Friday, June 17, 2022

Copyright Recapture: How to (Legally) Break Your Publishing Contract

How to Get Back Your Copyright After 35 Years

Siegel Reclaims Copyright
1941 Superman "Breaking Chains" Trademark
The term or duration clause of most publishing and entertainment related contracts is for the life of the copyright. In today's terms, that's an author's life plus 70 years. However, life of copyright contracts (with important exceptions) are unenforceable in all 50 states. That is because federal law takes precedence over state laws.

The 35 Year Termination Rule

To protect artists, authors, and compos of post-1977 works from bad deals signed by their younger selves, the Copyright Act gives them (and certain family members) a mulligan - a second opportunity to negotiate better terms or exit from an undesirable deal.

Embedded in the copyright statute is Section 203 – a powerful reset button, which returns terminated rights to an author or their family if timely exercised. Termination can be accomplished "at any time during a period of five years beginning at the end of 35 years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever is earlier."

Section 203 applies to grants of copyrights made by authors on or after January 1, 1978, rather than grants made by their heirs. This could include transfers of works created before 1978 if the transfer was made after January 1, 1978. For example, a film option signed by Stephen King in 1994 for the novel Carrie, written in 1974, could be terminated sometime between 2029 and 2034.

Works for hire are immune to termination.
However, the concept of work for hire is complicated. Therefore, just because a contract says a work was commissioned on a work for hire basis or created in the course of employment, does not make it so. Additionally, the termination right does not apply to foreign grants. 
In the United Kingdom, however, under narrowly prescribed circumstances, 25 years after the death of an author, rights revert to the author's estate. In Canada, 25 years after the death of an author, under a broader scope of circumstances, rights automatically revert to the author's estate. Here is a link to an excellent article by Professor Rebecca Giblin about reversion, and allied, rights outside the U.S.

They Don't Make It Easy

If you wish to terminate a rights agreement, a notice of termination must be signed, served, and recorded with the Copyright Office. In other words, t
he process for reclaiming copyrights is not automatic. 
The Copyright Act gives the termination rights holder the option, but not the obligation, to reclaim their copyrights. As a result, much to the joy of publishers, the vast majority of termination rights expire without being exercised.  
It is your responsibility to calculate the termination date. It can be anytime during a five-year window beginning the earlier of (a) thirty-five years from the date of first publication or (b) forty years from the date of execution. A notice of termination may be served ten years before the effective termination date or as late as two years before. A missed deadline or improperly drafted notice is a fatal mistake.

Example: Andrea signed a contract for her first novel on September 26, 1989. The book was published on September 26, 1992. The termination window is September 26, 2024, to September 26, 2029. The earliest Andrea (or her surviving family members) may serve the notice of termination is September 26, 2014, ten years before the earliest possible termination date. The latest Andrea (or her surviving family members) may serve notice is September 2027, two years before the latest possible termination date.

Andrea must serve the notice on her publisher, or publisher's successor, fill out the appropriate paperwork and record the notice of termination with the Copyright Office. This public record becomes part of the work's chain of title, establishing legal ownership. If anyone were to review the Copyright Office's database, Andrea's name and termination notice would appear in the title chain.

Derivative Works Exception

Under what's known as the "derivative works exception," a derivative work produced before termination may continue to be exploited under the terms of the license agreement. For example, a motion picture adaption of Andrea's novel can continue to be streamed post-termination, subject to the studio's duty to account to Andrea. With the proviso, the studio may not create new derivative works covered by the terminated grant of rights.

Joint Works

In the case of joint works created after 1977, a majority of the coauthors must sign the termination notice.  
The 56 Year Termination Rule

For works published before January 1, 1978, the maximum term of protection for certain works was 56 years. Over time, Congress increased the term of copyright protection from 56 to 75 years. In 1998 Congress increased the term again by 20 years for a total of 95 years. Congress also created a new right of termination for pre-1978 grants, licenses and assignments. 
For these older works, the Act provides a five-year termination window beginning 56 years after a work was first published or registered for copyright. To terminate, the author, or their surviving spouse and children, must serve and record the termination notice within the time limits specified by the Copyright Act. If not terminated, the agreement will continue for the duration of the agreement. Unlike post-1977 grants, licenses and assignments, pre-1978 grants, licenses and assignments made by an author's widow, children, and other statutory beneficiaries, are terminable.

Case & Comment. In 1938 Jerry Siegel and Joe Schuster, two young men from Cleveland, Ohio, signed over all of their rights to the Superman character to DC Comics for $130.00 and vague promises of future work. To address this and similar economic injustices, Congress gave authors a second chance to strike better financial deals. As a result, in 1999, using Section 302 of the Copyright Act, Siegel's heirs recaptured his rights to the Superman character. Unlike authors of joint works created after January 1, 1978, each author of a pre-1978 joint work work may serve a notice of termination on their own behalf and recapture their share of the copyright.

Fortunately, you don't have to be related to a man of steel to reclaim copyrights. The heirs of Hank Williams, William Saroyan, Truman Capote, Joe Young, Lorenz Hart, and many others have availed themselves of these valuable rights.

Tell Your Heirs to Beware  
As part of your estate planning, advise your statutory successors of your right to terminate. If you do not survive to exercise termination, that right is distributed to your family members as a statutory class. They may exercise this powerful right despite any agreement to the contrary. While copyright termination rights are kryptonite to copyright contracts, read on how this right can unintentionally be waived (given up).

Hoping they will catch family members off guard, publishers and motion picture studios may make offers to sweeten existing contract terms after an author dies.

Before signing an agreement that revokes and re-grants rights, family members should carefully review the document and consult with a termination rights attorney. If asked to sign during the period termination could be effected, they may be waiving their right to terminate.

If that later agreement revokes a publishing agreement, or film option, in exchange for a new agreement, the new agreement should be a significantly better deal than the previous grant. If not, they've lost the opportunity to renegotiate the terms of the agreement.


Call us if you are thinking about exercising your termination rights or need assistance renegotiating your entertainment or publishing agreement. Fees will depend upon the complexity of the matter and the number of works being terminated. We can help you: (i) identify which copyrights are eligible for termination; (ii) determine who is the proper party to exercise those termination rights; (iii) prepare and record the notice of termination; (iv) help you renegotiate your existing contract; or (v) work with your trusts and estates attorney on reopening an estate, or seeking copyright damages that flow from a determination of ownership or co-ownership of a recaptured copyright.

NOTICE: 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.

LLOYD J. JASSIN is a New York publishing and entertainment attorney with a special interest in copyright and trademark matters. He is co-author of The Copyright Permission and Libel Handbook: A Step-by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons). He is former adjunct professor at the NYU School of Professional Studies were he taught a course on digital rights. He has written extensively on negotiating contracts in the publishing and entertainment industries and has been quoted extensively in publications such as the New York Times, Publishers Weekly and Columbia Journalism Review. He may reached at or at (212) 354-4442. His offices are located at 1501 Broadway, Floor 12, New York, NY 10036.

(c) 2011 - 2022. Lloyd J. Jassin 

Trademark Registration Superman Breaking Chains
1941 Superman Breaking Chains Trademark Registration
Friday, February 25, 2022

Book Publishing Contacts: What Publishers Don't Want You to Know

By Lloyd Jassin

Did you know that most traditional print publishing contracts are life of copyright agreements? That means the author - and their heirs - will be legally bound to the publisher for the life of the author plus 70 years.

Literary Agent Giving Author Book Contract to Sign

Read This Before You Sign a Publishing Contract

What can go wrong with an author-publisher relationship that runs for the full term of a book's copyright? Plenty. Common disputes involve nonpayment of royalties, failure to publish, failure to exploit audiobook or foreign translation rights, burdensome non-compete clauses, nonpayment of royalties, and bankruptcy.

These risks are manageable, provided you deal with them during the contract stage of the relationship.  Once you pass the romance stage of the relationship with your publisher, you have less flexibility and it's much more expensive to to address these risks.  

Because the right to terminate or cancel a contract is not automatic, you need to plan your exit in case your relationship with your publisher sours. Unless your contract allows you to terminate in the event of publisher misconduct or breach, you are left with bad and worse choices: (a) ask a court to rescind the contract , or (b) wait 35 years to exercise your inalienable right of termination under the Copyright Act. 

Rather than relying on a lawsuit to get back your rights (courts prefer money damages over contract cancellation), if a publisher fails to publish within a contractually agreed time limit, there should be a mechanism for exiting the agreement. Similarly, if certain secondary rights (e.g., audiobook, foreign translation) go unexploited, those rights should revert to the author upon request. 

What to Expect When Negotiating a Book Contract

Bear in mind a publisher's standard form agreement is not chiseled in stone. Publishers regularly revise their contracts when asked to do so. The key is knowing what to ask for.

Preceding the actual book contract is the term sheet. Key terms are the grant of rights, payment, payout, royalty rates, delivery and publication date. The term sheet, which informs what goes into the contract, is the business deal. What follows is a tailor made contract incorporating those terms.  

In exchange for a down payment on future royalties, publishers receive the exclusive right to print, publish and sell the book in the territory (US? World?) for the full term of copyright. That's the deal. A good contract does not include film or television rights. 

To decode a deal term sheet or a book publishing agreement, some authors turn to literary agents, who receive 15% off the top for guiding you in the perilous journey from unbound to bound. Others retain flat or hourly fee book contract attorneys to help navigate the maze of legal jargon and publishing industry argot and advise on negotiation strategies. 

The Role of a Publishing Attorney

Book contract negotiation is not a zero sum game. It's a collaborative process between an author's attorney (or literary agent) and the publisher's contracts manager. 

A publishing attorney will give the proposed contract a thorough review.Their initial task is to determine if the deal terms are fair. They do this by comparing your contract to similar contracts. They are also there to help their clients think through the offer and its possible ramifications. While "How much of an advance will I receive?" is an important question to ask, it's not necessarily the most important question. In addition to rates and royalties, using a checklist similar to the one below, they will review everything from the grant of rights to the termination clause. Where there are differences, they will try to find a middle ground that respects both parties' legitimate interests.

Taking boilerplate provisions for granted can have serious consequences. Publishing contracts are chock full of double dips and legal loopholes, and when it comes to royalties, a hall of mirrors where what it says and what it means are often two different things. While major publishers are not out to screw you, they will maximize their gains at your expense. Smaller publishers? Some are gems, while others are opportunistic predators who over promise, and under deliver. Some will even ask you to foot the bill for editing, production and marketing.  . 

Whether one of the big five New York publishing houses, or one outside of the insular world of New York publishing, a well-drafted publishing contract can anticipate potential issues, reduce disputes, and save thousands of dollars in legal fees later on.  

For those who have already signed a publishing agreement, a publishing lawyer can help you understand what limitations the agreement places on you, and determine if those limitations are enforceable or can be neutered.  For example, a publishing attorney can advise you whether a next book option is enforceable, or simply an unenforceable "agreement to agree." Similarly, they can counsel you on termination for cause options, or termination as matter of right under the Copyright Act.  

Tip. If chomping at the bit to sign a contract but cannot afford to hire a lawyer, visit Victoria Strauss' Writer Beware blog - a beacon of light in the "shadow-world of literary scams, schemes, and pitfalls." Writer Beware doesn't offer legal advice, but it does a stellar job exposing and raising awareness of questionable business practices in the world of books and authors.   

Book Publishing Contract Checklist

The following checklist highlights points covered in a typical book publishing contract.  The questions and comments will help guide you through the process of book contract negotiation.

  I.   The Basics

      1. In whose name is the contract? Author?  A legal entity?
      2. If a legal entity, you will be asked to sign an inducement letter; a form of 
          personal guarantee.  
      3. Description of work (synopsis)
          -Tentative title, # of words, # of photos, intended audience
          -Attach book proposal

II.   Grant of Rights and Territory

      1. Is it a license of certain rights or an assignment of all rights? 
      2. Term or time period (term or years or in perpetuity?)
      3. Geographic scope
           a)     World?
           b)     Limited?  (e.g., U.S., its possessions & Canada)
      4. Exclusive rights granted
           a)     Primary rights
                  -Trade paperback
                  -Mass market
          b)     Secondary (subsidiary rights)
                  -Periodical rights
                  1) First serial (serialization of portions of a book before publication)
                  2) Second serial
(serialization of portions after initial publication)                              -Book club
                  -Live state / dramatic rights
                  -Film/TV rights
                  -Video Recordings / Audio Recordings
                  -Other digital versions (apps, enhanced eBooks)
                  -Podcast / Radio rights
                  -Merchandising (commercial tie-in) rights
                  -Emerging and future technologies (new ways to monetize)
                  -Foreign translations rights
                  -British Commonwealth rights
        c)    Rights Reserved by Author (What the author gets to hold back) 

III.   Manuscript Delivery

    1. Delivery requirements
          a) When due? Is the date realistic?
          b) What format? Spacing, margins, etc.
          c) What to deliver?
                 -Index (who pays?)
                 -Number of illustrations, charts, photos (who pays?)
          d) Copyright permissions and releases
                 -Permissions (do they parallel the rights you granted the publisher?)
                 -Who pays?
      2. Manuscript Acceptance
          a) Criteria: Satisfactory in "form and content" or at "sole discretion" of the  
            publisher? (Note: Historically, this clause has been a litigation flashpoint)
          b) Termination for unsatisfactory manuscript
          c) Termination for changed market conditions
          d) When must the publisher either accept or reject? 
          e) Good faith duty to edit
          f) Return of the author advance
                 -First proceeds clause
                 -False first proceeds clause
  IV. Copyright Ownership / Who Owns the Title?

      1.  Who is responsible for registering the work with the Copyright Office?
      2.  Tip.  Registration should be done within 3-months of initial publication.
      3.  Joint author or work-for-hire?
      4.  Reserved rights
            -Film, television, live stage usually retained by the author. 
      5.  Who owns the title? (By default it's often the publisher)

V. Author’s Representations & Warranties
      1. Author sole creator
      2. Not previously published; not in public domain
      3. Does not infringe any copyrights
      4. Does not invade right of privacy or publicity
      5. Not libelous or obscene
      6. No errors or omissions in any recipe, formula, or instructions
      7. Limited only to material delivered by Author

VI. Indemnity & Insurance Provisions
      1.  Author reimburses publisher for costs and expenses
      2. Does indemnity apply to claims or actual breaches?
      3. Can the publisher withhold legal expenses? Is it held in an interest   
      bearing account?  For how long?
      4. Are you named as an additional insured on the publisher's liability                          insurance?
      5. Does the publisher have the ability to settle claims without prior approval of         the author?  Be scared. Very scared.  But, there are workarounds.

VII. Publication
      1. Duty to publish within [X] months of delivery & acceptance?
          a) Force majeure (acts of G-d)
                 - Any cap on delays?
      2. Advertising and promotion
      3. Right to use author's approved name and likeness
      4. Advance Readers Copies for long lead time media
      5. Style or manner of publication
          a) Title consultation or approval?
          b) Book jacket
                 - Right of consultation? Approval?
          c) Changes in manuscript
      6. Initial publication in specific format?  Volume form? eBook? 
VIII.  Payments, Payout & Royalty Rates
      1. Advance against accumulated royalties
      2. When payable? (in halves, thirds, etc.)
      3. Royalties and subsidiary rights:
          a) Primary rights
                 -Hardcover royalties
                 -Trade paperback royalties
                 -Mass market royalties
                 -eBook royalties
                 -Royalty escalation(s)
                 -Bestseller bonuses
                 -Sneaky royalty reductions
                  1) deep discount and special sales
                  2) mail-order sales
                  3) premium sales
                  4) small printing
                  5) slow-moving inventory
                  6) bundling with other works
          b) Secondary (subsidiary) rights royalty splits
                 -Book club (sales from publisher’s inventory v. licensing rights)
                 -Serialization (first serial, second serial)
                 -Anthologies, selection rights
                 -Large print editions
                 -Trade paperback
                 -Mass market
                 -Foreign translation
                 -British Commonwealth
                 -Future technology rights
.                 -Audio rights
                  -Podcast rights
                 -Motion picture/TV/live stage
     4. Reserve for returns
          a) What percentage is withheld?
          b) Is there a limitation on how long they can withhold reserves?
      5. What is royalty based on? (Retail price? Wholesale price? net price?)
          a) At an average discount of 50%, 20% of net is the same as 10% of the list
          b) At an average discount of 40%, 16-2/3% of net is the same as 10% of the list
          c) At an average discount of 20%, 12-1/2% of net is the same as 10% of the list
       6. Recoupment of advance 
       7. Bonus (Tied to earning out the advance?  Tied to hitting a bestseller list?)

IX. Accounting Statements
      1. Annual, semiannual, or quarterly statements
      2. Payment dates
      3. Cross collateralize (good for the publisher, bad for the author)
      4. Audit rights
      5. Is there a time limit on your right to object to statements?
      6. Is there limit on time you can bring legal action?
      7. Examination on a contingency basis (publishers don't like this)
      8. Pass through clause for subsidiary rights income
      9. Does author have right to terminate if publisher defaults on payments?

X. Revised Editions
      1. If agreed to, how long is the revision cycle?
      2. Who revises if you are dead, disabled, or disinterested?)
      3. Royalty reductions if done by the third party (how much?)
      4. Sale of revised edition treated as a new book sale?
      5. Reviser/Author credit

XI. Next Book Option
      1. Definition of next work
      2. When does the option period start?
      3. Definiteness of terms (i.e., Is the option legally enforceable?)
      4. Different option flavors (e.g., First look, matching, topping)

XII. Competing Works      
      1. How is competing work defined?      
      2. How long does non-compete run?
      3. Any reasonable accommodations?
      4. Does it even make sense for a fiction writer to agree to a non-compete?
XIII. Out-of-Print = Reversion of Rights
      1. How defined? (number of copies sold over X accounting periods)
      2. Notice requirements
      3. Author's right to purchase digital files, inventory

XIV. Termination
      1. What triggers the reversion of rights?
          a) Failure to publish within (usually between 12 - 18) months of manuscript             acceptance
          b) Failure to account to the author after due notice
          c) Failure to keep the book in print (see Section XIII)
      2. Survival of Author's representations and warranties
      3. Do licenses granted before termination survive?
      4.  Does duty to account and audit clause survive termination?
XII. Miscellaneous
      1. Choice of governing law
      2. Mediation / Arbitration?
      3. Literary agency clause
      4. Personal guarantee if the author is a business entity, not a human being.
      5. Reversion of unexploited rights after X years (e.g., audiobook rights)

Illustration:from Lawton Mackall's Bizarre (Lieber and Lewis) 
Illustrator: Lauren Stout
Date: 1922

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