4.1 Transfers
In this chapter we will address the issues of copyright transfer and publishing contracts. These two issues are being considered together because they are closely related. If you are interested in having a publishing company publish your work, you must be familiar with the subject of copyright transfers, since ordinarily you will he asked to transfer some or all of the exclusive rights which comprise your copyright.
Section 201(d) of the Copyright Act provides that “[the ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will] or pass as personal property by the applicable laws of intestate succession.” Section 201(d) also specifies that “[any of the exclusive rights comprised in a copyright … may be transferred … and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner ….Section 204 provides that “a transfer of copyright ownership … is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed ……”
What do these provisions mean? Consider the following:
property rights
1. Property right. Copyright ownership is treated as a property right that can be transferred to another person by conveyance, or by will.
“exclusive rights” divisible
2. Divisibility. The “exclusive rights” comprising a copyright (set forth in section 106 of the Copyright Act) are “divisible,” meaning that any one or more of them can be transferred to another person. To illustrate, section 106 gives a copyright owner the exclusive rights to prepare derivative works (e.g., a musical arrangement), publicly perform the work, and make duplicate copies of the work. If Ron composes an original religious song in 2000 and owns the copyright in the work, he can transfer his entire copyright to Ruth, or he can transfer any one or more of his exclusive rights to Ruth. Similarly, he can transfer exclusive rights to different persons, or transfer “any subdivision” of an exclusive right. Note, however, that unless Ron transfers his entire ownership interest in the copyright, he remains the copyright owner even though he has transferred away most of his exclusive rights. This is an important consideration, for it ordinarily means that Ron’s name will continue to appear in all copyright notices (even on works produced by the transferees of exclusive rights), and copyright registration of the work must be in Ron’s name.
status of transferee
3. Status of transferee. A person to whom a copyright or an exclusive right is transferred by the original copyright owner “is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner ….” This means that a person to whom an exclusive right has been transferred has a legal right to proceed against an infringer of that right.
signed writing required
4. A signed writing. Also note that according to section 204, a transfer of copyright ownership is not valid unless “an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed ….” Section 101 defines a “transfer of copyright ownership” to include an assignment, exclusive license, or any other conveyance of a copyright “or of any of the exclusive rights comprised in a copyright.” This means that both transfers of copyright ownership and transfers of any one or more exclusive rights must be evidenced by a writing signed by the owner of the rights conveyed. This significant rule is illustrated in the following examples.
Example. Brian writes a book and submits it to a publisher for consideration. The publisher agrees to publish the work, but insists that Brian convey his entire copyright ownership in the work to the publisher in return for a royalty agreement. This transfer must be evidenced by a written instrument of conveyance signed by Brian. What if it is not? Let’s assume that the agreement is oral, or that a simple agreement is assigned by both parties that does not refer to any transfer of copyright ownership or of any exclusive rights. In such a case, Brian will remain the copyright owner; and the agreement between the parties will define their respective rights and obligations. Being the copyright owner is important, for it means that Brian retains the exclusive rights in the book, including the right to make derivative works (e.g., a second edition or abridgement).
Example. Pastor Dalton writes an article that he submits to a religious periodical for consideration. The periodical agrees to publish the work, but no written agreement is signed. Pastor Dalton remains the copyright owner. According to section 201 (c) of the Copyright Act (discussed in Chapter 1), the publisher has acquired only the “privilege of reproducing and distributing the contributions as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” If, five years later, it decides to reprint the article in the same periodical, it has the right, according to section 201(c), to do so even without Pastor Dalton’s authorization. If however, another publisher sees the article and writes the publisher to request permission to republish the article in its publication, such a request must be forwarded to Pastor Dalton since only he has the authority (being the copyright owner) to grant such permission. Of course, the result in this example would be entirely different had Pastor Dalton “expressly transferred’ the copyright in the article to the first publisher. In such a case, the publisher would have become the copyright owner, and could have used the article in any manner it chose. In addition, it would have had the sole right to authorize subsequent publication of the article by other publishers. Authors and publishers must lie careful to clarify plainly, and in writing, the nature of the right being transferred. Misunderstandings are all too common.
notary acknowledgment
Should a written transfer of copyright (or of one or more exclusive rights) be acknowledged by a notary public? Section 204(b) states that a notary’s acknowledgment is “not required for the validity of a transfer,” but that it is “prima facie evidence of the execution of a transfer.” This simply means that notarization is desirable, but not necessary.
Key point. A federal appeals court has observed, “No magic words must be included in a document to satisfy [the written agreement requirement for a transfer of copyright]. Rather, the parties’ intent as evidenced by the writing must demonstrate a transfer of the copyright…. The requirement is not unduly burdensome…. The rule is really quite simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece o f paper saying so. It doesn’t have to be the Magna Carta; a one-line pro forma statement will do.”1
Key point. Section 101 of the Copyright Act excludes “nonexclusive licenses” from the definition of a “transfer of ownership,” and therefore section 204(a)’s requirement that “transfers of copyright” be by a signed writing does not apply to transfers of nonexclusive licenses.2
Example. A federal court noted that while a “one-line statement” may satisfy the requirement of a signed writing, and need not even refer to “copyright” or “exclusive rights,” it must be a clear conveyance of rights.3
Example. A court ruled that a fax did not satisfy the “signed writing” requirement for a transfer of copyright. The court pointed out that the fax contained no mention of a grant of any rights. It concluded, “Section 204(a) has a simple requirement in order far a grant of an exclusive license to be valid—put it in writing. If the parties really have reached an agreement, they can satisfy section 204(a) with very little effort.”4
Example. A court concluded that the following special endorsement on the back of checks paid to writers did not amount to a transfer of copyright to the publisher: “Signature required. Check void if this endorsement altered. This check accepted as full payment for first-time publication rights to material described on face of check in all editions published by [the publisher] and for the right to include such material in electronic library archives.” The court concluded that this did not amount to a valid assignment of online electronic rights by the writers. The court conceded that “a writing memorializing the assignment of copyright interests” can be brief; but this minimal requirement had not been met in this case because the language was unclear. It referred to the right to republish articles in “electronic library archives,” and the court concluded that this language did not contemplate commercially sold CD-ROMs or online electronic databases. Further, the court pointed out that before the writers even signed their checks the articles had been republished in the online electronic databases.5
Example. In the PTL bankruptcy case, televangelists Jim and Timmy Bakker claimed that they were entitled to the value of all copyrights for music and books they had written while employed by PTL. In rejecting this claim, the court noted that “time and time again the Bakker’s made representations to the general public that all such rights had been assigned to and were the property of PTL. The court has no basis upon which to make any finding to the contrary.”6
recording transfers
The Copyright Office does not have any forms for transfers. Ordinarily, a transfer is in the form of a contract drafted by one of the parties. However, section 205 of the Copyright Act does permit transfers to be recorded in the Copyright Office. Although recording is not required for a valid transfer, it does provide certain legal advantages and sometimes is required to validate a transfer as against third parties with conflicting claims. The question of what terms should be included in a transfer agreement is considered later in this chapter.
termination of transfers
For works already under copyright protection on January 1, 1978, the copyright law contains special provisions allowing the termination of any grant of rights made by an author and covering any part of the period (usually 39 years) that has now been added to the end of the renewal copyright. This right to reclaim ownership of all or any part of the extended term is optional. It can be exercised only by certain persons (the author, or specified heirs of the author), and it must be exercised in accordance with prescribed conditions and within strict time limits.
Example. A federal court ruled that publishers could place the contents of magazines and other periodicals in online electronic databases and on CD-ROMs without obtaining the permission of writers whose articles were included in those periodicals. Several authors sued the publishers, claiming that the inclusion of their articles in the online electronic databases and on CD-ROMs violated their copyright interests. The publishers disagreed, claiming that the writers had authorized the publication of their articles in an online electronic format, and that the republication of articles in “collective works” is permitted by the Copyright Act. The court concluded that none of the writers had legally transferred any rights to their publishers to republish the articles in an electronic format. It acknowledged that writers can assign all or any portion of the copyright in their works to a publisher by means of a written assignment. If they choose, they can transfer the right to republish their articles in an electronic format. But none of the writers had done so. However, the court concluded that the publisher had the right to republish the articles on the basis of 201 (c) of the Copyright Act, which specifies that “[c]opyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contributions as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” According to this language, persons who contribute articles to collective works retain the copyright in their articles unless they have assigned them to the publisher. If they have not assigned the copyright in their articles to the publisher, then the publisher has the limited privilege of “reproducing and distributing the contributions as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” Since the writers had not assigned any rights to the publishers other than the right to “first publish” their articles, the remaining question was whether the republication of the collective works in an electronic format was a “reproduction” or “revision” of the collective work. If so, then it was permissible according to section 201 (e). The court concluded that the republication of the collective works (magazines and journals) on CD-ROMs and in online electronic databases met this test. It rejected the writers’ argument that the individual magazines and periodicals lost their status as collective works when they were placed online and on CD-ROMs.
4.2 Publishing Contracts
Let’s assume that you have completed (or are about to complete) a book, article, or song, and that you find a publisher that is willing to publish your work. What kind of contract should you sign? What terms should it contain? What rights should you transfer? These questions are of great importance to both authors and publishers, and they often are subject to negotiation. Consider the following points:
A. Attaching a Copyright Notice to Your Manuscript
copyright notice
Never submit a published work to a publisher for consideration without affixing a valid copyright notice. While a copyright notice is technically no longer required, there are important advantages to using such notices, and these are explained in chapter 1. Many authors and composers inadvertently “publish” their works before submitting them to publishers—for example, by circulating copies to several persons for review and comment. If you are not sure whether or not your work has been inadvertently published, then affix a copyright notice to any works that leave your control, including the copy that you submit to a publisher. If you are certain that the work is unpublished, then you can affix a notice reading “Unpublished work Copyright 2002 John Doe.” It also is helpful to add the following notice: “Unpublished manuscript submitted for review purposes only; publication or reproduction is prohibited without the author’s written consent; return to author when review completed.”
B. What Rights Are You Transferring?
rights that may be transferred to a publisher
Determine what rights you are going to transfer to the publisher. Consider the following options:
• All rights (i.e., copyright ownership). Many publishers require that an author transfer or
assign copyright ownership in a work, meaning that the author is left with no exclusive rights. Such arrangements are more common in book publishing than in the publishing of articles in periodicals. Authors who transfer copyright ownership in a book to a publisher typically receive in return a promise from the publisher to pay royalties at a predetermined rate and at specified intervals. Royalty agreements are also common in the transfer of copyright ownership in musical compositions. However, authors of books and composers of musical compositions sometimes agree to a specified fixed fee as their total compensation for conveying all rights in a particular work. Authors who transfer copyright ownership in an article to a periodical publisher typically receive a flat fee for their work. Note that an author who transfers all rights in a work to a publisher retains no legal rights whatever in the work. This can lead to unforeseen consequences.
Example. Linda writes a book, and transfers her copyright ownership to a publisher in exchange for the publisher’s commitment to pay Linda a royalty in the amount of 10% of the retail price of all books sold. If the retail price of the book is $20, and in 2002 the publisher sells 3,000 copies, Linda’s royalty payments would be $6,000. By transferring copyright ownership, Linda retains none of the exclusive rights granted to a copyright owner under section 106. She may not, without authorization, make copies of her work, perform it, make derivative works (translations, abridgements, editions, etc.), or exercise any of the other exclusive rights. In addition, if the publisher is declared bankrupt, an author may never again be able to reclaim or reassert ownership in the copyright.
Example. Lois writes an article for a religions periodical. The publisher asks for all rights, and a contract is signed conveying copyright ownership to the publisher. The article appears in January of 2002. In 2005, another publisher asks Lois for the right to publish the same article in its periodical. Lois has no right or ownership in the article, and so she must forward this request on to the original publisher. If Lois is unwilling to convey all her interests in her copyright, she should so inform the original publisher. Often, a publisher who otherwise would insist on receiving “all rights” in an article can be persuaded to accept a lesser interest.
• Exclusive license. What if you are unwilling to part with copyright ownership in your book manuscript? How can you interest a publisher in publishing it? Ordinarily, the answer is an exclusive license, whereby you transfer to the publisher an exclusive license to publish the work in a specified geographical region (often the entire United States) for a specified period of time. Since such an agreement makes the publisher the sole supplier of the book, some publishers are perfectly willing to enter into such arrangements. Again, the author typically receives a royalty in exchange for granting the exclusive license. Like a transfer of copyright ownership, a transfer of an exclusive license must be in a writing signed by the person transferring the rights involved.
• First rights (or first serial rights). An author who transfers first rights in an article to a periodical publisher gives the publisher the right to be the first to publish the article. The author retains all other rights in the work. First rights can be restricted to a particular country or region, such as “first United States serial rights” or “first North American serial rights.”
Example. Pastor Larry writes an article for a religious periodical, and conveys first rights to the publisher. The article is scheduled to appear in the July 2002 issue. Pastor Larry has no legal right to publish the article in any other publication prior to July of 2002. However, once the article appears in the original publication, Pastor Larry owns all rights in the work, and can publish it in any other publication without the consent or knowledge of the original publisher. Note, however, that section 201 (e) of the Copyright Act (discussed in Chapter 1) gives the publisher the right to reproduce the article in “any later collective works in the same series.”
• One-time rights. An author who transfers “one-time rights” in an article to a periodical publisher gives the publisher a nonexclusive right to publish the article on one occasion. There is no assurance that the publisher will be the first publisher to publish the article.
Example. In 1990, Peter wrote an article for a Sunday School publication that was published that same year. Peter transferred first rights to the publisher. In 2002, a religious periodical requests permission to publish the same article. Peter cannot transfer first rights to the second publisher, since the article already has been published. However, he can transfer “one-time rights,” meaning that the second publisher is free to publish the article on one occasion without any assurance that it is the first to do so.
• Nonexclusive license. “One-time rights” are in essence a transfer of a nonexclusive license to reproduce a work. This means that the publisher has legal authority to publish the work, but it does not have the exclusive right to do so. Book authors and composers of musical works who retain copyright ownership in their works occasionally transfer only a nonexclusive license to the publisher, meaning that the author remains free to publish the work with another publisher as well. Obviously, few publishers are interested in such an arrangement. One exception (discussed in sections 6.10 and 7.1) involves “blanket licenses” issued by publishers or some commercial companies representing several publishers. Such license agreements typically cover large repertories of sacred music. Churches that purchase such a license are authorized to make copies of listed music (e.g., transparencies, copies for the choir, bulletin inserts, and recordings) without violating the rights of copyright owners. However, a number of courts have held that such blanket licenses are legally enforceable only if they are nonexclusive. This means that a church must be able to purchase individual pieces of music without purchasing a blanket license, and it must be free to deal directly with the copyright owner rather than with the publisher or publisher’s agent. Nearly all blanket license agreements are nonexclusive for this reason.
• Simultaneous rights. Let’s assume that Anne writes an article for a Baptist Sunday School publication, and submits the same article for publication to a Methodist Sunday School publication. Both publishers agree to publish the work, and neither insists on a transfer of copyright ownership. Under these circumstances, Anne is said to have transferred “simultaneous rights” to the two publishers. Of course, this is merely another way of saying that she has transferred “one-time rights” to two publishers simultaneously. Such simultaneous transfers are common in religious periodicals, since there is relatively little overlapping in readership.
• Subsidiary rights. This term generally refers to many of the rights that the author of a book has in his or her work, other than publication. For example, the term includes the right to make derivative works (translations, dramatizations, abridgements, editions, etc). Authors and publishers should carefully define which, if any, subsidiary rights are being transferred.
Key point. Note again that a transfer of copyright ownership, or of any one or more exclusive rights belonging to the copyright owner (under section 106 of the Copyright Act), is not valid unless “an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed ….” To the extent that any of the rights discussed above involves the transfer of copyright ownership or of an exclusive right, it must be in writing signed by the owner of the rights conveyed.
Key point. Section 201 (c) of the Copyright Act provides that “[i]n the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in [a] collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” This means that unless there has been an express transfer of more, the publisher of a periodical in which an article appears is presumed to have the privilege of reproducing the article in the periodical, in any revision of the periodical, or in later periodicals in the same series. This provision clarifies the rights of publishers of collective works (such as periodicals) in those all-too-common instances when the publisher and author fail to specify what rights are being transferred.
Example. Mark writes an article for a religious periodical. The parties entered into no written agreement, and there was no understanding regarding what rights if any Mark was transferring. The publisher is presumed to have acquired the privilege of reproducing the article in the periodical, in revisions of the periodical, or in later periodicals in the same series. While no court has construed the meaning of the phrase “later collective work in the same series,” it is likely that this means that the publisher has the privilege to reprint the article in future issues of the same periodical (in the same series), without Mark’s authorization. This principle remains a source of considerable confusion in the publishing industry. Of course, as noted above, Mark can transfer more extensive rights to the publisher, but he apparently cannot transfer less than the basic republication “privilege” established by section 201(e).
C. What Terms Should Be Included in a Contract with a Publisher?
terms to consider in a publishing contract
In most cases, the publisher provides a preprinted form and allows little if any variation. The courts have provided authors some relief by holding that standard publishing agreements drafted by publishers will be construed in favor of the author. This rule is based on (1) the general legal principle that ambiguities in a document should be construed against the party who drafted it (and who presumably could have avoided the ambiguities), and (2) the unfair bargaining power typically enjoyed by a publisher. Nevertheless, authors should consider the following terms when negotiating contracts with publishers:
a. Names and addresses of the parties.
b. Indicate whether or not the publisher (or author, in the case of a work made for hire) is a person, a corporation, a partnership, or an unincorporated association. In some states, an unincorporated association is not legally capable of contracting. Also, a corporation ordinarily can execute a contract only through authorized officers or representatives.
c. List the title of the work (and any alternative titles that have been used in connection with the work).
d. Indicate what kind of document is being executed (a transfer, license, assignment).
e. Describe the rights that are being transferred, and indicate whether they are exclusive or nonexclusive. This is one of the most important provisions in any publishing contract.
f. Define any geographical or time limitations. For example, is the publisher authorized to publish these throughout the United States and in foreign countries? Is the publisher free to publish the work for the duration of the copyright?
g. Authors should consider requesting a “bail out” provision giving them the option of terminating a publishing agreement upon the occurrence of certain contingencies. For example, an author may want to reserve the right to terminate an agreement if sales of his or her work fall below a specified number in the course of a year. This is a very important right from an author’s perspective.
h. Be sure to indicate who has the responsibility of renewing the copyright in a work in its first term as of January 1, 1978, if this his not already been done. Misunderstandings here can lead to a loss of some legal benefits. If the author is going to retain the copyright ownership in the work, then the agreement with the publisher should specify, for example, that the author is responsible for obtaining renewal registration. If, on the other hand, copyright ownership is being transferred to the publisher, then the agreement should indicate that the publisher is responsible for renewal registration. Works first copyrighted on or after January 1, 1978 are protected for a single copyright terms, and accordingly renewal registrations are necessary.
i. Designate the number of copies to be published in the first printing.
j. Define what, if any, subsidiary rights the publisher will have in the work (assuming that the author retains copyright ownership). For example, should the publisher have the right to make translations, abridgements, and future editions of literary works, or arrangements of musical works? What about movies, videos, and electronic publications (such as CDs and websites)?
k. What compensation will the author receive for the rights transferred to the publisher, and how will it be paid? The author typically is given a right to periodic accountings that verify the accuracy of compensation being paid. Compensation ordinarily consists of either a flat fee or royalty payments. In either case, a fair amount should he negotiated. Also, consider whether or not advances should be paid. An advance is a prepublication payment by the publisher to the author, and usually is deducted from future royalty payments.
l. Determine what advertising and promotion the publisher will conduct, and how these expenses will be paid.
m. Many publishing contracts contain an author’s warranty that he or she owns the copyright and that it does not infringe upon the rights of any other person (often called a “warranty of originality”).
n. Arbitration clauses are common in publishing agreements. Such clauses require that any disputes between author and publisher be submitted to a panel of arbiters for resolution (rather than to the civil courts).
o. The agreement should be dated.
p. The parties must sign the agreement. If the publisher is a corporation, two duly authorized officers ordinarily sign on behalf of the corporation. The corporation’s name must still be listed.
q. A notary’s acknowledgement of each party’s signature is desirable, but not required.
Endnotes
1 Effects Associates, Inc. Cohen, 908 F.2d 557 (9th Or. 1990.)
2 See, e.g., Barnnan v. Mnemonics, Inc., 79 F.3d 1532, 1537 n. 12 (11th Cir.1996).
3 Papa’s-JuneMusic s McLean, 921 F. Supp. 1154 (S.D.N.Y 1996).
4 Radio Television Espanola S.A. v. New World Entertainment, Ltd., 183 F.3d 922
C.A.9 1999).
5 Tasini v. New York Tines Co., 972 F. Supp. 804 (S.D.N.Y 1997), rev’d on other grounds, 206 F.3d 161 (2nd Cir. 1999).
6 In re Heritage Village Church and Missionary Fellowship, Inc., 92 B.R. 1000 (D.S.C. 1988).
Tasini v. New York Times Co., 972 F. Supp. 804 (S.D.>J.Y. 1997).