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Electronic
Rights: Publishing Agreement - Permissions & Out-of-Print Clauses
© Copyright
2000 Lloyd L. Rich
Introduction
Electronic publication has significantly broadened the scope of publishing
and licensing opportunities for publishers. Therefore, it is important
that the author-publisher agreement permits the publisher to take advantage
of these opportunities to increase the revenue stream from the original
print-based publication for both the author and publisher. Two important
clauses that should be reviewed as a result of the increased importance
of electronic rights are the "permissions" clause and the "out-of-print"
clause that may also be referred to as the "discontinuance of publication"
clause.
Permissions Clause
The permissions clause is frequently overlooked as being one of the more
mundane boilerplate clauses in the publishing agreement. Traditionally,
permission to use third party material by the author has been restricted
to only the book that he/she is currently writing for future publication.
The permissions issues that were most commonly discussed by author and
publisher usually concerned who would pay for the right to use third party
material and the timely delivery of permission releases to the publisher
so that the publisher could ascertain that the author had obtained the
right to include the third party material in his/her book.
Today, the scope of use for permissions should be broadened to ensure
that the publisher has the ability to take advantage of additional commercial
opportunities other than just use the third party content in the publication
of a book. The publisher's broadened use of third party material should,
if feasible, be accomplished when the author initially obtains permission
to use the third party material. Although it is certainly possible for
the publisher to obtain permission each and every time the publisher plans
to use the author's work in other than book format, such as electronic
use, this may not be the most cost effective or efficient manner to acquire
permission.
The alternative permissions model is one whereby the publishing agreement
requires that the author initially obtain permissions to use third party
material for "all the rights" that the author has granted to the publisher
in the grant of rights clause. By using this permissions model the publisher
has the capability to use or license the author's work for other than
just book publication without being concerned with whether additional
permission must be obtained before using the third party content.
Another concern that that is frequently not addressed at all in the publishing
agreement or permissions clause involves those instances when the author
should obtain interview and photograph releases. Once again, specific
contract language could be added to the permissions clause that requires
the Author not only to obtain the releases for use of the material in
the book but also ensures that the publisher can use the interviews and
photographs for all the rights granted by the author to the publisher.
Recommendation:
The permissions clause should be reviewed and revised if necessary
to include permission to use third party material for the all rights granted
to the publisher and this clause should also encompass interview and photograph
releases.
Out-of-Print Clause
The out-of-print clause has traditionally concerned itself only with an
author's book that is no longer available in the book format. The purpose
of this clause is threefold in that it set forth the (1) particular conditions
under which an author's work would be considered out-of-print, (2) duties
of the publisher to reprint the book, and (3) author's rights in the event
the author's work goes out-of-print and the publisher fails to reprint
the book.
Although the specifics of this clause will vary among publishers this
clause has normally worked as follows. Once the book is no longer being
published and distributed by the publisher or if a licensed book edition
is not then currently available or forthcoming, then the publisher upon
the author's request must reprint the book within a specified period of
time or in failing to do so the clause permits the rights in the author's
work to be returned (revert) to the author.
This clause may still be satisfactory for some publishers but it may not
meet the needs of those publishers who are currently taking advantage
of or planning to use or license the use of the author's work in the new
publishing technologies such as publishing an author's work electronically
or by print-on-demand. It would be prudent for all publishers to review
the out-of-print clause and evaluate whether their existing clause takes
into consideration these new technologies in determining when an author's
work shall be considered out-of-print and more importantly whether you
want the out-of-print clause to provide for these new technology considerations.
The important question for the publisher is the following: "Should an
author's work be considered out-of-print when it is only available as
an "electronic book" or as a "print-on-demand book"? The significance
of this decision, especially as it relates to backlist titles, could have
an important impact on the company's publishing model and financial viability.
Although this may appear to be an easy decision for the publisher, there
are a number of issues that should be analyzed before making that decision.
The publisher's and author's goals are compatible and are principally
twofold: (1) the availability of the author's work to the purchasing public
and (2) the revenue from the sale and licensing of author's work. These
goals could be achieved in a variety of ways by revising the traditional
out-of-print clause and addressing those issues that will ensure that
the author's work continues to remain available for purchase and advertised
and promoted through both currently existing and new distribution methods.
It is my opinion that an author's work should not be declared out-of-print
based solely on the condition that it is no longer available in a print
format. Instead, the out-of-print clause should recognize that an author's
work will be considered "in print" for as long as the publisher and author
agree to certain conditions that provide for (1) the continuing availability
of the author's work which will include it being published through print-on-demand
technology or as an electronic book, (2) the book publisher's commitment
to promoting the author's title in its regular trade catalog and on its
web site, if such web site exists, and (3) guaranteeing the author a minimum
annual royalty. It is my contention that all parties, including the reading
public, will benefit from this revised out-of-print clause. For the publisher,
this proposal could require minimal or even no warehoused inventory and
the savings of financial resources could be better utilized in promoting
the author's work and ensuring that the author received an minimum annual
royalty. The reading public and author would be satisfied in that the
author's work would remain available for purchase for a longer period
of time than may be realistic under the existing publishing model.
Recommendation:
The publisher should review its current out-of-print clause and consider
revising it to better meet the needs of a new publishing model that may
result in the following benefits (1) increased revenue for publisher and
author, (2) a better use of financial resources for the publisher, (3)
a longer time period in which the author's work would remain available
to consumers, and (4) a guaranteed minimum annual royalty for the author.
Conclusion
Electronic rights have created a new revenue stream for publishers and
authors. However, the business and legal dynamics resulting from electronic
rights have created a new publishing model that must be incorporated in
the publisher's standard publishing agreement to ensure a successful transition
to this new model. This transition will only occur if the publishing agreement
is reviewed and revised accordingly.
This article is not
legal advice. You should consult an attorney if you have legal questions
that relate to your specific publishing issues and projects.
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Lloyd L. Rich is an attorney practicing publishing and intellectual property
law. He can be reached at 1163 Vine Street, Denver, CO 80206. Phone: (303)
388-0291; FAX: (303) 388-0477; E-Mail: rich@publishingattorney.com;
Web Site: http://www.publishingattorney.com.
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