Business Musings: Know Your Rights (Contracts/Dealbreakers)

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I recently got an email that sent a chill through me. It was a newsletter from a traditional publishing organization. This organization is geared toward publishers and editors, not toward writers.

The newsletter was essentially an ad for an upcoming seminar that will teach publishers to understand intellectual property and expand their rights business.

Why did this send a chill through me? Because the one thing that has protected writers who signed bad contracts is the fact that their traditional publishers have no idea how to exploit the rights they licensed.

I know, I know, I just used a bunch of words you’re familiar with in a context you don’t understand. I’ll get to that.

But in short, most publishers ask for more than they have ever used in the past. Publishers have been very short sighted in how they published books.

Up until a few years ago, those books were simply that to a publisher—a book. Something tangible. Not only was the book tangible, it “rotted” after a few months or a year. In other words, as far as the publisher was concerned, the book had little value after a year or so of publication.

Ten years ago, it was relatively easy to get the rights reverted on a book like that. Essentially both parties agreed that the terms of the contract had been met, that the parties no longer had need of the relationship, and so they severed their business relationship.

It wasn’t easy-peasy, but it wasn’t hard either. It usually took a letter or two.

By 2005, however, most agents refused to write that letter which severed the contract. The reason was simple from the agent’s perspective. Many, many, many agents used a combination of their agency agreement and a clause in the writer’s book contract to define their relationship with the writer, and determine who controlled the marketing and finances of that book.

It wasn’t in the agent’s best interest to cancel the contract. In fact, the longer the contract existed, the better it was for the agent.

Writers with agents would have to write those letters themselves—and then, publishers would often contact the agent to find out why the agent was “letting” the writer do this.

What a tangled mess.

I wrote my own letters. I never wrote to the editor (which was what most writers do). I wrote to the legal department. And we’d wrangle. I wrote so often on one series of books that the woman in charge of the legal department finally gave up.

Even though I wasn’t entitled to rights reversions on four of the books in that series, I kept asking whenever I asked for the first two books. I’d make a list of all six books in that series, ask for reversion, and get a grumpy letter from the woman in charge of the legal department.

Finally, after two years of this, she did the legal equivalent of throwing my books at me. She reverted all of them, and sent me a cover letter that basically told me to get out of her life.

I was happy to do so.

In 2012, I wrote a blog post about rights reversion. I told writers how I do it, and things they should consider when they’re doing it.

Remember: I am not a lawyer. Nothing I say in these blog posts should ever ever ever substitute for legal advice. I’m just putting information out there as a starting place so you can research it on your own and decide what you’re going to do.

In the last year or so, I’ve been hearing from writers who say it’s almost impossible to get their rights reverted. The publishers want to hold onto those rights as long as possible.

The main reason for this has nothing to do with reprinting the book or keeping the book in the marketplace. It has to do with the changes in accounting that have occurred in the big traditional publishing companies.

The Big 5 (4? 3? Whatever. Jeez.) are now part of international conglomerates. Those conglomerates understand that intellectual property has as much value or more value than the buildings and land that the conglomerates use to house their businesses.

Those conglomerates put all of the intellectual property on their account books as an asset. So your novel—even if it’s more or less out of print (or has a $19.99 ebook like my novel Fantasy Life)—has a value assigned to it that reflects not only its earnings right now, but its potential earnings in the future.

The command came down from on high that publishers should retain the assets as best as possible. (I’m pretty sure some of these publishing companies were purchased for their intellectual property assets, not because of their bottom lines. I have no interest in proving that, though.)

So, publishers have kept the assets, doing the minimum to retain the rights to them. But they really haven’t maximized their profits.

Think of it this way: your book is a house in the middle of an older subdivision. The house is paid off, and the taxes are minimal. The publisher has kept the house—hasn’t put it up for sale—but hasn’t done much more. Until recently, that is.

All of these seminars for publishers on rights and licenses focus on maximizing profit. In our analogy, these seminars teach publishers how to rent the house as is, how to improve the house and the property to get better rent, how to interest some major outside company in leasing the house for…say…photo shoots, etc.—all things that haven’t happened for years.

The amount of say you have in what these publishers do with your old books depends entirely on the contract you signed way back when.

If the traditional publisher burnishes off the book and exploits the rights, then the book gets revived, and your chances of reverting the rights go down to nothing at all.

But, you’re thinking, won’t you get money from all of those new uses of that book?

Again, it depends on the contract you signed. In theory.

In practice, publishers have started to claim rights they never had. They’re interpreting the contract terms for something negotiated in 1997 by 2016 standards, and finding ways not to pay for those uses.

Big corporations are all about profit for the corporation. The best way to maximize profit is to lower expenses.

That’s why, after these big companies merge, you see layoffs a year or so later. That gives the new company time to define itself, find employees with overlapping duties, and streamline production.

Once the layoffs are over, once the agreements with the subcontractors (like printers and distributors) end or get renegotiated, the corporations look around for other ways to cut expenses.

The easiest way is to cut the payments to the suppliers—the writers.

We’ll deal with the various ways that publishers cut payments to writers in a future blog post.

Just be aware that publishers often cut payments, and they use the contract as their guide. Not necessarily the contract negotiated in good faith with a corporate entity long merged into five other corporate entities, but the corporate entity that exists now.

Those of us with long-standing contracts with traditional publishers are fighting a different fight from new writers. New writers are being presented with contracts that differ substantially from the ones we initially got.

We all have something in common, though. We all can use copyright law to save our asses.

As I’ve written a million times before, writers do not sell books. We license copyright. Usually I say, if you don’t understand that, get a copy of Nolo Press’s current Copyright Handbook.  Many of you do that, but not all of you have read it.

So I’m going to give you a quick primer on copyright. Very, very, very quick, along with a few links that will answer more of your questions. Or maybe scare you with the wealth of material you have to learn.

By the way, if you Google “copyright for writers,” much of what you get is older. It’s not necessarily wrong, but it’s slanted to a world that no longer exists. For example, I just found one article from 1997.

If you want one good newere post that starts to explain copyright, go to “11 Things Every Writer Should Know About Copyrights,” from Helen Sedwick’s blog.

I haven’t looked through her entire website, but she’s a writer and an attorney who blogs a lot about contract, copyright, and business issues. Her Self-Publisher’s Legal Handbook has a lot of good advice.

I stumbled upon a relatively good article on copyright basics on a law firm’s website. The article is from 2005, but has some clear information. The article is titled, “Know Your Copyrights: A Legal Guide For Writers.”

Nolo.com has a copyright FAQ that is about as basic as it gets.  And of course, the U.S. Copyright Office has a FAQ for copyright, which you can find here.

And if you want to read the US Copyright Act, here’s a link to it.

All of this, of course, deals with United States’ copyright law, not copyright law for any other country. The U.S. copyright laws are based in our Constitution, and have been expanded and changed through acts of Congress over the past 200+ years. The trade agreements we sign, the copyright conventions held in conjunction with other countries, all have an impact on copyright.

Before you all ask me questions about copyright below, do some research on your own. Use those sites or the equivalent sites for your countries. Do the research.

So…let’s give you some basics here, from my American perspective.

What is copyright?

Here’s how the U.S. government answers that question:

Copyright is a form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works.

Yeah, that’s clear as mud, right?

What it actually means is that works created by someone—music, painting, photography, and writing—are protected under U.S. copyright law. Those works must be in a tangible form.

In other words, those works aren’t ideas. We can all have the same idea. All the law protects is how you express that idea. For example, I have found half a dozen articles on copyright basics. I’m writing one myself. We’re all using the same ideas and concepts, but the way we put those concepts together—on paper or on this blog—is what’s protected.

My words and the structure of this article are protected. The concepts I’m discussing here are not.

That’s very important. Just because you had an idea about a high school girl who encounters a vampire doesn’t mean you can copyright that idea. Think about the different ways that idea can be used.

Stephanie Meyer used it as the basis for Twilight, which some call a romance. (I have issues with a 104-year-old falling for a teenager, but maybe that’s just me.)

Joss Whedon came up with a completely different story using the high school girl encounters vampire idea: Buffy The Vampire Slayer.

Same idea, two different directions. Both Twilight and Buffy were copyrighted the moment they acquired a form—a novel in the case of Twilight and a movie screenplay in the case of Buffy, which is why the copyright office lists the fact that both published and unpublished works are copyrighted.

What does it mean to have a copyright?

Your copyright is property. You own it.

The law protects your copyright in five major areas:

  1. Reproduction
  2. Adaptation
  3. Distribution
  4. Performance
  5. Display

Only five? Some of you are asking. Many of you have seen Dean Wesley Smith’s article on “The Magic Bakery,” in which he discusses how writers can and do slice up copyright into thousands of pieces. That’s not a metaphor, by the way.

Those five areas, above, are huge categories. How the writer defines and licenses the copyright determines how the writer will earn money from that copyright.

Let’s define the five ever so briefly. Briefly because the more specific I get the more confusing this will all be. There are a million exceptions to everything in the law, and copyright is no different.

But for the sake of education…

Reproduction

The owner of the copyright has the exclusive right to make copies of that copyrighted work. Photocopies are exact copies of a novel manuscript. Books are substantially similar copies of a novel manuscript. It gets more complex from there, but you get the point.

Adaptation

The owner of the copyright has the exclusive right to make or to authorize derivative works based on the copyrighted work. What’s a derivative work? A game, a TV show, a short story, and so on and so forth. There are definitions of derivative works in the law. I’m not getting into that here.

Distribution

The owner of the copyright has the exclusive right to distribute or authorize distribution of copies of the copyrighted work “to the public by sale or other transfer of ownership, or by rental, lease, or lending.” Note that this is a different right than the right to make copies.

Performance

The owner of the copyright has the exclusive right to perform or authorize a performance of the copyrighted work publically. What “publically” means depends, again, on the law. But those performances can be live or in recorded form.

Display

The owner of the copyright has the exclusive right to display or authorize to display the copyrighted work publically. What “display” means includes TV productions, movies, and more.

The Owner of the Copyright

Have you noticed that throughout these descriptions, I’ve been using the phrase “the owner of the copyright” instead of “the writer” or “the creator”? Because if you sell all rights to a publishing company, they become the owner of the copyright. Not you.

Copyright is property. You can sell it outright. You can give it to someone. You can rent it, lease it, or lend it. You can rent, lend, lease, or sell a part of it.

The owner of the copyright, then, is a legal entity that might not be the creator of the copyright. Increasingly, in dealings with movie studios, agents, and publishing companies, the owner of the copyright is not the creator.

In fact, we just had interest on one of my books from a Hollywood production company. They wanted to “see” the book—from me or my representative. However, before letting them “see” it, I had to sign a document giving them some copyright in the book—even if they chose not to option the book. Not kidding.

This, a book they could have bought on any one of a dozen sites or stores. They came to us directly so that they could sneakily get a slice of copyright, just in case I wasn’t paying attention to the legalities and niceties of copyright law.

I refused to let them “see” the book, and did not bother to tell them they could buy it themselves, just in case they would take that as an acceptance of their stupid little legal ploy.

This, by the way, was not a fly-by-night production company, but one of the largest in the world, fronted by two very famous hyphenates you would recognize. I always wonder, when I see things like this, how many writers were flattered that representatives of these two famous people were interested in their teeny tiny book.

Slices of Copyright

Dean talks about slices of copyright in his magic bakery. Essentially he postulates that the magic bakery produces pies that can create thousands of pieces. He’s right.

You just have to know how to slice the pie.

I listed five major areas of copyright. Realize that they often work in concert. When you sell a book to a publisher, you’re licensing part of the right to reproduce the book and part of the right to distribute the book. Not all of those rights, I hope, but parts of them.

Let’s talk reproduction first. (Imagine if all relationships started like that. Wait! Wrong blog post.)

You can slice the reproduction pie very thinly. You might give a publisher the right to publish your book in limited edition hardcover with six illustrations, the edition limited to only 100 copies.

That leaves you the right to license the book to another publisher to publish the book in a standard hardcover edition in the territory of the United States only.

Which still leaves you the right to license the book to a third publisher to publish a trade paper edition of the book in the territory of the United States only.

And you can still license the book to a fourth publisher to publish a mass market edition of the book in the territory of the United States only.

And you might want a fifth publisher to publish the book in an ebook version, but only on Amazon in the United States. A sixth publisher might publish the ebook versions in all the other ebook services, but only outside of the United States.

Note that reproduction rights only give the publishers the right to make copies of that manuscript, that book. They do not give the publishers the right to distribute those books. Publishing companies ask for both for very logical reasons. They want to sell the book, after all, and to sell it, they need to distribute it.

Notice too, that the ebook deals I mention above list where the books will be distributed. Nothing in that grant of rights above specifies what happens if the writer decides to publish her own ebook and make it available only on her website. Since companies five and six are limited only to Amazon and other ebook services, those companies will not have the right to complain about that other ebook, the author-created one, available on the website.

Note too that we haven’t discussed any versions outside of the United States. All the rights to books sold in England or France or Japan are reserved to the author.

In fact, every contract should have some version of the phrase “All rights not mentioned herein are reserved to the author” in it, which really covers your ass.

Enough Already!

Is your head spinning yet? It should be. Because copyright is something all writers need to understand.

Yes, copyright is complex. Yes, it takes a long time to learn.

Yes, you have to.

Even you, indie writers.

I know, I know. You indie writers will never sign a traditional publishing contract.

Never say never. What about foreign rights contracts? What if someone wants to do a limited edition of your book? What if someone wants to produce a video of you reading your book?

And what about those pesky Terms of Service? Some companies make copyright grabs in their TOS. When you click agree, you lose copyright.

Remember that Hollywood rights grab I mentioned. Just by agreeing to let them “see” the book, without a guarantee of a read of the book or even consideration for a film/TV project, I would have had to sign a document giving them a portion of the copyright. That little gem is buried in a nondisclosure agreement, guaranteeing that I would not talk about any business I did with this particular firm.

Since I didn’t sign the agreement, and since I told them to bug off, I can tell you about it. But I’m not naming names, since their pockets are deeper than mine.

So, indies, you will have to know copyright. You will have to know it just as well as a traditional writer does. You just need to know it for different reasons.

And you traditional writers, how many of you signed contracts with a grant of rights in it that you did not understand, something your agent told you was “just fine”?

I won’t ask for a show of hands, because that would probably be almost every single one of you, although I’ll wager some of you only made that mistake once.

The current version of The Copyright Handbook from Nolo press is 472 pages long, and it only covers copyright for written works. It specifically says it does not cover copyright for music, art, photography or audio visual works. Because copyright is a huge, huge topic, and even those 472 pages aren’t really enough to cover everything.

You’re running a small business, people. Even you, traditional writers. You traditional writers are a supplier for a publishing company, at worst. You partner with the traditional publishing company to produce and distribute your book, at best.

You need to understand what you’re selling and/or licensing. Believe me, the people who negotiate with you know what copyright is and how to best use it. Publishers are learning each day how to do a better job with rights management.

By better, I mean “better for them.” Not for you.

Your job is to make sure you do the best job for you.

Think of copyright as a house. Each slice of the copyright is another building—not even on the same piece of land. That subdivision I mentioned? It might all be derived from the same manuscript. Each house, each garage, each shed. Think about that.

I have written hundreds of stories and articles, not counting all the novels I’ve written or the screenplays or the radio plays. Each one could be a subdivision.

It’s overwhelming, and yet, I manage.

Remember what I said last week. Your job is to retain as much control in your business as possible.

The best way to have control is to understand what you’re creating. You’re not creating books. You’re creating intellectual property.

Now, use this as a kick in the pants. Go forth and learn what that means.

Have you noticed my copyright notice at the end of each blog post? I own the copyright to each post, in this form. I will change the form of the posts slightly when I put them into a nonfiction book. I will own the copyright of that book as well, and I will license that copyright so that you all can have paper editions and audio editions and ebook editions, and maybe other kinds of editions.

I hope this post helped you see how essential copyright is. I hope this series of posts is useful to you, because it’s difficult for me. I’m teaching this week and I wrote the post last week when I really wanted to be finishing the latest novel.

So, please, incentivize me. Share, comment, and donate. Keep me writing about something I promised I’d write about (even though it’s not as much fun as traveling into outer space in my own tortured imagination).

Thanks so much.

ADDED 4/21: For Canadians who want to learn something about their country’s copyright laws, try this website courtesy of Frank Rocca (who writes as Frank Rockland): http://www.michaelgeist.ca/

Click paypal.me/kristinekathrynrusch to go to PayPal.

“Business Musings: Know Your Rights,” copyright © 2016 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2016 by Canstock Photo/FeverPitched.




10 responses to “Business Musings: Know Your Rights (Contracts/Dealbreakers)”

  1. […] and read the damn thing from cover to cover. I am not answering basic copyright questions here, although I did address some on a post some time ago. I also addressed a lot of copyright issues in my book on contracts and dealbreakers from last […]

  2. Stefon Mears says:

    Ah, Hollywood. I forget where I read this, but it was presented as a rule of thumb. If you’re contacted by a big name, they’re trying to dazzle you into giving something away for free. If you’re contacted by a nobody, assume they’re fronting for a big name to try to get rights on the cheap.

  3. Linda Wiener says:

    I’m looking for any help and suggestions. My partner was asked to do a work for hire. He did and it was eventually rejected and the MS returned to him with “all rights” and a recommendation to publish elsewhere, which he did. He checked with 2 copyright lawyers before publishing, showing them the return of rights letter and both said that he had all rights with no restrictions or reserved rights. He is being sued for publishing and since the suer is Harvard University, with their $37 billion dollar endowment, the situation is a nightmare. We do have good lawyers, but they have slick, dishonest lawyers and that has been working. We are looking for any suggestions that might help. You can find out more by going to change.org and looking up “Free Nampeyo”. We have many documents, as you can imagine and would be happy to show anyone any document.

  4. Poplar Hill says:

    I turned down a contract from what I thought was a reputable small press (hardcover as well as ebook, been around for 20 years) because they wanted all rights in perpetuity…agentless, I tried to negotiate (and learned a lot) but they wouldn’t budge.

  5. Alexis says:

    That Hollywood company’s attempt to snatch rights for simply looking at content is a new low. Of course, they can get away with it because there are plenty of writers who will agree to anything just to say to their family, “Hollywood is looking at my book.”

    Another minefield is the audiobook sector. Publishers used to allow authors to retain those rights. Not anymore. Now they want at least half. And it is a deal breaker. One clever author sells audio rights himself, which means they’re off the table.

    And then there are agents and Patreon–another horror story. But again, writers let it happen when they hastily sign. Worse still, I heard one writer say, “Well, my agent deserves it, even if I run the Patreon page without her help. I mean, she sold my novel to Crown. Besides, it’s only 15%.”

    Someone actually said that. I wanted to scream. Laura Resnick was able to buy a freakin’ house when she reclaimed “just 15%.” For others, that measly amount can be the difference between going full-time and all-in with writing (which arguably leads to more paying projects), and putting on that tie and wasting forty minutes to and from the cubicle for another two years.

    I wouldn’t go so far as to say avoid agents at all costs, but agency agreements should not be signed as-is. Don’t let them get paid for work they don’t do. Duh, people. Grow a backbone. Good God, even my teenage nephew was able to negotiate a $.50/hour raise at his Panera job.

    • Sonal Panse says:

      Disney does the same. I read the terms and conditions for one of their writing contests once. Merely submitting to the contest gave them perpetual rights to the submitted story. People were still eager to participate because it was Disney.

  6. savantefolle says:

    Hi Kris,

    I’m back from a interview with a popular CBC morning radio program in Toronto, about the World’s book & copyright day, and about my new YA book. I mentioned your name as one author exploring the changes in the publishing landscape.

  7. Marsha says:

    “Those conglomerates put all of the intellectual property on their account books as an asset.”

    I have first-hand experience with this in another business. Once upon a time I was Circulation Manager for a high-end mail order catalog. When it came time for the yearly song and dance with the banks, the catalog’s mailing list—the name and address of anyone who had purchased from the catalog or from their website—was the company’s largest (and other than some equipment, only) asset.

    The value of that list of names was enough to guarantee a loan extension, or even more money. There was a lot of argument with the loan officers as to whether this intangible asset was tangible, whether it had real value. in the end, the lawyers decided it did, and a list of names became the company’s largest asset.

    I can see how intellectual property has become so important to the publishers. What do they count as an asset otherwise? The buildings and property they own, equipment—most of which depreciates (well, not land). Intellectual property, like that list of names, holds its value and goes straight to the bottom line. Like the catalog company, it may very well be their most valuable asset and they’re going to grab it if they can.

    It works the same way for writers. Our intellectual property is a VALUABLE asset. Don’t give it away!

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