State of the Industry

So you’ve just finished your latest book and, boy, is it a good one. You’ve got characters who jump off the page, an engaging plot, and you’re certain if you could get Bill Shakespeare, Stephen King, and Hemingway in the same room, they’d sing your praises ‘til the cows came home (They were at the river. It was there.). It’s time your baby bird flew the coup and landed safely in the arms of a competent publisher. But where do you start?

In this first of three installments, Milt Toby explores the ins-and-outs of the standard publication processes. As an accomplished author and attorney, Toby is better equipped to be your guide than most.

Contract Decoding (Part 1 of 3)

By Milt Toby

Making sense of a publishing contract is not for the faint of heart. Faced with page after page of mind-numbing legalese, nearly always written by the publisher’s attorneys, authors sometimes give up midway through the process. They throw up their hands in despair and sign on the dotted line with minimal understanding of the long-term commitments they are making. This is a mistake, a serious one that often cannot be rectified. Publishing contracts set the parameters for what often will be a long-term relationship between parties that may have competing interests in their respective approaches to selling books.


“I didn’t read the contract”, or “I read it, but I didn’t understand it”, or “it doesn’t mean what I thought it did” are common arguments from authors who want to get out of a contract. These arguments hardly ever carry any weight in court, however. A contract with an author’s signature carries with it the strong presumption that the author read the contract, understood it, and approved the terms.

Authors’ questions should be answered and their concerns resolved before, rather than after, signing the contract. Deciphering all the language in a typical publishing contract is beyond the scope of this article. For the same reason, the article will be limited to so-called “traditional” publishing contracts. Self-publishing, whether print, or ebook, or a combination of the two, has its own set of issues, as do the pay-to-play arrangements in which the author pays at least a share of the publisher’s expenses associated with getting a book in print. Instead, the focus here will be on a few of the most important contract clauses. Coincidently, these issues also are the ones that frequently cause problems for authors, the first of which will be explored in this installment:

  • the rights being sold;
  • getting paid;
  • warranties and indemnification.

 Competing Interests

Fundamental to evaluating a publishing contract is an understanding of the nature of the relationship between an author and a publisher. While it is tempting to view that relationship as a partnership—and in some sense that characterization is a fair one—a publishing contract represents the competing interests of the two parties. The best deal for a publisher is one that maximizes profits while limiting potential liability in case of a lawsuit. Authors want the same things, maximum profit and minimal liability.

The parties’ goals tend to be mutually exclusive, however, and authors must understand that a contract drafted by a publisher’s attorneys is going to reflect the publisher’s interests and not necessarily the interests of the author. There is nothing unethical about this. It is a fact of life that an attorney’s obligation when representing a client is to protect the client’s interest. It also is a fact of life that authors (or their agents if they are lucky enough to have one) must protect their own interests in contract negotiations. There are no contract police that swoop in to protect an author’s interests.

The first step is figuring out exactly what the contract language really means.

Rights and Wrongs

Two questions matter the most to an author evaluating a publishing contract:

  • First, who really owns the rights to the manuscript?
  • Second, which rights are being sold?

The answer to the first question is not as obvious as it might seem. The default rule pursuant to Section 201(a) of the Copyright Act is that authors start out owning all rights to their work, beginning the moment the work is fixed in some tangible form. Copyright ownership is important because it allows an author to make money, either through self-publishing or through selling the publication rights to someone else. Publishing contracts typically require an author to warrant (legalese for “promise”) that she is the copyright owner and that she has the legal right to transfer those rights—more about potentially troublesome warranties later.

There are important exceptions to the general rule of copyright ownership that affect an author’s ability to earn money from her writing, however, including works made for hire and works produced by two or more contributors.

Work Made for Hire

If you write a book or magazine article as part of your job duties, as a staff writer for example, the employer, not the writer, is the “author” for copyright purposes. In this situation, which seldom applies to authors of fiction, the employer is the “author” and is the owner of the copyright. This means that the author of a work for hire, the individual who actually put words to paper, has no rights in the book or article.

Work for hire arrangements are most common in the newspaper and magazine publishing world. Work for hire language might appear in a book contract as well, though, and should raise a serious warning flag for authors.

Before signing a work for hire agreement, an author should weigh the effect of the clause—no rights in the resulting work—against the money (including royalties, if applicable) being offered by the publisher. A general rule of thumb is that the more rights being transferred, the more the author should be paid. A work for hire contract, in which all rights belong to the publisher from the start, should command the highest payment of all.

A contract that requires the author to transfer all rights to the publisher takes a different route to achieve the same effect as a work for hire agreement: although the author owns the copyright initially, the author winds up with no rights to the book. Authors should be wary of contracts that call for a transfer of “all rights,” “all world rights,” or something similar.

A question that sometimes arises involves registration of the copyright in the book. The contract should specify that the publisher will register the copyright for the book in the author’s name. With work for hire and all rights agreements, however, the copyright will be registered in the publisher’s name.

Collaborative Works

A second exception that can hamper an author’s ability to transfer rights in a book to an interested publisher arises when there is more than one author. Ownership of the copyright in a “joint work” is shared by the contributing authors, and problems can result if one co-author wants to sign a publishing contract and the other co-author does not. In such a situation, one of the joint authors may not have legal authority to act unilaterally when negotiating a publishing contract.

Authors considering a joint writing project should have a written agreement setting out their respective rights in the resulting work.

The answer to the second question—which rights are being sold—is more straightforward: the rights being sold are those specifically identified in the publishing contract. Corresponding language stating that all rights not specifically identified in the contract remain with the author always should be included in the contract.

The primary right, the most important one to both authors and publishers, is the right to actually publish the book. Typical language is “the exclusive right to publish the book for the first time in an English-language version” or something similar. Open-ended language, such as simply the “right to publish the book” should be avoided.

Everything else is a “subsidiary right.” These include electronic rights, serialization, book club editions, foreign language translations, audio recordings, Braille/large type, and film/television/radio/stage rights. Publishers generally ask for all subsidiary rights as a matter of course, and for many authors this is not a bad idea. The party in the best position to exploit a particular subsidiary right is the party that should have it, and this often will be the publisher. If, on the other hand, an author has a relative or friend with a high-powered job in Hollywood, for example, the author might want to retain performance rights. Publishing contracts typically call for a 50%-50% split between author and publisher for income from the sale of subsidiary rights.

Lessons Learned

Beyond the right to publish the book, with appropriate limitations to that right, there is no “correct” answer to which rights an author should transfer to a publisher. That is a business decision and an author should consult with an attorney, her agent, or other advisors familiar with publishing contracts for advice on whether the proposed contract accomplishes what it is supposed to do to protect the author’s interests.

In our next edition, Milt will explore one of the more popular aspects of publishing: getting paid.

Milton_C_TobyMilt Toby is an attorney and award-winning author of nonfiction. He joined the Board of Directors of the American Society of Journalists and Authors in July, after several years as Chair of the ASJA Contracts & Conflicts Committee. The information in this article is presented for educational purposes only and is neither legal advice nor a solicitation for clients. For more information about Milt’s books, visit his website at