Copyright Recapture: How to (Legally) Terminate Your Book Contract

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One of the most important rights that authors and their heirs hold is the ability to terminate book publishing contracts. To start this process, it's crucial to examine the details of your publishing agreement.  

First, look for contractual provisions that might allow you to end the contract, such as the publisher not properly reporting sales or failing to keep your book available for sale. If you don't find a clear reason in your contract for ending it, don't worry. Even when the contract doesn't provide a straightforward path to termination, authors have a lesser-known but powerful option under the U.S. Copyright Act. Regardless of any agreements to the contrary, it's crucial to recognize that the right to terminate holds greater authority than the terms outlined in the agreement.

Copyright Termination Rights Explained

 

To protect authors of older works from having to live with bad "life of copyright" grants, Section 203 of the Copyright Act allows authors and other creators to terminate a grant of rights, notwithstanding any agreement to the contrary.  What this means is the termination right trumps what's written in the agreement.

The principles outlined here also work for film and television options, as well as other copyright assignments, grants and licenses. 

Provided the notice complies with the Copyright Office's rigid requirements and is timely filed, the termination will take effect "no earlier than 40 years after the execution of the grant or 35 years after publication under the grant (whichever comes first)." When a work is eligible for termination is best determined by a copyright attorney.

"Don't forget that the termination right trumps what's written in the agreement."

  🔺Heirs should be aware that Section 203 only applies to grants made by authors and does not encompass grants or re-grants made by the heirs themselves. If you are an heir, be cautious, as publishers may try to convince you to surrender your rights for little money through re-grant requests, effectively negating termination rights.

Works for hire are immune to statutory termination, which is why you should be wary of signing a work for hire agreement. The concept of work for hire is complicated. Therefore, just because a contract says it is work for hire or created in the course of employment does not make it so. For clarification, contract a copyright attorney. 

 

While the termination right does not apply to foreign grants of rights, many countries have their own termination statutes. For example, in Canada, 25 years after the death of an author, rights automatically revert to the author's estate. Here is a link to an excellent article by Professor Rebecca Giblin concerning reversion rights outside the U.S.

Termination Notices Are Challenging to Draft

If you wish to terminate a rights agreement careful implementation is required. You must (a) carefully calculate the termination date; (b) draft the notice of termination; (c) sign it; (d) serve it; and (e) submit the documents for recordation (with the recordation fee) electronically through the Copyright Office’s online system. The documents will then be scrutinized by the Copyright Office and rejected if they do not comply in both content and form. 

In other words, the process of reclaiming copyright is not automatic. In the context of joint works, a termination notice requires the signatures of the a majority of the co-authors. The Copyright Act gives the termination rights holder the option, but not the obligation, to reclaim their copyrights. Consequently, the majority of

termination rights expire without being exercised.

  
It is the author's 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 from 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. Andrea's name and termination notice would appear in the title chain if anyone were to review the Copyright Office's database.

Derivative Works Exception

Within the framework of copyright law's "derivative works exception," a derivative work created before termination retains the right to be utilized according to the terms of the license agreement. To illustrate, a film adaptation of Andrea's novel can still be streamed after termination, with the stipulation that the studio is obligated to report to Andrea. However, it is important to note that the studio is restricted from generating new derivative works falling under the terminated grant of rights.

Terminating Pre-1978 Works

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 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.

Estate Planning Considerations

 

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 contract, the new contract should be a significantly better deal than the previous grant. If not, they've lost the opportunity to renegotiate the terms of the agreement.

Bottom Line

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 book publishing attorney and former publishing executive with a special interest in defamation, 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 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, Time Magazine, Forbes, Fortune, Publishers Weekly, and the Columbia Journalism Review. You may reach him at jassin@copylaw.com or at (212) 354-4442. His offices are located at 1501 Broadway, Floor 12, New York, NY 10036, and in Madison, NJ.

(c) 2011 - 2024. Lloyd J. Jassin 

 

 

 

 

 

How to Negotiate a Book Contract: Essential Terms and Rights

Asking an Attorney to Review a Book Contract

Book Contract Checklist of Deal Terms

When negotiating a book publishing contract, it’s crucial to ensure that the terms are specifically tailored to meet each author's unique needs and long-term goals. For example, if you're a subject matter expert or entrepreneur, your book can be a powerful tool to elevate your brand identity, build trust, and enhance credibility in your field. In this case, key contract considerations include securing approval over the title and cover design to align with your brand image, negotiating favorable terms for bulk book purchases, and setting a firm publication date that capitalizes on cross-promotional opportunities tied to your business or marketing strategy. These elements are vital for maximizing your book’s value in reinforcing and growing your brand.

On the other hand, romantasy authors (or other fiction authors) who have a long-term vision for their characters and the fantasy world they're building, will have different contract priorities. Retaining ownership of their characters, securing trademark rights for the series title, and maintaining exclusive rights to publish sequels and prequels are essential for protecting their rights.  Additionally, negotiating favorable advances, royalty rates, and controlling subsidiary rights (such as film, television, and  merchandise rights) forms the foundation of a solid publishing contract.

While legal terms in publishing contracts share a common language, a publishing attorney, or competent literary agent, can spot abnormalities or points that have been omitted to the detriment of the author. Unlike the film and television industries, the grant of rights is (and should be) narrow. In exchange for an advance against royalties, the publisher receives the basic right to print and publish your manuscript in book, eBook, and, more often than not, audiobook form for the entire term of copyright. Be wary if the grant of rights includes film, television, theater, and merchandise licensing rights. Typically, these rights are not granted to the publisher.

Common Contract Pitfalls to Avoid

Given that copyright protection extends for seventy years beyond an author's passing, the long-term implications of contract terms become particularly significant. You might wonder, what could possibly go wrong over such an extended period? The answer: quite a lot.  Without a properly negotiated book contract, potential pitfalls include:

• no reversion of rights if the publisher fails to pay royalties or goes out of business
• inability to recover rights when books go out of print or have minimal sales
• inability to reclaim unexploited audiobook or foreign translation rights 
• no voice in legal settlements of infringement, defamation, and other claims
• restrictive non-compete clauses
• option clauses that trap authors in unfavorable deals, often mistaken for guaranteed multi-book deals.

Timing Your Negotiations: The Romance Phase Advantage

Publishers are generally most open to accommodating requests for contract adjustments during the initial stages of the relationship, often referred to as the "romance" phase. Later is too late. Unless a book publishing contract allows an author to terminate for cause if the relationship goes awry, or rights are granted on a "use it or lose it" basis, the author is caught between bad and worse options - asking a court to rescind the contract (rescission is seldom granted) or waiting 35 years to exercise their right of termination under the Copyright Act. 

A Book Contract Should Not be Entered into Hastily

The primary purpose of a book contract is to detail the rights, delivery and acceptance conditions, payment terms, and remedies for breach of contract. For example, rather than relying on a lawsuit to get back rights, if a publisher fails to publish within a contractually agreed time limit, there should be a mechanism that permits an author to regain their rights. Similarly, if a publisher fails to exploit specific subsidiary rights (e.g., audiobook or foreign translation) within a reasonable time, it should trigger a reversion of those rights. In addition to reclaiming or recapturing rights, an author should reserve, or hold for their own use, film, television, live stage, podcast, and merchandise licensing rights. If a book publisher claims these rights, they deviate from industry norms. 

The Attorney's Role in Contract Review

Preceding the actual book contract is the term sheet. The term sheet contains the main deal terms. To decode a term sheet some authors turn to literary agents, who will receive a 15% commission on everything from books to audiobooks to film deals. Others retain flat or hourly fee book contract attorneys to help them negotiate royalty rates, the grant of rights, and, later, decipher the legal provisions found in the actual publishing contract.  

Initially, a publishing attorney will review the deal terms and make recommendations to their client. The initial task is to determine if the deal terms measure up to industry standards. We do this by comparing the terms to similar terms offered by similarly situated publishers for comparable books. After both parties agree to the deal terms, the publisher will prepare a contract incorporating those terms, plus the publisher's stock provisions. Like agents, attorneys are buffers that save you from dealing with the minutia of contract negotiation. They will help the client think through the offer and its possible ramifications and advise them on what is negotiable and what is not. An author's attorney can argue for the exclusion of certain items or rights from the proposed contract and the inclusion of others, such as naming the author as an additional insured on the publisher's media perils policy. 

Decoding Royalty Structures and Industry Standards

It’s no surprise that book publishing contracts, drafted by the publisher's lawyer, are rife with double dips and legal loopholes that favor the publisher. When it comes to royalties, they often create a hall of mirrors where what is stated and what it actually means can be two very different things. The Big Five New York publishers offer royalties based on the suggested retail price. Royalties for trade paperback books range from 7% - 7.5% of the list price on average. Typically, established publishers offer 10% of the list price for the first 5,000 hardcover copies sold, 12.5% on the next 5,000 sold, and 15% thereafter. Many smaller publishers base their royalty on the "net amount received," which may be 40% to 50% less than the retail price.  The standard eBook royalty rate offered by established publishers, and many independents, is 25% of the net.

Is Your Book Contract Signable?

When presented with the contract, you will want to modify specific terms.  In the case of a subject matter expert, business owner, or series author, you want title approval. Yet most stock contracts state the publisher decides the book's title.  Contract clauses are malleable, not words set in stone. A good publishing attorney - or agent- knows the contract managers at the major publishing houses. Logical arguments supporting rational positions and knowledge of industry practice are the underpinnings of most book contract negotiations.

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, improve financial return, and save thousands of dollars in legal fees later on. 

Post-Signature Review: Understanding Your Existing Deal

For those who have already signed a publishing agreement, a publishing attorney or literary lawyer can help you understand the deal's limitations and determine if those limitations are enforceable. For example, a publishing attorney can advise whether a next book option is enforceable or simply an unenforceable agreement to agree. For example, a common concern is whether a non-compete clause can prevent an author from writing a new book on a related topic. Similarly, a publishing attorney can advise on termination for cause options or termination as a 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

Below are matters to consider when you draft or negotiate your next publishing agreement. Each key point deserves greater attention than given here (and will be the subject of future blog posts). While not all clauses are equally important (or negotiable), a well-drafted contract will cover all or most of the points outlined below.

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I. General Provisions

• Names and addresses of the parties

• Description of the work (tentative title, word count, illustrations, audience, genre)

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II. Grant of Rights and Territory

• Is this an assignment of all rights or a license?

• Duration (fixed term vs. life of copyright)

• Geographic scope: worldwide vs. limited (e.g., U.S. and Canada)

• Exclusive rights granted:

  • Primary rights: hardcover, trade paperback, mass market

  • Subsidiary rights:

    • First serial (pre-publication excerpts)

    • Second serial (post-publication excerpts)

    • Reprint rights

    • Dramatic rights

    • Film/TV rights

    • Audiobook / Dramatic Audiobook rights (approval over narrator?)

    • Foreign translation

    • British Commonwealth rights

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III. Manuscript Delivery

• Delivery requirements:

  • Due date (is it realistic? “time is of the essence”?)

  • Format and method of delivery

  • Supporting materials: rights-cleared photos, illustrations, charts, permissions/releases

• Manuscript acceptance:

  • Standard: “satisfactory in form and content” vs. publisher’s sole discretion

  • Termination for unsatisfactory manuscript or changed market conditions

  • Notice requirements for acceptance/rejection

  • Good-faith duty to edit

  • Return of author’s advance (first proceeds clause, etc.

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IV. Copyright Ownership

• In whose name will the work be registered?

• Who handles registration with the Copyright Office?

• Collaboration or ghostwriter agreements in place?

• Scope of permissions consistent with rights granted

• Reserved rights retained by the author

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V. Representations & Warranties

• Author is sole creator

• Work is original and not previously published

• No copyright infringement

• No invasion of privacy or publicity rights

• Not libelous or obscene

• No harmful errors in recipes, formulas, or instructions

• Limited only to material delivered by the author

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VI. Indemnity & Insurance

• Does indemnity include alleged claims, or only proven breaches?

• Scope of indemnity: claims and/or breaches

• Publisher’s right to withhold legal expenses (how long?)

• Is the author named as an additional insured on publisher’s media liability policy?

• Does the author have approval over settlement of claims?

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VII. Publication

• Duty to publish within a set number of months

  • Force majeure (acts of God) — are delays capped?

• Advertising and promotion commitments

• Right to use author’s name and likeness

• Advance Reader Copies (sent 3–4 months before pub date)

• Style and manner of publication:

  • Book title (consultation or approval rights)

  • Jacket design (consultation or approval rights)

  • Editorial changes to manuscript

• Publication by a specific imprint or in a specified format?

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VIII. Money Issues

• Advance Against Royalties: Timing of Payments

  1. On Signing: [__%] of the total advance, payable upon full execution of this Agreement.

  2. On Delivery and Acceptance: [__%] of the total advance, payable upon Publisher’s written acceptance of the complete and satisfactory manuscript.

  3. On Initial Publication: [__%] of the total advance, payable upon first publication of the Work in hardcover (or, if first published in another format, upon such initial publication).

  4. On Publication of Trade Paperback Edition: [__%] of the total advance, payable upon first publication of the Work in trade paperback format (Note -- from the author’s perspective, tying an installment to a later paperback release is not optimal, as timing may be uncertain or significantly delayed).

• Royalties:

  • Basis for royalty? Suggesedt retail price? Amount received? Net receipts? 

  • Cross collateralization: Are advances/royalties from multiple books lumped together (one pot) or kept separate?

  • Primary rights: hardcover, trade paperback, mass market, ebook

    • Escalations, bestseller bonuses, royalties reductions (deep discount, mail order, premiums, etc.)

  • Subsidiary rights:

    • Book club (sales vs. licensing)

    • Serialization (first/second serial)

    • Anthologies/selection rights

    • Large print editions

    • Foreign translation (Who controls foreigin translation rights?)

    • British Commonwealth

    • Audio rights (Who controls dramatic audiobook rights?)

    • Film/TV rights (Typically, retained by the author)

    • Merchandising

    • Future technology/database rights

• Reserve for returns: percentage withheld, liquidation timing

• Deep Discount Sales: Specify royalty rates (often 10% of net receipts or less) for sales made at high discounts (e.g., 50%+ off list price). Note -- Deep discount clauses can erode author earnings if applied too broadly—watch for language that permits the publisher to classify ordinary sales (such as to Amazon, book clubs, or wholesalers) as “deep discount.” Narrow the clause to true special-market or bulk sales.

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IX. Accounting Statements

• Frequency (annual, semi-annual, quarterly)

• Payment dates

• Can publisher recoup outstanding advances from future books?

• Author’s audit rights

• Deadlines for objections or legal action

• Right to hire forensic accountant (contingency basis?)

• Pass-through clause for subsidiary rights income

• Termination right if publisher fails to account

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X. Revised Editions

• Frequency and by whom

• Reduced royalties if author doesn’t participate?

• Are revised editions treated as new books?

• Reviser credit (can original author remove name?)

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XI. Option Clauses

• Definition of “next work”

• When option period starts

• Are terms definite (legally enforceable)?

• Type of option: first look, matching, topping?

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XII. Competing Works & Morality Clauses

• How is a competing work defined?

• Duration of non-compete

• Exclusions (what does not count as competing)

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XIII. Out-of-Print

• Definition of “out of print”

• Notice requirements

• Author’s right to purchase plates, files, or inventory

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XIV. Termination

• Triggers for reversion of rights:

  • Failure to publish within 12–18 months of acceptance

  • Failure to account after due notice

  • Failure to keep book in print

• Survival of author’s reps and warranties

• Do pre-termination licenses survive?

• What triggers repayment of advances?

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XV. Miscellaneous

• Choice of governing law

• Mediation or arbitration clauses

• Bankruptcy protections

• Emerging issues (e.g., AI, morals clauses)

• Literary agent clause

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Illustration: from Lawton Mackall's Bizarre 

Illustrator: Lauren Stout

Date: 1922

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