Perpetual License for Derivative Rights

From Writer Beware:

SFWA’s Contracts Committee has recently been seeing a proliferation of contracts from small magazines, and a very few established markets, that license all derivative rights in perpetuity.

This is a red flag for a number of reasons, even if these rights are licensed non-exclusively. A derivative work is defined by copyright law as “a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” This sort of rights grab is by no means normal; magazines generally only take very limited first publication and archival rights for a limited time. Licensing the right to create derivative works can and mostly likely will interfere with the author’s right to exploit their right to create or license derivative works to others.

The risks of signing such contracts can be serious. To give examples of some of the negative impact of these rights grabs.

1) Dramatic rights are compromised, limiting the author’s ability to sell works for TV and film use because the author can no longer offer exclusive rights to the story, which means movie or TV producers who want exclusive dramatic rights are not likely to be interested in the work. The best case scenario is that the author may end up having to give the publisher of the magazine a cut of any income.

2) Marketing rights are compromised, in that any marketing deal could be undercut by the publisher, who would also have the ability to market those rights.

3) The ability of the author to publish sequels is compromised. The Publisher could commission sequels to the work from another writer, in competition with the author. Even if the Publisher were required pay a fee to the author for a sequel written by another writer, the existence of such competitive sequels would likely seriously hurt the author’s own sequels.

4) The author would have a de facto business partner for the rest of the author’s life and beyond for the life of copyright. Whether or not a clueless publisher would even realize what they’ve acquired or have any idea how to exploit it, the specter would hover over the author’s further use of any elements in the original story. In addition, if the publisher files for bankruptcy, any rights the publisher held would likely become part of its assets sold during the bankruptcy process. The author would then end up with a completely unknown business partner.

5) Even with a perfectly drafted contract, which seems unlikely with a publisher who would propose such a contract in the first place, it could easily take years of legal action to unscramble the competing rights.

Link to the rest at Writer Beware

22 thoughts on “Perpetual License for Derivative Rights”

  1. I feel that there should be a red flag warning on every website that appeals to aspiring or inexperienced writers. DO NOT SIGN AWAY ANY MORE RIGHTS THAN ABSOLUTELY NECESSARY. AND NOT EVEN THOSE.

    • Ah, but then they wouldn’t be able to reel in those that don’t know any better … 😛

      Next you’ll be asking ASI to admit to being crooks! 😉

    • Absolutely, license only, with strictly limited terms.

      I’m in KU – where Amazon does have an exclusive license to publish my works. But for a defined and short time period. Renewal at my sole discretion. No interest in any derivatives. (On the last, any producers with more money than brains can contact me through my web site… :>)

  2. I know I can be naive at times, but I would have thought that the growth of the Indie sector would have forced publishers to offer better contracts, not worse. Instead, it’s as if all notions of fair and decent behaviour have flown out the window. Rapacious is the word that springs to mind. 🙁

    • Desperate times call for desperate actions.

      Far too many are failing to allow themselves to be caught in bad contracts, so they must ensure that those they do catch are ‘owned’ for life.

      It has never been about selling the best books – but of controlling the market. Amazon and the like have removed a lot of that control from their hands, so they grasp at any threads they can.

      And there are new writers daily, writers that don’t know any better ‘yet’. Writers they might be able hook with a badly worded contract and prevent them from becoming yet another indie.

      • If what you say is true, and I fear it might be, the people running trad. publishing are corporate hacks without a shred of decency. 🙁

          • There is also the story of how the 25% of net “standard” came about. I can’t find the link to the original Teleread story but it goes something like this:

            Back in mid-late 2009 as the numbers were coming in on ebook sales, showing they were adding up to big money, somebody at Random House remembered that ebooks were treated as subsidiary rights with royalties at 50% of net. (This was around the time Eminem’s lawsuit over digital music royalties was in court.) The corporate publishers were gearing up to digitize their backlist and planning to window ebooks to make sure frontlist remained mostly print.

            The oh-so clever lad/lass got RH management to send out contract amendments to their authors (bypassing agents in most cases) offering a 2%(?) boost in print royalties and a cut in ebook royalties to 25% of net.

            This is classic asymmetrical negotiation: because of the lag in corporate publishing royalty payments of six months to a year, the authors hadn’t seen any recent ebook sales numbers and most were only getting a few bucks worth of ebook royalties, if any, (many of their books didn’t have ebook editions. Yet.) so most happily signed on for the higher print royalty. A few didn’t want to be bothered and flipped the letter to their agents who promptly went ballistic…
            …at being bypassed. Not at the new terms. Those they saw nothing wrong with.

            For some “mysterious” reason, all the BPHs quickly offered up the same ebook terms as the new “industry standard”, many without the pbook royalty boost. Because once 25% of net was enshrined they didn’t need to sweet talk anybody. And most especially not newcomers. Those get “take it or leave it” deals.

            As soon as the ink dried on the new deals, the BPHs went into overdrive digitizing the backlist and raking in the ebook bounty. And, of course, conspiring to raise ebook prices via Apple and Agency.

            That’s the culture of the Multinational Corporate Publishers.

            They’re playing a kind of limbo dance, to see how low tbey can go before Dreamers stop submitting. So far there is no end in sight.

        • These aren’t even necessarily big trad pub. I saw one of these contracts from a small publisher, an indie writer who published one other person. She put together some themed anthologies. $125 dollars if your story was one of them, and she claimed all rights worldwide. The contract had no reversion possibilities, though she said outside the contract that an author could discuss reacquiring their rights after five years.

          When someone pushed back, the comments were that this was standard in the magazine world and it was good exposure. *eye roll*

          • “though she said outside the contract”

            If it’s not ‘in’ the contract then they don’t have to actually ‘do’ it …

            Just another step in the con game.

  3. It has been a long time since I’ve sold a magazine article, but back in the 20th century it was customary to send an article off on spec, and you either got a check eventually or waited some amount of time and sent it off to the next potential buyer.

    I don’t remember ever getting a contract for a magazine article.

    • The check was the contract. 😉

      In the somewhat more honest, pre-multinational days, magazines published their terms up front, typically for first world rights. That was it. The moment the magazine hit the newstands rights went back to the author who could resell, anthologize, whatever.

      Payment schedules varied; some paid on acceptance, some on publishing, and some (like Hugo Gernsback) on lawsuit.

      • I like the comment about Hugo Gernsback.

        I once called up a magazine editor, for a magazine to remain nameless but known as a slow pay, and said “Hey, it’s nice seeing my name in print, but how come I don’t see it in print after ‘Pay to the order of…’?” They paid.

  4. Wow… I’ve just realised how very lucky I was to go Indie right from the start. I mean, I knew that trad. pub. had very little to offer me as a debut writer, but back then I had no idea how bad things actually were. Correction: how bad things actually are. :/

  5. Back when I bothered to submit to periodicals, the standard terms were a per-word rate (from a cent to as much as ten cents) for first serial rights only. Nothing more, nothing less. IMHO, any publication that offers less and wants more rights is to be shunned and boycotted.

    And don’t forget you can die of exposure, but money will keep you warm.

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