Toronto Lawyer - The Publishing Agreement: Things You Need to Know but were Afraid to Ask

The following is the first of several articles dealing with the legal aspects of a publishing contract. This article is designed to provide general information only. It does not in any way constitute legal advice nor in any way create any lawyer-client relationship. If you require legal advice, you are urged to contact a qualified licensed legal professional to assist you.

Someone once wrote: "the law is an ass." Sadly, few lawyers can dispute this assertion with any conviction. Entering into a publishing agreement without considering the legal and financial consequences may also leave you as, you guessed it, an ass. It is encouraged that you retain competent counsel to negotiate your publishing agreement. Failing that, it is important to know what you are signing. For the next couple of issues, I will be outlining some general provisions of a "typical" publishing agreement.

Let's start with a basic principle: what is being contracted for in a publishing agreement? The simple answer is that the publisher has agreed to publish an author's work in return for royalty payments. But, because written work is intellectual property, a publishing agreement is unlike a typical buyer-seller relationship. Canadian copyright law grants the author copyright in its own work and, as the holder of such right, the author is not selling but lending the copyright to third parties (i.e. the publisher) to utilize for a specified period of time. Legally, the publishing industry usually refers to this licensing arrangement as the granting of rights.

There are a myriad of issues related to the granting of rights. I want to highlight one issue that has particular importance to the Canadian publishing industry. It is not unusual for an author to grant rights both domestically and internationally since the royalties from the latter may be more than the former. Nevertheless, an international grant of rights may not make sense for either party. The publisher may find it is not cost-effective to market a work if international royalty payments are modest. Conversely, an author may not want to grant international rights if the publisher does not have sufficient distribution channels.

It is advisable for an author to ask appropriate questions of publishers before granting international rights. If a publisher does not have extensive contacts abroad or is unwilling to utilize these channels, it is not advisable to grant international rights.

Practically speaking, the publisher may require the author to grant rights internationally as a condition for publication. If the publisher demands this condition but is unable or unwilling to distribute internationally, the author should propose that the publisher receive the granting of international rights but for a limited period of time. If the publisher fails to exploit the rights to the work within this period, the rights revert back to the author. If reversion occurs and the author licenses its work internationally, the Canadian publisher is granted a portion of the international royalties received by the author for assuming the risk of publishing the author initially. In this manner, both parties can protect

themselves appropriately.

As this article demonstrates, a publishing contract can be a complex legal

and business agreement. Even if the negotiating power between parties is unequal, there are solutions that can be negotiated that are mutually beneficial.

The following is the second of several articles dealing with the legal aspects of a publishing contract. This article is designed to provide general information only. It does not in any way constitute legal advice nor in any way create any lawyer-client relationship. If you require legal advice, you are urged to contact a qualified licensed legal professional to assist you.

In my last article, I mentioned that a publishing agreement is not like a typical buyer-seller relationship because of the involvement of intellectual property. Here, I want to explore that concept further by providing a general overview of the Canadian copyright regime.

Copyright, as the term suggests, is the right to copy a work. Only the creator of the work, most likely the author, is allowed to produce or reproduce the work or allow others the same right. Copyright is granted if the work is "original" and the expression of the work is in a fixed manner (e.g., in a printed manuscript, on your computer). Merely having an idea is not copyrightable. The concept of "original" is a much-litigated field of law and is difficult to define with any great certainty. The one thing we can state with confidence about the concept of "original" is what it is not: It is not a copy of someone else's work.

Copyright also attaches to its holder a "bundle" of rights specific to each type of work. For a novel, Canadian copyright law grants the author the exclusive right to, among other things, translate the work, produce sound recordings or films, and convert the work for public performance. In a typical publishing agreement, the author will assign this bundle of rights to the publisher along with the right to reproduce the work.

A copyright is deemed to exist from the moment the work was created until the end of the calendar year in which the author of the work dies (regardless of whether the author has sold or assigned copyright for the work or not) plus an additional period of 50 years.

Copyright law is an extremely complicated field of law, and I recommend you consult a properly qualified professional if you feel there are copyright issues in your publishing agreement. However, I want to highlight a few points for your consideration.

As I mentioned, copyright protects the fixed expression of an idea and not the idea itself. Thus, someone duplicating your plot is not infringing on your copyright unless such duplication is substantial enough to cross that originality. For example, a stereotypical "the butler did it" plot is not a copyrightable expression of an idea. However, copying the how, when, where, why, and other nuances of an author's "the butler did it" novel may possibly constitute copyright infringement.

Second, if you have contracted to produce a work as a ghostwriter, make sure you review the copyright provisions carefully: Many publishing agreements state that the publisher retains the copyright and the author waives any right to the same.

Finally, make sure that either you (as the author) or your publisher registers the copyright with the Canadian Copyright Office in Ottawa. Registration is not mandatory, but it does grant the author additional protection in the case of dispute over the copyright.

This article was written to provide general information only. It does not in any way constitute legal advice nor in any way create any lawyer–client relationship. If you require legal advice, you are urged to contact a qualified licensed legal professional to assist you.

With the shopping season upon us, this is an appropriate time to discuss something we all need more of- money. As the old adage goes “you have to spend money to make money.” As you all know, it costs a lot of money and time before a work is ever published. There are obvious costs to being an author: buying a computer, paying to deliver manuscripts and hiring an agent. However, some unpublished authors or authors hoping to sign with small publishing houses are often unaware of the hidden costs of bringing your work to market. In particular, there is one hidden costs that is often overlooked.

Smaller publishing houses often require a “turn-key” manuscript. This term means that the author pays for the majority of the publishing costs (i.e. cover art) and the publisher receives a substantially completed product. The publisher’s expenses are usually limited to editing and production costs.

If you are asked to produce a turn-key manuscript, please note there is a legal requirements and monetary expense to keep in mind: licensing fees. As discussed in a previous article, intellectual property owners collect royalties and/or licensing fees every time their work is used. Authors who quote other people’s work or song lyrics or use a painting or photograph on the cover of their work must request permission and/or pay the owner of that work a fee. The fee amount varies depending on the type of work. Sometimes, less established artist do not ask for a fee since you are advertising their work to the general public. Regardless of the fee structure, it is standard practice to obtain permission before using another person’s work.

More established publishing houses usually bear the administrative costs of obtaining artist’s permission and paying applicable licensing fees. However, independent publishers and small publishers sometimes require the author to bear these costs and to produce evidence that the appropriate permission and fees have been obtained and paid respectively.

What if the author refuses to pay such costs? Surely, no one will notice if a work with a small print run quoted a work without obtaining permission? Not so. Larger publishing houses employ compliance officers and law firms to protect the copyright of their author’s work. It is these same individuals who apply for “cease and desist” orders against websites to remove copyrightable material used without permission. These individuals employ the same level of scrutiny in the publishing industry.

If an infringement is found, intellectual property owners can sue both the author and the publisher for copyright infringement. Lawsuits are time-consuming and expensive and most publishing contracts state that the author must pay for the cost of defending or settling a lawsuit if the copyright infringement was attributed to the author’s negligence. Thus, saving a few dollars now may cost you thousands of dollars down the road. Please remember the cost of licensing fees if you are asked to produce a turn-key manuscript.