Friday, April 27, 2012

The Importance of Reversion Clauses in Book Contracts

Posted by Victoria Strauss for Writer Beware

Most book publishing contracts can be divided into two types: fixed-term, where the grant of rights extends for a defined period of time, such as five years; and life-of-copyright, where the grant of rights extends for the full duration of copyright. (If you're unclear on the difference between rights and copyright, I've explained this in an earlier blog post.)

According to the Berne Convention, the international source for copyright law, the term of copyright is the author's lifetime plus 50 years. Many countries have lengthened that, however, and in the USA, UK, and much of Europe, copyright now extends for the author's lifetime plus 70 years. (For more info, see this handy chart of copyright duration in various countries.)

Life-of-copyright sounds scary, but it doesn't have to be. It's a rare book that's so successful that it remains on the market for more than a few years--and traditionally, authors can reclaim their rights once their publishers have taken their books out of production. This process is called reversion. It's governed in a publishing contract by a reversion or termination clause, which describes when and how the publisher will take the book out of print--i.e., out of production and off the market--and also, since simply taking a book out of print doesn't necessarily guarantee the return of rights, the steps the author must take to get the publisher to relinquish those rights back to him or her.

In a fixed-term contract, a reversion clause may not be needed, unless the fixed term is unusually long (for me, "unusually" would start at about eight years)--though publishers often do cover themselves by allowing for discontinuation of publication for various reasons, such as slumping sales. In a life-of-copyright contract, however, the reversion clause is vital. Unless you're Harper Lee or some other perpetually-in-print luminary (and maybe not even then), there's no reason in the universe for a publisher to hold your rights for so long.

Even so, in the days before the digital revolution turned everything upside down, there wasn't much incentive for authors to revert their rights once their books went out of print. Rights to an already-published book were extremely difficult to re-sell; and with none of the easy self-publishing options that exist today, there wasn't much an author could do with them on their own.

As a result, many writers--me included--simply allowed rights to their OOP books to sit with their publishers. This suited the publishers fine, since it could be very handy to still be holding rights to the OOP books of a suddenly-famous author. Dan Brown is one example of this--after The Da Vinci Code became a mega-success, his publisher rushed his OOP books back into print.

In the past few years, however, once-sold rights have become extremely valuable--to authors, who can tap into the rising enthusiasm for ebooks by self-publishing their backlists; and also to publishers, which are eager to digitally exploit the long tail of their rights catalogs. The reversion clause in a life-of-copyright contract is more vital than ever--and it is equally vital that it be precise.

In the pre-digital era, it was standard for reversion clauses to leave the decision to take a book out of print entirely to the publisher's discretion. Here's an example, from my 1997 Avon contract:
If all editions of the Work in the USA and Canada which have been published or licensed by the Publisher are out of print, and if, within six (6) months after written demand by the Author or the Author's representative, the Publisher does not agree to provide within an additional six (6) months adequate stock to meet the normal demand for the Work, or to arrange for a reprint or book-club edition...this Agreement will forthwith terminate and all rights in the Work will revert to the Author...The Work shall be considered in print if it is for sale by the Publisher in any edition, or if it is under option or license granted by the Publisher.
This used to be all that was needed. Books were physical objects only; they took up room in warehouses, and when they stopped selling in significant numbers it was in the publisher's interest to clear warehouse space by removing them from sale and pulping them or selling them to remainder dealers (especially after the Supreme Court's 1979 decision in the Thor Power Tools case made warehousing more expensive).

These days, a reversion clause like this is not enough. Books are no longer just physical objects, and electronic files don't live in warehouses. An ebook can be kept "in print" indefinitely at minimal cost. Under a clause like the one above, a publisher could easily argue that the existence of an ebook, or a digital file used to produce a POD edition, constituted "in print" and "for sale," even if the book wasn't actually selling a single copy. The author would have no ability to demand reversion--in fact, the circumstances under which he or she could demand reversion wouldn't even arise.

"Out of print," therefore, needs to be much more narrowly defined--ideally, tied to specific, objective circumstances, such as minimum sales or income figures that the publisher can't argue its way around (theoretically, at least.) Here's the reversion language from my 2000 HarperCollins contract (my bolding):
If either Work is out of print and the Publisher receives from the Author a written request for a reversion of rights to such Work, the Publisher shall within four months of the Publisher's receipt of such request do one of the following: (i) announce that it will reissue an edition of such Work...(ii) enter a license providing for the publication in the United States of an edition of such Work...or (iii) revert in writing to the Author the rights to such Work granted to the Publisher in this Agreement...

If for two consecutive accounting periods neither the Publisher nor a licensee of the Publisher has printed copies of the Work...but the Work is available for sale from the Publisher or a licensee of the Publisher by some means of on-demand printing, or electronic transmission or reproduction and within those two accounting periods, the Publisher and its licensees, collectively, have sold less than 250 copies of the Work, the Work shall be deemed out of print.
Back in 2000, not everyone recognized the importance of this kind of language--I'm very fortunate to be with an agency that keeps on top of the changes in publishing and really knows its stuff.

Here's a more recent example, from my 2011 contract with Marshall Cavendish (again, my bolding):
The Work shall be considered in print if it is on sale by Publisher in any English-language edition available through normal trade channels in the United States or if it is subject to an option or an outstanding license for any English-language edition available through normal trade channels in the United States under this Agreement. If the Work is not in print, Author may request in writing that Publisher keep the Work in print. Publisher will have six (6) months to comply. If Publisher fails to comply...then at the end of such six (6) month period this Agreement shall terminate and all of the rights granted to Publisher shall revert to Author...The existence of an individual print on demand edition or an electronic edition shall not constitute the Work being in print unless there are total combined sales of $500 or more a year for these editions.
The clauses above come from large and medium-sized publishers. For those of you with small presses, you're probably more likely to encounter a fixed-term contract than a life-of-copyright contract. However, many small presses do have life-of-copyright contracts, and if you're offered one with reversion/termination language that's more like the first clause I quoted than the second two, you should seriously consider whether it's a publisher you want to work with.

And of course, if your life-of-copyright contract has NO reversion or termination clause--and these are out there, believe me; I've seen them--run away. Fast.

Here's an ugly example of what can happen when reversion language is not precise enough--an author who can't regain her rights because her publisher is insisting that a book with almost no sales or distribution is still "in print" within the literal, and much too broad, meaning of her reversion clause.

And here's one major publisher's attempt to turn back the reversion clock: Simon and Schuster's 2007 effort to alter its standard contract language to ensure that it could consider a book in print as long as the book was available in any form, even just the publisher's electronic database, and even if the book had zero sales.

16 comments:

Anonymous said...

Do you know anything about chuffedbuffbooks?

Michael Capobianco said...

Excellent post. We managed to resell Iris after it went out of print and was reverted, so it can be done. Also, it's getting harder and harder to get a publisher to revert books no matter what the reversion clause says, so if you have a book that's OOP, send a reversion letter NOW and expect to have to insist and persevere.

Priya Sridhar said...

Normally, where would this clause be in the contract? And does it usually appear in magazine contracts?

Victoria Strauss said...

Priya,

It's usually toward the end of the contract, if it's a separate clause. Sometimes publishers don't have a separate termination/reversion/out of print clause, but fold it into other clauses. I've seen termination language stuck into the royalties clause, the copyright clause, any number of odd places. But wherever the language appears, in life-of-copyright contracts there should be something stipulating how rights return to you, and tying reversion to the objective factors I've discussed.

Magazine contracts typically take one-time rights--i.e., after your article or story is published rights revert to you, sometimes after a specific period of time. But not always, especially with online publications--and archiving can be an issue. I'm not as knowledgeable about magazine contracts--maybe someone who knows more will chime in.

Iola said...

Very useful examples - thank you.

Ellen said...

I have a friend whose publisher -- Condor -- disappeared. She hasn't even been able to find them to ask for reversion of rights.

Sandy said...

Great post. I have reversion rights in my contracts. They revert to me at the end of the four year contract.

J. M. Strother said...

Most useful post I've read all year, particularly the examples with your bolding. I've often wondered about this in the digital age and you have answered my specific questions. Thank you.
~jon

Gabriele Goldstone said...

Excellent post! Thank you.

If a publisher stops publishing and tells you in an email that you get all rights back - is that good enough?

Also, if nothing in the contract ever came true, does that void the whole deal?

And, if the publisher is refusing to communicate - what then?

Also, is it possible to rename your work and move on?

Grace Seybold said...

Regarding magazine rights and archival, here's the language from a contract I signed recently for an online magazine, to which I sold First Electronic Rights for a short story:

"Author agrees not to publish or permit others to publish The Work in any form, print or electronic or audio, prior to its publication in the above-named magazine and for ninety days following its publication...Following the "No Competing Publication" period...the Publisher will place the work in said archives. If the Author prefers that The Work not be retained there, in either electronic or audio form or both, he/she must notify the Publisher in writing, including via email, and the Publisher must remove the requested forms of The Work within seven days."

So the archives are an opt-out system in this case; the publisher will automatically put stories there unless you ask him not to.

The exclusivity period (the amount of time before you can start trying to sell the story elsewhere as a reprint) seems to be between three and six months, usually, and begins the day the story is published. The longest one I've seen is two years; I'd have been hesitant about signing one for that length of time if I hadn't known the editor personally in that case. Some publishers will make an exception to the exclusivity period if you're putting your story in a collection of your own work rather than selling it to another magazine, but you shouldn't assume that this is okay unless you have their written assurance that it is.

This contract also has a clause about what happens if the story isn't used for some reason:

"In the event that The Work is not published within eighteen months of this agreement becoming effective, all rights revert to the Author, and the Author has the right to sell or arrange for publication of the above-named Work in any manner. Author shall keep any payments made by the Publisher to him/her. With the Author's written consent, this time period may be extended."

I hope this is useful to you!

Anonymous said...

Great post, Victoria. Thanks for writing this.

Re the magazine rights question: just a note. In my dealings with magazines, I have been _amazed_ by how cavalier they are with contracts.

--Greta

Richard C. White said...

@Gabrielle (11:34)

I am not a lawyer and do not play one on television. *grin* However, in situations like this, it will depend on what your contract says and if in doubt, what a competent I.P. Contract lawyer says.

With that said, I'll try to answer your questions based on experiences with other authors and other companies that I've observed.

1) It depends. Some publisher may want to have a notarized physical letter (to keep their own lawyers happy). Some publishers may accept an email with the appropriate headers (get full headers) to prove the email actually came from the company in question.

2. That's not something you can arbitrarily determine. Contract laws differ from state to state (or country to country). That's something your IP Contracts attorney may have to help you decide, whether you want to try and get a court to break the contract for non-compliance. But you can't just decide "I'm not happy so I'm breaking the contract", unless there's wording in the contract that says one party or the other can do so "if X doesn't happen within Y days", and even then it can be tricky.

3. If the publisher is not communicating, then there's not really much you can do. All you can do is be persistent and professional in your attempts to communicate with them. I've seen this happen with a lot of small print and e-publishers who get in over their heads and think if I ignore the problem, it'll go away. It seldom ends well.

4. No. Your work is under contract to another publisher. Your best bet until this is resolved is to move forward with a NEW work. You do not want to rename your work and then submit it. If the new publisher googles some of your phrases and it appears to have already been printed, you can be sure they'll drop you, they could sue you for any money they've spent on publishing a book for which the rights were not clear and you could be given a bad reputation within the industry as someone not to be trusted.

If you can't get the rights clear for the book we're discussing, then all I can suggest is to take a deep breath, bite the bullet and move on to your next (and better) book. After all, your next book should be better than your first one and the one after that even better as you learn. *smile*

Gabriele Goldstone said...

Wow. not-a-lawyer-Richard. Thank you. :)

The thing is - my next work is a stand-alone sequel. So I suppose I should change those characters' name - if not their location.

I appreciate your insights.

Richard C. White said...

@Gabriele

If your work is truly a stand-alone sequel, then yea, doing a basic global find and replace should work . . . O.K., maybe not quite that easy, *grin*, but you've got the right idea.

If there are things that hang on the original book, then be sure to address those things in your next book and incorporate them so the reader isn't left going "Wait, where did that come from?"

A stand alone sequel is certainly easier to salvage than Part Two of a trilogy since you shouldn't have to rebuild the back story.

Cathleen Ross said...

Thanks for making this complex area so comprehensible.
Best
Cathleen Ross

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