Avoiding Author Contract Conflict

December 2001
by Alan J. Kaufman
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I started my career as a literary agent/attorney, went on to become Senior Vice President and General Counsel of a major trade publisher for 20 years, and am now in private practice specializing in representing small- to mid-sized publishers. In other words, I have been on both sides of the negotiating table and have reviewed literally hundreds of different publishing boilerplate agreements over a long period of time. I have reached the conclusion that many of them have unnecessarily antagonistic clauses, expressed in non-user-friendly language, that do not reflect the publisher’s actual business practices. On the other hand, many of the same agreements leave out clauses that are essential to the publisher’s interests.

Negotiating a boilerplate agreement is one of the first interactions between a publisher and an author or the author’s literary agent. It gives an author or agent the first impression of the publishing company. That relationship should not commence with an arduous, time-consuming negotiation process necessitated by a poorly drafted document.

While there is no question that publishers and authors have divergent self-interests, most issues can usually be resolved. For example…

Grant of Rights/Subsidiary Rights

A publisher is interested in securing as many primary and subsidiary rights as possible, while the author or agent wants to reserve those rights. Among the more important subsidiary rights are translation rights and British Commonwealth rights. Proceeds received from licensing these subsidiary rights buffer the risk the publisher undertakes in paying a royalty advance to the author. If th
thor or agent insists on reserving translation and British Commonwealth rights and the issue becomes a “deal breaker,” one way of resolving the matter is for the publisher to agree that the author or agent can sell the translation and British Commonwealth rights provided that all monies derived from the licensing of these rights are sent to the publisher until the royalty advance has earned out, at which time the author will commence receiving 100% of these licensing proceeds. This solution meets the publisher’s objective of mitigating risk while acceding to the request to reserve rights made by the author or agent.

Representations, Warranties & Indemnity

A publisher has the right to expect that an author make certain representations and warranties, including that the author is the sole author of the work, is the legal proprietor of all the rights granted and has the power to enter into the agreement, that the work is original, not in the public domain, free of any lien, claim or debt, and that the work will not violate any copyright or any other right of any third parties, and will not be libelous or illegal or cause harmful effect. If an author willfully violates any of these representations and warranties, there is no question that the author should fully indemnify the publisher from any costs, including reasonable attorneys’ fees, settlements, or judgments incurred by the publisher as a result of the author’s breach. But what if the author’s breach of a representation or warranty is not willful? If a publisher has an Errors and Omissions Insurance Policy which enables it to add an author as an additional insured in the event of a claim or suit (i.e., “author insurance”), the solution is a happy one. The publisher can agree to look solely to the proceeds of its Errors and Omissions Insurance Policy for the payment of any sums which are due from the author as a result of the indemnification, with the author paying some portion (usually one-half) of the deductible of the insurance policy. It is highly recommended that publishers have such Errors and Omissions Policies; premiums are relatively affordable. However, in the absence of an Errors and Omissions Insurance Policy, the publisher and the author will need to negotiate how much of the costs will be borne by each of the parties. A compromise of a 50/50 split of all attorneys’ fees and any settlement, with the author bearing all of the cost of a judgment, is not unusual.

Electronic Rights

The recently-decided case of Random House, Inc. v. Rosetta Books LLC states that publishers do not obtain electronic book rights when granted book rights, unless the publisher’s boilerplate agreement specifically grants these rights to the publisher. Most authors’ agents have agreed to grant publishers the right to reproduce verbatim a title in electronic book form (as opposed to granting enhanced interactive multi-media rights). It is therefore surprising to me how many publishers’ agreements do not deal with electronic book rights, do not specify a royalty rate for electronic books, and do not deal with the issue of whether e-books and Print-on-Demand books will keep a work “in print.” While e-books and Print-on-Demand books are not now of real financial import to publishers, there is no doubt in my mind that they will be so in the future and should be dealt with in boilerplate agreements.

Of course, publishers can avoid many of these problems by having its boilerplate agreement drafted by an experienced publishing attorney who understands the business reasons for every clause, and by reviewing the agreement from time to time and modifying it to reflect changes in the industry, new legal decisions, and evolving custom and usage.

Finally, a word to those publishers who feel that the way to resolve conflicts with authors is to take the “tough” position. Frankly, this will often work with authors so desperate to be published that they will sign anything. However, as an author obtains some measure of success (and, of course, these are the very authors that publishers want to publish), the author will have more choices as to who will be their publisher and publishers will fare best with contract policies that are reasonable and within industry norms.


Alan J. Kaufman practices law with the New York-based firm Frankfurt, Garbus, Kurnit, Klein & Selz where he specializes in publishing, new media, corporate law and manuscript (libel) review as well as distribution, author, and licensing agreements. You can reach him at 212/826-5579 or akaufman@fgkks.com.

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