beer.

‘Liam,’ I said, ‘I love you. You have to promise me to always use a condom and never get AIDS.’ 

I make, my Readers agree, a “reductive” and “rogue” remark. The preceding passage “comes across as homophobic” and is an LGBTQ infraction Level 2. But in 1992, people were still dying in large numbers from AIDS, and I would have urged all young people to use condoms. Excel Reader is kind enough to acknowledge this — “the author has chosen to reproduce contemporary dialogue which may not … reflect brilliantly on her” — but the other Readers seem to concur that the past should match an idealised present, in the same way that Anne of Green Gables, say, got a gay best friend when she went on Netflix.

There are similar injunctions throughout the text. I am enjoined not to quote from My Ántonia by Willa Cather, as it is “an old novel”; nor to state that homosexuality has historically been taboo in Nepal, as homophobia comes from colonialism; nor to mention that the Taliban were terrorists. Extending the principle of sunny improvement into the present, Wordsearch List breaks out of their list to make the helpful suggestion that I should remove references to terrorism from across the book, as it “over-sensationalises such a heavy topic, especially with minors involved”.

. . . .

But Some Kids isn’t a novel, nor written for children. Adults are able to put books down if they upset them, so their books may safely contain difficult ideas. I don’t, for example, agree with my Readers that the references to looks, attraction and sexuality in my book should be removed in case readers are hurt by a metaphor as a child might plausibly be. I think adults can endure bings being compared to boils. I also believe that physical human beauty empirically exists, is enormously important for adolescents, and that I can observe its currency and often destructive power, especially for young women, in the classroom. I make an explicit argument about this, which readers may disagree with.

. . . .

I struggle with all this. I baulk, besides, perhaps snobbishly, at their language: the imprecision of phrases such as “feels like the kind of saying that could be deemed insensitive these days”, or “white knight tone/verve” (verve?). I snarl when Excel helpfully suggests I have made a typo with e. e. cummings, and lost his capital letters. It upsets me in particular, when so many of their criticisms depend on it, that none of the Readers deploy the word “irony”, but use “sarcasm”, “jocular aside” and “subtlety” instead, always as negatives. Comment Button condemns my entire chapter on Prizes as “it shows none of the adults involved in a good light”. Indeed it doesn’t. They are being satirised, even though one of them was me.

Link to the rest at UnHerd

The OP gave PG an idea for another standard paragraph writers should put into their publishing contracts:

Phony Provision for Sensitivity Review

Publisher will not utilize “sensitivity readers” to review and comment on Author’s Work without the prior written consent of Author. In the event that Publisher desires to have one or more sensitivity readers review and comment on Author’s work and Author consents, Publisher shall immediately pay Author an additional sum equal to the advance Publisher paid Author at the time Author executed the Publishing Agreement with Publisher.

The purpose of this additional payment is to compensate Author for the additional time that Author will require to review the comments and recommendations of the sensitivity readers.

Author can reject some or all of the recommendations or make some or no modifications as suggested by all, some or none of the sensitivity readers.

In the event Publisher is not satisfied with Author’s response to the comments and suggestions of the sensitivity readers, either Publisher or Author may terminate this Agreement. Upon such termination, Author shall repay the advance received from the Publisher but shall be permitted to retain the additional payment received due to the use of sensitivity readers as described above. Upon receipt of Author’s returned Advance payment, Publisher shall give Author a document executed by an officer of Publisher, certifying that Publisher has relinquished all rights to Author’s Work.

Without the advance written consent of Author, Publisher shall not disclose the reason why the Publishing Agreement with Author was terminated nor any information regarding the sensitivity analysis, its findings and/or recommendations nor shall Publisher reveal the identities of any of the sensitivity readers to any third parties or, by acting or failing to act, reveal any information about the sensitivity analysis to any third party without Author’s advance written consent in writing in each case.

Publisher shall require that each employee, agent or representative of Publisher who has or had any information about the sensitivity analysis of Author’s Work to sign an an agreement to keep this information confidential under the same terms and conditions which limit Publisher’s disclosures above.

In the event that Publisher or any employee, agent or representative of Publisher discloses any information that it or they have agreed to keep confidential, the parties agree that the discovery, calculation and/or proof of the amount of damages incurred by Author will be difficult or impossible for Author to fully discover and prove.

Accordingly, in the event of any breach of the provisions of this Sensitivity Review provision by Publisher or anyone who is under obligation to maintain the information relating to the Sensitivity Review as described described above, Author shall be entitled to liquidated damages for such breach in the amount of Author’s Advance multiplied by ten. By way of example and not limitation, if Author’s advance for the Work is $10,000, the amount of liquidated damages Publisher shall pay to Author for breach of this agreement shall be $100,000.

In the event that Publisher refuses to promptly pay liquidated damages as provided herein and Author hires legal counsel to enforce Publisher’s obligations under this Agreement, Author shall be entitled to recover Author’s reasonable legal expenses and costs from Publisher in addition to the Liquidated Damages to which Author is entitled under this agreement.

NOTE: This is purely an exercise by PG to demonstrate how a Sensitivity Review provision might be constructed. PG has not conducted any research to determine whether such a provision would be enforceable under US or state laws or the laws of any other country in the world.

THIS IS NOT LEGAL ADVICE.

You obtain legal advice by consulting an attorney, not by reading a blog post. PG is not your lawyer.

If you want to try to accomplish something that is similar to what is described in PG’s fanciful Sensitivity Review, you really and truly need to hire a competent attorney to advise you. Failure to do so could result in a giant legal mess, a huge bill and untold sleepless nights.

What Can Happen When Your Agent Decides To Become Your Publisher

From Writer Beware:

Last week, several people drew my attention to this article in the Des Moines Register. “Iowa Romance Writer Sues Over Efforts to Have Ghostwriter Take Over Series.” 

If your “conflict of interest” radar is screaming right now, it should be. 

Clark’s complaint (which you can see here) accuses Grishman et al. of breach of contract, breach of fiduciary duty, and fraudulent concealment, and alleges a variety of malfeasance, including concealing the family connection, and invoking an allegedly non-existent contract clause to justify buying out the final two books in an uncompleted series and hiring a ghostwriter to write them. Clark is seeking to terminate both her RedRock Literary and Pink Sand Press contracts, and to receive an award of “lost profits, damages, costs, and attorney’s fees based on Pink Sand’s breach”. 
As of this writing, Grishman hasn’t filed a response to the lawsuit, but he did have this to say to a local reporter:

. . . .

Apart from the books it has published for Clark, Pink Sand has virtually no track record as a publisher. A search on Amazon turns up two other authors and five other titles–but the status of those titles is unclear. They are nowhere to be seen on the Pink Sand website, they don’t appear ever to have been promoted–or even mentioned–on Pink Sand’s Facebook page, and four of them–by Jeanne De Vita, writing both as herself and under the pen name Callie Chase– have either been taken out of print or are listed as out of stock or unavailable everywhere but on Amazon.

. . . .

Both of the contracts Clark signed–the RedRock agency contract and the Pink Sand publishing contract –are attached to her original complaint. 

The agency contract looks reasonably standard to me, though it imposes a three-year term that the author can terminate only in the event of breach by the agent–not ideal. It also has an arbitration clause, which could complicate things for Clark’s legal effort to be released.

The publishing contract, which covers a whopping 28 titles, is another story. It includes some really terrible clauses, particularly in regard to payment. 

For instance, here are the royalty rates for hardcover publication:

This is seriously nonstandard. Mass market paperback royalties are also substandard, at 5% of wholesale. 
Of course, both of these provisions are moot, since Clause 4(a) of the contract stipulates publication only of “an e-book and trade paperback edition”–but there are big problems with royalties for those formats as well. Ebooks are paid at just 15% of net (even the big publishers typically pay 25% of net, and most small presses pay considerably more). As for trade paper royalties, there is no mention of them in the contract. At all. (!!!)

Subsidiary rights payments too are hugely, one might almost say rapaciously, substandard, with the publisher keeping 85% and the author getting just 15%. These include foreign language, book club, and numerous other rights that are typically allocated at least 50/50 between author and publisher.  
Other lowlights: an overly lengthy grant term (10 years); no advances for certain of the many backlist titles acquired; a non-competition clause that bars Clark not just from publishing competing works, but from publishing anything until the terms of the contract have been completed; an agency clause that empowers RedRock to increase its commission for subagented rights sales beyond the commission rates stipulated in the agency contract; and a clause that empowers Pink Sand to retain rights for five years to a delivered revision it declines to publish, unless the author can find another publisher willing to hand all the author’s earnings over to Pink Sand until advances have been repaid. (Good luck with that.)

It’s hard for me to imagine any reputable publisher offering a contract like this, or any reputable literary agent advising a client to sign it. I see some pretty atrocious contracts from inexperienced publishers who don’t know any better, but Grishman is not inexperienced. Waterhouse Press is a successful house, and he worked there for years. 

Make of that what you will. Make what you will, also, of the timelines involved. David Grishman incorporated RedRock Literary (for the first time) on November 13. Less than three weeks later, on December 2, he signed Clark as an agency client. Six weeks after that, on January 15, Steven Grishman incorporated Pink Sand Press. Clark’s publishing agreement was signed just eight days later, on January 23. 

The whole thing has the feeling of a rush to pin something down.

Link to the rest at Writer Beware

PG was inclined to go on a rant, but, surprisingly, he restrained himself.

He will make a few points, however.

  1. Yes, lawyers cost money. Ms. Clark is learning that because she has had to hire a lawyer to represent her in this contract litigation.
  2. Litigation always costs more, lots more, than hiring a competent attorney to look at a contract before you sign it.
  3. (Side note: PG has cut his law practice way back and isn’t accepting any new clients. If anyone has had a personal satisfactory experience with another attorney who reviewed a publishing contract or agency agreement, send a note to PG via the Contact PG link at the top of the blog so PG can add her/him to his list of attorneys to send to people who contact PG for legal help when he’s not able to provide it.)
  4. Any time someone sends you a document for your signature, they are asking you to agree to be bound to a contract, give them permission to do something, give up some right you have, pay them money, act as their body slave, etc., etc., etc. This is standard practice for most reputable businesses and also standard practice for many crooks.
  5. READ THE DAMN CONTRACT BEFORE YOU SIGN IT! READ THE DAMN CONTRACT BEFORE YOU SIGN IT! READ THE DAMN CONTRACT BEFORE YOU SIGN IT! READ THE DAMN CONTRACT BEFORE YOU SIGN IT!
  6. Make a working copy of the contract, sit down with that copy and a red pen and READ THE DAMN CONTRACT! The longest business agreement PG ever reviewed was much shorter than any book PG has read. (And a lot more boring.)
  7. An author who has spent hours and days and weeks and months writing a book should be willing to spend the extra time necessary to make sure that her/his baby is going to have a good home surrounded by honest people. Plus, remember how much it will cost you in legal fees to get out of a bad contract.
  8. Annotate the contract with your red pen as you go through it – underlines, question marks, exclamation points are all great. Write notes in the margins. Use your red pen for anything that worries you, that sounds fishy or that you don’t understand.
  9. If the contract says something like, “As set forth in Paragraph 49 . . . ” make your red pen mark, then go look at Paragraph 49, use your red pen there and combine the Paragraph 49 language with the language that includes “As set forth in Paragraph 49 . . . ” so you’re reading both provisions together.
  10. The other party can give you something in Paragraph 1 and effectively take it all back in Paragraph 49.
  11. Be just as careful reading the end of the contract as you are when you are reading the beginning of the contract. If the contract has exhibits or additional pages after the place where the parties sign it, read those just as carefully as you read the rest of the contract and use your red pen liberally.
  12. In most American business contracts, the last provisions of the contract are called boilerplate and often consist of stuff the person who put the contract together may well have copied and pasted from a prior contract. But just because it’s copied from another contract doesn’t mean the boilerplate provisions are fair or safe or that something nasty isn’t hidden there.
  13. PG can recall more than one contract written by someone else that incorporated what looked like it was a boilerplate “Standard Terms and Provisions” section at the end of the contract. In some cases, these were even a photocopy of something taken from another contract and attached to the custom contract that the parties had agreed to. On more than one occasion, the innocent-looking “Standard Terms and Provisions” included some terms that were deal-breakers for PG’s clients, even though the rest of the contract was fine.
  14. After you get finished with your red-pen fun, either:
    1. Send an email/letter to the person you’re dealing with asking about each of the items that concerned you or that you don’t understand; or
    2. Make a photocopy of your red-marked version of the contract and ask the other side to respond to your concerns.
  15. Aside from specific responses to your redline questions, the manner in which the individual on the other side reacts to your questions may tell you a great deal about whether this is someone you want to work with or not.

PG has millions of additional tips, warnings, cautionary tales, etc., that he could add, but these are the most obvious things you should look at and do.