The Nine Worst Provisions in Your Publishing Contract – Part 1

Several years ago, PG prepared a presentation for an authors’ group and called it The Nine Worst Provisions in Your Publishing Contract. At the time, he included those items in a series of blog posts for TPV.

Today, those posts may be findable in the dusty archives of TPV, but who knows what’s happening down there? Digital termites may have invaded and chewed bits of PG’s wisdom into nothingness.

So, PG has decided to resurrect The Nine Worst Provisions and sprinkle them about on TPVx over the next couple of days.

If an author decides to publish her work with a traditional publisher, she will enter into a publishing contract.

While each contract is different and must be read from beginning to end, there are many types of clauses that will be found in most traditional publishing contracts. Some of these contract clauses are benign and others are toxic. Since toxic contract provisions are more interesting to talk about, I’ll focus on some of the worst ones I see during the course of my legal practice while representing authors.

Your Contract Lasts Forever – Life of Copyright

What is This Provision?

Virtually all publishing contracts from traditional trade publishers include a provision stating that the publishing contract will last for the life for the full term of the copyright.

In the United States, the full term of the copyright lasts for as long as the author lives plus seventy years after the author dies. Copyrights in other western countries also typically last for the life of the author plus a large number of years thereafter.

Let’s do some math.

In the United States in 2017, a thirty-year-old female can expect to live for an additional 51.9 years. A male of the same age can expect to live for 47.7 years.

If a female author signs a publishing contract that includes life of copyright provisions in 2017, that contract will last until the woman dies in the year 2068 and then 70 more years to 2138. The contract will expire more than 120 years after it is negotiated and signed.

What’s the Problem?

A typical commercial license for enterprise software will last 3-5 years. Such a license is granted by the creator of the software to someone who wants to use it. An enormous variety of business contracts other than software licenses fall into the 3-5 year range.

Why such a short time? Why not license the software for 120 years?

The answer is obvious. Things can change drastically in only a few years. The software may become much more valuable or much less valuable. The software industry may have very good reasons to adopt another business model that encompasses a different pricing structure that works better for one or both of the parties.

A contract of any type that is fair to both parties in 2017 will undoubtedly be obsolete by 2138.

Many publishing contracts signed 10-15 years ago are obsolete today because they did not make proper provisions for ebooks. However, because of the structure of many book contracts authors signed during that earlier time period, publishers held practical veto power over the author’s ability to do anything with ebooks or make any money from them other than through the original publisher.

What is a publisher going to do for an author fifty years from today? 100 years? Will anything in the book business change between 2017 and 2138?

What does it look like? (sample language)

The language setting the term of the Agreement can appear anywhere in the publishing agreement. The language can also be divided between two or more paragraphs of the agreement.

The term of this Agreement shall be for the full term of copyright available for the Work in whatever forms and places where Publisher exercised its Rights to the Work.

How do I fix it?

Fixing this language problem is simple. The contract should just state the number of years it will last.

This Agreement shall terminate five years from the effective date of this Agreement.

You and the publisher can agree on a renewal provision to extend the contract, either in the original contract or in a separate agreement.

At the end of each five year term, this Agreement shall automatically renew for an additional five years unless either party gives no less than ninety (90) days’ prior written notice to the other that the Agreement will not renew.

Rationale for Change

One of traditional publishing’s standard revenue assumptions is that almost all books will sell the most during the first one or two years following their release. Thereafter, sales will decline.

An additional fact of traditional publishing is that virtually all meaningful marketing expenditures for most books will take place during the book launch and for a few weeks thereafter.

A term of 3-5 years gives the publisher the opportunity to harvest most of the money a book will earn under traditional publishing practices.

If a book does not follow the traditional sales trajectory and seems to have an evergreen audience that will continue to earn the publisher money, the publisher can certainly negotiate with the author and offer additional payments to induce the author to not exercise the right to terminate and allow the contract to continue for an additional five years.

On the other hand, if a book enters its twilight years, it is extremely unlikely that anyone at the publisher will spend any time or money on activities designed to resurrect the book. Indeed, it is unlikely anyone at the publisher will give any thought to the book.

If rights to the book are reverted to the author, she can pursue self-publishing, seek another publisher that may be interested in spending money on a relaunch of the book and other options that will help the book find new audiences and increase the author’s income from the book.

Special Notes

One of the implications of a contract that can easily last well over 100 years is that, in addition to the author, all of the people who were present at the publisher when the contract was negotiated will be dead long before the contract ends. The agent who assisted the author in contract negotiation will be dead before the contract ends.

Any promises or understandings between the author and publisher which are not clearly described in the contract will be unenforceable. There may be no one living who can say that the author and publisher always operated under this implied understanding of a particular paragraph.

It is also quite possible that the publisher may no longer be owned or controlled by people who are in the publishing business. If, during the extremely long period of time covered by a term of copyright contract, the publisher runs into financial difficulties and is purchased by an individual or organization that deals in distressed assets, the new owner will interpret contract provisions in a way that benefits the owner with no consideration of its impact on the image or goodwill of what was formerly a publisher.

Disclaimer

PG is a lawyer, but nothing you will read here is legal advice. You obtain legal advice by hiring a lawyer, not reading a blog post.

3 thoughts on “The Nine Worst Provisions in Your Publishing Contract – Part 1”

  1. I suggest something slightly different, but only slightly:

    For previously unpublished works, 35 years (see 17 U.S.C. § 203). Because that’s when the author can terminate it anyway (if it’s not a work for hire, and a surprisingly small proportion of works for which one would be dealing with a NYC commercial publisher actually qualifies as works for hire, see 17 U.S.C. § 101).

    For previously published works, and/or revisions of previously published works, 10 years.

    And for both, a draconian, pro-author “out of print” clause (beyond the scope of PG’s post here) that automatically terminates if the publisher isn’t pushing hard enough to make the book independently profitable to both the author and the publisher.

    “Life of the copyright” is not enforceable per se for a never-previously-published work that isn’t work for hire. But you shouldn’t let that language get into the contract anyway, because the formalities and pecularities of § 203 leave something to be desired and missteps to be made. To give a hint, the Copyright Office recently for the first time issued regulatory guidance on what a termination notice must include to be effective… four decades after the statute came into effect. One might ponder the concept of agency (or regulatory) capture in this context.

    • One of my later Nine Worst Provisions is something I called “A Minimum Wage for Authors” which essentially gives the author the right to terminate a publishing contract if royalties payments drop below an amount specified in the publishing agreement.

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