How to Read a Book Contract – Somebody’s Gonna Die

12 October 2019

Per a request in the comments, from an earlier post on The Passive Voice

Let’s assume you are an author represented by a literary agent. If Passive Guy asks you who your agent is, you’ll respond with something like “Suzanne Jones” or “James Davis.”

Passive Guy is certain Suzanne and James are wonderful people, but they’re going to die.

This is not a threat, simply a statement of biological reality.

Who will your agent be after Suzanne dies? Will it be someone you choose or not?

You selected Suzanne because she had a great reputation for helping authors build good long-term careers. Your career isn’t built yet. Who’s going to help build your career if she’s gone?

These are not hypothetical questions. One of the comments to a recent essay about agents by Kristine Kathryn Rusch described the story of Ralph Vicinanza, a literary agent for Stephen King, the Dalai Lama and others, who died in September, 2010, at age 60.

Here’s a bullet-point description of what has happened since Mr. Vicinanza’s death, according to the comment (which fits with other accounts PG has found):

  • The other two agents in the Vicinanza agency quit their jobs
  • A letter was sent to all authors advising them to find other agents and promising to continue to pay royalty checks
  • The executor of the Vicinanza estate intends to keep receiving payments from publishers and collecting agency fees from the authors
  • Other agents are asking Vicinanza authors for more than 15% to handle titles the Vicinanza agency handled, presumably because the estate will claim the first 15%

Contracts with a large organization should differ from those with an individual or small organization. A large organization, like a big publisher, is not going to disappear. It may go bankrupt or be sold, but it will have enough value so someone is likely to keep it running in some form or fashion.

However, if somebody in a large publisher dies, another person will replace the dear departed and business will continue as usual. An author has a relationship with a big publisher because the publisher can jam a lot of books into bookstores, airports, Wal-Mart, etc. The jammers may change, but the jamming continues. (PG knows about author/editor relationships, but you can hire an editor without hiring Random House.)

In a small organization, like a literary agency, a death of an individual can result in the death of the agency. PG would suspect many of the clients of Mr. Vicinanza’s agency signed the agency contracts because of Mr. Vicinanza, and quite possibly, only because of Mr. Vicinanza. PG would have signed if Mr. Vicinanza promised to turn him into another Stephen King.

It appears the executor of Mr. Vicinanza’s estate is his sister, Louise Billie. Passive Guy did a quick Google search and couldn’t find any evidence that Ms. Billie is a literary agent or has any experience in that business. Yet, under the agency’s contracts with authors, Ms. Billie, acting on behalf of the estate, is handling royalties and, presumably, retaining 15% plus, perhaps, expenses.

What’s the contractual solution to problems like this? It’s much simpler than stating the problem.

If the services of a particular individual are a key value to you, include a provision in the contract that gives you the right to terminate the contract:

  • if that person dies,
  • becomes disabled and unable to perform his/her normal work, or
  • leaves the agency for any reason

As far as what happens to the agency percentage on book contracts the agent negotiated while alive or working at the original agency, PG would push for a provision that says those end when your agent goes.

A possible compromise would be that the agency percentage continues to be paid to the agency for one or two years after termination, but PG doesn’t like that because, at least according to the hypothetical value proposition of an agent, the agent’s services are continuing and overlap from book to book. The work an agent puts into your third book also enhances sales of books one an two.

The Vicinanza experience demonstrates that other agents are not willing to accept authors under standard compensation terms if they have to share compensation.

If agents boohoo about this, Passive Guy would simply point out that, if an attorney dies, the attorney is entitled to fees earned up until he takes his last breath and no more. A client is always free to hire another attorney at any time, whether the attorney is alive, partly dead or all the way dead.

Someone is bound to ask why the author should receive royalties forever while the agent who negotiated the publishing contract doesn’t receive agency fees forever.

The answer is that when the author wrote the book, she created an asset, recognized under copyright law, that will exist for a long time and is capable of generating income in a variety of different ways over its lifetime, some of which are recognized today and others of which won’t be conceivable for another 50 years.

The author owns the asset, the agent does not. The agent was paid for a service provided. PG would argue if the ongoing services of a particular agent were the key value to the author, when those services are no longer provided for any reason, the author shouldn’t be required to make any additional service payments.

How to Read a Book Contract – Agency Coupled with an Interest

12 October 2019

A reprise of an earlier PG post about Agency Contracts per the request of a couple of visitors to TPV.

In an earlier post showing an Author/Agent agreement, the sample clause included a claim by the agent that the 15% fee was “an agency coupled with an interest.”

This term has rightly caused concern among many authors. Done right, an agency coupled with an interest could well give an agent a piece of the copyright to the author’s book or books and could make the agency agreement irrevocable.

However, we have an opinion from the Supreme Court of New York County, New York, on this very topic based upon an agency clause that appears to be very similar to the one we reviewed yesterday. (A quick explanation about New York state courts – unlike almost every other state and the federal court system, the “Supreme Courts” in New York are the trial courts. This decision is currently being appealed to the New York State Court of Appeals, but if PG were a betting man, he would bet the appellate court will confirm the trial court’s decision.)

Here are the facts:

  1. Beginning in 1996, the Peter Lampack Agency (PLA) represented Martha Grimes, mystery novelist supreme.
  2. Ms. Grimes earned over $12 million during the 12 years PLA represented her.
  3. PG assumes that PLA never had an Agency Contract with Ms. Grimes because they didn’t talk about it in the lawsuit they filed later.
  4. In 2005, PLA negotiated a four-book agreement with Penguin.
  5. The 2005 Penguin contract included an Agency Clause very similar to the one we discussed yesterday.
  6. The Penguin agreement included an “option” – basically a right to negotiate – for Ms. Grimes’ next book.
  7. In 2007, Ms. Grimes fired PLA and hired another agent.
  8. In 2009, Ms. Grimes’ attorney sent Penguin the manuscript for The Black Cat and later signed a publishing contract for that book.
  9. PLA sued Ms. Grimes, Penguin and a bunch of Penguin subsidiaries, claiming it was owed agency fees on The Black Cat and other books of Ms. Grimes published by Penguin, based on the 2005 option clause and the fact that other books of Ms. Grimes were published under “extensions” of contracts PLA had negotiated before it was fired which contained standard agency clauses.

Here’s the version of the PLA agency clause the court included in its opinion:

The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement . . . . Such Agent is hereby fully empowered to act on behalf of the Author in all matters in any way arising out of this Agreement . . . . All sums of money due the Author under this Agreement shall be paid to and in the name of said Agent . . . . The Author does also irrevocably assign and transfer to [PLA], as an agency coupled with an interest, and [PLA] shall retain a sum equal to fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement.

Ms. Grimes’ attorneys argued that she owed nothing because she terminated the agency relationship with PLA in 2007 and contended that PLA did not have an agency coupled with an interest.

The Court ruled on a Motion to Dismiss and Ms. Grimes was a big winner. Winning on a Motion to Dismiss is the trial attorney’s equivalent of a slam dunk right in the face of opposing counsel. Essentially, it means the judge concluded PLA had no case on most of its claims.

The Court’s opinion first stated the general rule that an agency for no definite term is revocable at will. The court then stated the second rule that when an agency authority is coupled with an interest, it becomes irrevocable. PG will spare you a lot of legalese, but the following is from the opinion:

An agency is coupled with an interest where, as a part of the arrangement with the principal, the agent receives title to all or part of the subject matter of the agency. . . .

[t]o make the power irrevocable, there must be an interest in the subject of the agency itself, and not a mere interest in the result of the execution of the authority . . . .]). Words alone are not enough to establish an agency coupled with an interest.

What does this mean?

In order to have an “interest,” the agent probably has to have a claim on the copyright to the book itself, not a claim against the stream of income generated by licensing a publisher to publish the book. The words in the agency clause stating that PLA had “an agency coupled with an interest” were insufficient to give it such an interest.

The words in the agency clause stating, “The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement,” did not create an irrevocable agency agreement.

Since PLA did not have an agency coupled with an interest, its agency was revocable at will. PLA was not entitled to a commission from monies earned under publishing agreements made after its term as an agent had ended.

PLA argued that the language giving it the right to “fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement,” meant that, in addition to monies generated by the original four-book contract, it also had the right to monies generated under the option clause.

The Court found this language did not specify that PLA would receive a commission from the new publishing agreement made after the Agency’s termination. The option clause was not an agreement. The agreement for The Black Cat was separate from the original contract.

As to the claims that PLA was entitled to commission under other agreements that were “extensions” of those negotiated by PLA, the Court used the same reasoning to deny those claims.

PG will note that Penguin got dragged into this litigation because of the Agency Clause it permitted to be inserted into the publishing contract.

As mentioned, the case is under appeal and it will be awhile before the appellate court hands down its opinion.

We learn three things that one New York judge in one court believes about Agency Clauses:

  1. A contractual claim to commissions based on future publisher royalties is not the same as having an “interest” in the book, which is the subject matter of the agency.
  2. Stating an agency is “irrevocable” has no effect whatever in the absence of a specific interest in the book.
  3. Stating that the agent has an “agency coupled with an interest” does not prevent the author from terminating the agency at any time.
  4. Once the agency is terminated, the agent has no claim against royalties paid under later contracts absent a specific contractual clause to that effect.

Here’s a link to the court opinion.

The Queen of Forensic Science

12 October 2019

From The Wall Street Journal:

I’ve long been a sucker for that crime-fiction stereotype, the old lady sleuth who defies social expectations by being clever and fearless. The nosy Miss Marple, the curious Jessica Fletcher, the cozy Miss Maud Silver—they all have in common an independence, a kind of postmenopausal unflappability and an infinite capacity to upend the assumptions of condescending cops and criminals. So it was with great delight that I met the real thing in the pages of Patricia Wiltshire’s fascinating memoir “The Nature of Life and Death: Every Body Leaves a Trace.”

Ms. Wiltshire, also known as the queen of forensic science, also known as the snot lady for her unique retrieval of microscopic evidence from the nasal cavities of the dead, is a petite, fastidious septuagenarian, a lover of cats, Baroque music and sloe gin who is arguably the U.K.’s premier forensic ecologist-botanist-palynologist. (Palynology is the “study of dust,” or microscopic organic particulates.) In other words, she collects and analyzes the pollen granules and fungal spores that are carried out of, or into, crime scenes on killers’ shoes, clothes, shovels and gas pedals, and helps police figure out the how, what and wheres of a crime. “We all leave our marks on the environment,” she writes, “but the environment leaves its marks on us too.”

Her technique, once the samples are collected and identified in processes she describes as sometimes “mind-blowingly tedious,” is to re-create in her mind the vegetation at the crime scene—forest or meadow, backyard or farm—and from it extrapolate the nature of the soil, the shade, the sun. She can determine the maturity of trees based on pollen findings—spruce, for example, don’t produce pollen until they are 40—and, with the help of criminal-behavior profiles (like the fact that murderers tend not to carry corpses much more than 100 yards) and British flora-distribution maps, she can conceptualize the terrain where a body might be found or where a killer was. Each square foot of landscape, she notes, is unique, like a fingerprint.

Ms. Wiltshire is quite good at this re-creation. She has aided detectives in almost 300 cases, from cracking the “Jigsaw” murder—where she helped connect the dismembered and widely distributed body parts of the victim to a killer couple—to nailing Chinese triad assassins, and even to catching a team of illegal badger cullers by the soil traces left on their lethal spades. Painting a picture based on myriad details is what Ms. Wiltshire does, and she does it again in this lively profile of her work and personality.

. . . .

A significant percentage of the book is personal history evoking her sickly childhood in a Welsh coal-mining village—where she recuperated in the company of her encyclopedias—her love of science and subsequent academic and professional achievements, the traumatic death of her young daughter and her unintentional career in forensics. A portrait of a prickly, precise and plucky woman emerges, one who can remove a corpse’s face skin as tidily as she maintains her immaculate kitchen; who readily scolds cops who are skeptical of her methods (“after all these years of teaching them,” she sniffs, “they still cannot seem to get their heads around the constraints and requirements of environmental sampling”) and lawyers who challenge her findings in court by suggesting dandelions are found everywhere. “Well, of course they are not,” she writes. This lady in pearls anticipates, with the excitement of “a child who wakes early on Christmas morning,” a trip to a body farm in Knoxville, Tenn., where the rate of human decay is studied. Really, what’s not to love?

Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)

 

The FBI Lost Our Son

11 October 2019

Maybe a Writing Prompt

From The Wall Street Journal:

William and Theresa Reilly were biking on a leafy trail north of Detroit when their son, Billy, sent a text from his trip to Russia. The 28-year-old man had never lived away from home, and the Reillys fretted over his safe return.

Billy Reilly had yet to find a career, but his foreign-language and computer skills led to part-time work in counterterrorism for the Federal Bureau of Investigation in Detroit. He was one of the bureau’s army of confidential sources, and the Reillys didn’t know if his trip was somehow connected.

Over the years, Billy had delved into the Boston Marathon bombers, cultivated alleged Islamic State recruiters, analyzed Syria’s civil war and conversed with Russian-backed separatists fighting in eastern Ukraine. He used online aliases to penetrate terror groups over computers from the family home in Oxford, Mich.

Billy planned to return soon, and his parents were relieved to hear from him. He had told them a vague story about joining a humanitarian mission into eastern Ukraine. Once abroad, Billy leaked alarming bits and pieces, mentions of fighting, drinking and bloody encounters with volunteer soldiers.

“Big news,” Billy texted. His plans were changing. He wasn’t leaving Russia just yet. Mrs. Reilly was so absorbed she didn’t notice a dog approaching her on the trail. It bit her ankle, she recalled, drawing blood.

Billy sent the text on June 24, 2015. Mr. and Mrs. Reilly called and wrote him texts back over the following hours and the next day. They lost sleep, tethered to their phones, but heard nothing.

A day or two later, a government sedan pulled up to the Reilly home. FBI special agent Tim Reintjes introduced himself. The Reillys had never met him, but they knew from Billy that he was their son’s FBI handler.

“Something happened to Billy,” Mrs. Reilly recalled thinking. “They know about it, and he’s here to tell us.”

Instead, the agent asked if Billy was home. When the Reillys said he was in Russia, Agent Reintjes seemed surprised. He began asking questions, probing for details.

Over the next months, Agent Reintjes returned a half-dozen times. He asked for the laptop and phone the FBI had given Billy. He also wanted to retrieve Billy’s phone bill as soon as it arrived.

Agent Reintjes brought colleagues who assured the couple that the world’s leading investigative agency was on the case. “They’ll find him,” Mrs. Reilly recalled thinking. “We don’t have to worry.”

Then the Reillys found another phone Billy had used. It contained text messages between Billy and a contact named “Tim.” The number matched the one on Agent Reintjes’s emails to Mrs. Reilly.

The parents scrolled through the texts and found a series of perplexing exchanges suggesting the FBI agents knew all along about their son’s trip.

As Billy prepared to leave for Russia, Tim had sent a text in early May 2015.

“Do you have your trip itinerary yet.”

“I’m still waiting on visa,” Billy replied.

Two days before Billy flew to Moscow, Tim arranged a face-to-face meeting and wrote, “Bring your travel info.”

The Reillys couldn’t understand why Agent Reintjes hadn’t told them.

. . . .

The FBI’s counterterrorism work grew to preventing attacks. To help, the agency recruited workers like Billy Reilly, part-timers with the right skills to infiltrate terror or criminal networks, either in person or through online chat rooms and social media.

These sources work in a dangerous world, with little training and fewer of the institutional protections afforded full-time FBI agents. They draw no government benefits beyond an occasional paycheck and a pat on the back. Yet they are critical to the FBI’s work to see plots in the fog of international jihad.

As an FBI source, Billy was required to report foreign travel, even vacations. The bureau has the authority to dispatch sources on foreign missions. It is one of the U.S. agencies responsible for disrupting terror cells abroad.

. . . .

Alarmed that Agent Reintjes was hiding information about their son’s disappearance, Mr. Reilly, a retired Teamsters driver for Coca-Cola, and Mrs. Reilly, for years a stay-at-home mom, began a quest to find Billy themselves.

. . . .

The Journal posed more than 100 questions to the FBI. Brian P. Hale, a spokesman, responded in an email: “The FBI never directed William Reilly to travel overseas to perform any work for the FBI.”

. . . .

Billy obtained a bachelor’s degree in biology from Oakland University, a public college in Rochester, Mich. The financial crisis had deepened Michigan’s economic troubles, and he was pessimistic about local job prospects. “Billy always wanted something bigger than our lives,” his sister said.

In the spring of 2010, there was a knock at the door, and a man in a suit introduced himself to the Reillys as an FBI agent and held a printout of the senior Mr. Reilly’s passport. After a raid on an al Qaeda position, the agent said, U.S. forces in the Middle East had recovered a hard drive that contained communications with someone using an IP address at the Reilly house.

Mr. and Mrs. Reilly looked at each other, and then toward Billy’s second-floor bedroom.

Billy, then 23, explained to the agent how he had found his way into restricted jihadist chat rooms. During their conversation, the agent asked Billy if he had any interest in working with the FBI.

. . . .

The bureau’s Detroit office had roughly 200 agents, and its counterterrorism unit was one of its busiest. Billy, an American of European heritage, who had knowledge of Arabic and could approach potential terror targets online, had great potential value to the FBI.

Billy told his uncle that 80 FBI agents had tried and failed to access a particular jihadist site that Billy penetrated. “They knew the language, but they didn’t understand the culture,” the uncle recalled Billy saying.

. . . .

The FBI’s Confidential Human Sources Policy Guide warned that a source’s “misconduct will reflect on the FBI. Fairly or unfairly, the FBI will be viewed in the light of that reflection.” Agents were schooled to cut off contact when sources behaved in ways detrimental to the agency.

. . . .

Billy’s value to the FBI soared when the Arab Spring began unfolding at the end of 2010. In Syria, as an unpredictable uprising took root months later, Billy tried to see through the confusion. His FBI reports often read as though they were prepared for the CIA, including analyses about an emerging group of fighters that became known as Islamic State.

“I think that after IS consolidates their control of Raqqa, Deir Zowr, East Aleppo,” he wrote of the militant group’s spread in Syria. “…their target will be the Homs area.” He turned out to be correct.

. . . .

The Reillys recalled Billy voicing doubts about his work in 2013, after he played a role in an undercover case targeting an Iraqi émigré. The FBI identified people with suspected jihadist sympathies who traveled to the Middle East. Aws Naser, of Westland, Mich., fit the profile.

Mr. Naser believed the FBI was already watching him when Billy reached out to meet in person. Billy had said his name was Mikhail, and that he wanted to learn about Islam. Mr. Naser recorded a video when he met Billy and planned to expose “Mikhail” as an undercover agent.

“I wanted to see how they entrap people, so they can never do it again to innocent people,” said Mr. Naser. Years earlier, he said, he had worked as an interpreter for the U.S. Marines in Iraq.

Mr. Naser was arrested before he could post the video of Billy on YouTube. FBI agents stood in the driveway as police led him from his home on Jan. 4, 2013, Mr. Naser said in an interview. He was accused of stealing $180 from a cash register at a former workplace and squirting pepper spray at a cashier.

Mr. Naser, who had previously pleaded guilty to disorderly conduct, said he was owed the money in back pay.

FBI agents were in court when a judge set Mr. Naser’s bond at $2 million. He was later convicted of felony armed robbery and sentenced to a prison term of three to 20 years.

Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)

Agency Clauses

11 October 2019

Based on some questions from clients, PG thought it might be a good idea to republish this earlier post he wrote and published here several years ago.

Agency Clauses

An agency clause may be inserted into a publishing contract between an author and a publisher. In essence, a typical agency clause provides that the agent may receive royalty payments on behalf of the author and has authority to act in the name of the author with respect to the contract.

Here’s an example:

All sums of money due to the Author under this Agreement shall be paid to the Author’s agent, Annie Agent, of 321 Applesauce Avenue, New York, NY 10023, U.S.A. (hereinafter called “the Agent”) and receipt by the Agent shall be a good and valid discharge of all such indebtedness and the Agent is hereby empowered by the Author to act on the Author’s behalf in all matters arising in any way out of this Agreement.   For services rendered and to be rendered the Author does hereby irrevocably assign and transfer to the Agent the sum of 15% (fifteen percent) as an agency coupled with an interest out of all monies due and coming due to and for the account of the Author under this Agreement.

To understand this beast, you need a teensy bit of legal background info. (I promise this won’t hurt too much.)

Since the agent doesn’t usually sign the publishing contract, the agent is a Third Party Beneficiary of the contract.

The classic Third Party Beneficiary example is a life insurance policy. Grandpa George buys a life insurance policy for $100,000 from Cornpone Mutual when he’s only Pa George. He names his three chillun, Bo, Lucille and Little George, as the beneficiaries. (Hint)

Grandpa George pays all the premiums on time, but gets careless around the hay baler one day and goes to meet his Maker. In pieces. The chillun tell Cornpone Mutual it’s time to pay up, but Cornpone says its policies do not cover hay baler accidents.

The parties to the life insurance policy are Grandpa George and Cornpone Mutual. The chillun never signed anything. Indeed, if they were under 18 at the time the policy was purchased, they were legally unable to enter into contracts.

The usual rule is that only parties to a contract can sue for enforcement or damages. This raises a problem. Grandpa George was a good man, so there are very few lawyers in the place where he has gone. There is also no email and Fedex guys who take packages there never return.

The children were named in the insurance policy, however. Although they didn’t sign, they are Third Party Beneficiaries so they can sue Cornpone Mutual in their own names.

Outside of a few clearly-defined fields, Third Party Beneficiaries are quite rare in the business world. When Passive Guy was practicing law, he would negotiate dozens of contracts with nary a Third Party Beneficiary in sight. The standard practice was to have everybody sign the contract if they had any rights under the contract.

However, in the wild and wacky world of publishing, agents are Third-Party Beneficiaries to a lot of publishing contracts. As will become clear during our discussion, Passive Guy thinks Agency Clauses only benefit the agent and can cause problems for both the author (obviously) and the publisher (don’t know if they’ve thought much about this).

So, in general terms, what does the presence of an agent as third-party beneficiary to a publishing contract mean? This is a weird area of the law, filled with lovely Latin phrases, serving primarily to fill out the semester in a Contracts Law class (which is one reason to have everybody sign the contract). PG will boil it down into fundamentals as they relate to an Agency Clause.

  1. If one or both of the parties to a contract violate the terms of the contract to the detriment of the Agent, the Agent can sue to enforce the contract.
  2. The Agent’s rights are subject to the terms of the contract.
  3. The Author and Publisher have obligations to the Agent to perform under the terms of the contract.

Isn’t this fun? Don’t you wish you could be a Third Party Beneficiary too?

Before we go further, let me make clear that Passive Guy is not anybody’s lawyer anymore. As much as he may love and admire you, PG is not your lawyer. Most publishing contracts will have a clause saying New York law applies to the interpretation of the contract. PG is not a New York lawyer either. Any legal discussions will be general in nature and New York or other state or federal laws may conflict with PG’s generalities. Hire your own lawyer if you want legal advice.

So, let’s start dissecting the Agency Clause so see where we have some wiggle room. Some agents just use an Agency Clause without a separate Agency Agreement between the Author and Agent. Our analysis will assume this is the case. If there’s a separate Agency Agreement, things can become much more complicated.

Passive Guy wants you to see this clause through PG’s magic contract vision glasses.

What does Passive Guy’s super-power vision see here?

1. Purple highlights – Unsurprisingly, the Agency Clause is about money only. Potential benefits or compensation other than money are not covered by this clause. Something that could be easily converted to money or is a money equivalent – a Visa gift card, for example – might be covered. PG is assuming “money” is not a defined term in the Publishing Contract. (For you persnickety types, super-power vision is not perfect. The purple “an” is a mistake.)

2. Blue highlights – Only money payable to the Author is covered. Money payable to other people or entities is not covered. The assignment clause, if any, in the Publishing Contract would make for interesting reading.

3. Yellow highlights – The Agent is authorized to act on Author’s behalf. In the oh-so-ever-humble opinion of PG, this gives rise to the classic obligations that an agent owes to a principal. These include always acting in the principal’s best interests, disclosing conflicts of interest, etc., etc.

Arising in any way out of the Agreement is broad.

For services rendered and to be rendered is interesting in light of the Ralph Vicinanza agency matter discussed previously. This implies an ongoing stream of services and is specifically worded as consideration for the ongoing 15% agency fee. If no more services will be rendered, there’s an argument no more agency fee should be paid.

4. Green highlights – PG never likes irrevocable agreements where one party is providing services to the other. The services may start out just fine, but if they go bad, you want to be able to stop paying for them.

If this is the only written description of the Agent’s agreement with the Author, then no term – time period – for the agency exists. It’s not one year or five years or a hundred years. Generally speaking, an agency agreement that doesn’t have a term is revocable at will by the principal.

Agency coupled with an interest is an agency in which the agent has an interest in the property regarding which he or she is acting on the principal’s behalf. PG has another post on this ominous-sounding term coming out tomorrow, but, for our discussion today, essentially, it means the same thing as irrevocable. It’s a belt-and-suspenders approach to try to keep the Author from revoking the agency agreement. Absent a separate document actually describing the interest of the agent, it probably doesn’t add much.

5. Red highlights – Payments to the Author under other agreements, even other agreements with this particular Publisher, are not covered by the Agency clause.

So, putting all this together, what do we have?

Following are a few (but not nearly all) possibilities:

1. The Agent is empowered to act on the Author’s behalf respecting this Agreement, but nothing prohibits the Author or someone else – an attorney or agent – from also acting on behalf of the Author. The Agent doesn’t have an exclusive right.

2. All the Agent’s rights are tied to this specific Publishing Contract. New or separate agreements are not included. If the original agreement includes options for additional books in a series, PG thinks there is a good argument that if the Author insists on a separate agreement for subsequent books, the Agency Clause in the first agreement would not necessarily give the Agent a commission on subsequent books. (Again, we’re not dealing with situations in which there is a separate Agency Agreement.)

3. Since everybody is bound by the Publishing Contract, if that Contract has an out-of-print clause, the Publisher can declare the book out of print and enter into a separate agreement with the Author for something like an enhanced and revised version of the original book. There will likely be many other clauses in the Publishing Contract that allow the Publisher to effectively terminate the commercial life of a particular book.

4. If the Author receives an ebook amendment or rider to the original contract, and the Author no longer desires to use the Agent’s services, the Author might want to insist on a separate Publishing Contract for the ebook. Under the terms of the Agency Clause, the ebook contract might not be commissionable.

5. PG is sure the attorney who first came up with the for services rendered and to be rendered language thought he/she had done a cool thing in providing for future consideration from the agent for future commissions. However, if future services by the Agent are not satisfactory to the Author and the Author terminates the relationship for that reason, this contract language strengthens Author’s argument that the Agent’s commissions should end.

6. If the Author gives the Agent specific instructions, preferably in writing, about what the Author wants the Agent to do or not to do respecting the Publishing Contract, PG believes the Agent cannot act contrary to the Author’s instructions unless the Author asks the Agent to do something illegal or totally ridiculous.

7. If there is a fight between the Agent and the Author based on the Agency Clause, PG thinks it quite likely the Publisher would be dragged into ensuing litigation, particularly if the fight was about a separate contract between the Author and the Publisher for which no commissions were payable. PG wonders why a Publisher would open itself up to this possibility when the Agency Clause provides no discernable (at least to PG) benefit to the Publisher.

Passive Guy will close this very lengthy post by admitting puzzlement and worry.

When PG heard these Agency Clauses described before he saw one, he expected to find a serious lock-down legal provision. Instead, there appear to be lots of holes in the one used to illustrate this post. Others PG has received for his Contract Collection (Thank You!) are almost identical.

The reason PG worries is whenever it appears too easy to get out of what’s supposed to be a tight contract, PG fears he has missed something big or obvious.

Since we have a large number of informed publishing veterans visiting The Passive Voice, let me know if I’m really off-base in my analysis.

Contract Collection

If you have a publishing contract you would like to share with PG, he would appreciate you’re forwarding a copy to him. You can feel free to blackout/whiteout/cover up the names of any individuals or publishers involved in the contract prior to sending the copy of the contract.

PGContracts@thepassivevoice.com

KDP Access Issues

11 October 2019

PG is working on access issues to KDP.

These began last night and during his interactions with KDP support, he thinks he was transferred to CreateSpace support. He’s not certain why they are two different groups of support people.

The Createspace support person was very conscientious and got PG an unlock code for an ID/email that was clearly his, but wasn’t the usual ID he used for KDP – it had one extra character. He thought he might have used the provided ID for some related purpose with KDP and forgotten about it, but was happy to get a reset code via email.

After resetting, these slightly-different credentials got him into a time-warped collection of Mrs. PG’s books with older covers. However, none of Mrs. PG’s more recent titles were there. It was a bit like a setup for The Twilight Zone.

PG thinks he remembers that KDP and Createspace used to have different logins – you went to Createspace to do indie POD books and KDP to do indie ebooks. He suspects the place he ended up had an archive of Mrs. PG’s POD books at the time the Createspace and KDP processes were combined. All the publication dates were from 2012-13, before Mrs. PG’s revised covers were added and no ebook versions were present, although there were links that offered the opportunity to either link to create a Kindle ebook or link to an existing ebook.

PG has spent a lot of time trying to understand what his various and sundry KDP logins do and documented the strangeness for a second discussion with KDP support.

Posts will continue to be a bit scanty until PG figures this all out or he hears Rod Serling’s voice.

.

Wine comes in at the mouth

11 October 2019

Wine comes in at the mouth
And love comes in at the eye;
That’s all we shall know for truth
Before we grow old and die.
I lift the glass to my mouth,
I look at you, and I sigh.

~  William Butler Yeats

Explaining How an Author Terminated a Movie Studio’s Copyright to “Terminator”

11 October 2019

From Pirated Thoughts:

“I’ll be back” said the author of the original Terminator movie. Gale Ann Hurd, the author of the original Terminator film starring Arnold Schwarzenegger, has informed Skydance Media that it is terminating the grant of copyright to the work and seeks to reclaims the rights…but how?

Copyright law is complicated and the ins and outs can be incredibly confusing even to people who claim to specialize in the field. When someone creates a work (painting, screenplay, or photograph) they are deemed the owner of the work. There is one exception, if it is a work made-for-hire. A work made-for-hire comes in two forms: 1) you are paid by someone to create a work for them; or 2) the work is create in the normal course of business for an employer.

First, someone can be commissioned to create a work for someone else, like I am paying you to take a photograph of me and I will own the photograph. As long as the agreement is in writing before the photograph is taken, I own the rights instead of the photographer.

Second, if you create something in your everyday work life for your employer, they own it. For example, if I am a salaried reporter for the New York Times, the Times owns the copyright to any story that I may publish.

. . . .

If a work is a made-for-hire the original creator cannot ever regain the rights to the work. This is how many movie scripts and other stories are created. However, there is an exception.

If I independently create a work, meaning not as a work made-for-hire, I am the owner of the rights and I can do whatever I want with the work including transferring the rights to someone else. However, copyright law provides that after 35 years following publication and author can terminate the transfer and regain the rights to the original.

Gale Ann Hurd was the author of the Terminator film may back in the 80’s.

. . . .

In 1984, the Terminator film was published and here we are 35 years later and, according to the Hollywood Reporter, Hurd has informed the studio who now owns the film, Skydance Media, that is terminate the transfer of rights. Also terminated is the right to make derivative works such as sequels to the original Terminator.  The author must give two years before the termination takes effect and then all such exploitation of the work must cease in any way.

So what does this all mean for movie studios? Utter chaos perhaps as the loss of rights to make valuable sequels and prequels or just another settlement negotiation. Skydance will likely make Hurd a large monetary offer to retain the rights to the valuable franchise.

Link to the rest at Pirated Thoughts

And from The Future of Music Coalition:

Unlike most countries, the United States copyright law provides musicians and songwriters an opportunity to regain ownership of works that they transferred to outside entities, such as record labels and music publishers. Congress established this “second bite at the apple” for authors of creative works after a period of 35 years. “Termination of transfer” is not automatic, however, and there are certain steps creators must take to regain the rights to their works. This guide aims to shed more light on the process for the benefit of musicians and songwriters who are eligible to reclaim ownership of their creations.

As you read this guide, it is important to keep in mind that there are two copyrights in a piece of music: the composition copyright (think notes on paper) and the sound recording copyright (think sounds captured on tape or hard drive). Songwriters often enter agreements with publishers to “grant” their songwriting copyrights in exchange for up-front payment and/or the promise of circulation in the marketplace. Musicians (and bands) transfer their sound recordings to labels for similar reasons, including distribution, promotion and marketing. Authors of both copyrighted works can reclaim the copyrights to their original creations after a period of 35 years.

. . . .

Why do creators have this right?

It is often difficult to determine the worth of a creative work at the time of its creation. Because the value is unknown, musicians and songwriters will not be in the most advantageous position when negotiating what labels and publishers will pay for commercially exploiting their work. Thus, Congress made a policy decision to give authors an opportunity to regain ownership of their copyrights and entertain new, potentially more lucrative licenses for their work. Creators may also choose to re-transfer their copyright(s) under more favorable licensing terms. Consider also that changes in the marketplace can increase the range of potential uses for a piece of music, which may not have existed at the time of its creation. For example, few could have anticipated the explosion of console video games and “synch” opportunities. In addition, artists can now “go direct,” selling music directly to fans without the high barriers to entry common to the historic marketplace. There are surely new platforms for music that have yet to arrive, so it is important that artists have the ability to directly participate in revenue streams generated by potential new uses.

Section 203 of the Copyright Act permits authors (songwriters and recording artists) to terminate deals that they made transferring or licensing their copyrights after 35 years. Meaning, if you transferred your recording or song to a record label or publisher at the beginning of your career or licensed certain rights, you may be eligible to regain ownership or terminate the licenses after this period. Artists may have more leverage than they did at the time that they signed away their copyright(s), and using this leverage, artists could re-grant their copyrights in a better deal or recapture ownership for the purpose of licensing directly.

. . . .

Generally, any type of transfer or license that authors make with their copyright(s) can be terminated. This includes assignments (even such grants that purport to give someone else power over your copyright forever!) The grants that you can terminate apply only to transfers of copyrights; trademarks and other “related” non-copyright rights are not affected or terminable (e.g., if you transferred the trademark in your band name to your label, it will retain ownership of the trademark).

Link to the rest at The Future of Music Coalition

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