Out of Print Provisions in Book Contracts

August 2001
by Ivan Hoffman, B.A., J.D.
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Ivan HoffmanIvan Hoffman is an Internet law, publishing, copyright, corporate training and online education, trademark, and music attorney, practicing for over 28 years.  He practices in the Los Angeles area.  His web site is www.ivanhoffman.com. You may reach him at ivan@ivanhoffman.com. This article is not intended as legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. You should consult with an attorney familiar with the issues and the laws. This article does not create any attorney client relationship.


What constitutes “out of print” in the world of print books and now-with the advent of print on demand-in the electronic world can be a significant legal and business issue for both publishers and authors. This clause in a book contract is often glossed over, but rights to a book that may no longer appear marketable can have important implications.

The following issues are some essential ones that contracts should cover.

The Threshold for “Out of Print”

When a book is out of print must be defined. Of course, the publisher may make a voluntary decision to declare the book out of print. It may do so at any time, subject to whatever restrictions the author has been able to negotiate. Often the agreement calls for some affirmative act on the part of the publisher, such as sending written notice to the author and/or placing a notice in Publishers Weekly.

However, without a voluntary decision on the part of the publisher, both parties should have some concrete standards by which they can determine when the book shall be deemed out of print. By “deemed,” the law means that if some defined occurrence takes place, an event shall be considered to have happened and certain legal consequences will flow from that.

In the world of traditional print book publishing, this “deemed” event is often defined as there being fewer than “X” units of the book available for sale to the public. But this is not a sufficient definition since it leaves unclear the matter of how that “X” units situation is determined. Does it exist when a book has been published in both hardcover and paperback and has fewer than X units available fo marle in only one of these formats or must fewer than X units be available in both? In the best interest of the publisher, the provision should be structured to deem the book still in print if it exists in any quantity in any edition. In the best interest of the author, it should deem the book out of print if it falls below the defined threshold in any edition.

In the electronic world of print on demand and downloadable files, clearly a different standard must be defined. It is often best established on the basis of income being received by the author during any given accounting period or periods. In other words, in the event the author does not receive $X.00 during X accounting periods from print on demand and/or electronic versions, then the book shall be deemed out of print, at least in that format or those formats.

What Rights Attend the Determination?

If the occurrence of the event means that rights to the book revert to the author (subject to other provisions discussed below), then the rights ought to revert only to the format in which the book is deemed out of print. So, for example, if the provision says a book can be declared out of print if it falls below the defined threshold in one edition but not in another, then the rights to that edition only might revert to the author. If that edition were, say, the print on demand or downloadable version, then the publisher might retain rights to the print version or versions.

Out of print provisions may allow the author to purchase any remaining copies at a defined price (say, the publisher’s cost of manufacture or the wholesale price) during a finite period of time, and provide that the publisher may remainder or otherwise dispose of the copies if the author fails to purchase during that time. Both parties should examine their agreement to see how, or whether, the author has rights to purchase books prior to remaindering and, if not, whether the author participates in any income received as a result of remaindering.

Agreements may also provide that the author must notify the publisher of intent to reacquire the rights to the book or to a specified edition, in which case the publisher will have a certain time frame within which to reissue or re-license the book in order to defeat the out of print reversions.

In addition, agreements should provide that any reversion that does occur be subject to any existing third party licenses, and that any income received by the publisher from such licenses continue to be divided according to the provisions of the agreement. In other words, the author will take rights to the book or edition subject to any rights of third party licensees. In this regard, the publisher should have negotiated provisions in those third party licenses that deal with when any licensed book is deemed out of print so that the publisher may recapture those rights.

Conclusion

As with all contract provisions, the “standard,””boiler plate” clauses cut and pasted from a book generally are unsatisfactory in that they fail to deal with the myriad of issues that arise in the actual publisher-author relationship. A contract should solve more problems than it creates, and a contract should never leave any provisions open to being interpreted by any judge or jury. If you wish to try to avoid expensive litigation, it is advisable to take the time to have the agreement thoroughly drafted in the beginning. “Help me” is almost always cheaper than “fix me.”

Thus, when negotiating a new book deal, the visionary author and publisher look down the road to the time when the book is no longer the darling it started out to be.

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