Introduction
During the past few years electronic rights or "e-rights" have significantly increased in importance to everyone involved in the publishing community. Today one cannot read an industry publication, attend a conference or engage in a discussion with another publishing professional without encountering e-rights publishing. Authors, agents and book, e-book and print-on-demand publishers are involved in a struggle to stake out the scope of their e-rights territory.
E-rights have provided significant opportunities for new and expanded revenue streams for the traditional printed word. Some of these new opportunities include the following. Authors who have been unable to have their work published by a book publisher now have the ability to have their work originally published by an electronic publisher or print-on-demand publisher. Agents are working with authors to resurrect their "out-of-print" titles by republishing them as e-books or through print-on-demand publishers. Book publishers have realized that the licensing of e-rights to an electronic publisher should be viewed as publishing the work in another format, as for example the licensing paperback rights. E-book publishers are actively acquiring e-rights from book publishers and authors as well as signing authors to publishing contracts that provides for the first publication of the authors work in digital format. E-book publishers include companies that (i) sell individual titles to consumers who will read them on a hand-held devices, (ii) license online collections to libraries and (iii) sell individual titles to consumers. Print-on-demand publishers permit a book publisher of any size to keep a backlist title available by manufacturing only minimal quantities of that title, even only a single copy, at any given time and provides new opportunities for self-published authors.
As should be expected e-rights and the dynamics of the electronic publishing landscape have resulted in "new" and modified business and legal issues that may no longer fit easily into existing publishing models and traditional publishing and distribution contracts. I will explore this dynamic e-rights market in a series of articles that will focus one-rights from the perspective of publishers, authors, agents and distributors. The control of e-rights in a given work will be the subject of the remainder of this article.
Authorship, Copyright Ownership and Assignment of Rights
Copyright ownership vests initially with the author of the work. The author could be the individual who created the work or the author could be the publisher if the work was prepared as a "work made for hire" and the requirements of the Copyright Act's work made for hire doctrine were satisfied. The creator of the work, if the author, could also assign his/her copyright ownership to the entire work or only particular rights, such as publication rights, to a third-party such as a publisher or distributor.
The 1976 Copyright Act for the first time embodied explicit statutory recognition of the principle of divisibility in a copyright. Section 201(d)(1) states that "the ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law" and Section 201(d)(2) states that "any of the exclusive rights comprised in a copyright, including any subdivision of any rights ... may be transferred ... and owned separately."
The "grant of rights" clause in a publishing agreement enumerates those rights that are specifically granted by the author to the publisher. An author's grant could include all the exclusive rights and interests in the author's work, which means that the publisher has complete control over the exploitation of the work. On the other hand the granting clause could be very limited, such as only permitting the publisher to publish the author's work in a hardcover book edition. The importance of the grant of rights clause is that the publisher may only exploit those rights specifically granted to the publisher by the author. Copyright infringement would occur if a publisher exploits a right that was not granted to the publisher by the author.
Who Controls the E-Rights?
Today most grant of rights clauses specifically include a reference to e-rights, but in addition, especially from the publisher's perspective, the granting clause should also contain a "future technology clause". The future technology clause is important because it permits the publisher to exploit a work in any future media that is not currently known of or in existence at the time the publishing contract was executed. The inclusion of the e-rights and future technology clauses are critical in determining the rights of the publisher and author. In the event that there is an e-rights dispute the court will analyze the grant of rights clause to ascertain whether the author or publisher controls all or part of the e-rights. Therefore the publishing contract be very clear regarding the intent of the parties concerning the exploitation of e-rights.
There have not been many judicial decisions involving the ownership of e-rights. In the event the publishing agreement is not clear on an e-rights grant or fails to address e-rights then a court will turn to the future technology clause if it exists; however the courts do not the interpret the future technology clause uniformly. Judicial interpretation of future technologies and whether a "new use" was contemplated at the time the publisher and writer signed the contract is not a recent phenomenon. Courts for many years have interpreted entertainment industry contracts to decide whether a grant of rights for an existing use of the work covers the right for a new use of the work. On other occasions a court will look beyond the future technology clause and evaluate the entire contract to determine the intent of the parties. It must also be remembered that it is a general rule of law that any ambiguity in a contract is usually construed against the party that prepared the contract, which in the case of publishing contracts is normally the publisher.
In the most significant e-rights case through the end of 1999, Tasini v. The New York Times Co., the court went further then interpreting the grant of rights clause to reach its decision. This decision, at least temporarily, may have ended speculation about the control of e-rights when an author did not explicitly grant the e-rights to a publisher.
Tasini v. The New York Times Co. (District Court Decision -1997)
In Tasini the District Court for the Southern District of New York was asked to decide whether a publisher could include in their electronic database and/or CD-ROM an article that was written by freelance writer for newspaper or magazine publication without first securing the permission of the writer. The freelance writers contended that permission was required because the e-rights had not been granted to the publisher. On the other hand the publishers, among other arguments, contended that writer's permission was not required since the publisher by including the print article in an electronic database and/or CD-ROM was only exercising the right of revision that is held by copyright owners of "collective works." Thus the substantive issue in this case focused upon e-rights that were not specifically granted to the publisher by an author and yet were exploited by the publisher in electronic media.
The court ruled in favor of the publishers and decided that even though a freelance writer failed to grant a publisher the e-rights in an article that copyright infringement did not occur when the publisher republished the article in an electronic database and/or CD-ROM. The court held that a publisher in republishing the article in an electronic format was lawfully exercising the right of revision for a collective work. A more detailed analysis of this decision can be found in my article entitled Electronic Rights: Going Beyond The Grant Of Rights Clause, which can be found at http://www.publaw.com.
Tasini v. The New York Times Co. (Court of Appeals Decision -1999)
On appeal the US Court of Appeals for the Second Circuit ruled in favor of the writers, overturned the district court ruling and found that the New York Times and the other publishers had not been granted e-rights by the writers and were not protected under the privilege afforded publishers of collective works under Section 201(c) of the 1976 Copyright Act. The Court of Appeals concluded that the publishers' contention and district court's decision that the electronic databases were only revised, digital copies of their newspaper or magazine went beyond the scope of the revision right privilege in Section 201(c). Therefore, copyright infringement occurred when a publisher, without obtaining permission from the writer, included a writer's article in an electronic database, such as the New York Times database which is an anthology of multiple editions of the The New York Times, or granted a license to include a writer's article in a CD-ROM, such as the General Periodicals OnDisc database which contained materials from multiple publishers and was considered by the court to be "at best a new anthology".
Conclusion
We have certainly not heard the end of e-rights controversies as only as recently as December 1999 two new copyright infringement lawsuits were filed by authors and photographers against the National Geographic Society. These lawsuits alleged that authors and photographers did not grant the e-rights in their works to the National Geographic Society and therefore the National Geographic Society could not include their works in a CD-ROM. The National Geographic Society is currently faced with five pending legal actions that involve e-rights.
What lessons should publishers and authors learn from the Tasini decision as it relates to the control of e-rights? First, it must be recognized that we may not as yet heard the end of Tasini since there is a pending request for a rehearing of the case by the full Court of Appeals, and even after that rehearing, if it occurs, there could be an appeal to the US Supreme Court.
However, if we disregard these pending judicial matters, a publisher should realize that without having obtained the author's specific agreement to grant the publisher e-rights, that any exploitation of the e-rights by the publisher could be a copyright infringement of the author's work.
Therefore, a publisher and author should fully negotiate the e-rights issue at the time they enter into a publishing agreement and they should include with as much detail and clarity their intent as it concerns these important rights.
Lloyd L. Rich is an attorney practicing publishing and intellectual property law. He can be reached at 1163 Vine Street, Denver, CO 80206. Phone: (303) 388-0291; FAX: (303) 388-0477; E-Mail: rich@csn.net; Web Site: http:// www.publaw.com. Jennifer L. Fountain, a recent graduate of the University of Denver School of Law, provided the research for this article.
This article is not legal advice. You should consult an attorney if you have legal questions that relate to your specific publishing issues and projects.