If you’re an author, there are some basic things you must know about publishing contracts. Whether you are looking to publish a manuscript for a book, e-book or other publication, you must understand these 8 things to avoid a terrible deal.
Publishing a book is a remarkable achievement.
Authors must make it a point to understand and review their publishing contracts before signing any deals with a publisher and ensure that achievement is capitalised on.
A publishing contract can make all the difference for an author, to ensure that they get the best deal to compensate them for their hard work creating the manuscript.
In this article, we have outlined the top 8 considerations for authors to know what they need to think about when it comes to their publishing contract.
In this article, the following topics are covered:
- What are publishing agreements?
- What terms are used in a publishing contract?
- What kind of information is generally covered in a publishing agreement?
- What are the things to look out for in a publishing contract?
- What are the usual intellectual property arrangements at the time of publishing?
- Publishing under a creative commons licence
- What happens when there is no publishing agreement
- How can Prosper Law help?
Author: Farrah Motley, Legal Principal of Prosper Law and a publishing lawyer.
What are publishing agreements?
Generally, publishers sign an agreement with an author before publishing the author’s work.
This is known as a publishing agreement.
Under Australian law, the author of work is – just by virtue of being the author – the copyright owner. The rights of copyright owners are described in the Copyright Act 1968 (Cth).
Being the copyright owner, it is important for authors to be discerning about what they sign up to. One complicated clause written in legalese is the difference between continuing to be the legal owner of your publication and giving those rights away.
Generally, authors will be provided with a publishing contract in a form that the publisher or publishing house has prepared. This means it is already weighted in their favour. As an author, you must engage a book lawyer to negotiate on your behalf and ensure you are getting the best deal.
The form in which your work is being published is also important. For instance, a book or a chapter of the book, conference paper, journal article, or any other type of research output.
The decision to publish the research behind an Open Access or a paywall impacts not only the terms of the agreement but also the final licence for the work.
What Terms Are Used in a Publishing Contract?
A publishing contract includes various key terms, like copyright, grant of rights, royalties, and more that authors need to comprehend:
Firstly, in Australia, the author (by legal default) owns the copyright in the manuscript they have created. An author should remember that when they are licensing their copyright to publishers, they are not transferring ownership to the publisher.
They are only giving them permission (a ‘licence’) to use their manuscript in order to publish, produce, market and sell the book in the countries, languages, and formats specified in the contract. At all times, they are retaining the full ownership of the copyright.
On the other hand, if an author assigns, vests or transfers copyright ownership to the publisher, the author is relinquishing its ownership of the copyright in the work and the publisher becomes the new owner.
TERM OF AGREEMENT
This signifies the duration for which the author is licensing their copyright to the publisher. Usually, most publishers try to set this as the full term of the copyright, which is generally the author’s lifetime plus 70 years after death.
GRANT OF RIGHTS / SCOPE OF THE LICENCE
More often than not, publishers try to obtain a broad licence from the author. The scope of that licence can be:
- Either worldwide or confined to specific countries;
- For a significantly long time, which can be as long as the legal term of the copyright (the life of the author plus 70 years) or for an agreed period, say 5 to 20 years;
- For publishing in the specified formats, like print, audiobook, and eBook.
- When the authors grant a licence to the publishers to publish their work, they also grant them subsidiary rights. This permits the publishers to negotiate with third parties on their behalf to use their work for translations, merchandise, serialisation, and film and television adaptations.
Authors are usually paid royalties, which are essentially a percentage of either the net receipts or the retail price (excluding GST) that the publishers receive from the purchaser or the book’s seller.
If you’re an author that is negotiating royalties, you need to consider the following:
- What happens if the publisher does something that reduces the royalties payable to the author?
- When are royalties calculated and when are they paid?
- Who is responsible for calculating the royalties and can that be checked by the other person?
- Which currency will royalties be paid in and what currency conversion rate will be used?
This signifies the amount that the publishers are ready to pay the author in advance before the publication. This is the prepayment of a part of the publishers’ royalties to pay to the author on the first printing.
Fundamentally, the purpose of a non-compete clause is to prevent the authors from writing another book having similar content that can undermine the sales of the current book they are contracted to write. This helps in protecting the publishers’ investment in the book.
But what if an author wants to write a sequel to the current book, but the publisher doesn’t want to publish the sequel? You can get around this issue by giving the publisher the first right of refusal so that if they decline the offer, the author is able to approach other publishers.
Alternatively, an author could require a publisher to publish a sequel if the first book hits a certain threshold of sales (demonstrating that it is a commercially viable publication for the publisher).
AUTHOR’S OBLIGATIONS / WARRANTIES
Authors must be careful to read and understand their obligations while drafting the publishing contract. Typically, a contract will require the work to be original and not plagiarized in any way.
Authors also need to have secured permission for any copyrighted content they might have used. They must also make sure to deliver work on time and at a publishable standard.
Finally, they should be ready to participate in the proofing and editing stages of production quickly and professionally.
Publishers generally agree to pay for all the costs involved in the production, marketing and distribution of a publication.
They may also take charge of selling and marketing the author’s work on the agreed schedule. On the other hand, the author must ensure that the agreement includes a clear deadline for publication. The publishers must also undertake the responsibility of paying the royalties to the author and issuing sales statements or accounts.
What Kind of Information is Generally Covered In a Publishing Agreement?
A publishing agreement generally covers information such as:
- The time when the author’s work will be published
- The format in which the work will be published, whether in print or online or both
- How many print copies will be made available
- Whether the author is entitled to any royalties and how those royalties will be calculated
- How the royalties will be shared between the publisher and the author
- When the authors and the publishers will be paid royalties
- How the copyright of the work will be managed
In a publishing contract, authors may need to warrant that:
- The work has been created by the author, who owns the copyright of the work
- If third party copyright material is used, the author must possess the necessary permissions to include such material
- The material neither contains any defamatory or unlawful statements nor does it infringe upon the rights or privacy of others. For some authors, it may be difficult to warrant that a publication does not contain defamatory material because this may require a legal review to determine this. Instead, an author can warrant that they have not knowingly included defamatory material
- Also, it should not include any instructions or materials that can cause harm or injury
What Are The Things To Look Out For In A Publishing Contract?
While creating a publishing contract, it is essential to look out for certain things:
Delivery Clause & Publication Deadline
Upon receiving a copy of the publishing agreement, the authors must review the agreement and determine if a delivery clause is mentioned in the contract or not.
This clause sets out the date by which the authors are required to deliver the final copy of the work to the publishers.
Authors should consider whether this deadline is achievable, whether things outside of the control of the author may cause delay and a mechanism for extending the due date for the publication.
Authors must also ensure that their contracts include a publication deadline as well. Doing so will ensure that both the authors and the publishers are aware of the significant dates. Authors should also note any other additional requirements mentioned in the delivery clause that they may need to negotiate or comply with.
Alterations to the Work Submitted
Since the authors spend so much time and effort creating the work, they must make sure that the publishers cannot alter their work without their approval. Therefore, most publishing agreements usually include a clause, which strictly states that the publishers must obtain the authors’ approval before making any amendments to their work. If the publishing contract fails to include such a clause, every author must negotiate with the publishers to incorporate this clause
These rights are referred to as ‘moral rights’ and are protected by law. In fact, moral rights are protected by the same law that governs copyright, the Copyright Act 1968 (Cth). Moral rights apply only to individuals and include the right:
· That an author of a work has a right of attribution of authorship in respect of the work;
· That an author of a work has a right not to have authorship of a work falsely attributed
· That an author has a right of integrity of authorship in respect of the work
If an author’s moral rights are infringed, there are legal consequences including that the author may bring a legal claim against the person or business who has infringed their moral rights.
The publishing agreement must include clauses that clearly explain how the royalties will be paid and at what rate. The authors can also negotiate with the publishers for rising royalties depending on the total number of sales.
As per industry standards, the royalties are usually:
- Print: 10% of the recommended retail price
- E-book (released in print first): 25% of the net receipts
- E-book (released as an e-book first): 40% to 50% of net royalties
This clause essentially covers the book’s presentation in terms of the title, images, and cover design. It also includes the sales process as well as the marketing strategy required to promote the book.
Generally, the publishers ask the authors for their opinion on how the book covers should look.
More often than not, the publishers even contemplate the ideas provided by the authors and try to incorporate them.
However, suppose the authors wish to have more significant input while collaborating with the publishers to find the right design for their book. In that case, they must negotiate with the publishers before signing the publishing agreement.
Most contracts that follow the industry standards allow the authors to keep all their rights for any media, audio, and merchandise. However, authors must check whether their publishing agreements allow them to retain the subsidiary rights or whether the publishers have the said rights.
If the publishing contracts allow the publishers both film and merchandising rights, the authors will receive approximately 80% of the net sale receipts. While it is possible to negotiate the film or audio rights later when the book becomes successful, it is best to negotiate it at the outset.
It is in the best interest of both the parties involved to have a dispute resolution clause included in the publishing contracts.
Doing so helps in establishing the steps that the authors and the publishers should take if any misunderstanding or disagreement arises.
Following this process will also spell out clearly who will be the ultimate decision-maker and the appropriate type of dispute resolution.
What Are The Usual Intellectual Property Arrangements at the Time Of Publishing?
Several situations can arise at the time of publishing for which the contracts may vary:
Author Assigns the Copyright to the Publishers
Most authors usually assign the copyright in journal articles either to the journals of the publishers. The publishing contracts in such scenarios are known as copyright transfer agreements.
However, while publishing a book, the authors usually grant the publishers a licence. When authors sign the copyright transfer agreements, they grant their rights as both author and copyright holder to the publishers. This signifies that the author might have to need permission from the publishers for:
- Depositing an Open Access version into an institutional repository
- Sharing the published work with colleagues
- Making the published work available on their website
- Using the published work in their teaching
Until and unless the publishing agreement states differently, the assignment of copyright is generally permanent. However, if the author assigns the copyright to the publishers, they can enter into agreements with other parties to use the work at their discretion.
Author Grants the Publishers an Exclusive Licence
The authors need to allow the publishers certain rights over their work for the entire agreement term. Granting these rights to the publishers only signifies that the publishers can publish, communicate, and distribute the published work online. They can sublicense the material as well.
Usually, the duration of the agreement varies from one contract to another. However, some agreements can be perpetual or indefinite. For example, if the licence granted by the author includes the right to sublicense, then the publishers can further grant the same rights allowed to them to a third party.
On the other hand, the author cannot grant these rights to anyone else as long as the agreement is in place.
Author Grants the Publishers a Non-exclusive Licence
Just as authors can grant exclusive licences to the publishers, they can also give non-exclusive rights to some other party or publishers. When the authors sign a non-exclusive licence, they can keep the rights to licence their work with other publishers.
Nevertheless, there might be qualifiers to this, like confirming that the publishers possess the right to the first publication of the material.
Publishing under a Creative Commons Licence
When publishers plan to publish an author’s work under an open licence, also known as a Creative Commons licence, they are prohibited from claiming any exclusive publication rights. In such a scenario, the work is made available freely for further distribution under the terms of the licence.
However, the publishers are more likely to ask for first publication rights under a non-exclusive publishing agreement. Nevertheless, in rare cases, the publishers might also ask for a transfer of copyright to themselves.
What Happens When There Is No Publishing Agreement
Some publishers do not want to use publishing agreements. In such cases, they are allowed to publish the author’s work only for the purpose for which it was submitted. They would not be allowed to re-publish the same article anywhere else without getting the author’s permission.
Signing a publishing contract is not an easy task.
The author must look at the clauses carefully and understand what they mean, the likely risks and possible rewards and determine how they should be captured in the publishing contract.
If any clauses fail to reflect the author’s interests and the publishing goals, they should negotiate those clauses with their publishers.
How Can Prosper Law Help?
We offer legal services to authors, editors and publishers. Get in touch with our friendly publication lawyer today and find out why our clients choose Prosper Law.
Farrah Motley | Legal Principal
PROSPER LAW – Australia’s Online Law Firm
M: 0422 721 121
A: Suite No. 99, Level 54, 111 Eagle Street, Brisbane, Queensland Australia 4000