CHAPTER 14

The Writer's Rights

While receiving a contract is very exciting, it can also be overwhelming. There is a lot of legal language and there are complicated publishing terms and phrases. You may decide to hire someone to negotiate for you, but it is important to understand the basics yourself. This chapter will help you learn contract basics and understand some of the writer's rights. If you have an agent or lawyer in the field, she will negotiate to improve your contract. This chapter will help you understand what kinds of changes she can ask for.

An Overview of Contracts

Just as each publisher is different, so are its contracts. Some will be only a page, and others could be forty pages long. While it would be impossible to go into detail about individual contracts here, the following sections should give you a basic understanding of some of the most common elements found in book contracts.

The Author's Duties and Rights

Most contracts will include a description of the work, and you are expected to fulfill this description. This can include the type of work (fiction, nonfiction), format of manuscript, number of pages or word count, and an outline. Of course, there may be other elements included in the description, depending on the publisher. There will also be a deadline date given by which time you must turn in the completed manuscript. Sometimes contracts will also include deadlines for revisions or other such work to the manuscript. The contract can describe how the manuscript is to be delivered on the deadline date, such as in an e-mail attachment, in hard copy, or on disk.

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Usually, a publishing company will have a standard contract, with blank spaces where specifics are filled in, such as title, deadline dates, and compensation. After a negotiation with your agent, attorney, or yourself, some of the paragraphs, such as those claiming your film rights, may be crossed out. Just because a paragraph looks “standard” doesn't mean you must accept it.

The contract will require that you promise not to include any libelous statements about a third party. You are also required to promise that the work is entirely yours and not copied or taken from another source. If you do include material from another source, you must include a citation and provide written permission, which will sometimes involve the payment of a fee to the party that owns the rights to the material. Most publishers will stipulate that you are responsible for this fee. In regard to some children's books, such as how-to books, the contract may require that you have not included anything that may harm the reader.

The copyright should be in your name, unless you have agreed to a work-for-hire project, in which case the publishing company will most likely have the copyright in its name. The publisher will apply for the copyright in your name, but you should insist that your contract specify that this will be done within 90 days of publication. You need the registration in order to collect damages and attorney's fees, in case you have to sue someone for infringement.

Also look for the reversion of rights clause, which stipulates what happens to the rights once a book goes out of print or if the publishing company goes under. These things happen all the time. Pay close attention to the definition of your book staying “in print.” In earlier days this meant that the publisher was required to keep physical books available in a warehouse; if no books were printed within a six-month period, rights would revert to the author upon the author's written request. But now, many publishers wish to define “in print” in terms of the book being digitized and stored in a computer. If you sign a contract containing such a definition, your book may become unavailable to the public, but the rights may never revert to you. This means you can't sell them to another publisher, or even print them yourself through a print-on-demand company, to keep them available for fans or students.

Be careful of language like “including but not limited to” and “media now known or hereafter devised.” Make sure that each separate right you license to your publisher has specific terms and conditions, after which they revert to you. If your publisher insists on a particular right, offer a compromise: you will license that right for a limited time, say two years.

Your publisher will probably insist on e-book and audiobook rights; you should understand the royalty percentages of these rights. This is a rapidly evolving topic, and you should stay current by discussing it with your agent or attorney and by reading materials from The Authors Guild. Publishers know that in the future digital rights may be very valuable, as books provide content for e-book, audiobook, television, and Internet programming. Some of these applications don't cost the publisher much money to exploit, so you should receive a higher royalty percentage. If a hardcover royalty is 10 percent, and a paperback royalty is 5 percent, perhaps a digital royalty should be in the range of 15 to 25 percent. Sometimes publishers hold on to digital rights forever, and sometimes for five years. The term may be negotiable.

The Publisher's Duties and Rights

The contract will stipulate what the company will pay you for an advance and royalties, as well as what percentage you will take for the sale of subsidiary rights. It will state how many copies of the book you are to receive free of charge, and what price you will pay for additional copies, which is normally at a discounted rate. Or, if this is a work-for-hire, the contract will state the flat fee you are to be paid.

The contract will spell out the handling of rights and what should happen if any rights are sold. Normally, the publisher handles the selling of rights and you are entitled to a percentage of the sale. We will discuss subsidiary rights in further detail in a moment.

Sometimes you will find an option clause in the contract. This clause states that you are required to send your next work to the publisher. The publisher is given the right of first refusal. In other words, you must submit your next work to this publisher and no other until the publisher has declined the manuscript. There are usually no set limits on the time the publisher has to review your next work. So, under contract, your manuscript could be with that publisher for several months before the editor gets to it. If there is not a time limit stipulated, you may find yourself stuck waiting for a response, unable to submit it elsewhere.

This is just an overview of common contract elements. The following sections go into greater detail about those that tend to create the most confusion.

Understanding Royalties

Once you receive a contract, you will probably first flip ahead to the page that states how much you will be paid. After all, you have put a lot of hard work into this manuscript, and though you are pleased that it will be turned into book form, you want to know what your compensation will be. Though your editor has most likely already discussed this with you, it is just a good feeling to see it in writing.

There are two basic types of compensation: flat fee and royalty basis. The flat fee is given in cases of a work-for-hire. This is pretty straightforward: you are paid a set amount of money for writing a book and turning over all rights to the book. You do not receive any further payments.

On the other hand, if you signed a contract to receive royalties, then you will receive royalty statements detailing what monies you are entitled to. They will show how your book is selling and the amount of royalties being paid to you, based on the percentage agreed upon in the contract. Check these statements carefully to be sure you are getting what you deserve. While a publishing company is not likely to cheat you, mistakes can be made. Your agent will be better prepared to interpret royalty statements than you are. Also keep in mind that while you may have earned the money several months earlier, the check may take a while to get to you. Normally, publishing companies cut royalty checks twice a year, some annually.

The Advance

The advance is just what it sounds like — an advance payment on the money you will earn from the sales of your book.

Let's say you have written a middle-grade novel. The contract states that you will be given an advance of $4,000 for this manuscript, half to be paid on signing of the contract and the other half to be paid when the manuscript has been received and deemed acceptable (acceptable meaning that you have fulfilled your contractual obligations, in the judgment of your editor).

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If you have written a picture book that was illustrated by someone else, then you will have to split the royalties with the illustrator. Normally the royalties are divided equally. So if the book had been receiving a 10 percent royalty, then you would be paid a 5 percent royalty.

This is money you would be entitled to once your book is published and begins selling. Your book must earn back the advance before you can begin collecting royalties on it. In the above case, your novel must earn $4,000 in royalties before you get any more money.

Royalty Calculations

Royalties are traditionally paid on the list price (suggested retail price) of the book, which means the price you would pay as a customer buying the book. Some companies do, however, pay royalties based on the net price, or the amount of money the publisher retains on each book after expenses. Net price takes into consideration discounts that are often offered to buyers, which can come down below half the retail price, as well as other expenses to the publisher. If the publisher has the right to calculate net, and pays you on that basis, then the possibility of your evaluating the fairness of your statements is reduced. To compensate for these factors, your royalty percentage should be higher if it is based on net than if it is based on list.

Let's say your middle-grade novel will earn royalties based on the list price. To keep things simple, we'll say that your novel's retail price is $10. Your contract states that you will receive a 10 percent royalty on hardcover editions. So, for this example, you would receive $1 per hardcover book sold. Now, you need to figure in the advance:

Advance (4,000) divided by royalty per book (1) equals number of books to be sold before the advance earns out (4,000).

Before you will receive any more money, your book must sell 4,000 copies. Beginning with copy number 4,001, you will begin receiving $1 per book sold.

To make this even more complicated, paperback editions of hardcover books normally have a smaller royalty even though the text is exactly the same. Publishers have to do this because the retail price for paperbacks is lower but the costs to produce the book are still high.

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You may want to inquire about an escalator clause in your contract. An escalator clause states that once your book sells beyond a set number, the royalties will increase. It certainly doesn't hurt to ask. Check with your agent about the possibility of negotiating for this.

Let's say the contract states that you will receive a 6 percent royalty on the paperback edition of your book. So if the paperback edition of your book sold for $5, then you will receive 30 cents per book sold. In this example, you would not need to calculate in the advance since the hardcover edition had already earned out the advance. But what if it hasn't? Sometimes the contract will specify that the paperback sales must pay back the advance, if the hardcover hasn't done so. This could be a negotiating point.

You can already see some of the complexities of contracts. If you landed your book deal without an agent, you might want to get one at this stage, to help you understand and negotiate the contract being offered. Also, at the moment you are offered a contract, you are eligible to join The Authors Guild (www.authorsguild.org); they will provide much information about contracts. They are very tough advocates for writers, and you may not want to be as demanding as they suggest, but they are on your side, and they will help you understand the issues.

Subsidiary Rights

“Subsidiary rights” is a general term used to refer to all rights to a manuscript other than the initial publication rights. You're probably wondering, what else is there? Well, there's a lot. It's important that you understand what is outlined in the contract regarding subsidiary rights — who has the authority to sell these rights and what percentage of the sales you will get.

How many times have you seen a movie that was based on a book? This falls under the subsidiary rights clause in your contract. Remember, this is your creation. If others want to profit off of it, then you are entitled to a cut. In addition to movie rights, subsidiary rights include:

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While subsidiary rights often refer to media other than books, they refer to paperback books as well — both mass-market and trade. Publishing companies frequently publish the paperback versions of their hard-cover titles, but they don't have to. They can sell these rights to another publishing company.

If you are unsure of what these rights may or may not include, be sure to ask. If you have an agent, the agent will most likely negotiate the contract to keep some of the rights with the agency. The agent will then work to sell these rights — of course, taking a 15 percent commission. If you use an entertainment lawyer, she will charge a flat fee or hourly fee for the work, but will not retain that 15 percent in the property in the future.

One new and very important area of subsidiary rights is digital rights. This includes the right to market your book in an electronic reader, as an e-book. This market is new but growing fast, and you can expect it to become a major factor in book contracts over the next few years. Study materials from The Authors Guild before you sign away your digital rights.

Copyright 101

Some first-time writers are concerned that someone will steal their story and publish it as their own. For this reason, they apply for a copyright through the U.S. Copyright Office before sending in the manuscript. While it may sound like a great idea, it is unnecessary. In fact, editors who see the copyright symbol (©) on a submitted manuscript will likely deem the writer an amateur.

By simply writing your work, you are copyrighting it. That's the beauty of the copyright law. Once you have put your idea into tangible or “fixed” form, in this case on paper in written form, the work is automatically protected under law. Copyright protects both published and unpublished works. You needn't go through the hassle of contacting the office, requesting the needed materials, and filling out the appropriate forms. Once your manuscript has been accepted for publication, the publishing company will do that for you. But as mentioned above, add a clause to your contract that the publisher will register your copyright within 90 days, just in case you become involved in a lawsuit.

Ideas Are Not Protected

On the other hand, someone could steal your idea. Ideas are not protected under copyright law. If they were, there would be very few books ever published. For instance, let's say you have an idea for a story in which the protagonist braves a fierce thunderstorm and miraculously pulls through. As your idea, it may seem like something no one has ever published before — taking into consideration specific details, characterizations, and settings.

However, take the idea to its very foundation — man versus nature — and then think of all the books published with that same idea in mind. See, it's really not that original. It is how you present the idea and tell the story that makes your work unique and therefore able to be protected.

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The publishing company is not required under law to display a copyright notice. Don't worry; it is still protected. However, you don't want someone to steal your work and then claim they didn't know it was under copyright. So even though it isn't necessary, it is still important to inform the public of the copyright status.

How Long Does the Protection Last?

Not to interrupt your huge sigh of relief, but copyright does not protect your work forever. The U.S. Copyright Office states on its website (www.loc.gov/copyright) that a work “created on or after January 1, 1978, is automatically protected from the moment of its creation and is ordinarily given a term enduring for the author's life plus an additional seventy years after the author's death.” So what happens to your work once it is no longer protected by copyright? It enters the public domain.

Public Domain

Once a work is no longer protected by copyright, it passes into the public domain. This means that anyone can use the work in whatever way he wants without having to pay for permission to use it. The author and the author's heirs do not receive any type of payment for its use.

For instance, think about all the reproductions of Edgar Allan Poe's work. His works have taken form in textbooks, books of individual stories, compilations of his selected works, anthologies, and movies. Because his work is in the public domain, publishers, movie producers, editors of anthologies, and so forth can use his material to make a nice profit. They are paying only production costs because they do not have to pay the author for the right to use the work.

A Twist on the Original

You aren't a publisher or movie producer, so how can you use the works in the public domain to your advantage? Well, you could use a work that is in the public domain and add a new twist to it, narrate it from a different character's point of view, provide a sequel to the story, or adapt it into a modern version.

Perhaps you have read a story and, while thoroughly enjoying it, questioned several of its ingredients. Maybe these questions have haunted you, so you make an attempt to answer them in your own style. The beginnings of your own fantastic tale are indebted to the original work. You may choose to go into depth about the main character's childhood, perhaps explaining some of his actions in the original story. Or maybe you continue the story into the character's adulthood.

Maybe, as a child, you read a classic tale differently than other kids. Maybe you sympathized with the antagonist, and didn't care for the main character. You could recreate the story shedding light on the antagonist's feelings, and turn the story around to make the original antagonist the protagonist.

The possibilities are endless. But if you are considering using a work that is in the public domain to your advantage, you need to see who else out there has had the same idea. For example, if you were fascinated with the wolf from The Three Little Pigs and want to tell his version of the story, you will soon find that this has already been done in The True Story of the 3 Little Pigs, by Jon Scieszka.

Plagiarism, Permissions, and Fair Use

Now that you know what is and isn't protected by copyright, we'll talk a little about the in-between stuff. In some cases, you will be able to use someone else's work even though it is copyrighted. It's important to pay for most uses, and the responsibility for getting permissions usually falls on the author. When you use a few lines from a poem or song, you must consider what percentage of the whole you are borrowing. The trend seems to be that publishers are becoming more cautious about quotations, and licensing them is becoming more expensive.

Plagiarism

The illegal way to use someone else's work is to plagiarize. Plagiarism is taking someone else's words or ideas and passing them off as your own. Under no circumstances should you ever plagiarize. Even if you use material that falls under fair use, you must always cite the source. Otherwise, it is plagiarism, and in this technological age, plagiarists are sure to get caught.

Plagiarism is considered literary theft and taken very seriously. Always check with your editor if you are concerned about your use of someone else's work. To be completely on the safe side, create an original work and don't rely on the words of others.

Permissions

If the material you want to include does not fall under fair use, then you will need to be granted permission for the use of the material. For instance, let's say you are writing a nonfiction piece on losing a parent. You have discovered a wonderful article published in a well-known and respected psychology journal that you wish to quote. The excerpt you want to use is straightforward and clearly written — and two paragraphs long. In this case, you would want to get permission to use the excerpt in your book.

You would have to pay for the use of the excerpt and get the permission in writing. Often publishing companies will require a copy of the permission to keep in your file if you are using excerpted material. In fact, the contract will sometimes have a clause involving permissions and who is responsible for acquiring and paying for them (this usually falls to the author).

Also be sure to give credit where credit is due. If you are copying the material word for word, use quotation marks, and don't forget to cite your source.

Fair Use

If the use of another author's words falls under fair use, then you are fine. You won't have to pay for the right to use them; neither will you have to go to jail. So what is fair use? Unfortunately, this category is not easily defined.

Generally speaking, you may use a very small percentage of a whole copyrighted work. So if you want to quote a phrase or sentence from a 500-page book, this would be considered fair use — if, and only if, you cite the source. If you do not cite the source and use a direct quote, passing it off as your own words, then it is considered plagiarism.

Remember, it must be a small piece of the whole. Let's say you want to use a single line from a poem. While this may not seem like much, if the poem is only three lines long, you have taken 33 percent of the author's work, which certainly does not categorize it as fair use.

This chapter has explained some of the rights of authors and publishers, and some areas in which these rights can be negotiated. Rights issues are complex and changing, and you need to educate yourself well before you receive that first contract. As soon as you are eligible, join The Authors Guild and study their materials. You're about to be a published author; arm yourself!