A publishing contract is an agreement in which an author grants a publisher the right to print sell and otherwise commercially exploit their work. For authors, securing a publishing contract is usually regarded as a significant milestone, however, whilst this can be an exciting time it is important to understand the impact this agreement will have on the author's intellectual property rights ("IPR") in the future. Provided the text and/or illustrations are the author's original work and have not been copied from any other works, the author shall own the IPR in the work and have the ability to grant licences to the work as they see fit.
It is crucial that authors are clear on: (i) the extent of the rights they are granting to a publisher, and (ii) what limitations are being placed on their rights to exploit their own works for the duration of the licence. Once an author has clarity on points (i) and (ii), this information can be used to assess whether they are being adequately compensated by the publisher under the proposed agreement.
In this blog we have summarised some of the key factors to consider in publishing contracts, however this is not an exhaustive list.
Subsidiary Rights
In addition to the 'primary' right to publish the book in print and electronically, often additional rights are granted to a publisher known as "subsidiary rights".
Subsidiary rights can include (but are not limited to):
- the right to translate the work into a different language;
- the right to produce adaptations of the original piece of work;
- the right to reproduce the work as an audio book;
- the right to publish extracts of the book in newspapers or magazines; and
- the right to make and sell merchandise based on the work i.e., toys and t-shirts.
As an author, you should not grant these subsidiary rights without first considering how you will be rewarded if the publisher decides to exploit these subsidiary rights, for example, by producing a spin-off series based on the original work, how will your royalties be calculated? It is also important to consider how much autonomy an author wishes to retain over their work.
Territory
Publishers will often request worldwide rights over the work, which entitles them to print and distribute the work globally, without limitation (subject to the terms of the agreement). It is possible to limit this right to a specific country or area (e.g., by granting the right to publish in the UK only) or to impose minimum sales for specific territories for these exclusive rights to be retained. Territorial rights should be considered alongside any right to translate the work since these tend to work in tandem. It is important that authors are careful that they do not grant two (or more) publishing houses the rights to publish the works in the same territories if the agreements state that they are being granted 'exclusivity' to publish the work in that region. It is also important that the publishing agreement includes a guarantee from the publisher that the work will be published within a specific timescale to prevent the publisher from sitting on the rights.
Royalty Calculations
A royalty is a percentage paid to the author for each book sold. Often royalty payments will have to exceed any advance before they are payable to the author. Calculation of royalties can vary but are typically based on either recommended retail price or net receipts. The royalty rate will vary depending upon how the royalties are being calculated and on the form in which the work is sold (e.g., audio books or physical print) and may be calculated differently for translated works and merchandise relating to the works, for example.
Royalty calculation clauses can be complex, and it is important to understand how royalties will be calculated and if they will increase over time or when certain targets are met.
Promotions
The author may be required to promote their work via advertising and marketing or attend events such as book launches to increase traction surrounding the work. If this is agreed with a publisher, then the author should be clear on how they will be paid for their time and work and how their expenses (e.g. travel) will be covered by the publisher.
Termination
On termination of a publishing agreement, the rights should revert to the author to allow them to exploit their IPR as they see fit. This is often subject to the publisher retains the right to sell any books still in print.
Indemnities
Publishing contracts often include indemnity clauses. An indemnity is the obligation of one party to compensate the other (on a pound for pound basis) for any loss suffered if a particular event(s) should occur, or for a particular breach of the contract. An example often seen in publishing agreements is a requirement for an author to indemnify the publisher if transpires that the author has copied the work of a third party and is therefore infringing on another party's IPR.
Understanding the indemnity provisions within the contract is particularly important where an author is contracting as an individual (i.e., in their own name and not via a company) to ensure that the author is not exposing themselves to uncapped/ inflated liability levels unnecessarily.
Given the importance of the work to an author, it is vital that the publishing contract accurately reflects the agreement and author has reached with a publisher so that both parties are comfortable with the scope of the rights granted and the compensation payable to the author.
If you would like to discuss your any of the points raised in this article, please contact Alison Bryce, Rebecca Ronney or your usual Brodies contact.
