How to Spot a Rights Grab

by | Apr 24, 2015

By Helen Sedwick

Writers see the warnings all the time. Watch out for rights grabs, those contracts that transfer all rights to the writer’s work to some less-than-reputable publisher or self-publishing company. Without realizing it, the writer has given away the right to publish his or her book in print, ebook, audio, app, and all future formats, in all languages, worldwide, for the life of the copyright. Heartbreaking.

Bloggers like Victoria Strauss at Writer Beware and Mick Rooney of The Independent Publishing Magazine are invaluable watchdogs, calling out these rights-grabbers. Sadly, they often hear about the scams after writers have lost rights, money, and sleep.

How can writers spot these rights grabs BEFORE they are exposed in the blogosphere? What are the clues? After all, no writer wants to lose rights or be David suing Goliath like this.

The answer, of course, is read the contract before your hit Submit.

Daunting? Not if you know where to look. Instead of starting at the beginning of the contract, go straight to any paragraph called Grant of Rights, License, Permission, or Permitted Uses, and look for these Danger Words: Assignment and Exclusive.

If you see these Danger Words, you may not need to read any further.

Assignment

Legally speaking, a publishing contract is a license, meaning permission to use. The writer continues to own the copyright. In contrast, an assignment transfers complete ownership. It is rarely appropriate in publishing or self-publishing, except for a freelance or ghostwriting project if you understand upfront you are transferring all your rights and ownership in the work.

Victoria Strauss recently posted part of a contract for an online magazine called Omni Reboot. It’s a typical rights-grab:

Section 3. Assignment. Author does hereby irrevocably assign to Company and its successors all right, title, and interest throughout the world, in and to the Approved Entries, including without limitation, any copyrights and other proprietary rights in and to the Approved Entries in any media now known or hereinafter developed, and in and to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or future infringement of such rights.

Translation: Bye-bye copyright and royalties.

If you are handed a contract that assigns and transfers ownership, don’t sign it unless you understand the consequences.

Exclusive Licenses

An exclusive license can be as bad as an assignment.

As I said, a license is permission to use only; you, the creator, retain ownership of the copyrighted work.

Licenses may be worldwide or geographically restricted, short-term or perpetual, royalty-free or royalty-paying, limited to particular media such as audio books, print, e-books, or to a particular language, and most importantly, exclusive or nonexclusive.

If you grant a non-exclusive license, then you may grant the same rights to others at the same time. If you grant an exclusive license, you are agreeing not to transfer similar rights to anyone else.

A license is similar to a lease. Imagine you are a landlord of a shopping center, and you lease shops to various tenants. Their rent is based on how much they sell. Each shop lease is like an exclusive license granted to only one user. Other licenses, such as the right to use the parking lot, are non-exclusive.

Your goal is to lease/license to each shopkeeper/licensee only the space it can actually use. If a shop/licensee sells ebooks in English only, you do not want to grant them the right to produce audio books in Spanish, etc. You don’t want to tie up rights with someone who cannot use them to generate royalties for you.

Traditional Publishing

In traditional publishing, a writer should expect to grant exclusive rights to the publisher, but even then try to limit the license to the market the publisher actually serves. Here is an example of an over-reaching contract from a small publisher of print and ebooks:

EXCLUSIVE RIGHTS: The Author grants the Publisher an exclusive worldwide license to print, publish, and sell in all book, ebook, audio book, or in any form or format, in whole or in part, now known or hereafter invented in any language throughout the world during the term of this Agreement including any renewals or extension thereof, the Work as well as any derivative works, created now or in the future while this agreement is in force, including but not limited to study guides, lapbooks, unit studies, and curricula.

I would not want to grant the rights to publish audio books, future formats, translations and other derivative works to a publisher that may not have the capacity to market in those areas. To return to the shopping center analogy, I would want to keep the lease/license as small as I could negotiate.

Almost every contract is negotiable. If the other side tells you the contract is standard and everyone signs it, don’t believe them. Negotiate.

Self-Publishing

In self-publishing, licenses are almost always non-exclusive, That way you may sell print books through CreateSpace, IngramSpark/Lightning Source, and your own website, and sell ebooks via Amazon, Smashwords, IBooks and other vendors, all at the same time.

There are exceptions, such as KDP Select where writers agree to sell their ebooks exclusively through Amazon for a 90-day period. Some self-pub companies such as BookBaby require exclusive rights in some areas. I find these exclusive licenses are acceptable, as long as the writer may terminate the exclusivity at any time, as is the case with BookBaby.

Here’s an example of a writer-friendly (and reader-friendly) grant of rights:

Author grants Outskirts Press a NON-EXCLUSIVE, worldwide license to distribute and sell the manuscript in print and/or digital form; author grants Outskirts Press the non-exclusive right to exhibit manuscript in part on websites or promotional materials owned by Outskirts Press; author grants Outskirts Press the non-exclusive right to store and transmit digital versions of manuscript to facilitate production, distribution, and sale of manuscript.

But avoid any contract that has a granting clause that looks like this provision from an Author Solutions’ contract:

Distribution License Granted. Throughout the Term of this Agreement, You grant to Us the exclusive, transferable, worldwide license to manufacture, store, use, display, execute, reproduce (in whole or in part), transmit, modify (including to create derivative works), import, make, have made, offer to sell, print, publish, market, distribute, and sell (individually or as part of compilations of collective works), and license for use via any subscription model, through all distribution channels (now or hereafter known, including online and electronic distribution channels), and otherwise exploit in any language, in print form, digital format, audiobook format, or via any other medium, now known or hereafter devised, the Work.

Hybrid Publishing

A new breed of publishing company has emerged, sometimes called hybrid, assisted, partnership or some other term implying teamwork. The author pays for editing, design, production, and marketing services (self-publishing), and the hybrid publishers provide their services at no or low cost. In return, they retain a higher percentage of the royalties. The license agreements typically run for three to five years and are exclusive, which makes sense only if the hybrid publisher is truly investing in the project.

Hybrid publishing is a developing business model, and I can’t say yet whether these arrangements make sense for indie authors. (Readers, please pipe in.) I recommend writers keep these agreements short-term (three years or less) and insist on the right to terminate if sales are below an agreed-upon threshold.

Contests

Some contests offering publishing contracts also have overreaching agreements. Here’s one from MeeGenius, a children’s book publisher distributing app books only.

If MeeGenius accepts your Manuscript, you agree to grant, and hereby grant, to MeeGenius exclusive worldwide, perpetual rights, with the right to sublicense, to publish and otherwise use the Manuscript as a book, in print form, audio book, sound recording, and/or any other analog, digital or digitized formats, for distribution in original or translated versions in all languages, in all cases, over or via any communications network or medium, in all cases, whether now existing or hereafter devised. .. MeeGenius will also have the right to create a series of or other derivative books based on one or more of the story lines, characters, specific passages of text, actual illustrations or derivatives illustrations in the style thereof, or other aspects of the Manuscript or Work, on the same royalty and payment terms as provided herein as applicable.

Translation: You are giving this small app publisher exclusive rights to all formats and markets, including many in which it has no track record or expertise. No one else may sell your book in any format, including you. A typical rights-grab.

Share your knowledge

If you come across an overreaching contract, share the information with other writers. On forums such as Absolute Water Cooler, you can post warnings. Or send the information to me, Victoria Strauss, Mike Rooney, or Predators and Editors.

The sense of community among self-publishers is extraordinary. On Twitter, Facebook, and on countless blogs, we share tips about writing, character development, cover design, and platform building. Let’s work together to stop these rights grabs as well.

Sedwick.HeadshotHelen Sedwick, is a Contributing Writer for The Book Designer. She is also an author and a California attorney with thirty years of experience representing businesses and entrepreneurs. Her latest book is Self-Publisher’s Legal Handbook: The Step-by-Step Guide to the Legal Issues of Self-Publishing.

You can find more information about Helen here.

Disclaimer: Helen Sedwick is an attorney licensed to practice in California only. This information is general in nature and should not be used as a substitute for the advice of an attorney authorized to practice in your jurisdiction.

Photo: bigstockphoto.com. Amazon links contain my affiliate code.

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6 Comments

  1. Annie

    Great data! I knew contracts could be sneaky in some cases, but not this bad. Thanks so much for the heads up.

    Reply
  2. John Maberry

    Excellent explanation and translation of legalese into understandable English for laypersons. As person with a JD, I know whereof I speak AND the difficulty of learning to write about contracts and prose generally after having been trained in legal writing.

    Reply
    • Helen Sedwick

      John, Thank you. I enjoy doing what I can to educate writers and other artists on how to protect their rights.

      Reply
  3. Helen Sedwick

    Ernie, Thanks for sharing this. It’s important for writers to know negotiating can lead to greater success for all involved.
    Too many writers are afraid to negotiate. They fear they will lose the deal or appear unappreciative. They don’t realize that thoughtful negotiating does not hurt you in the business world. In fact, the other side is likely to respect you more if you do your homework and negotiate.

    Reply
    • Melanie Rockett

      Too many writers are desperate. They feel so honored to even be considered by a “publisher” that they sign whatever is put in front of them. I’ve see far too many authors have their properties totally ripped off by unscrupulous publishers … all because they were too excited to read the fine print and too intimidated to ask for changes or too desperate to simply walk away from a BAD DAD deal.

      Reply
  4. Ernie Zelinski

    You say, “Almost every contract is negotiable. If the other side tells you the contract is standard and everyone signs it, don’t believe them. Negotiate.”

    I agree. If the publisher refuses to negotiate, walk away. That’s what I do.

    Some time ago I negotiated a contract with an American traditional publisher that pays me a royalty of 30 percent net (the equivalent of 15 percent of the suggested retail price) for a tradeback edition of one of my books. Most American traditional publishers will pay a maximum of 7.5 percent of suggested retail price for a tradeback edition. I also retained the ebook rights and the foreign rights for this book — which have paid off big time for me given that the book has been published in 16 foreign languages and in three ebook formats.

    I have been able to negotiate 110 book deals around the world (in 28 other countries) with publishers for the print rights to my 15 creative works. In most of these cases I was able negotiate a lot better terms for the advance and royalties than the foreign publishers were first offering. I also managed to retain the vast majority of the ebook and subsidiary rights.

    Reply

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