AN INTERVIEW WITH LLOYD J. JASSIN
Reprinted from "Managing Publishing Rights" by Jack McHugh
McHUGH: Let's first discuss the subject of "electronic rights." "Electronic
publishing tends to be a loosely defined term. How do you define "electronic
JASSIN: Electronic publishing is hard to define because it is changing
so rapidly. It's technology driven. Simply stated, "electronic publishing"
is the process of turning two-dimensional works into digital code, and
distributing that information electronically to consumers. That takes
many forms. For example, interactive educational or entertainment CD-ROM
products, DVDs, online databases, electronic books, even game cartridges.
Bits are replacing paper as the storage media of choice for certain types
of information. Instead of turning pages, we can access information using
a mouse or computer touch screen. With the arrival of "virtual reality,"
before long, you'll even be able to strap on a helmet and glove and take
a virtual stroll through the corridors of the Louvre, which, exists, not
in Paris, but in your mind.
McHUGH: From the publisher's standpoint, is it best to use a work for
hire to get all rights from an author, including electronic?
JASSIN: As I discuss in my book, there are two fundamental ways in which
publishers can obtain rights. One way is through a license. However, with
a license you do not obtain ownership of the final work -- only certain
limited rights, defined by contract. Your standard author-publisher agreement
is nothing more than a license. Under copyright law, any right not expressly
granted to the publisher, is retained by the author. Therefore, if you
do not get an express grant of electronic rights, you do not have the
right to exploit those rights. If you look at older publishing agreements,
you'll see that many of them did not contemplate electronic rights. There's
been much litigation over whether entertainment contracts -- some drafted
in the 1930s -- contemplated new uses such home video. These cases are
instructive for electronic and multimedia publishers. What they illustrate,
is that the burden of negotiating for electronic rights falls on the publisher's
shoulders. Electronic rights are not automatically part of the package
when you acquire rights.
Where appropriate, publishers should consider obtaining rights on a work
for hire basis. With a "work for hire," the publisher steps into the shoes
of the creator and becomes the author of the work for copyright purposes.
However, not all works qualify as works for hire. A work for hire can
only arise in two situations: (i) a work created by an employee within
the scope of his or her employment; and (ii) a work created by an independent
contractor upon special request of the hiring party. For the second type
of work to qualify as a work for hire, it must also fall into one of nine
narrow categories listed in the Copyright Act. For example, a novel can
never be a work for hire, since it's not on the short list of nine works
eligible for work for hire status. Therefore, merely stating a work is
a work for hire is not enough. Copyright law is very formalistic when
it comes to work for hire agreements. For example, there's controversy
among courts over whether a work for hire agreement signed after work
has begun is valid. Consequently, it's important that all work for hire
agreements contain a back up copyright assignment. With a properly drafted
assignment, the original creator remains the author, but the publisher
gets all the rights. A sophisticated rights holder, however, will resist
any attempt acquire rights on a work for hire, or buy-out, basis.
McHUGH: Is there specific language that a publisher should use to secure
the electronic rights in publishing agreements with authors?
JASSIN: To anticipate future advances in technology, the rights grant
should give the publisher the sole and exclusive right to use and adapt,
and to authorize others to use and adapt, the work by any means, "whether
now known, or hereinafter invented." For instance, if fifty years from
now the storage device of choice was no longer paper, or digital in form,
but holographic, provided the granting clause was drafted properly, it
wouldn't matter what medium or method was used to record or exploit the
work. Since one of the rights afforded by copyright is the right to authorize
derivative works -- or adaptations -- a publisher would also want to obtain
the right to combine the work with other works. Publishers should work
closely with their legal counsel in drafting broad rights grants favorable
to their interests.
McHUGH: What suggestions do you have for publishers posting material on
the Web to protect their rights to their work?
JASSIN. The first thing publishers should do before putting anything on
the Net is to register their works with the U.S. Copyright Office. Similarly,
they should consider registering their domain name as a service mark with
the United States Patent and Trademark Office (www.uspto.gov). If your
domain name is used to identify and distinguish your services, it most
likely qualifies as a service mark. Publishers should also add appropriate
copyright and trademark notices to their materials. Unfortunately, high-speed,
high-quality digital copying systems, make it easy to flout copyright
law. However, if your menus, text and graphics have proper copyright notices,
it makes it difficult for someone to raise a good faith infringer defense
-- which is not a defense at all, since ignorance is not a defense to
copyright infringement. In addition, publishers should state exactly what
their policy is with respect to copying by posting usage notices. (E.g.,
"Copying for personal archival purposes only. This data may not be distributed,
sold or licensed to third parties."). It's also a good idea to include
contact information to steer potential licensees toward you. The more
accessible you are, the less likely someone will steal your material.
Ultimately, technology will come to the rescue. In the not so distant
future, information will be tagged with digital license plates, allowing
copyright owners to track uses of their work electronically. Using "smart"
licensing technologies, the digital distribution of information will result
in automatic debits and credits to users' digital cash accounts.
McHUGH: If material is downloaded off the Web and reproduced, is the reproduced
material copyright protected?
JASSIN: Neither the ease with which users can upload or download information
on the Internet, nor the fact that the information has been posted anonymously,
places a work in the public domain. Unauthorized postings and republications
of copyrighted materials, if not a fair use, is copyright infringement.
Remember, the same rules that apply to authors, artists, creators and
publishers outside cyberspace also apply on the World Wide Web. While
digitization (i.e., turning books into bits), scanning, computer networks,
and the Internet have made copying chapter-length excerpts from books
quick and easy, that doesn't mean the material being copied isn't protected
by copyright. Just as new technology has continued to adapt to our needs,
what's protected under copyright law has also expanded. Congress, when
they drafted the 1976 Copyright Act, made room for technological advances
by allowing fixation of copies any tangible medium "now known or later
McHUGH: How should publishers approach the licensing of electronic rights?
What are the potential pitfalls in licensing electronic rights?
JASSIN: For example, electronic licensing of rights in Europe is problematic,
because, unlike America, Europe respects an author's moral rights. "Moral
rights" give authors the right to object to changes in their work and
the right to claim ownership -- even after title to their work passes.
I should note that moral rights persist even after copyright expires,
and may be enforced by the original author's heirs after the death of
the author. Important to authors and publishers is the fact that moral
rights may be enforced outside the United States although the work was
created here by a United States citizen. Another issue publishers face
is where can they be sued. Traditionally, courts have asserted jurisdiction
over persons physically present within their state. However, courts can
also assert jurisdiction over nonresident defendants who intentionally
engage in transactions with someone in their state. Since publishers come
in contact with a multiplicity of jurisdictions, potentially, they can
be forced to defend a lawsuit just about anywhere. Importantly, the Internet
has made it increasingly easy for publisher defendants to be sued for
copyright and trademark infringement, obscenity, defamation and invasion
of privacy anywhere they cause injury. For example, in a recent criminal
case, a California-based bulletin board service was hauled into a Tennessee
court and convicted of violating federal obscenity laws. They obtained
jurisdiction in Tennessee, because a government employee downloaded and
ordered obscene materials, using a Tennessee-based computer and mailing
McHUGH: For the publisher, what are the key elements in an electronic
JASSIN: The key elements in an electronic licensing agreement are similar
to traditional licensing arrangements. When licensing rights to third
parties to create and distribute electronic rights, the key issues are
what platform (hardware or operating systems) or markets the work is being
licensed for. Also, the agreement must address the territorial scope,
length of the license term and compensation. Keep in mind that any of
the exclusive rights that make up a copyright can be owned separately
by one or more people. Just think about the way books are marketed. Besides
hardcover rights, there are trade paperback, mass market and reprint rights.
These are, in essence, different platforms. Each right is, as a rule,
sold piecemeal to one or more publishers to maximize the author's return.
Since digital technology (and business practice) is constantly changing,
publishers should be reluctant to grant broad rights, too. If they are
granted, it should be for a substantial fee and with restrictions attached.
As a rule, titles are prepared for specific platforms (e.g., IBM or Macintosh
compatible machines). Some licenses may contain a right of first negotiation
for unsecured platforms, or an option under which the licensee obtains
the right for a specific time to option further platforms rights. As a
licensor, your goal is to grant limited licenses for limited durations
for maximum compensation. The royalties and fees you receive will vary
depending the terms of the deal. Remember, a license can cover the entire
scope of copyright, or be limited to a particular media, market, language,
territory or period. Clearly, there's much room for negotiation.
McHUGH: Many publishers now contract with outside companies to develop
a Web site. What suggestions do you have for the publishers when dealing
with a Web-site developer?
JASSIN: When working with outside website developers, publishers should
be concerned about who owns the finished product. Unless there's a special
kind of agreement in place before any work begins, the developer, not
your company, owns the intellectual property developed for the site. A
worse case scenario is that the developer could prevent you from adapting,
or updating the website without their permission. This follows from the
fact that under copyright law, copyrights vests initially in the author
of a work. Therefore, the website development agreement should state that
the developer is an independent contractor, and the finished product will
be considered a "work for hire." Also, the agreement should make clear
who is responsible for obtaining clearances. If the developer uses someone
else's copyrighted material, you want to make certain you have the right
to use that material without infringing that person's rights. Developers
should warrant that the finished product does not infringe anyone's copyright,
trademark, or invade anyone's right of privacy or other proprietary rights.
They should also indemnify the publisher against intellectual property
claims from third parties. Among the other issues that should be addressed
are what services will be provided, when work will be completed, the payment
schedule, and approvals. The agreement should also address design specifications,
and how bugs, or service interruptions, will be handled. If you plan to
link to other sites, your agreement should spell out who will be responsible
for obtaining permission from the owners of the sites you plan to link
with. The website development agreement should also specify who will be
responsible for listing your site on on-line directories and search engines.
McHUGH: During the lifetime of a book, there comes a time when a book
is no longer in demand, and therefore, the publisher wants to declare
the book out of print. What is a workable contract definition for out
of print in the book contract? Is a book out of print if physically no
copies, in book form, are available and yet there are CD or audio versions
JASSIN: When a book goes out-of-print, rights generally revert to the
author. However, in the current digital environment, where copying of
chapter-length excerpts from books is cheap and easy, the fact that a
work is currently out-of-print in someone's warehouse is becoming irrelevant.
Digital storage of information as bits, and the demise of static media
as the format of choice for certain types of information, means that books
never have to go out-of-print. For example, "publishing on demand", allows
consumers to purchase printed material from remote locations connected
to electronic databases. There's no inventory. Similarly, "ultra short
run printing" allows publishers to electronically store books, and, again,
print on demand. When an order is received, the printer is turned on.
Since electronic uses are not like print uses, reversion of rights tied
to the number of books in the warehouse, may no longer make sense. If
an author is getting royalties for "electronic" sales of the work, then
rights should not revert unless royalties fall below a certain level.
As for drafting point (favorable to publishers), an out-of-print clause
might prohibit the reversion of rights if the author's advance has not
earned out. Also, if there's a reprint edition planned, or arrangement
with another publisher to reprint the work within a reasonable period
after the author gives the publisher notice of her intention to terminate
the agreement, then, despite the fact royalties have slowed to a trickle,
rights should not revert. It's worth noting, that most normal out-of-print
clauses require that the author notify the publisher that she wants the
publisher to reprint the book. Failure to reissue the work within, say,
six (6) months of notice, gives the author the right, but not obligation,
to terminate the agreement. The Authors Guild position on electronic rights
is that for purposes of "out-of-print" clauses, electronic and print rights
should be treated separately, since a work can remain available in an
electronic database indefinitely. That is, electronic rights, just like
print rights, should revert when usage falls below a certain level. This
is reasonable, provided, rights don't revert automatically.
McHUGH: Do you have any other suggestions or thoughts for authors and
their publisher partners in the areas of rights management?
JASSIN: Yes. In a nutshell, your goal, when acquiring rights is to win
as many rights as possible for the least amount of compensation. When
selling rights, your goal is grant limited licenses for limited durations
for maximum gain. In other words, buy low, and sell high.
McHUGH: Tell us about your book; what's the book's purpose and who is
JASSIN: I' very excited about the new book, which the Publishers Marketing
Association (PMA) has endorsed. Briefly, The Copyright Permission and
Libel Handbook: A Step-by-Step Guide for Authors, Editors and Publishers
($15.95, trade paperback) (John Wiley and Sons, Inc.) provides information
and techniques that will help authors and publishers navigate the murky
legal waters of preparing a manuscript, or multimedia work, for publication.
Written in a question and answer format, it's really two books in one.
Part One, "The Copyright Permission Handbook" provides step-by-step instructions
on how to determine when permission is needed, as well as details on locating
the party with authority to grant you permission. There are also separate
chapters on copyright law fundamentals, "fair use" quoting, what's not
protected by copyright, using public domain works, working with collaborators
and clearing multimedia permissions. It's really a handbook for the information
age. Part Two, "The Libel Handbook," is designed to minimize your risk
of getting sued for libel or invasion of privacy. The book is available
at all Barnes and Noble stores, as well as through amazon.com, and at
my website (www.copylaw.com).
NOTICE: This article represents copyrighted material and may only
be reproduced in whole for personal or classroom use. It may not be edited,
altered, or otherwise modified, except with the express permission of
the author. This article discusses general legal issues of interest and
is not designed to give any specific legal advice pertaining to any specific
circumstances. It is important that professional legal advice be obtained
before acting upon any of the information contained in this article.
LLOYD J. JASSIN is a New York-based publishing and entertainment
attorney in private practice. He is coauthor of the bestselling Copyright
Permission and Libel Handbook: A Step- by-Step Guide for Writers, Editors
and Publishers (John Wiley & Sons, Inc.), available at bookstores
or at www.copylaw.com. Mr. Jassin has written extensively on negotiating
contracts in the publishing and entertainment industries, and lectures
frequently on contract and copyright issues affecting creators. He is
counsel to the Publishers Marketing Association and Vice Chair of the
Small Press Center. He may reached at Jassin@copylaw.com or at (212) 354-4442.
His offices are located at 1560 Broadway, Suite 400, New York, NY 10036.
JOHN B. McHUGH is a publishing management consultant
and industry commentator. He has held management positions at Houghton
Mifflin, Richard D. Irwin, and Wadsworth, Inc. At the American Society
for Quality, McHugh serv ed as Publisher and Director of Programs. His
office is located at: 5747 N. Ames Terrace, Glendale, WI 53209, (414)
351-3056 (t), (414) 351-0666 (f).