How a Non-Assignment Clause Can Destroy a Publishing Company's Valuation

When the owner of an independent publishing company wishes to sell their company they will

need to establish the value of the business they have built.  The yardstick that will be used is based on cash flow and, ultimately determined by the soundness of its author agreements.  Many start-ups are poorly financed, and in the beginning, the owners have neither the time nor the legal acumen to focus on their most important asset, their boilerplate author agreement.   At the outset of a publisher's career, this error can frustrate their ability to sell the company in later years.    

Problems often arise when publishers borrow agreements found online.  Lacking the necessary legal acumen, a start-up publisher may delete essential provisions that they do not fully understand.  For example, the assignment clause. 

 

Don't Let a Non-Assignment Clause Sink Your Ship

Experience is a hard school. To illustrate, Owen, a successful independent publisher with a backlist of 75 books, decides to sell his company. In his mid-50s, with no children to take over the business, his exit strategy is to bankroll the sale of his growing company into early retirement. As part of the due diligence process, he compiles all of the company’s author agreements, foreign translation licenses, and other important documents for a potential buyer to review. To his dismay, his attorney and broker call to say the deal had fallen through because the publishing agreement he filched off the Internet when money was tight contains a non-assignment clause.  The insidious clause reads, “Neither this agreement nor any right or obligation hereunder may be assigned or delegated, in whole or part, by either party without the prior express written consent of the other.”

What could have been a quick and very profitable business transaction requires the consent of all of Owen's authors, and in one instance, all of a deceased author's uncompromising heirs. And, the author of the crown jewel of Owen's backlist (which accounts for 50% of his gross annual revenue) will exploit the pending sale to renegotiate her contract -- a contract she desperately wants to get out of. 

While there are publishing programs at many universities and organizations such as the IBPA, you can only learn publishing by doing.  Since you are dealing with copyrights - intangible assets -- you must, at least, have an excellent foundation author-publisher agreement.   Then, through persistence and luck, you are in a position to make the most of the opportunities ahead.    

If you intend to sell your publishing company tomorrow, or 20-years from now, you need to pay attention to your author-publisher contract today. As Owen discovered, a well-drafted publishing agreement is a publisher’s most valuable asset.

Taking the boilerplate provisions for granted can also have severe consequences for authors.

Before signing a contract, it is important to understand what the contract says (not what the publisher says it says). In his autobiography, Twain lamented on his lack of legal acumen in negotiating a publishing contract with an onerous non-compete clause:

“I made my contract for The Innocents Abroad with American Publishing Company. Then after two or three months . . . it occurred to me that perhaps I was violating the contract, there being a clause forbidding me to publish books with any other firm during the term of a year or so. Of course that clause could not cover a book which had been published before the contract was made; anybody else would have known that. But I didn't know it, for I was not in the habit of knowing anything that was valuable and I was not in the habit of asking others for information.. It was my ignorant opinion that I was honor bound to suppress The Jumping Frog book and take it permanently out of print. [My publisher] as willing to accommodate me on these terms: that I should surrender to him, free of royalty, all bound and unbound copies which might be in New Company’s hands; also that I hand him eight hundred dollars cash; also that he supervise the breaking up the plates of the book…. One may perceive by these details that [my publisher] had some talent as a trader.” - Mark Twain

Had Twain been wiser, he would have hired a publishing attorney to help him navigate the competitive books clause in his contract.

Most publishing contracts today still contain Twain-like non-competition clauses that can prevent an author from publishing other books during the contract term. While no non-fiction publisher will strike its non-compete clause, if asked politely, most will offer the author a more palatable version of the clause than the one initially presented. In the case of fiction, the non-compete clause should be deleted. The literary result being the fiction publisher has to rely on the next book or option clause to protect its legitimate interests.

Nothing is demeaning or unseemly about asking a publisher to modify specific contract terms. For example, if a book is tied to an existing brand or business, most publishers will tweak their boilerplate out of respect for the author's branding (or trademark) concerns. Book contracts typically give the publisher (not the author) the right to determine the work's title. If the book is an extension or outgrowth of the author’s existing business (e.g., Chicken Soup for the Soul®), asking for approval and ownership of the title – which also functions as a trademark – becomes a critical issue. But don't assume a publisher will change anything -- despite their assurances -- once the ink on your signature is dry. That's not how the Game of Authors is played. As negotiations are winding down, make sure you straighten out misunderstandings and memorialize what has been agreed to. Once a contract has been signed, the parties are under no obligation to vary the terms.

Why formal agreements are necessary.

The key to a good contract is clarity and understanding the business (not just legal) issues endemic to the publishing industry. Ambiguity and inconsistency are the two critical ingredients in litigation soup.

For authors, it is helpful to keep in mind that most contracts are not take-it-or-leave-it propositions. Be courteous. Be tactful. Knowing what to ask for is critical. Use an agent or attorney who understands the parameters of the typical publishing deal to negotiate your contract. Also, working through an agent or attorney allows an author to preserve her creative relationship with the editor or publishing house while her representative hammers out the business issues.

For publishers, an overly author-friendly contract can be problematic when it comes to selling their company. Perhaps, Michael Joseph, a UK publisher, said it best, “No publisher can afford to fall in love with literature.”

Keep in mind that the duration of most publishing contracts today are for the life of the copyright. If the book is financially successful, the publisher and the author (or author’s heirs) will be bound together for a very long time. The above examples should clarify that getting stuck with a bad contract is a long-term, perhaps, intractable problem. 

Related Blog Posts

 

Libel in Fiction

Fair Use in a Nutshell 

Book Contract Negotiation Checklist 

Twelve Copyright Permission Myths 

Estate Planning for Authors 

 
Beyond the Blog (Resources)

Author Guild

Dramatists Guild

National Writers Union (NWU)

Romance Writers of America (RWA)

Science Fiction Writers of America (SFWA)

Society of Authors (UK)

Society of Children's Book Writers and Illustrators (SCBWI)

Text and Academic Authors Association (RWA)

Independent Book Publishers Association (IBPA)

Negotiating a Book Contract by Mark Levine

Outside of a Dog #3: Poe's Legal Battle

Poe's Successful Defamation Lawsuit

Outside of a Dog is a 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.

The New York Times reports that the literati have reached for their plagiarism pitch folks andtorches.  This time the literary prey is the author of a work of historical fiction whose main character is Mrs. Edgar Allan Poe.  The author of The Raven's Bride is in a perilous position - a literary outcast.  Ironically, Poe was vilified by New York's carnivorous literary establishment toward the end of his career.  In defense, instead of the pen, Poe reached for a lawyer.  Long forgotten, Poe's literary feud and lawsuit are a sad account of what happens when good writers do bad things.  

While famous for The Raven, Edgar Allan Poe was notorious for writing painful, intimate sketches of New York's literati.  Three years before his death, Poe's literary output was at a virtual standstill.  However, he had no difficulty spewing gossip for Godey's Lady's Book.  An abhorer of literary cliques, he used this lofty perch for self-promotion and to mercifully skewer friend and foe alike. He also used it to settle old debts. In July 1846,  Poe picked a fight with Thomas Dunn English, a minor poet and publisher, who Poe "profiled" in The Literati of New York.  Poe took issue with English's appearance (comparing him to an ass), his poetry (allegedly plagiarized) and even punctuation.  Poe knew English from his hardscrabble days in Philadelphia. Although the two had been friendly, that friendship ended in 1843, when English published a pro temperance novel, in which he ridiculed Poe by depicting him as a deceitful and quarrelsome drunk.   While English did not name Poe, the character in the novel was unmistakably a drawn-from-life portrayal of the brilliant writer.

In payment for Poe's unkind portrayal of him in Godey's Lady's Book, English dished out double what Poe had heaped in front of him in print.  On June 23, 1846, The Evening Mirror published English's "Reply to Mr. Poe," in which he called Poe a drunk, a forger, a fraud, a plagiarist, and, channeling Monty Python, an abject poltroon.  Curiously, Poe's large head and tiny hands were spared, but not his manhood.  My theory concerning English's apparent restraint, is that he had a large forehead and small hands. Petty, nasty and prideful describes both Poe and English.  English painted Poe as an unprincipled poseur:

"He is not alone thoroughly unprincipled, base and depraved, but silly-vain and ignorant -- not alone an assassin in morals, but a quack in literature.  His frequent quotations from languages of which he is entirely ignorant, and his consequent blunders expose his to ridicule, while his cool plagiarisms from known or forgotten writers, excite the public amazement."

Poe, no longer welcome in New York's literary salons, retreated north to a small, drafty, cottage in the village of Fordham.  Blacklisted and broke, he sued the owners of The Evening Mirror (but, not English) for publishing English's rejoinder. Why did Poe drop his pen and deploy a lawyer?  Three reasons.  English challenged Poe to sue him. Poe's lawyer took the matter on a contingency fee basis.  And, in a letter to Horace Greeley, Poe wrote,  "I sue; to redeem my character from these foul accusations."  On February 17, 1847 a jury awarded "Mr. P. $225 damages and six cents costs."   He had sued for $5,000 in compensatory damages.  Within three (horrible and unhappy years) Poe was dead.

Was Godey's Lady's Book a good career move for Poe?  I don't think so.  Was challenging Poe to make good on his threat to sue him a smart move on the part of English?  Ditto. 

On a personal level, while not condoning possible bad behavior, I hope the author of The Raven Bride survives the persecution and returns as a full-member of the literary world. The journals that vilified Poe are long forgotten.  Poe is evermore. There are second acts.  

Related
Outside a Dog: Nos. 1 & 2 (Mark Twain's 1900 eBook Contract  & Reserved Rights)
Libel-in-Fiction: Is Dick Cheney a Robot?  by Lloyd J. Jassin
Poe Makes Appearance as Marmaduke Hammerhead in Tom Dunn English's 1844 Roman a Clef 

Resources
Poe's Major Crisis: His Libel Suit & New York's Literary World (1970, Duke Univ) by Sidney P. Moss
Israfel: The Life & Times of Edgar Allan Poe  (1927, Doran) by Harvey Allen
Poe's Poisoned Pen: A Study in Fiction as Vendetta (2009), by CL Givens

Edgar Allan Poe's "The Bells" sung by Phil Ochs

Sample Interview Releases

 Disclaimer

These forms are provided as is. Use of these forms do not create an attorney-client relationship. It is your responsibility to ensure the accuracy of these forms. Before using these forms confer with your own legal advisor.

Form A

Dear_,

You have informed me that you are the author of a book tentatively entitled ________ (the “Book”) to be published [by Publisher or about subject matter of book].

You have interviewed me for the Book, and I hereby consent to your use of my name, photographs, comments as quoted or derived from the interview(s), and any materials I provided to you, in the publication, advertising, or promotion of the Book, and any editions or revisions thereof, in any languages, throughout the world.

I hereby consent to your use of my name, likeness, and biography and the right to fictionalize same, and to portray, impersonate, or simulate me in any way whatsoever, and to make use of any incidents or episodes in my life, factually, fictionally, or in any combination thereof, in preparation, production, performance, broadcast, exhibition, and exploitation of one or more motion pictures or television programs, or both, including episodes of any television series (herein collectively referred to as the “program”), including, but not limited to, merchandising, publication, and other allied rights therein. You shall have the right to use the proceeds of any interviews in and in connection with the Book, and all services rendered by me hereunder (including my interviews and conversations) are rendered as a “work for hire” for copyright purposes.

I understand that the Book and/or portions thereof may be published in newspapers, magazines, and other printed media and may be released or distributed in other recorded media, such as television, motion pictures, computer disk, videodisc, and by other electronic means. I hereby consent to all such derivative uses, including the exhibition and publication in any and all media, now known or hereafter discovered throughout the world in perpetuity. Rights granted herein may be assigned to other individuals or entities.

I waive any right to inspect the Book or program(s). I further waive any claim in connection with the aforementioned use or uses, including, but not limited to, claims relating to defamation, rights of privacy or publicity, confidentiality, copyright, or otherwise.

I represent and warrant that I have full right, power, and authority to execute this Agreement, and I am over twenty-one years of age.

Very truly yours,

[Interviewee’s signature]

[Interviewee’s name]

[Address]

[Email Address]

Writing About the Dead

While the dead cannot be defamed, those left behind—such as family members or associates—can pursue legal action over perceived injury to their reputation. This article provides tips for minimizing legal risks when writing about the deceased.

How 'Look Inside the Book' Previews Increase Legal Risks for Authors

Joseph Iseman, a former partner at the law firm of Paul, Weiss, Rifkind & Garrison, once advised Peter Schwed, the editorial director of Simon & Schuster, that preparing an index for any nonfiction book was a dangerous activity if any of the characters were still alive.

In his autobiography, Turning the Pages: An Insider's Story of Simon & Schuster, Schwed explained Iseman's reasoning.  "Anybody who thinks he is likely to be in a book but doesn’t intend actually to read it is likely to scan the index to see if there are any references to him." 

Amazon's Look Inside the Book feature, which allows potential customers to preview a book's content before making a purchase, has made Iseman's advice to omit the names of living individuals from the index a relic of a pre-internet age. Whereas, in the 1990s, you could still minimize the chances of getting sued for libel by omitting an index to your book, there's no hiding in today's digital world.

Rest in Peace? Libel Law and the Deceased

Under U.S. law, the dead cannot be defamed. However, a person's estate may continue to pursue a defamation claim filed before death.  

Here are some strategies for minimizing legal risks when writing about the dead: 

(a) Consider the Deceased's Family. While the dead cannot be defamed, be careful about making unsupportable accusations about the living—their family, friends, and associates. Unlike the dead, they can fight back.

(b) Utilize Disclaimers. A prominent disclaimer stating that your work is fiction or that certain elements are fictionalized may help deter claims by the living. Still, as explained below, it is not an impenetrable shield against defamation.

(c) Fictionalize. Changing names, locations, and certain details can help minimize claims. However, even if labeled as fiction, if someone closely resembles a real person in ways that make them identifiable to others, that person may have grounds to sue for libel.  

(d) Truth. Truth is an absolute defense against defamation claims. If the statement can be proven true, it cannot be considered libelous, even if it harms someone's reputation. 

The most foolproof strategy for minimizing libel claims is to wait for your literary prey to die. As the old saying goes, "He who laughs last laughs best. Revenge is best served cold at your publication party—preferably with a glass of Sauvignon Blanc, Riesling, or Gewürztraminer.

*A handful of states as of this writing, including Colorado and Georgia, have criminal libel statutes that allow the dead, i.e., their estates, to sue for libel.  In Colorado, any statement "tending to blacken the memory of one who is dead, or to impeach the honesty, integrity, virtue or reputation or expose the natural defects of one who is alive, and thereby to expose him to public hatred contempt or ridicule,” can get you into hot water if writing about a private individual.  For more information about criminal libel, click here.

###

Related Articles 

• Legal Consequences of Using Real People in Fiction
• When Can I Legally Use, Repurpose and Publish Without Permission? 
• How to Choose a Book Title and Not Get Sued
  

DISCLAIMER / TERMS OF USE

Not Legal Advice. The information contained in this blog is intended as general advice. Because the law is not static, and one situation may differ from the next, we cannot assume responsibility for any actions taken based on information published here. Be aware that the law may vary from state to state. Therefore, this blog cannot replace the advice of an experienced attorney. No attorney-client relationship is created by your access to or use of this website. Contacting us by email does not create an attorney-client relationship. If you wish to establish a professional relationship, it must be done through a mutual agreement in writing. Please do not send us any confidential information until an attorney-client relationship has been established.

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Music & Publishing Industries Suffer Setback in Digital Download Case

 

Copyright Alert: 9th Circuit Holds Digital Downloads are Licenses Not Sales

FBT Productions LLC v. Aftermath Records (9^th Circ. 2010)



What should musicians and authors be paid for digital downloads?  In a decision with implications for the publishing industry the Ninth Circuit Court of Appeals recently ruled that rapper Eminem’s production company was entitled to 50% of his record label’s revenue from digital sales. 

The issue in F.B.T. Productions v. Aftermath Records was whether a digital download was a “sale” or a “license.” Like the music industry, publishers have taken the position that digital downloads should be accounted for as sales not licenses.  Typically, the royalty rate paid for subsidiary rights revenue is split 50/50 between the author and publisher, compared to 25% of net paid to authors for the “sale” of an eBook. 



Distinguishing Sales and Licenses

 

In its September 3, 2010 ruling, the court held that digital downloads should not be treated as auditable physical units for royalty accounting purposes.   The ruling is 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. 

The divisibility of copyrights was the theory relied upon by the court in determining that a digital download from the iTunes store was not a sale but a license. 

The Ninth Circuit held:

When the facts of this case are viewed through the lens of federal copyright law, it is all the more clear that Afterrmath’s agreements with the third-party download vendors are “license” to use the Eminem master recordings for specific purposes authorized thereby — i.e., to create and distribute permanent downloads . . . — in exchange for periodic payments based on the volume of downloads, without any transfer in title of Aftermath’s copyrights to the recordings. Thus, federal copyright law supports and reinforces our conclusion that Aftermath’s agreements permitting third parties to use its sound recordings to produce and sell permanent downloads . . . are licenses.

To the extent publishers transfer the right to make digital copies available to a digital download distributor, who then sells direct to consumers, it would, under the holding of this decision, constitute a license.  Digital download distributors do not, to quote the decision, “obtain title to digital files.”  The legal principle is quite simple.  Copyrights are divisible.  They can be assigned for less than their complete term, for a particular territory, and for a particular use -- rather than all rights under copyright.  If iTunes or Amazon or Sony or Kobo purchases an eBook from a publisher and resells it to a consumer, in the Ninth Circuit, it would considered a sale.  On the other hand, if the publisher retains ownership of the files, and receives periodic statements iTunes, et al, the rule of the case, applied mechanically, would categorize revenue from the "sale" of a digital download as subsidiary rights income.  


Many contract templates have already been modified by publishers in anticipation of a decision such as this one.  As such, they are likely immune to the decision's economic impact.  With regard to legacy or backlist contracts, labels and publishers will try to mitigate the impact of this decision by seeking retroactive contract amendments, and, perhaps, waivers of claims for back royalties.

The court regarded the record label’s ability to regain possession of the digital files at any time as a key element in supporting it’s finding that the label did not “sell” anything.

There is no dispute that Aftermath was at all relevant times the owner of the copyrights to the Eminem recordings at issue in this case, having obtained those rights through the recording contracts in exchange for specified royalty payments. Pursuant to its agreements with Apple and other third parties, however, Aftermath did not “sell” anything to the download distributors. The download distributors did not obtain title to the digital files. The ownership of those files remained with Aftermath, Aftermath reserved the right to regain possession of the files at any time, and Aftermath obtained recurring benefits in the form of payments based on the volume of downloads . . . Under our case law interpreting and applying the Copyright Act, too, it is well settled that where a copyright owner transfers a copy of copyrighted material, retains title, limits the uses to which the material may be put, and is compensated periodically based on the transferee’s exploitation of the material, the transaction is a license.

Importantly, if FBT were applied to books, you would find the word “license” multiple time, in, for example, Amazon’s Digital Distribution and Sony’s eBook agreements with publishers. 

Opportunities for Authors & Strategies for Publishers

 There is no way to predict whether the Second Circuit would follow the same line of reasoning as the Ninth Circuit.  Historically, the Second Circuit and Ninth often come to different conclusions via-a-vis new media issues.  No doubt, the commentators will have a day of it.  The decision will be opposed by the music and publishing industries.  Public statements will be made stating that the decision should be limited to the facts of this particular case.  And, while Eminem’s label may threaten to take the case to the Supreme Court, it will likely not act on that threat, as a final adverse judgment (assuming the Supreme Court would hear the case) would be devastating to that beleaguered industry.   

"The Penguincubator"
Dowload or Book Sale?
Penguin's Early B2C Experiment

Like the recent Random House–Wylie dust up, and the Rosetta Books decision, matters such as this are usually settled on confidential terms.  As the  FBT decision is not limited to records, agents and publishers should turn to their lawyers to help them determine what is the best current business practice in view of this important decision.  Consequences?  Agents will be emboldened to demand higher royalties from digital downloads, raising the familiar argument, "There's little direct cost today in getting eBooks into readers' hands.  Give me more!"   The future?  eBook rates for backlist titles (but maybe not for frontlist titles) will rise above 25%, and some wise publisher in the next six months will issue a press release stating that “In the light of dramatic changes that have taken place in the book publishing industry over the past several years, it is only fitting that the authors who comprise our backlist – and their heirs – be paid in accordance with today’s standards.”  

As the Rosetta Books decision illustrated, additional rights beyond primary rights, when sought by a publisher, are subject to separate negotiations and consideration.  If not resolved by a separate agreement, or amendment to the contract, such matters can wind up in court.   Whether this decision helps establish new ground rules for artist and author compensation remains to be seen.  I bet it does. 



How will this affect book publishing?  Will it accelerate the pace of the industry’s transition from a B2B to a B2C model?  Will conglomerates unload (trade) publishing houses?  Will Google start acquiring houses like the TV networks once went after studios?  A Penguincubator on every corner?  Stay tuned. It's not the end of publishing, just another chapter. 



Related Blog Posts

 

Libel in Fiction

Fair Use in a Nutshell 

Book Contract Negotiation Checklist 

Twelve Copyright Permission Myths 

Estate Planning for Authors 

THE INFORMATION CONTAINED IN THIS ARTICLE IS OF A GENERAL NATURE.  IT IS NOT INTENDED AS LEGAL ADVICE.  READERS ARE STRONGLY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE RELYING ON ANY INFORMATION CONTAINED HEREIN.  THIS POST DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP OR ANY OTHER EXPECTATION OF REPRESENTATION

Ask a Lawyer: Interviews and the Law

Q: I'm writing a book based on interviews I've done with political leaders, writers, actors, and other prominent people. Do I need written permission? What can I do to avoid being sued for libel?

A: What can possibly go wrong if you don't obtain a signed release? Plenty. Leading the parade of horribles is defamation. Will the interviewee claim the edited interview, either by omission, implication or innuendo, placed them in an unfavorable light?

 

In 2016, Katie Couric was sued by a gun advocacy group for deceptive editing of an interview in a documentary titled Under the Gun. While Couric beat the $13 million dollar defamation lawsuit on appeal, a simple release could have saved time, money and the stress. 

 

While there are defenses such as innocent construction (to defamation), truth (to defamation), fair use (to copyright infringement), and implied consent (to use in other media), because of the legal what-ifs and hazy boundaries of the law, the best practice is obtain a signed release.  

Click here for sample interview release forms.

 

Spoken Releases

 

There are many reasons authors do not obtain written releases, including deadline pressure on interviews conducted by phone or Zoom. While less reliable than a signed release, recorded consent is a viable alternative, provided the scope of rights is clearly defined.

 

At the beginning of an audio or video interview ask if you have permission to record the interview, and they understand that you may edit the interview and use it for future research or in different media.

It's important that the interviewee respond. If you edit or transcribe the interview accurately, and store the recording in a safe and accessible place, you've gone a long way to reducing the risk of a successful defamation or copyright infringement lawsuit. 

 

Of course, the law will hold you to your promise if the interviewee limits how or where the interview may be used. 

 

The Parade of Interview Horribles

 

A  Parade of Horribles

Copyright. One of the hotly contested issues in copyright law is who owns an interview. Some copyright scholars posit that an interview is jointly owned by the interviewer and interviewee. However, to qualify as a joint work, there must be evidence that the parties intended to be joint owners. If determined to be a joint work, the co-authors are afforded equal rights in the work, subject to to a duty to account to each other.   

The Copyright Office believes that an interview consists of two separate copyrights, i.e., the interviewer and interviewee own the words they spoke. A third theory is the interviewer owns the copyright in the selection and arrangement of the questions and answers. Because it's often unclear if the interviewer and interviewee shared an intent to be co-authors, the best practice is to get a signed release.    

 

If the ownership issue can't be resolved conclusively, you may be able to roll out the fair use defense. But, it's a partial solution. For example, it won't allow you to publish an entire interview.

Fair use allows writers, podcasters, and others to copy small portions of in-copyright works for socially productive purposes without permission. A defense to copyright infringement, it enables courts to avoid rigid application of copyright law where the strict application would "stifle the very creativity which the law is designed to foster."

Unfortunately, fair use is not amendable to mechanical rules. The fair use test takes into consideration or weighs these four factors: (a) the purpose and character of the use, including whether the use is primarily commercial in nature; (b) the nature of the copyrighted work; (c) the amount and importance of what's used in relation to the original work; and (d) if the use supersedes a market for the original?

Libel. Libel is a false statement about a living person (business or group) that harms their reputation. Truth is a complete defense to libel. Where the plaintiff is a celebrity or public figure, the plaintiff must show that the false statement was made with reckless disregard for the truth (aka actual malice). While a celebrity or other public figure may have a tough time winning a libel suit due to the constitutional actual malice standard, a well-drafted release will give you the right to edit and use the interview in any media without consent.

The gold standard is a well-drafted written release. Document signing apps like DocusSign and Adobe Sign are simple e-signature solutions. Today we're habituated to clicking OK boxes without much thought. So, getting a release signed need not be a burdensome task.

Media Liability Insurance

If you don't have a signed release, given the murkiness of the law, media liability insurance is something to look into. It's a specialized form of insurance that covers claims of copyright and trademark infringement, invasion of privacy, defamation, and other contextual errors and omissions. Some policies even cover claims of misappropriation of ideas and negligent publication. Most of these policies also cover the costs of defending a lawsuit, including attorney's fees and court costs.

# # #

 

Image:  Parade of Horribles and Antiques, Portland, Maine

Photographer:  Unknown

Year:  1920

Credit: Main Historical Society

Related Blog Posts

Libel in Fiction

Fair Use in a Nutshell 

Book Contract Negotiation Checklist 

Twelve Copyright Permission Myths 

Estate Planning for Authors 

Ask a Lawyer: Do I Need an Interview Release?

["Ask a Lawyer" appears in The Huffington Post. The "Q" to my "A" is  Jeff Rivera, a journalist who reports on publishing and entertainment trends and personalities.]

Q: I'm writing a book based on interviews I've done with political leaders, writers, actors, and other prominent people. Do I need written permission? What can I do to avoid being sued for libel?

A: What can go wrong if you don't have a signed release? Leading the parade of horribles are claims for defamation, false light invasion of privacy (a misleading implication that the average person would find highly offensive), and breach of contract.   

 

If you choose to forego a release, free speech, fair use, and implied consent defenses may insulate you against specific claims. However, because of the legal what-ifs, the ill-defined boundaries of implied consent, and the fact public figures are known to have large egos, deep pockets, and lawyers on speed dial, the best practice is to obtain a release.  

 

A well-drafted release will cover more than just permission to use a person's name and statements. For example, a release can potentially sidestep a lawsuit alleging alterations made to the speaker's words have tarnished their reputation. This is especially helpful when the individual is not a public figure and the statements do not concern a matter of public interest. 

 

Another potential problem a release can prevent is a disgruntled interviewee's attempt to revoke their consent or demand certain statements be deleted. The drafter of a release will want the unambiguous right to use the individual's name, voice and likeness to promote the interview. A release may include an indemnification clause that shifts liability from the publisher or podcaster to the interviewee. If the interview can be edited at the publisher or podcaster's discretion, the interviewee might try to exclude any editorial changes made without their consent from the indemnity.

Here's a link to sample interview releases. 

 

Spoken Releases

 

Did I hear you say, "What self-respecting political leader, bestselling author, or celebrity would sign an interview or guest appearance release? Excellent point. While less effective than a signed release, you can record the subject's consent. Provided the scope of rights is clearly defined, it's a viable alternative.  

 

While recording, before the interview starts, state the interview date and the interviewee's name. State clearly that the interview may be edited and used in all media, in whole or in part, in all languages throughout the world, in perpetuity. Then ask if you have their permission to record the actual interview and their answers to your questions. 

 

Of course, the law will hold you to your promise if the interviewee limits how or where the interview may be used. 

 

The Parade of Interview Horribles

 

Infringement and Libel Lead the Parade of Horribles

Copyright. Will the interviewee claim ownership of the interview? Some copyright scholars posit that the interviewer and interviewee jointly own the interview. To quality as a joint work, the interviewer (or podcast host) and the interviewee must agree that they will each own the interview. But that's not how things usually work in the real world. Most interviews do not qualify as joint works under the Copyright Act. In the rare instance an interview qualifies as joint work, either co-owner can issue non-exclusive licenses without the other's consent, subject to a duty to account for any profits made. 

The Copyright Office believes that an interview consists of two separate copyrights. That is right. They believe it consists of two separate copyrights - the interviewer and interviewee each owns the words they spoke. It's an interesting theory but of little practical value to the interviewer. Another legal theory is that the interviewer owns how the questions and answers are selected and arranged. In other words, the interview as a whole. So, who owns the interview? There's no bright-line rule. That's why it's a good idea to get it in writing.  

Libel, Privacy, Publicity. Without a signed release, writers, publishers, and podcasters are vulnerable to being sued for defamation and, a lesser threat, invasion of privacy. 

Libel is a false statement about a living person (business or group) that harms their reputation. Truth is a complete defense to a libel claim. Where the plaintiff is a celebrity or public figure, the plaintiff must show that the false statement was made with reckless disregard for the truth (aka actual malice). While a celebrity or other public figure may have difficulty winning a libel suit because of the legal actual malice standard, written consent is the best defense. If you transcribe accurately and can locate the recording or release, you've taken significant steps to minimize the risk of a successful libel suit. 

 

The right of publicity is the right to control the commercial exploitation of a person's name, likeness, or voice. However, the use of a celebrity's persona without their permission is generally protected under the "newsworthy" exception, provided it's related to the use and is not expressly misleading. The "newsworthy" exception applies not just to hard news but also matters of legitimate interest to the public, including sports, entertainment, and politics. In some states, a deceased person's right of publicity survives their death and may pass by will or be assigned.  

If you don't obtain consent, the advantage of interviewing a celebrity is that the First Amendment makes it difficult for a celebrity to bring a successful claim for invasion of the right of publicity and libel.   

The gold standard is a well-drafted written release. Document signing apps like DocuSign and Adobe Sign are simple e-signature solutions. Today we're habituated to clicking OK boxes without much thought. So, getting a release signed need not be a burdensome task.

Fair Use
 

If the ownership issue can't be resolved conclusively, you may be able to roll out the fair use defense. But it's a partial solution. For example, it may not allow you to publish an entire interview.

Fair use allows writers, podcasters, and others to copy (usually) small portions of in-copyright works for socially productive purposes without permission. Finally, as a defense to copyright infringement, fair use allows courts to avoid rigid application of copyright law where the strict application would "stifle the very creativity which the law is designed to foster."

Unfortunately, fair use is not amendable to mechanical rules. The fair use test takes into consideration or weighs four factors: (a) the purpose and character of the use, including whether the use is primarily commercial; (b) the nature of the copyrighted work; (c) the amount and importance of what's used in relation to the original work; and (d) if the use supersedes a market for the original?

Media Liability Insurance

If the subject matter is sensitive and you don't have a signed release, given the murkiness of the law, media liability insurance is something to look into. It's a specialized form of insurance that covers claims of copyright and trademark infringement, invasion of privacy, defamation, and other contextual errors and omissions. Some policies even cover claims of misappropriation of ideas and negligent publication. Most of these policies also cover defending a lawsuit, including attorney's fees and court costs. 

 #  # # 

 

I Shall Be Released, performed by Bob Dylan
 

 

 

Image:  Parade of Horribles and Antiques, Portland, Maine

Photographer:  Unknown

Year:  1920

Credit: Main Historical Society

Related Blog Posts

Libel in Fiction

Fair Use in a Nutshell 

Book Contract Negotiation Checklist 

Twelve Copyright Permission Myths 

Estate Planning for Authors 

THE INFORMATION PROVIDED HERE IS OF A GENERAL NATURE AND IS NOT INTENDED AS LEGAL ADVICE. IF YOU HAVE A SPECIFIC LEGAL ISSUE OR QUESTION, SEEK THE SERVICES OF A COMPETENT ATTORNEY.

The Legal Consequences of Using Real People in Fiction

When Fiction & Reality Collide

Q: My main character is loosely based on a real person. I mean, that's who inspired me. I never identify him by name (he's my ex-friend) and I've made up 90% of the events that happen in the book. I'm worried after the book becomes successful, that he'll come back and try to take a stake in the millions.  What can I do to prevent this?  - GWB

A:  So you ask, “How do you discourage your friend from becoming a plaintiff after reading your novel and fictional portrayal of him?”

A basic understanding of libel law Libel is helpful.  Libel is defined as a false statement of fact “of and concerning” a living person that damages their reputation.  If you were to say that fiction, which describes a world that doesn't actually exist, was incapable of defaming a real person, it would be logical, but wrong. 

Happily for novelists (and The Weekly World News), when the model upon which a fictional character is based sues, generally, their claim doesn't get not survive summary judgment.  For a novel, or other fictional work, to be actionable, its detail must be convincing. The description of the fictional character must be so closely aligned with a real person that someone who knows that person would have no difficulty linking the two.  And, there must be an implicit belief that what the author said – notwithstanding her denials – was true.  What about a fictionalized autobiography?  If your memoir is fictionalized, but you don't make that clear to readers, there's no veil of fiction to hide behind for purposes of libel law. 

Despite the breathing space the First Amendment affords writers, not all libel-in-fiction lawsuits are resolved in favor of the author or their publisher partner.  For example, in 2009, in the “Red Hat Club" case, the plaintiff was awarded $100,000 in damages by a Georgia court for a fictional portrayal modeled on her.  The “original” claimed that her fictional double, falsely depicted in the bestselling novel as a sexually promiscuous alcoholic who drank on the job, defamed her.  From a libel defense perspective, this drawn-from-life portrayal failed, in part, because the author included personal characteristics that made the plaintiff recognizable, and mixed them with other traits that were false and defamatory, but, still believable.

Now back to your question.  Are you sure you never identify the real person who inspired your main character?  Aside from their name, can they be identified from their ethnicity, appearance, historical or other details found in your book, so that someone who knew them (or knew of them), could identify them and assume that the statements in your book were truthful?  While you may not identify your ex-friend by name, if you haven’t completely disguised the person, the likelihood of a successful claim for falsely portraying them increases.  Is your friend a public official or public figure?  If so, they have another hurdle to jump.  Unless he can prove by clear and convincing evidence that what you wrote was deliberately or recklessly false, there's a good chance -- but no guarantee -- you'll be excused from liability under what's known as the "Actual Malice Standard."

Merely changing the name of your friend isn’t enough.  You might consider transforming him beyond recognition.  Why?  Courts consider plausibility.  A broadly drawn caricature of your friend, which is difficult to reconcile with your ex-friend, can be an effective device to stave off a libel lawsuit. For example, Kim Pring, a former Ms. Wyoming, sued Penthouse over an article that described Ms. Pring’s ability to cause men to levitate by performing oral sex.  Initially, the Federal District Court found for Miss Pring, awarding her $26.5 million in damages.  On appeal, however, the Court of Appeals reversed the decision; holding that no reasonable person could believe that was described was actual facts.  Be outrageous.  If the reader accepts the novel as pure fiction, no libel will be found.  Parody – if done properly can take the chill out of free speech.  [Note the italicized “if”].   If done improperly, and the hypothetical reasonable reader thinks your failed parody conveys actual facts, the First Amendment may not be available to you.  "Obvious cues," like levitation or time travel can help telegraph what is First Amendment protected fiction from fact.   When it doubt, have the book vetted by a publishing attorney.        
     

Here’s a run-down of a few techniques that can minimize the chance of getting sued for libel in fiction:   (a) disclaim; (b) disassociate the doppelgänger from its real-life counterpart; (c) depict but do not disparage; and/or (d) as explained later, wait for the real-life person to die before publishing your fiction.  With regard to option (d), revenge is best served cold at your publication party -- preferably with a Sauvignon Blanc, Riesling, or Gewurztraminer. 

Disclaimers, while helpful, are by nature, self-serving.  While a disclaimer cannot insulate you or your publisher from a libel suit, it may support the defense that identification with the real person in your novel is unreasonable.   The words “A Novel” in the subtitle of your book is considered by some attorneys to be the best form of disclaimer.  In addition, a full disclaimer should appear on the reverse title page of your novel, or skillfully integrated into the introduction or preface of your book. 

Change the physical characteristics of your main character enough to disguise his identity.  The risk of being sued is further reduced if your main character is treated as a likable character rather than a vicious and unscrupulous evildoer.  While it is very tempting to retaliate against those who have injured us, if a character drawn from life isn’t likable, it is even more important to disguise their  identity.   

Create a Frankenstein monster.  Combine or clone several people’s physical traits and biographical facts, so no single person's actual DNA appears in your book.   If the work is not "of or concerning" an identifiable person, you have a complete defense to a libel lawsuit based on fictionalization.  Speaking of Frankenstein, the dead cannot be defamed.  As such, they make terrible plaintiffs -- but excellent targets for vengeful authors.  Why?  Under U.S. libel law, if the original is dead, s/he can't sue for libel.  If this last suggestion gives you an additional  reason to outlive your literary prey, consider it my gift to you.  And remember, he who laughs last, laughs best.  

 I would be remiss if I did not bring up three other legal horrors.  First, the law of defamation is not concerned with who you intended to target, but who gets struck by your barbed arrow.  What that means is unintentional defamation is actionable.  "Woops!"  is not a defense to libel.   If you shoot an arrow in the air, from a legal perspective, where the  arrow lands, not where you intended it to land, is what matters.  Lawyers who vet, and writers who write, need to watch out for same-named individuals who are falsely, but, believably, depicted. 

While publication of truthful information is generally considered a full defense to libel, private individuals can sue for highly offensive or embarrassing truths.  So, if your book goes too far and reveals intimate areas of a person’s life – sexuality, family life, medical procedures, and mental (in)capacity – you may invite a right of privacy claim.  Are there defenses?  Yes, but, that's beyond the scope of this post.   

The right of publicity involves the unauthorized use of a person’s name or likeness for commercial gain.  It is related to the right of privacy.  Fortunately for novelists, due to free speech considerations, courts historically construe publicity rights narrowly.  But, that’s the subject of another Q&A. 


If you feel uncomfortable with the legal minefield of libel, right of privacy and right of publicity law, consult a publishing attorney.  A publishing attorney can evaluate or vet your manuscript, and suggest ways to mitigate or avoid many of risks of writing about real people and actual events. 

Expect to pay a publishing attorney what you'd pay a good book doctor.  As they say, "An ounce of prevention is worth a pound of cure."  

Disclaimer:   This article discuss legal issues of general interest and is not designed to give any specific legal advice concerning any specific circumstances.   Libel law is fact specific.  Further, is no single body of  law applies.  Today, information travels far and wide.  Many countries do not recognize the protections we give authors and publishers.  It is important that professional legal advice be obtained before acting upon any of the information contained in this article.

Resources

Smith v. Stewart (Red Hat Club Case)
Pring v. Penthouse
Bindrim v. Mitchell (case ended badly for the author) 
Carter-Clark v. Random House (Court of Appeals)
Carter-Clark v. Random House (Supreme Court)


Libel in Fiction Quotes

"I don't get hurt or bleed; hair doesn't muss, it's one of the advantages of being imaginary." 
    - Ted Baxter in the The Purple Rose of Cairo

"All literature is gossip."  - Truman Capote

"Novelists are inspired gossips." 
    - Margaret Drabble

“But we are the sum of all the moments of our lives---all that is ours is in them: we cannot escape or conceal it. If the writer has used the clay of life to make his book, he has only used what all men must, what none can keep from using. Fiction is not fact, but fiction is fact selected and understood, fiction is fact arranged and charged with purpose."
    - Thomas Wolfe's Preface to Look Homeward Angel

 

 

Related Blog Posts

 

Fair Use in a Nutshell 

Book Contract Negotiation Checklist 

Twelve Copyright Permission Myths 

Estate Planning for Authors