Victor Bohnam Carter's Authors by Profession, tells the sad story of John Milton, blind, deprived of his pension and suffering from financial hardships, signing a hellish publishing contract for his epic poem, Paradise Lost. "The agreement was dated April 27, 1667, and provided that Milton receive £5 for the first edition or impression of 1300 copies, £5 for the second, and the same for the third.” Under the agreement, Milton transferred "All that Booke, Copy, or Manuscript" to his publisher with "the full benefit, profit, and advantage thereof, or w[hic]h shall or may arise thereby." Milton died in 1674. During his lifetime he received a total of £10 from his publisher Samuel Symons. Milton’s widow later sold the copyright to Symons for £8.
Contract for John Milton's "Paradise Lost"
When the owner of an independently operated publishing company wishes to sell their company, they will need to establish the value of the business they have built. The sale price will be based on the discounted cash flow of the company, and, ultimately, the soundness of its author agreements. Many start-ups are poorly financed, and in the beginning the owners have neither the time nor foresight to focus on their most important asset, their author contract template. This error at the outset of a publisher's career can frustrate their ability to sell the company in later years.
Problems often arise when publishers borrow an agreement found online. Lacking legal acumen, a start-up publisher may delete important provisions that they do not fully understand - or inadvertently carry forward a "poison pill." For example, an anti-assignment clause. Generally, a contract is fully assignable unless it contains such a clause.
Experience is a hard school. To illustrate: Owen, a successful independent publisher, with a backlist of 65 books, decides to sell the assets of his company. In his late-50s, with no children to take over the business, his exit strategy is to bankroll the sale of his growing company into an early retirement. As part of the seller's due diligence process he compiles all of the company’s author agreements, foreign translation licenses, financials and other important documents for a prospective buyer to review. To his dismay, his attorney and broker call to say the deal has gone south because the publishing agreement he filched off the Internet when money was tight, contains a non-assignment clause. The clause reads, “Neither this agreement nor any right or obligation hereunder may be assigned or delegated, in whole or part, by either party without the prior express written consent of the other.
What should have been a straight forward business transaction, now requires the consent of all of Owen's authors, and in one instance, all of a deceased author's uncompromising heirs. Plus, the author of the crown jewel of Owen's backlist (which generates 50% of the company's gross annual revenue) will use the pending sale to renegotiate her contract -- a contract she desperately wants to get out of. Is there a way around the discretionary power Owen inadvertently invested in his authors? Perhaps.
There are two ways to buy a company. Stock sales and asset sales. In certain states the acquisition of stock in the target company will not violate an anti-assignment clause. However, buyers prefer assets sales.
If an agent, or author, wishes to insert an anti-assignment clause in your agreement, resist. Or, consider carving out exceptions for the sale of substantially all of your company's assets, or the sale of the company to a related company.
TIP: If you change a boilerplate contract clause for a particular transaction, be careful not to use the revised contract as a template for future deals, unless that is your express intention.
While there are publishing programs at many universities, and organizations such as the IBPA to educate future publishers, at best you will receive an introduction to contracts. When starting out, don't hesitate to hire a lawyer familiar with the industry. There are a fair number of attorneys across the country who are intimately familiar with the book publishing industry. You can't afford not to call one of them.
If you want to succeed as a publisher you must have a well drafted author-publisher agreement. Then, through persistence and luck, you are in a position to make the most of the opportunities ahead.
Lloyd J. Jassin is a publishing attorney and entertainment lawyer. He counsels clients on contract, licensing, copyright, trademark, unfair competition, defamation, right of privacy and general corporate law matters. His practice includes drafting and negotiating publishing and entertainment industry contracts, intellectual property due diligence, trademark prosecution, dispute resolution and litigation. A graduate of Benjamin N. Cardozo Law School, he is co-author of The Copyright Permission and Libel Handbook (John Wiley & Sons). He can be reached at 212-354-4442 or via email at Jassin@copylaw.com.
Not Legal Advice. The information contained in this blog is intended as general advice. Because the law is not static, and one situation may differ from the next, we cannot assume responsibility for any actions taken based on information publishing here. Be aware that the law may vary from state-to-state. Therefore, this blog cannot replace the advice of an experienced attorney. No attorney-client relationship is created by your access to or use of this website. Contacting us by email does not create an attorney-client relationship. If you wish to establish a professional relationship, it must be done through mutual agreement in writing. Please do not send us any confidential information until an attorney-client relationship has been established.
Attorney Advertising. While intended as general advice, this blog and its contents may be considered attorney advertising under the rules of certain jurisdictions. Hiring an attorney is an important decision, and should not be based solely on advertising. Past results are no guarantee of future results.
Limitation of Liability. We disclaim any liability, loss, damage, injury or cost (including, without limitation, attorneys' fees, lost profits, or data) caused by the contents of this blog or website.
Links. This website contains links to third-party websites and other resources. These links are provided solely for your convenience and for educational purposes. They should not be construed as endorsements by the Law Offices of Lloyd J. Jassin.
Jurisdiction. By using this website you have irrevocably agreed to the sole and exclusive jurisdiction and venue of the U.S. federal and state courts located in New York City, USA. Any action, suit or proceeding involving the use of this website, the information contained in this website, to the extent permitted by federal law, will be governed by the laws of the State of New York (excluding New York's choice of law rules) in the absence of applicable federal law.
(c) 2018. Law Offices of Lloyd J. Jassin.
After you have ceased to be, or in the words of Monty Python, "run down the curtain and joined the bleedin' choir invisible," your copyrights will endure for another 70 years. Roughly the life of a cockatoo or Amazonian parrot.
This article is about how to build an enduring estate plan for your children, and your children's children's children. One that respects your desires, and mitigates the chance of bitter fights over legal technicalities.
Long term planning is required because copyrights are long term propositions. For works published before 1978, copyrights last for 95 years from the date of first publication. For works created after 1977, copyright lasts for the life of the author plus another 70 years.
Who will deal with the myriad of other issues that arise during the life of a copyright? Read on.
Who Will Manage Your Literary Legacy?
While during your life you may be able to play catch-up with legal formalities, unless you have a well-drafted will, or have created a valid trust (or both) for the benefit of others, you have left the ownership and care of your literary legacy largely to chance.
Ideally, authors should name a "Literary Executor" in their will. An "executor" is a person responsible for settling a deceased person's estate. Among the duties of a General Executor (as opposed to Literary Executor) are contacting an attorney to file a petition for probate of the will; collecting debts owed to the estate; filing for life insurance and other benefits; contacting an accountant (or attorney) to prepare the decedent's final income tax returns, a federal estate tax return and state estate and inheritance tax returns as may be required; and notifying the beneficiaries named in the will.
person selected for the limited purpose of managing your published and unpublished works when you pass on.
One court described the Literary Executor's role as "requir[ing] a delicate balance between economic enhancement and cultural nurture." If you have made the appropriate provisions in your will, your Literary Executor will distribute all of the literary property that you owned at the time of your death, and can manage your literary estate on an ongoing basis.
The Literary Executor, acting on behalf of the beneficiaries under your will (e.g. family members, a designated charity, a research library or archive), will be responsible for entering into contracts for exploitation of your copyrights and other intellectual property rights; controlling access to unpublished works; collecting royalties; maintaining your copyrights and legacy; and, if called for, donating your letters, unpublished manuscripts, and other literary materials to a library, special collection or historical society.
Unlike a general executor who gets the deceased's estate ready to distribute, the literary executor's job is not for a limited time. It is coextensive with the life of the copyright.
Because of the enduring, and changeable, nature of copyrights (e.g. revised editions, film adaptations), the duties of a Literary Executor, or Literary Trustee, projects decades into the future and are ongoing.
Be forewarned. Copyrights are complicated. For example, a literary executor is trusted to advise an author's heirs on the process of copyright termination. The Copyright Act gives an author's heirs the inalienable right to terminate certain agreements made during an author's lifetime - even if those agreements were in perpetuity. The mechanics of the termination process are astonishingly complex. Notices must be served within a prescribed period. If the author's heirs miss the window, or file an improperly drafted notice, the grant or transfer made during the author's lifetime continues in full force for the life of the copyright.
A General Executor will often be a spouse or other family member that does not have experience with literary matters. Therefore, you should consider entrusting the care of your papers, existing contracts and unpublished manuscripts to a Literary Executor.
By taking the time to carefully select a Literary Executor, you lessen the likelihood of bitter infra-family disputes over control of your work or works. Family squabbles over copyright control can easily frustrate the ability of scholars, publishers and producers who want to quote, publish or produce your work. And, if your final wish is that your unfinished play based on your aunt Hilda's lesbian affair go unpublished or un-produced, you can provide in your will that your Literary Executor destroy your manuscript after your death. By way of example, Ernest Hemingway (1898 - 1961) made it clear during his lifetime that he did not want his unfinished and unpublished story fragments and manuscripts published after his death. However, since his will was silent on the subject, his estate edited and released not just his early stories, but three unfinished novels (one of which was a posthumous collaboration with his son, Patrick). All three were reviewed poorly.
Ideally, your Literary Executor should be someone who understands how the publishing industry works. That person should also be comfortable with negotiating contracts, and savvy enough to hire an attorney. A Literary Executor should also be someone who will carry out your intentions - even at the expense to your beneficiaries of foregoing untapped royalties. And, since all things come to an end -- including Literary Executors -- you should provide in your will for a replacement when the estate's Literary Executor dies or becomes incapacitated.
Because the duties and powers of a Literary Executor are not defined by statute, it is imperative that the person drafting your will take great care in describing the scope of your Literary Executor's duties. The powers of a Literary Executor should be as broad and comprehensive as possible, unless, of course, you believe there should be limitations, qualifications or conditions imposed upon your Literary Executor (e.g., different executors appointed for book publishing and theater-related matters).
Will the Literary Executor have the sole and exclusive right to make all decisions regarding appropriate publication, republication, sale, license or other exploitation of your work? Or, should she merely be appointed as an advisor to the General Executor?
Will the Literary Executor be responsible for preparing unfinished or unpublished manuscripts for publication and seeing those works through publication?
Will the Literary Executor have the right to terminate copyright licenses?
Will they have the power to destroy any letters or papers they believe should be destroyed?
In return for their services, will the Literary Executor receive a fee or commission for their services? What is fair compensation? What about reimbursement for expenses?
Will the Literary Executor be required to maintain a separate bank account for such monies?
Will the Literary Executor have the sole right to sue for infringement of copyrights?
Will the Literary Executor have the authority to pay accountants attorneys, agents, subagents and others?
In the event the Literary Executor is unwilling or unable to perform her duties, what are the provisions for appointing her successor? Or, will the General Executor assume those duties?
While a family member may agree to work for free, attorneys and literary agents will most likely seek a fee of between 10% and 15% for new contracts they negotiate on behalf of the estate. With regard to administering existing contracts, fee arrangements can vary greatly depending upon the size of the literary estate and the responsibilities of the Literary Executor.
In some instances, an author may create a lifetime (“inter-vivos”) trust and transfer literary assets to the trust. In this case, a trustee will be appointed to carry out responsibilities similar to an Executor. In such instances, the author appoints a "Literary Trustee" who acts in much the same manner as a "Literary Executor" would under a decedent's will. Furthermore, if an author names trusts as beneficiaries under his will and literary assets will be transferred to such trusts, then the author must also name, in addition to a Literary Executor, a Literary Trustee (who would be the same person) in order to continue acting in such a capacity after the literary assets have been transferred to the trusts.
If you have accumulated enough wealth so that your assets will be subject to an estate tax upon your death, then the Executor will be responsible for valuing all of your assets at that time, including manuscripts, copyrights and contractual rights derived from the publication and reproduction of your works. The Executor (or Literary Executor, as the case may be) should hire an appraiser with significant experience in appraising -- or valuing -- these interests. Authors with significant estates should meet with their attorney or accountant now to determine whether any lifetime planning can be employed to reduce the value of their estates at their death so that more assets can pass to their heirs.
We recognize that most people don't like to talk about their mortality. Our advice is don't remain nailed to your perch. Tend to your copyrights now. If you have questions about copyrights and estate planning, please feel free to contact us.
NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
Nearly everyone has heard the oft-repeated statistic that 50% of all marriages end in divorce. The odds are no better with creative partnerships than with romantic ones. Pity the poor writer, expert, or public figure who enters into a creative partnership without thinking about the financial, emotional and practical challenges ahead of them. If the relationship falters, a well-drafted collaboration agreement (written during the romance stage of the relationship) can be consulted.
Contracts define the parties' goals, their rights and remedies, and recognizes what could go wrong. The key reasons collaborations fail are lack of commitment, lack of communication and unrealistic expectations. And, the inability to deliver a final manuscript that is complete and satisfactory in the amount of time allotted.
The art of converting a deal into an effective agreement, requires you to address the following: (i) money (how much and when paid), (ii) business and creative decision-making authority, (iii) ownership, (iv) authorship credit, and (v) how to handle disputes.
How you choose to address these issues depends largely on your sense of fairness, your bargaining power, industry custom and practice, and, if you are represented by an attorney, their support and guidance in reaching a workable agreement. And yes, sometimes it's not about the money, but what the book can do for you, your brand, or a cause that matters to you.
In the absence of a formal agreement, the way copyright law deals with authorship is black and white. When two people blend their independently copyrightable contributions with the intent to write a book, or other creative work, each party is presumed to co-own the copyright. That allows either party to publish the work without the other's permission. If there is no written agreement, each co-author receives 50% of the profits. Judges do not apportion a larger or smaller share based on the collaborators' contributions, experience, reputation or seniority.
Decision-making problems arise when there are multiple offers for the work or requests for exclusive rights and no written agreement exists between the parties. If there is no written agreement, or the agreement fails to address the issue, an uncooperative co-author (or a deceased co-author's estate) can prevent the other party from licensing or selling book, film or other rights, as no publisher, or producer, will acquire rights on a non-exclusive basis. If the book is a memoir, or an extension of one author's business or brand, then that party should be concerned about controlling business and creative decisions. Relinquishing control, or foregoing credit, however, does not necessarily mean the party giving up those rights receives a smaller financial interest. Neither does it equate with lack accountability or transparency, provided those concerns are advanced by the party drafting - or negotiating - the agreement.
If you are a ghostwriter of a memoir, or the writer of an "as told to" based on conversations with the subject, are you delivering a “warts and all” portrait? Alternatively, is your role to put the best face on your subject’s story, without resorting to blatant deception? You need to flesh this out. In drafting the agreement, the subject's attorney will structure it so payment to the writer is tied to delivery and acceptance of the manuscript.
Compensation is generally in the form of progress payments tied to satisfactory (and timely) delivery. A portion of the writer's fee is paid on signing the ghostwriter or collaboration agreement. A further payment will be due on delivery of an acceptable book proposal. If the book is is sold to a publisher, further payments will be tied to payments of the advance. The greater you detail what is to be delivered, the less arbitrary the acceptance standards will be.
If you can't hold it together long enough to see the work published, the impact of a literary breakup can be devastating. One such disaster scenario is the unilateral termination of "as told to" collaborations, such as the failed collaboration between Fay Vincent, the former commissioner of baseball, and writer David Kaplan, who worked without a contract, on the chance a publisher would acquire the book and pay them an advance. The authors signed a deal with Little Brown, which promised to pay them an advance of $300,000, half of which was paid on signing, with balance due on delivery and acceptance of the complete manuscript. After 90% of Vincent’s memoir was completed, Vincent withdrew the project from his publisher, which required him to repay the advance. However, he allowed Kaplan to keep his share of what had already been paid, or $60,000. While Kaplan and Vincent had exchanged draft versions of a collaboration agreement before their relationship devolved into an intractable dispute, the issue before the court was whether Vincent could prevent Kaplan from publishing any of the work they created. See, Kaplan v. Vincent, 937 F. Supp. 307 (SDNY 1996). Because they were friends, Kaplan "did not believe a formal agreement was necessary." If they had a formal agreement – as opposed to an oral understanding -- costly, time consuming and psychologically draining litigation would have been avoided.
Some of the deal points found in these agreements are quite simple and other are not. Below are the major elements of a typical ghostwriter or collaboration agreement. Whether you push and push, or settle for less, is between you and your attorney (or agent). But, don't lose sight of the fact a workable agreement, is often a reasonable agreement.
Responsibilities. Be specific. What must be delivered? What is the date it must delivered by? When you engage a writer to help you write a nonfiction book, generally, the writer will prepare a book proposal before completing the manuscript. A book proposal is a detailed overview of the book, it contains the author’s credentials and information about how the book can be marketed, plus one or two sample chapters. The proposal is the bait used to solicit interest from publishers. A nonfiction book proposal is usually written with the understanding that substantive work on the actual manuscript will not begin until there is an offer from a publisher.
In some circumstances, where one party is more knowledgeable in publishing matters, it may be appropriate to grant that person the exclusive right to negotiate with agents and publishers. If you are not the one shopping the proposal, you will either reserve the right of final approval of the publishing contract, or predicate approval on receiving some minimally acceptable payment.
Compensation. If one of the parties has greater immediate financial needs -- whether money is needed to pay their rent or for travel-related research -- the other party can defer all or part their compensation from the initial advance. As discussed above, it is customary for commercial publishers to advance a sum of future royalties to the authors when they sign a publishing agreement. It's been likened to a pay day loan. Once that money that has been recouped or refunded from future proceeds, the author who deferred can start getting paid, perhaps on more favorable terms than if they had not deferred payment. Deferring payment is also a way for the subject of a book to obtain the services of a more experienced writer without having to go out of pocket for a large sum.
Delivery dates in publishing are tied to publisher advances. A missed deadline can result in cancellation of a book contract. That, in turn, can trigger an author's obligation to repay their advance. Any agreement between collaborators should deal with the return of the portion of the advance paid to each collaborator.
If the subject gets cold feet and pulls out (assuming both writer and subject are parties to a third party publishing agreement), stipulating in the collaboration agreement that the writer does not have to repay their portion of the advance will take some of the sting out of a failed collaboration. In other types of creative divorces, it may be possible to separate out each author's contribution, and transfer those rights to the original contributor. These strategies overlap, and are not at the exclusion of each other.
Keep in mind, even those who do not qualify as joint authors for copyright purposes (for example, individuals who made an important – but not copyrightable -- contribution to the manuscript) may still share in the profits and control of a work through an appropriate contractual arrangement.
Credit. By some estimates, up to 70% of nonfiction books are ghostwritten. For example, it is widely believed that Theodore Sorenson wrote John F. Kennedy's Pulitzer Prize-winning book, "Profiles in Courage,” for which JFK took both the prize and sole author credit for. Clearly, a talented writer, who knows the ins and outs of publishing, can be a great asset in helping a public figure or an expert (but not an expert writer) go from idea, to book proposal to finished manuscript to published author.
Writing credits take various forms. The most common writing credits are: "by Subject and Writer" or "Subject with Writer" or "as told to Writer." By definition, if the book is ghostwritten, sole authorship credit for the work will be in the subject’s name only. In that case, the writer-for-hire must make peace with the fact the subject will receive sole authorship credit. Some might argue that ghostwriters should receive higher fees, because their names don’t appear on the finished book. In the case of an equal in credit collaboration agreement, the size and prominence of names, as well as the order of names on the cover and title page, needs to be negotiated and agreed to in writing.
Copyright. A work for hire is a term defined by statute. It can either be a work specially commissioned, or one created by a regular employee in the course of their employment. If you are the hiring party, it is especially important to clarify the nature of the writing services before you hire the person you wish to perform those services. Later may be too late if your objective is to own all of the rights. After-the-fact attempts to classify a work as "for hire" often fail, which is why an effective contract includes a back-up copyright assignment.
Death & Disability. In the event of either party's death, disability or an intractable disagreement, the agreement should have rules for hiring a new writing partner to complete the book. The agreement might specify that the authority to enter into contracts, and make creative decisions, vests solely in the subject's estate, or the writer (subject to a duty to account). If a work is likely to be revised, the agreement should include a clause that allows the remaining author to revise the work and reduce the compensation paid to the other's heirs or representatives if it becomes necessary to hire an outside writer. The agreement should also specify whether the person hired to complete the work is entitled to receive credit as an author.
Control of Business & Editorial Matters. Control of business affairs (e.g., who is responsible for seeking out and approving book deals?) and editorial matters (e.g., who has the authority to approve the final draft of the work or authorize revisions?) are critical issues. Unanimity may be required for certain decisions (e.g., approval of the initial publishing contract). If one party retains approval rights over the manuscript, the other party should try to impose reasonable limitations, such as a chance to correct the manuscript within (e.g., 30) days after receipt of the other party’s comments. Requiring the party with approval rights to provide detailed editorial reasons for any dissatisfaction, arguably, establishes objective criteria by which the writer can revise and have their contribution judged.
Representations & Warranties. From a ghostwriter, or "as told to" writer's perspective, the subject must provide representations (or promises) and warranties that they have or will: (i) provide access to pertinent documents, whether diaries or memorabilia, or business papers; (ii) provide reasonable access to themselves; (iii) use their best efforts to provide the writer with access to other individuals as may be required to write or finish the book; and (iv) cooperate in good faith with the writer in pursuing a publishing deal. Special attention should also be paid to the indemnity clause. An indemnity is a promise to reimburse the other party should they breach their warranties.
Reciprocal representations and warranties are the norm as well. They include: (i) no contractual commitments (e.g., a confidentiality agreement) exist that will interfere with the ability to perform their obligations; (ii) their contributions are original and will not violate any copyrights, proprietary rights, or rights of privacy, publicity, or constitute a libel against, or violate any other common law rights or other rights of any person or entity.
If any liability arises because of a breach of either party's’ representations or warranties, the non-breaching party should be reimbursed for costs and expenses (including reasonable attorney's fees), and damages paid out to others. If you are a "for hire" writer, meaning, the copyright vests in the party that hired you, the agreement should require the hiring party to make best efforts to have the publisher name you as an "additional insured" on the publisher's media liability policy. If a writer is relying on material provided them by the person who hired them, they should exclude this material from their own representations and warranties.
TIP. Since verifiable truth is a complete defense to libel (at least in the United States), your agreement should require that both parties retain copies of all recorded interviews, transcripts, books, notes, letters, emails and other research materials used in preparation of the book. If there is a lawsuit, you may be required to prove the truth of the statements that are published. (see §9.12.1, The Copyright Permission and Libel Handbook (John Wiley & Sons).
An effective contract might also include a non-disparagement clause. This is particularly important if you are a public figure, or represent a public figure.
You agree that you will not (nor will you cause or cooperate with others to) publicly criticize, ridicule, disparage or defame Subject, his family, his business associates, company, directors, officers, shareholders, employees, agents, or attorneys, with or through any written or oral statement or image, whether or not they are made anonymously or through the use of a pseudonym.
The subject's lawyer will also include a provision that requires the writer to agree to treat the ghostwriter agreement itself as confidential. One common error is not to include exceptions, such as sharing the agreement with your agent, attorney, tax preparer, or as compelled by a court or government agency (e.g., the IRS). In terms of remedies for breach, in addition to injunctive relief (necessary because "A lie can travel halfway around the world while the truth is putting on its shoes." -- Charles Spurgeon), the ghostwriter might be required to forego royalties, or repay amounts previously paid, but any such remedy will be subject to scrutiny by the courts and a possible finding of unenforceability.
The time to address these issues is before the actual creative process begins. Although collaborators might not feel comfortable discussing long-term financial and other issues, an effective agreement deals with these matters up front, rather than after the brickbats start flying.
Disclaimer: This article, parts of which were previously published, discusses general legal issues of interest and is not designed to give any specific legal advice concerning any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the advice contained in this article.
About the Law Offices of Lloyd J. Jassin. At the Law Offices of Lloyd J. Jassin we provide more than legal advice. We offer a broad understanding of the industries in which our clients operate and a network of contacts within the publishing, entertainment and licensing communities. Clients gain access to all of the knowledge, counsel, and advocacy that the firm can provide. View Lloyd's complete profile.