Reversion in the Digital Age: Is Out-of-Print Out of Style?

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November 2011
by Steve Gillen

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Because not every book is a success and not every successful book has an indefinite shelf life, the publishing contract has evolved to anticipate and incorporate an exit strategy for that day when the publisher decides that revenue from expected sales will no longer justify the cost of continuing to carry the work. Once a work slides to, through, and off the backlist, publishing contracts generally protect the author’s interests by providing for a reversion of rights to the author when the work is allowed by the publisher to go “out of print.”

But what does “out of print” mean today?

Taking a book out of print (OP) has historically reflected a more or less permanent decision to discontinue publication of a work and remainder the inventory, so that the book will no longer be available for immediate purchase or even for back order. OP must be and has been distinguished from OS (out of stock), which is a temporary status, though the temporary time can be long if the publisher is caught off guard when an unexpected surge in retail demand meets long lead requirements for scheduling press time.

In the days when publishing a book meant placing a print order for a few thousand, or a hundred thousand, copies, keeping a book in stock and in print represented a material financial commitment by the publisher that served to evidence and reinforce its continuing intention to affirmatively market, promote, and exploit the book.

Conversely, allowing the book to go out of stock and remain that way in the absence of some impediment to scheduling a reprint was a pretty clear indication that the publisher had lost confidence or interest in the marketability of the work. So it made perfect sense for OS/OP to become the contractual trigger for reverting rights to the author.

Has OS/OP been reduced to a metaphor in a business that is trending media agnostic, or is there still a place for language like this in your contracts? The answer depends on what you publish.

As Dominique Raccah pointed out in “E-books: How Far, How Fast?” (September), there isn’t one uniform book industry, and not everyone is migrating from print to digital at the same rate, with the same success, or even at all. Adult nonfiction, reference books, textbooks, and children’s books all remain far back on the digital migration curve.

For Print-Only Publishing Programs

If your publishing program is focused on any of the markets mentioned above, or if you don’t contemplate either digital or print on demand (POD) in your publishing future, contractual reversion language that is focused on the traditional OS/OP trigger will continue to serve you adequately.

In that event, you will want to be sure that your reversion clause adequately defines what constitutes “out of print.” The most flexible approach, of course, is to say that the book is OS/OP when you as its publisher say that it is. This keeps you from being boxed into any particular reprint schedule and allows you maximum flexibility in allocating your business resources.

One alternative to the when-I-say-so approach is defining OS/OP in terms of an objectively measurable benchmark—e.g., “The Work will be deemed out-of-print if the domestic print edition becomes, and is allowed to remain, unavailable for purchase for a period of [specify] consecutive months after the Publisher’s receipt of the Author’s written request to reprint or release the Work . . . ”

The period you specify should be long enough to accommodate any reasonably foreseeable reprint scheduling contingencies, but not so long as to be unwarranted; four to six months is probably supportable.

For Digital and POD Publishing Programs

If your publishing program includes, or may include, digital books or POD, your contractual reversion trigger will have to anticipate the possibility that the presence or absence of physical books in a warehouse is not a reliable indicator of your commercial commitment to the book.

With this in mind, many publishers have changed their contracts to provide that the publisher may maintain its exclusive hold on the rights to a work so long as the work is available for order in any edition in any format or medium.

On its face, this appears to mean that the publisher can satisfy its obligation merely by maintaining a digital file from which it could generate an e-book or a POD copy in response to a single-book order. In actuality, however, the ability to fill an order or two per year is probably not worth the bother of insisting on it, the costs you might incur in terms of your goodwill among authors, and the risk you might run of having to resist a formal challenge.

So why spend your capital bargaining for the right to hang on to something after you no longer use or need it? Instead, why not have your contracts provide a flexible reversion trigger that measures something meaningful, something that faithfully fulfills the function once served by the OS/OP trigger?

Consider specifying a trigger that will not be tripped as long as there is one or more of the following:

• a domestic print edition in stock and available for order (or a reprint secured within X months of the

author’s demand)

• a digital edition available for purchase in either e-book or POD form or in any other form now known

or yet to be developed with gross sales in the most recent [royalty period/calendar year] of at

 

least $[specify]

• promotional investment the publisher can document that is directly in support of the work of at least

$[specify] during the calendar year preceding an author’s request for reversion

A publisher who meets any one or more of these criteria is still in the game and can back up its continuing interest in the work with objectively measurable, independently verifiable data.

For Any Publishing Program

Yet again, the devil is in the details. Regardless of which approach you choose in your contracts, do not continue to use the label “Out of Print” for a provision unless OS/OP status is the sole trigger.

Instead, use a label that is more media neutral, such as “Reversion of Rights” or “Discontinuance of Publication.”

And regardless of which approach you take, be sure that the reversion clause in your contract:

is not triggered until after repayment of any remaining author indebtedness to the publisher (if there

are unrecovered charges against the author’s account, it is reasonable to hold rights in security

for repayment of bona fide debts)

reverts rights in the manuscript as delivered by the author, excluding any publisher-provided material

(if the publisher paid for photos or art or other supporting materials, some of which might also be

used in other works by the same publisher, the copyrights in this material should not be

unintentionally assigned away)

in the case of multiple authors, reverts rights to those authors as their respective interests may lie

(no sense volunteering to serve as the arbiter of their co-ownership rights)

makes the reversion of rights subject to any subsidiary rights or other licenses previously

granted by the publisher

If you obtained a copyright registration for the work as published by you, the public record will reflect your ownership of that work, and your author may ask you to execute a short-form assignment of the copyrights in the work. To bring the public record up to date, the author would then record that with the Copyright Office, so be certain that the short-form assignment completely reflects those rights properly reserved by you.

Back in the beginning, when you were focused on courting an author with an eye toward publishing marriage, you probably weren’t eager to think about separation. But things do not always go as planned. No matter how traditional or technically ambitious your publishing program is, you should be able to avoid nasty divorces with an agreement that precisely defines when rights will be reverted and that makes the reversion process as painless as possible.

Steve Gillen is a lawyer and partner in the intellectual property firm of Wood Herron & Evans and has focused his practice on publishing and media matters for 30 years. He is a member of IBPA and a frequent contributor to the Independent. To reach him, email sgillen@whepatent.com or call 513/241-2324.

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