Friday, July 29, 2016

The Art of the (Jointly Authored) Book Deal

"I can never understand how two men can write a book together; to me that's like three people getting together to have a baby."-- Evelyn Waugh

Nearly everyone has heard the oft-repeated statistic that 50% of all marriages end in divorce.  The odds are no better with creative partnerships than with romantic ones.  Pity the poor writer, expert, or public figure who enters into a creative partnership without thinking about the financial, emotional and practical challenges ahead of them.  If the relationship falters, a well-drafted collaboration agreement (written during the romance stage of the relationship) can be consulted.   

Good Contracts Make Good Writing Partners

Contracts define the parties' goals, their rights and remedies, and recognizes what could go wrong.  The key reasons collaborations fail are lack of commitment, lack of communication and unrealistic expectations.  And, the inability to deliver a final manuscript that is complete and satisfactory in the amount of time allotted.

The art of converting a deal into an effective agreement, requires you to address the following: (i) money (how much and when paid), (ii) business and creative decision-making authority, (iii) ownership, (iv) authorship credit, and (v) how to handle disputes.

How you choose to address these issues depends largely on your sense of fairness, your bargaining power, industry custom and practice, and, if you are represented by an attorney, their support and guidance in reaching a workable agreement.   And yes, sometimes it's not about the money, but what the book can do for you, your brand, or a cause that matters to you.  

The Law Presumes 50/50 Ownership

In the absence of a formal agreement, the way copyright law deals with authorship is black and white.  When two people blend their independently copyrightable contributions with the intent to write a book, or other creative work, each party is presumed to co-own the copyright.   That allows either party to publish the work without the other's permission.  If there is no written agreement, each co-author receives 50% of the profits. Judges do not apportion a larger or smaller share based on the collaborators' contributions, experience, reputation or seniority.   

Decision-making problems arise when there are multiple offers for the work or requests for exclusive rights and no written agreement exists between the parties.  If there is no written agreement, or the agreement fails to address the issue, an uncooperative co-author (or a deceased co-author's estate) can prevent the other party from licensing or selling book, film or other rights, as no publisher, or producer, will acquire rights on a non-exclusive basis.  If the book is a memoir, or an extension of one author's business or brand, then that party should be concerned about controlling business and creative decisions. Relinquishing control, or foregoing credit, however, does not necessarily mean the party giving up those rights receives a smaller financial interest.  Neither does it equate with lack accountability or transparency, provided those concerns are advanced by the party drafting - or negotiating - the agreement.

Ghost Written & "As Told To" Books 

If you are a ghostwriter of a memoir, or the writer of an "as told to" based on conversations with the subject, are you delivering a “warts and all” portrait?  Alternatively, is your role to put the best face on your subject’s story, without resorting to blatant deception?   You need to flesh this out.  In drafting the agreement, the subject's attorney will structure it so payment to the writer is tied to delivery and acceptance of the manuscript.   

Compensation is generally in the form of progress payments tied to satisfactory (and timely) delivery.  A portion of the writer's fee is paid on signing the ghostwriter or collaboration agreement.  A further payment will be due on delivery of an acceptable book proposal. If the book is is sold to a publisher, further payments will be tied to payments of the advance.  The greater you detail what is to be delivered, the less arbitrary the acceptance standards will be.

If you can't hold it together long enough to see the work published, the impact of a literary breakup can be devastating.  One such disaster scenario is the unilateral termination of "as told to" collaborations, such as the failed collaboration between Fay Vincent, the former commissioner of baseball, and writer David Kaplan, who worked without a contract, on the chance a publisher would acquire the book and pay them an advance.  The authors signed a deal with Little Brown, which promised to pay them an advance of $300,000, half of which was paid on signing, with balance due on delivery and acceptance of the complete manuscript.  After 90% of Vincent’s memoir was completed, Vincent withdrew the project from his publisher, which required him to repay the advance. However, he allowed Kaplan to keep his share of what had already been paid, or $60,000.  While Kaplan and Vincent had exchanged draft versions of a collaboration agreement before their relationship devolved into an intractable dispute, the issue before the court was whether Vincent could prevent Kaplan from publishing any of the work they created.  See, Kaplan v. Vincent, 937 F. Supp. 307 (SDNY 1996).  Because they were friends, Kaplan "did not believe a formal agreement was necessary."   If they had a formal agreement – as opposed to an oral understanding -- costly, time consuming and psychologically draining litigation would have been avoided.

The Elements of the Deal

Some of the deal points found in these agreements are quite simple and other are not.   Below are the major elements of a typical ghostwriter or collaboration agreement.  Whether you push and push, or settle for less, is between you and your attorney (or agent).  But, don't lose sight of  the fact a workable agreement, is often a reasonable agreement. 

Responsibilities. Be specific.  What must be delivered?  What is the date it must delivered by?  When you engage a writer to help you write a nonfiction book, generally, the writer will prepare a book proposal before completing the manuscript.  A book proposal is a detailed overview of the book, it contains the author’s credentials and information about how the book can be marketed, plus one or two sample chapters.  The proposal is the bait used to solicit interest from publishers. A nonfiction book proposal is usually written with the understanding that substantive work on the actual manuscript will not begin until there is an offer from a publisher. 

In some circumstances, where one party is more knowledgeable in publishing matters, it may be appropriate to grant that person the exclusive right to negotiate with agents and publishers. If you are not the one shopping the proposal, you will either reserve the right of final approval of the publishing contract, or predicate approval on receiving some minimally acceptable payment.  

Compensation.  If one of the parties has greater immediate financial needs -- whether money is needed to pay their rent or for travel-related research -- the other party can defer all or part their compensation from the initial advance.  As discussed above, it is customary for commercial publishers to advance a sum of future royalties to the authors when they sign a publishing agreement.  It's been likened to a pay day loan.  Once that money that has been recouped or refunded from future proceeds, the author who deferred can start getting paid, perhaps on more favorable terms than if they had not deferred payment.  Deferring payment is also a way for the subject of a book to obtain the services of a more experienced writer without having to go out of pocket for a large sum.  

Delivery dates in publishing are tied to publisher advances.   A missed deadline can result in cancellation of a book contract. That, in turn, can trigger an author's obligation to repay their advance.  Any agreement between collaborators should deal with the return of the portion of the advance paid to each collaborator.   

If the subject gets cold feet and pulls out (assuming both writer and subject are parties to a third party publishing agreement), stipulating in the collaboration agreement that the writer does not have to repay their portion of the advance will take some of the sting out of a failed collaboration. In other types of creative divorces, it may be possible to separate out each author's contribution, and transfer those rights to the original contributor. These strategies overlap, and are not at the exclusion of each other.

Keep in mind, even those who do not qualify as joint authors for copyright purposes (for example, individuals who made an important – but not copyrightable -- contribution to the manuscript) may still share in the profits and control of a work through an appropriate contractual arrangement.   

Credit. By some estimates, up to 70% of nonfiction books are ghostwritten. For example, it is widely believed that Theodore Sorenson wrote John F. Kennedy's Pulitzer Prize-winning book, "Profiles in Courage,” for which JFK took both the prize and sole author credit for. Clearly, a talented writer, who knows the ins and outs of publishing, can be a great asset in helping a public figure or an expert (but not an expert writer) go from idea, to book proposal to finished manuscript to published author. 

Writing credits take various forms.  The most common writing credits are: "by Subject and Writer" or "Subject with Writer" or "as told to Writer." By definition, if the book is ghostwritten, sole authorship credit for the work will be in the subject’s name only. In that case, the writer-for-hire must make peace with the fact the subject will receive sole authorship credit. Some might argue that ghostwriters should receive higher fees, because their names don’t appear on the finished book.   In the case of an equal in credit collaboration agreement, the size and prominence of names, as well as the order of names on the cover and title page, needs to be negotiated and agreed to in writing. 

Copyright.  A work for hire is a term defined by statute.  It can either be a work specially commissioned, or one created by a regular employee in the course of their employment. If you are the hiring party, it is especially important to clarify the nature of the writing services before you hire the person you wish to perform those services.  Later may be too late if your objective is to own all of the rights. After-the-fact attempts to classify a work as "for hire" often fail, which is why an effective contract includes a back-up copyright assignment.  

Death & Disability.  In the event of  either party's death, disability or an intractable disagreement, the agreement should have rules for hiring a new writing partner to complete the book. The agreement might specify that the authority to enter into contracts, and make creative decisions, vests solely in the subject's estate, or the writer (subject to a duty to account).  If a work is likely to be revised, the agreement should include a clause that allows the remaining author to revise the work and reduce the compensation paid to the other's heirs or representatives if it becomes necessary to hire an outside writer.  The agreement should also specify whether the person hired to complete the work is entitled to receive credit as an author.  

Control of Business & Editorial Matters. Control of business  affairs (e.g., who is responsible for seeking out and approving book deals?) and editorial matters (e.g., who has the authority to approve the final draft of the work or authorize revisions?) are critical issues. Unanimity may be required for certain decisions (e.g., approval of the initial publishing contract).  If one party retains approval rights over the manuscript, the other party should try to impose reasonable limitations, such as a chance to correct the manuscript within (e.g., 30) days after receipt of the other party’s comments.  Requiring the party with approval rights to provide detailed editorial reasons for any dissatisfaction, arguably, establishes objective criteria by which the writer can revise and have their contribution judged. 

Representations & Warranties.  From a ghostwriter, or "as told to" writer's perspective, the subject must provide representations (or promises) and warranties that they have or will: (i) provide access to pertinent documents, whether diaries or memorabilia, or business papers; (ii) provide reasonable access to themselves; (iii) use their best efforts to provide the writer with access to other individuals as may be required to write or finish the book; and (iv) cooperate in good faith with the writer in pursuing a publishing deal.  Special attention should also be paid to the indemnity clause.  An indemnity is a promise to reimburse the other party should they breach their warranties.  

Reciprocal representations and warranties are the norm as well.  They include: (i) no contractual commitments (e.g., a confidentiality agreement) exist that will interfere with the ability to perform their obligations; (ii) their contributions are original and will not violate any copyrights, proprietary rights, or rights of privacy, publicity, or constitute a libel against, or violate any other common law rights or other rights of any person or entity.  

If any liability arises because of a breach of either party's’ representations or warranties, the non-breaching party should be reimbursed for costs and expenses (including reasonable attorney's fees), and damages paid out to others.   If you are a "for hire" writer, meaning, the copyright vests in the party that hired you, the agreement should require the hiring party to make best efforts to have the publisher name you as an "additional insured" on the publisher's media liability policy.  If a writer is relying on material provided them by the person who hired them, they should exclude this material from their own representations and warranties.   
TIP.  Since verifiable truth is a complete defense to libel (at least in the United States), your agreement should require that both parties retain copies of all recorded interviews, transcripts, books, notes, letters, emails and other research materials used in preparation of the book. If there is a lawsuit, you may be required to prove the truth of the statements that are published. (see §9.12.1, The Copyright Permission and Libel Handbook (John Wiley & Sons).
Confidentiality & Non-Disparagement Clauses.

Confidentiality clauses are huge issues for celebrities and other public figures.  The downside of not dealing with confidentiality and non-disparagement issues is reputational harm.  Here's an example of the confidentiality clause from the unexecuted collaboration agreement between Fay Vincent and David Kaplan discussed above:  
All material whether oral or written contributed by either party for use in the manuscript, including materials and information provided prior to the execution hereof, shall be considered confidential, and neither party shall use any of such material or the facts or the information contained therein that have been provided with the parties' collaboration except as permitted hereunder or under an agreement with a third party to which both parties have previously agreed in writing, without the express prior written approval of the other party. In no event shall any confidential material otherwise be used by the party that has not furnished the same in the event there is any termination of the agreement. Specifically, Kaplan agrees not to participate in interviews, write any articles or books, or take any actions in or by which he discloses in any manner any of the unpublished information furnished to him hereunder, or any portion thereof, in connection with the work which is not publicly available or independently discovered by Kaplan, including any non-public aspect of the relationship of the parties involved in the preparation or the writing of the Work and/or its adaptation for use in any media whatsoever ....
An effective contract might also include a non-disparagement clause.   This is particularly important if you are a public figure, or represent a public figure.  
You agree that you will not (nor will you cause or cooperate with others to) publicly criticize, ridicule, disparage or defame Subject, his family, his business associates, company, directors, officers, shareholders, employees, agents, or attorneys, with or through any written or oral statement or image, whether or not they are made anonymously or through the use of a pseudonym. 
The subject's lawyer will also include a provision that requires the writer to agree to treat the ghostwriter agreement itself as confidential.   One common error is not to include exceptions, such as sharing the agreement with your agent, attorney, tax preparer, or as compelled by a court or  government agency (e.g., the IRS).  In terms of remedies for breach, in addition to injunctive relief (necessary because "A lie can travel halfway around the world while the truth is putting on its shoes." -- Charles Spurgeon), the ghostwriter might be required to forego royalties, or repay amounts previously paid, but any such remedy will be subject to scrutiny by the courts and a possible finding of unenforceability.  


The time to address these issues is before the actual creative process begins. Although collaborators might not feel comfortable discussing long-term financial and other issues, an effective agreement deals with these matters up front, rather than after the brickbats start flying.       

© 2013 - 2016.  Lloyd J. Jassin  

Disclaimer: This article, parts of which were previously published, discusses general legal issues of interest and is not designed to give any specific legal advice concerning any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the advice contained in this article.

About the Law Offices of Lloyd J. Jassin.  At the Law Offices of Lloyd J. Jassin we provide more than legal advice. We offer a broad understanding of the industries in which our clients operate and a network of contacts within the publishing, entertainment and licensing communities. Clients gain access to all of the knowledge, counsel, and advocacy that the firm can provide. View Lloyd's complete profile

Contact: Law Offices of Lloyd J. Jassin, The Paramount Bldg., Floor 12, 1501 Broadway, NYC, 10036, (tel.) 212-354-4442; (Email), or visit: Follow us on Twitter:

Friday, May 20, 2016

Simon & Schuster Slapped with eBook Royalty Class Action Lawsuit

A book is a book, except when it comes to eBook royalties. That's the premise of a class action lawsuit filed on Thursday, May 19, 2016, in the Supreme Court of the State of New York by class representative Sheldon Blau, MD.   

The lawsuit alleges Simon & Schuster has been cheating its authors by improperly categorizing eBook transactions as "sales" rather than "licenses."  

The distinction is significant, because the royalty rate for sales is much lower than the rate for the license of rights.  If categorized as a license the author receives 50% of net receipts, rather than 25% of net typically paid to authors for the "sale" of an eBook.

A book is a book, except when it comes to eBook royalties
According to a report in Law360, an unnamed spokesman for Simon & Schuster told Law360 that the division that published Dr. Blau's book, was sold (or was it licensed?) to another company in 1998, and that the publisher never published a digital edition of the book.

The eBook royalty class action looks back approximately six years, the statute of limitations on contract actions in New York State.  It alleges Simon & Schuster engaged in a "pattern and practice of paying Plaintiff and others similarly situated royalty payments for the distribution of licenses for electronic books, or "e-books," at a rate for book "sales," or some other lower rate than that required for "license" transactions."

This issue arose, in a different context, in F.B.T. Productions v. Aftermath Records, a 2007 federal lawsuit brought by Eminem's management company against his record label over digital royalty rate splits.  Like the music industry, book publishers have taken the position that digital downloads should be accounted for as sales not licenses.

In its 2010 decision, the F.B.T court held that digital downloads should not be treated as auditable physical units for royalty accounting purposes.   The Ninth Circuit ruling was important for the recording industry, because recording artists (like book authors) receive 50% of the record company’s net receipts from rights licensed to third parties -- as opposed to 12% to 20% of the retail price when a recording is "sold."

In the wake of the Eminem decision, most publishers amended their contracts, so the sale or license of  an "eBook" is unambiguously treated as a sale.   The lawsuit, therefore, challenges the publisher's interpretation of their legacy or backlist contracts.    

Monday, February 22, 2016

Four Ways to Tame Your Permission Fee Budget

Clearing rights and permissions can be both costly and time consuming.  Fortunately, the Copyright Act places exceptions and limitations on a copyright owner's right to demand a permission fee.  Obviously, not all of these exceptions and limitations will apply in every situation.  Start by asking yourself the following four questions.  If you answer yes to any of them, read on.  The use you are contemplating may be undertaken without permission.

  1. Is the work is in the public domain (i.e. out of copyright)? 
  2. Is the material uncopyrightable (e.g., unadorned ideas are common property)?  
  3. Is the use a fair use? 
  4. Is the material offered under a Creative Commons License?

    Below is more information about these important copyright exceptions and limitations. If after reading this you are still unsure whether you need to pay a permission fee, you should seek permission or the advice of counsel.

    1.  Public Domain (Expired & Forfeited Copyrights)
    Copyright protection does not last forever. That is why copyright is referred to as a "limited monopoly.” When copyrights grow old and die, the work they once protected falls into the public domain. How long copyright protection lasts depends upon a number of factors, including, the date of publication, the date of the author's death, and in which countries you intend to publish the work. Literary and artistic works published before 1923 are out of copyright in the United States, and can be used (subject to the below caveats) without permission.

    For works created after December 31, 1977, the duration of copyright is 70 years from the end of the year in which the author dies. For works for hire created after December 31, 1977, the duration of copyright is 95 years after publication. 

    For works published between 1923 and 1977 the term of copyright is 95 years from initial publication. However, special rules apply to works created or published before 1978. For example, before 1964, copyright owners were required to renew their copyrights during the 28th year of copyright. If the owner failed to renew, their copyright was forfeited. 

    A tremendous number of works entered the public domain because renewal was not made during the 28th year. The renewal scenario requires a further qualification. If the public domain work you wish to use is based on a work that is still in copyright, you can't use that work without the permission of the underlying rights owner. For example, while the owners of the motion picture "Rear Window" forfeited copyright by failing to renew during the 28th year, the owner of the underlying work, a short story by Cornell Woolrich, did renew their copyright. Since the copyright in the film only extended to the new material added by the producers of the film, the owner of the copyright in the underlying short story was able to stop unauthorized distribution of the film. The takeaway? If a work is an adaption of another work, both the underlying rightsholder, and the holder of the copyright in the derivative work may hold rights. Similarly, before 1988, publication without a proper copyright notice could invalidate the copyright. Today, there are no renewal or notice formalities.

    Caution! Copyright is not the only form of legal protection for creative works. Although a work may be in the public domain for copyright purposes, rights to the material may be protected under other legal theories such as trademark or unfair competition law (which protects against confusingly similar usage by another); the right of privacy (which protects a person's right to be left alone); the right of publicity (which protects an individual’s exclusive right to benefit commercially from his or her name, voice, photograph or likeness). Similarly, works such as databases may be protected under trade secret or contract law in the U.S. and abroad. Further, new or later versions of a work, to the extent the underlying public domain has been embellished with new copyrightable material, may also require permission. 

    Although a work may be in the public domain in the United States, it may still be protected in other countries. For example a work by a United States author that is in the public domain in the United States for failure to renew, may still be protected in countries such as Germany, where copyright formalities are abhorred, and duration is based on when the author died, not a specific term of years. If you plan to publish a public domain work abroad, you may be required to obtain permission if the author died within the last 70 years. If you fail to obtain permission, you will expose yourself to the risk of one or more lawsuits overseas.

    2. Uncopyrightable Material

    There are certain types of works that are immune from copyright protection altogether. Copyright does not protect unadorned or fundamental ideas, concepts, procedures, recipes, principles or discoveries. The same principle applies to facts. Copyright, however, does protect the way ideas, concepts, procedures, principles and discoveries are expressed, explained or illustrated. Be aware that where the dividing line between an unadorned or unprotectable idea lies, and one that is sufficiently developed to enjoy copyright protection, sometimes is hard to discern. As a general rule, copyright does not protect short phrases, names or titles either. However, short phrases, names and titles may be protected by trademark or unfair competition law if they serve a branding purpose. Fortunately, the use of a trademark as a point of reference in a story, or used in a non-deceptive way to criticize a product or service, will generally be deemed a fair or non-infringing use.

    3. Fair Use

    Fair use allows scholars, researchers and others to borrow or use small (and sometimes large) portions of in-copyright works for socially productive purposes without seeking permission. The doctrine -- which complements the First Amendment -- helps courts avoid rigid application of copyright law where rigid application would "stifle the very creativity which the law is designed to foster." Against this backdrop, fair use can be looked at as a balancing act. It is an imperfect attempt to reconcile the competing ideals of free speech with the property rights of individual creators. 

    While invaluable to scholars, the media and business people, it should be noted that fair use is not a right but a defense to copyright infringement. The central point is that fair use determinations involve risk. So, if you can't make the decision yourself, and are risk adverse, seek permission.

    To determine whether the use made of a work in a particular instance is a fair use, courts consider the below four factors. No one factor is determinative of the issue, although factor four, which relates to economic harm, weighs heavily in any fair use decision. 
    • The purposes and character of the use, including whether the use is primarily commercial;
    • The nature of the work that's been copied;
    • The amount and importance of what was taken in relation to the original work as a whole;
    • The effect the copying has on the marketability of the original work and its derivatives
    Cutting Through the Fair Use Gobbledygook 
    While there are no mechanical rules to define with precision what is a fair use, the following considerations, distilled from leading court decisions, will help you assess if a proposed use is likely to be deemed a fair use.        

    • Fair use favors transformative uses. Use the work as a springboard for new insights. Critique the original. Make a connection between it and other works. Use it to buttress your own arguments, or the arguments of others.
    • Since ideas are common property, it's easier to justify use of a factual or informational work than a creative one. That is because teaching, scholarship, research and news reporting are cumulative in ways not typically associated with art and music.
    • Poetry, song lyrics, and visual works enjoy a high degree of protection under copyright law, so, fair use tilts against use of these works.  
    • Quoting from unpublished materials exposes you to greater risk than quoting from published materials. While not determinative in and of itself, if a work is unpublished, that fact weighs against fair use.  
    • Sometimes even a small (but important) portion borrowed from a larger work may constitute copyright infringement. Make sure the amount you use is reasonable in light of the purpose of the copying.
    • Synthesize facts in you own words, keeping in mind that close paraphrasing may constitute copyright infringement if done extensively. 
    • Lack of credit, or improper credit, weighs against finding fair use. However, giving someone appropriate credit, will not, alone, transform an infringing use into a fair use.
    • Parody is a work that that ridicules or mocks another work. Fair use favors parody. It does not favor satire. Make certain the parody is apparent. A conservative approach is to conjure up just enough of the original to convey your parodic points.  
    • Being a non-profit educational institution won't insulate you against liability if you exceed the bounds of permissible fair use.  
    • The most important consideration concerns economic harm. Don't compete with the work you are quoting or copying from. If the use displaces or diminishes the market for the original work, including revenue from licensing fees, it is probably not a fair use. However, the more transformative the work, the less likely the displacement of sales will be determinative.  
    4. Creative Commons
    Creative Commons Buttons
    Devised by the Creative Commons ("CC"), a non-profit organization, standardized CC licenses give the public permission to share and use a creative work on conditions set by the copyright owner. While neither an exception nor limitation on copyright, by clearly stating what is a permissible use, a CC license short circuits the need to seek formal permission. A CC license button (or link to the license) will appear in close proximity to the work. If you violate the terms of a CC license, in addition to termination of the license, the potential consequences include compensatory or statutory damages, or an injunction. Therefore, you must read a CC license very carefully. Common to all CC licenses are the following conditions: "Licensees must credit the licensor, keep copyright notices intact on all copies of the work, and link to the license from copies of the work. Licensees cannot use technological measures to restrict access to the work by others." CC licenses are generally associated with online use.

    If you plan to make use of a work that does not fall within the above four safe havens, then you must obtain a license or permission from the owner of the work. Begin the process early. Locating rights holders is not always easy, and negotiating rights and permissions takes time.

    Finally, don't be afraid to negotiate rates with the rights holder, keeping in mind that non-profit organizations often receive more favorable permission quotes.   Also, if the amount you want to use is small, or the use will promote the rights holder, or contribute to the public good in a significant way, fees may be reduced or waived.  But, don't count on it.  

    Additional Resources:
    Classroom Use Guidelines (not legal authority; but agreed-upon minimums)
    DISCLAIMER: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances.   It is important that professional legal advice be obtained before acting upon any of the information contained in this article.  When in doubt, seek permission or the advice of counsel.

    LLOYD JASSIN is a New York-based copyright, publishing and entertainment attorney.  He is co-author of the Copyright Permission and Libel Handbook: A Step- by-Step Guide for Writers, Editors and Publishers (John Wiley &; Sons, Inc.).   Lloyd has written extensively on negotiating contracts in the publishing and entertainment industries, and lectures frequently on contract and copyright issues affecting creators and their publisher partners.  A long-time supporter of independent presses, he is First Amendment counsel to the Independent Book Publishers Association  (IBPA) and sits on the advisory board of The Beacon Press, one of America's oldest independent presses. 

    He may reached at or at (212) 354-4442.  His offices are located in the heart of Times Square, in The Paramount Bldg., at 1501 Broadway, FL 12, NYC, 10036.  Follow the Law Firm and Lloyd on Twitter at

    Thursday, February 4, 2016

    No Copyright Infringement Intended (Yeah Right)

    Empty Heads
    "No Copyright Infringement Intended" appears next to countless YouTube videos and other online works. However, it is a hollow disclaimer.  There is no pure heart and empty head defense to copyright infringement.  Copyright is what is known as a strict liability tort. If the use is unfair (i.e., not a fair use), a plaintiff does not have to prove any knowledge or intent to make its case.
    In the Harrisongs case, the court determined that George Harrison's My Sweet Lord subconsciously infringed the Chiffons’ 1963 hit He’s So Fine.   Innocence is only significant when it comes to calculating monetary damages and attorney's fees.  Bad-faith infringers are treated more harshly than innocent ones.
    When Mark Twain was accused of subconsciously cribbing the dedication to the ironically titled The Innocents Abroad from a book of poems by Oliver Wendell Holmes, he quipped, "Adam was the only man who, when he said a good thing, knew that nobody had said it before him.”  An argument can be made that "No Copyright Infringement Intended" trumpets the fact that the defendant knew they were infringing, or recklessly disregarded that possibility.  If the infringement is willful, or your behavior reckless, a court can award up $150,000 per infringement together with attorney's fees.
    As George Harrison learned, under copyright law, ignorance (or innocent intent) is not bliss. If you intend to use or reuse someone else’s copyrighted work, first educate yourself about fair use, the public domain, and what is - and isn't -- protected by copyright.
    Fitzgerald Pub. Co., Inc. v. Baylor Pub. Co., Inc., 807 F. 2d 1110 - Court of Appeals, 2nd Circuit 1986

    ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F. 2d 988 - Court of Appeals, 2nd Circuit 1983


    Friday, December 4, 2015

    Outside of a Dog # 4: Authors Experiencing a Slump in Earnings

    New Guild Survey Reveals Majority of Authors Earn Below Poverty Line Outside of a Dog is an irregular series that features publishing wisdom from a variety of classic and contemporary sources. As a lawyer, I'm fascinated by the economics and entrapments of publishing contracts and cases.

    "It is better to have a permanent
    income than to be fascinating."
                       - Oscar Wilde
    How are authors paid?  Generally, poorly.  So poorly, that a recent Authors Guild survey revealed that the majority of authors earn below the poverty line.  

    While there is a romantic Left Bank notion of the self-sacrificing writer turning their back on convention, proper writers must eat. To that point Samuel Johnson said, "No man but a blockhead ever wrote except for money." 

    There have been many bitter remarks written about the size of book advances and the economics of traditional book publishing. Mid-list authors, demoralized by anemic advances, whose royalty accounts are perennially in-the-red, should take note that publishing is an equal opportunity abuser.  Calvin Trillin, Edgar Allan Poe, and even the poet Horace have groused about the meager earnings and economics endemic to the publishing industry. What follows is a sampling of those author grumblings (and a discussion of how author advances are calculated).

    Publishing Monkey Business

    In the 1932 comedy Monkey Business, Groucho Marx says “Oh, I know it’s a penny here and a penny there, but look at me. I worked myself up from nothing to a state of extreme poverty.” The line, attributed to screenwriter, S.J. Perelman, is an apt statement about typical author earnings, which, according to the Authors' Licensing and Collecting Society has fallen by 29% since 2005.

    Perelman was a thorn in the side of  his editor, Bennett Cerf, when it came time to negotiate his book contract with Random House.  In response to Cerf's refusal to increase his book advance, Perelman, the Algonquin Round Table wit, countered: “I am afraid that a $250 advance is mandatory; after fourteen months of my life on my Sabine farm, I have practically no worms to drop into the bills of my young and the movie business isn’t helping to any degree.” Marshaling all the right arguments, he added that Cerf would be better served by sending him back to his typewriter with a “happy grin and a high heart,” than "leaving his money to an animal hospital."

     “[C]all in Swaine, Cravath, deGersdoff & Wood and draw up those tortuous contracts." Perelman wrote Cerf.  "I’ll have Samuel Untermyer [Perelman's attorney] go over them (I pay him fifty or sixty thou a year just to handle my book contracts) and send them on without delay.”  While a notorious penny-pincher, Perelman understood the value of having a fountain pen-for-hire to look over his contracts. 

    How Book Advances Are Calculated

    When a contract is negotiated between an author and a publisher, the author is generally paid a nonrefundable advance against future royalty income. That means the author won't see another dollar until the advance is earned back. One of looking at the advance is that it is the bet the publisher is placing on the book.  Regrettably, traditional publishers are buying fewer books, and advances have been heading south for over a decade.  

    While there is no set formula, publishers base advances on the number of copies they project to sell in first six months to a year after a book first goes on sale. Clearly, Perelman's publisher, Random House, was not expecting much.  To calculate an advance, a publisher looks at what the royalty payout to the author is on each copy, then multiplies that by the number of copies they project to sell (less a deduction for anticipated returns).  If a publisher pays an advance of $50,000 for a first novel,  assuming a royalty of 8% of a cover price of $19.95 (think trade paperback original), or $1.59 a copy, that means the publisher will have to sell more than 31,446 copies before the advance is earned out and the author earns a dollar more than the $50,000 already paid to her.  For this reason, during negotiations it's important for an author to ask how many copies the publisher thinks it will sell, and at what price.  If you are fortunate enough to be taken to lunch before an offer is made, a good time to slip in the "How many do you think you can sell?" question is after the first glass of wine has been polished off.  In vino veritas.

    The Strange Relationship Between Writers & Money 

    Unlike Perelman, author Kurt Vonnegut had a different relationship with money and the writing process. Rebelling against the "more is better" approach to advances, he advised his son (author Mark Vonnegut) “to carry on without an advance” while working on his first book. You can read the complete letter he wrote to his son in Kurt Vonnegut: Letters, but here's an excerpt:
    I have mixed feelings about advances on first books. They are hard to get, for one thing, and are usually so small that they tie you up without appreciably improving your financial situation. Also, I have seen a lot of writers stop writing or at least slow down after getting an advance. They have a feeling of completion after making a deal. That’s bad news creatively. If you are within a few months of having a finished, edited manuscript, I advise you to carry on without an advance, without that false feeling of completion, without that bit of good news to announce to a lot of people before the job is really done.
    Trillin's Extravagant Lunch Principle

    Calvin Trillin's contract negotiation advice is colored by a an insider's cynicism fed by extravagant author lunches and familiarity with the entire publishing scene - not a law degree. His singular advice was “the advance for a book should be at least as much as the cost of the lunch at which it was discussed.”  

    A corollary to Trillins’ formula governing advances: The cost of clearing permissions should never exceed the size of the advance.  Think carefully about the book you want to write as the cost of clearing rights to previously published material can bankrupt you.  

    You Can't Make a Living, But you Can Make a Killing in [Publishing]*

    Thackery wrote "the rewards of the profession are not to be measured by the money standard."  While the size of the advance is not always an accurate predictor of a book's success, an author who receives a small advance invariably receives less promotional support from their publisher than one who receives what PublishersMarketplace calls good deal ($50,000 - $99,000), or a significant deal ($100,000 - $250,000).  nice deal ranges from $0 - $49,000.   

    But, it's not all doom and gloom for the recipients of a nice deal. Tom Clancy's The Hunt for Red October ($5,000), published by The Naval Institute Press, went on to sell millions of copies. Terry Pratchett, Stephen King, Jacqueline Susann, and JK Rowling all received small advances for their first books, which goes to show that publishing is a perplexing business where small bets can pay off big, and big ones can come back to haunt you.

    According to Victor Bohnam Carter's book, Authors by Profession, John Milton, in the midst of a financial crisis, signed a hellish publishing contract for his epic poem, Paradise Lost.  “The agreement was dated April 27, 1667, and provided that Milton receive £5 for the first edition or impression of 1300 copies,  £5 for the second, and the same for the third.”  During his lifetime, Milton received a total of £10 from his publisher Samuel Symons.  Milton’s widow later sold the copyright to Symons for £8.   Edgar Allan Poe died virtually penniless, having risen above the poverty line only once during a fourteen year period between 1835 and 1849.  Similarly, Walt Whitman lived his whole life in poverty.  To paraphrase Kinky Friedman, they were ahead of their time and behind on the rent.  

    Things were no better for authors in ancient Rome.  How do we know?  The poet Horace (who coined the phrase “carpe diem”), grumbled loudly that his works brought the Sosii brothers (his publishers) gold, but, him, only fame.  Hic meret aera liber Sosiis, hic et mare transit, Et longum noto scriptori prorogat alvum. — (Art. Poet., 345)

    UK publisher, Michael Joseph in his autobiography, The Adventure of a Publishing  writes:
    I do not believe that the terms of a contract are often the reason for an author’s dissatisfaction, as may be supposed.  There are barrack room lawyers among authors, but they are very few.  For the most part authors are content with the terms they receive.  If they have an agent, the publisher cannot be held responsible; if they have not, they usually have little understanding of royalty scales and advances and are grateful for what they receive." Joseph went on to say that "nowadays there can be few publishers foolish enough to underpay their authors.  
    Joseph was living in a pre-Kindle world.  In his day, traditionally published authors would accept low royalties in order to get their books to market.  That was before the self-publishing revolution.  Today, many authors are saying no to 25% royalties offered by traditional publishers, opting for self-publishing, where they can receive 70% of the list price of an eBook sold on Amazon.  At the same time, it's not uncommon for published authors to jump from house to house, seduced by financial offers from competing publishers.“I never saw an author in my life,” wrote Oliver Wendell Holmes, “saving perhaps one, that did not purr audibly as a full grown domestic cat on his fur smoothed the right way by a skilled hand.” 


    In a 1956 letter to travel writer Leila Hadley, S.J. Perelman shared his philosophy about the business of publishing: “[T]he only rule of thumb I know is, get the biggest advance you can (which in turn forces them to try to recoup their investment) and be as demanding on advertising, publicity, etc. as is consonant with your decency.”  Categorizing the common practice of only advertising a book after it begins to sell as “Alice-in-Wonderland” thinking, he urged Ms. Hadley to “be on the ground and participate in all the Martha Dean, Tex and Jinx, and TV panels merde you can evolve.”  Not bad advice.  

    *apologies to Robert Anderson who once said: "You can make a killing on Broadway, but you can’t make a living."

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