COLLABORATION AGREEMENTS IN THE PUBLISHING INDUSTRY

Reprinted with special permission from Lloyd J.Jassin, Esq.

COLLABORATION AGREEMENTS IN THE PUBLISHING INDUSTRY

by Lloyd J. Jassin, Esq.

March 2004

You might be an author intending to work with someone who has an idea for a “how-to” book. Or you could be a celebrity engaging the services of a ghostwriter. Or, you might wish to work with a professional writer on a book about your life experiences. Whatever the case, a written collaboration agreement that defines the parties’ rights and obligation is essential. Absent such an agreement, ownership of your creative efforts will be governed by the default provisions of the Copyright Act—and not necessarily according to your wishes.

Regrettably, much confusion exists about the legal consequences of working with a collaborator. As this article points out, there are good reasons for collaborators to enter into formal agreements. Collaborating with someone is the literary equivalent of marriage. Like a prenuptial agreement, a collaboration agreement should be made before becoming legal partners. By making you think through the proposed relationship in advance, the agreement can save you money, time and trouble later on if the relationship doesn’t work out. If avoiding future disputes is not sufficient reason for having a collaboration agreement, take note that many publishers will insist that such an agreement be in place before offering a book contract.

Copyright Ownership & Joint Works

The essence of the collaboration agreement is copyright ownership. Copyright is a bundle of exclusive rights that gives authors of original literary, musical, dramatic and artistic works the sole right to authorize (or prohibit) the following uses of their work: (a) to reproduce all or part of the work; (b) to make new (derivative) versions; (c) to distribute copies; (d) to perform (e.g., recite, dance, or act) the work publicly; and (e) display the work publicly.

Even if you don’t call yourself a coauthor or owner of a joint work, you may be legally considered one. The formal legal definition of a "joint work" is "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole" (1976 Copyright Act, Section 101). What determines true joint authorship is the intent of the authors. To qualify as a joint work each author must intend that their respective contributions “merge” into a “unitary whole.” To ascertain the parties’ intent, courts sometimes look for evidence of "billing" or "credit." Accordingly, an author's good faith description as sole author on a copyright notice, copyright registration, or elsewhere, may be probative of intent not to collaborate.

Besides the proper intent, each author's contribution must be independently copyrightable. Under the Copyright Act, each individual must contribute more than mere ideas, suggestions or refinements. In Erickson v.Trinity Theater Inc. (7th Cir., 1994), a federal appeals court held that an actor was not a joint author of a play because his helpful advice and refinements made during improvisational scenes were not copyrightable contributions.

In assessing what constitutes joint authorship, some courts, such as the Seventh Circuit, look almost exclusively at the parties' intent. Other courts look at intent, as well as "artistic control.” For example, in Aalmuhammed v. Lee (9th Cir. 2000), the U.S. Court of Appeals for the Ninth Circuit, held that "[A] creative contribution alone does not suffice to establish authorship of a movie" because movie making is, by definition, a collaborative effort, involving creative contributions of everyone from cinematographers to lighting directors. In Aalmuhammed, the court determined that a technical consultant was not a joint author of the movie Malcolm X, a film co-written, directed and co-produced by Spike Lee. Lacking a written agreement, the court looked at who had creative control, and the parties' intent to be coauthors. Since Lee's name appeared at the top of the credits (i.e., evidence that Aalmuhammed lacked control over the work), and neither Lee nor the movie studio exhibited any intent to be the coauthor, the court found that Aalmuhammed's claim to joint authorship was in a word "overreaching."

In the book publishing context, if one author has final and sole control over the work, it would arguably not qualify as a joint work. What happens if it isn’t a joint work? Without an assignment or license, the contributor would be considered the owner of what was developed or contributed. However, the hiring party would have an implied license to use the contributor’s work, but without a written agreement, the scope of those rights would be unclear. When working with editors, research assistants and other contributors to a book, a waiver of copyright ownership (i.e., acknowledgment that the work was prepared as a work for hire) or an assignment agreement is an apt solution to this problem.

Legal Consequences of Creating a Joint Work

When a joint work is created, each collaborator enjoys an equal ownership interest in that work. Under the default rules of the Copyright Act, each collaborator can license the nonexclusive rights to the work to third parties, provided they fairly account for the profits to the other. Problems commonly arise when there are multiple offers for the work or requests for exclusive rights and no agreement exists between the collaborators. In effect, a recalcitrant collaborator can prevent the other collaborator from licensing or assigning exclusive rights in the work to a third party.

Classifying a work as a joint effort determines not only initial ownership of its copyright, but also the copyright's duration, and the right of termination. The right of termination allows authors to terminate book contracts and other licenses made after January 1, 1978 (see article, Copyright Termination: ( How Authors (and their Heirs) can Recapture their Copyrights). For joint works created on or after January 1, 1978, copyright protection endures for the life of the last surviving coauthor plus 70 years.

 

Caution! The default rules of the Copyright Act do not take into consideration the actual contributions of the collaborators. Even if a joint author contributes only 5% of a work, she would be entitled to an equal share of ownership in the entire work. Take for example a book written by a professional writer for a celebrity author. Under the default rules of the Copyright Act, unless the writer and celebrity agree to a different split, each of them would be entitled to equal ownership of the work, including an equal share of the advance and royalties.

 

The Collaboration Agreement

It is perfectly legal for joint authors to contract around the default provisions of the Copyright Act. For example, the parties can agree that Author “A” receive control over all contracts, or that Author “B” receives less than 50% of the profits as otherwise dictated by the Copyright Act.

Not all collaborations involve an equal division of work. However, an unequal collaboration can function smoothly if there are mutual respect and priorities, and clear objectives. While the written collaboration agreement will vary depending upon the facts, the following are key issues that should be discussed and dealt with before merging your creative efforts into a unitary whole. Particular care should be given to how the proceeds of the work will be shared and who controls editorial, business, financial and other decisions. Of course, how collaborators split proceeds and make decisions, ultimately, depends on their respective bargaining power.

Responsibilities. Try to be as specific as possible about what is to be delivered, and the time for delivery. Often, one joint author will write the book proposal, with the understanding that substantive work on the actual manuscript will not begin until there is an offer from a publisher. This scenario is common with “as told to” books. If a book proposal is to precede delivery of a complete manuscript, it might be specified:

Writer shall use best efforts to prepare a full book proposal which will be used to sell the Work to publishers (the "Proposal"). The proposal will be double-spaced, consisting of a preface, introduction, and sample chapter. In consideration for preparing the Proposal, Subject shall pay Writer the non-refundable sum of $X,XXX (the "Proposal Fee") due upon execution of this Agreement. One Hundred (100) percent of the first $X,XXX received by Writer under the Publishing Agreement (net of agency commissions and expenses incurred in preparation of the Work), if any, shall be repaid by Writer to Subject. Following execution of an Agreement for the initial publication of the Work, pursuant to Paragraph 6 (the “Publishing Agreement”), Writer shall further research, prepare, write and deliver the Work.

 

In some circumstances, where one collaborator is far more knowledgeable in publishing matters, it may be appropriate to grant that person the exclusive right to negotiate with agents and publishers. Generally, the junior collaborator will reserve the right of final approval, or predicate approval on receiving an advance of at least $________ for initial publication rights to the book, and other terms usual and customary in the publishing industry.

If you are a professional writer working with a celebrity or other public figure, there are other critical issues to consider. These include access to pertinent documents, access to the subject, and the subject’s good faith effort to secure the writer’s access to interviews with other individuals as may be needed to prepare the proposal or complete the book. Deadlines in publishing are critical. Make certain the delivery schedule set forth in the publishing agreement is realistic. A missed deadline can result in cancellation of a book contract. That it turn, can trigger the authors’ obligation to repay their advance. A professional writer working on an “as told to” book may want to try for a provision that says that if the subject gets cold feet and pulls out, the writer does not have to repay his portion of the advance. A related issue is who has the right to exploit the material already written if the project is canceled or the collaborators decide not to work together. If the authors’ contributions are easily divisible (e.g., John wrote chapters 1 -9; Albert wrote chapters 10 – 14), the simple solution is for each writer to get exclusive custody of their respective materials. Things get more complicated if the authors’ contributions are not readily divisible, or a writer is let go before the parties have signed with a publisher, or someone is hired to finish what the departing collaborator started. Depending upon the facts, various options exist, including a buy-out of materials already prepared (e.g., the book proposal), perhaps tied to an agreement not to compete with the work in progress. If the authors’ contributions have merged (i.e., there’s no practical way to separate out and revert rights), the contract might state that “if the Work is not published neither party may use the Work, nor any part thereof, without the prior written approval of the other.” In the competitive world of publishing, allowing each joint author the right to use the merged portions freely may not be an option since publishers seek “exclusive” rights to publish.

 

Compensation. If one collaborator needs money to get through the period in which they are writing the book, the parties may agree that person receives a larger split of the advance. In exchange, the recipient may forego a percentage of future royalties. Alternatively, that money can be recouped or refunded from future proceeds, with any additional monies shared as set forth in the authors' agreement. Often, the sharing of expenses is related to the sharing of receipts.

Keep in mind, even those who do not qualify as joint authors for copyright purposes (for example, individuals who made an important creative or financial contribution to the finished work) may still share in the profits and control of a work through an appropriate contractual arrangement. For example, a ghost writer or other writer for hire does not have to forgo royalties in exchange for a one-time fee. To protect yourself in the event the book earns back its advance, you may wish to take a smaller fee, in exchange for a percentage of royalties. While conventional wisdom says most books don’t earn back their advance, by having a stake in the book—even a small one—an insurance policy is in place if the book becomes a surprise bestseller.

Credit. Billing credits also depend on the bargaining power of the parties. Issues include size and prominence of names, as well as order of names on the title page. If there's brand equity in your collaborator’s name, it may make sense for that person's name to appear first. Where the division between the authors' contributions is not clear-cut, alphabetical order is a sound approach. Author credit designators include the terms "by Me and You" or "by Me with You" or "as told to Me." By definition, if the book is ghost written, sole authorship credit for the work will be in the subject’s name only.

 

Copyright. If a joint work is intended, state that clearly in the collaboration agreement. Under the default copyright rules, if a collaborator dies, his statutory successors step into his shoes. Therefore, the agreement should specify that the surviving author – subject by duty to account to the deceased collaborator’s family – take over editorial responsibilities. If the book is likely to be revised, the agreement should also contain a provision that allows the surviving collaborator to reduce the compensation paid to the estate if substantial revisions are made to the text.

Approvals. Control of business and editorial matters are key issues. In cases where there are more than two authors, and approval or consent is required, unanimity may be required for certain decisions (e.g., approval of the initial publishing contract). Other circumstances may require a majority vote. Additionally, the parties may give approval rights over certain decisions (e.g., selection of a literary agent or publishing attorney) to one party since that person has superior knowledge and experience in such matters. If approval rights over the manuscript are retained by one party, the other party should try to impose reasonable limitations, such as a chance to correct the manuscript within (e.g., 30) days after receipt of the other party’s comments. You may wish to reference the approved book proposal in the collaboration agreement, and try for a provision that states:

Provided Subject has made herself available to Writer as set forth in Paragraph X, Writer shall deliver a complete Proposal, satisfactory to Subject in content and form, on or before __________. Subject shall have the right to approve the Proposal. Subject shall further have the right to promptly review and comment on draft sections of the manuscript from time to time to ensure that the Work substantially conforms to the approved Proposal, and for purposes of ensuring the accuracy of those facts contained therein. Subject shall have the right to approve the final text of the Work prior to the delivery date specified in the Publishing Agreement, such approval not to be unreasonably withheld or withheld.

For the writer, referencing the approved proposal in the collaboration agreement, and requiring the subject to provide reasons for any dissatisfaction, establishes certain objective criteria by which the writer’s contribution will be judged. After resubmission of the materials, if the text is still unsatisfactory, the termination provisions of the contract could be invoked.

Warranties. Special attention should be paid to the representations and warranties and indemnity clauses. An indemnity is a promise that party “A” will reimburse party “B” for losses if “A” breaches the warranties that the contribution “does not infringe any copyright, or violate any right of privacy or publicity of, or libel, or violate any other proprietary right of any individual or entity.” Representations and warranties keep collaborators honest. They should be reciprocal. If any liability arises because of a breach of either parties’ representations and warranties, the non-breaching party should be reimbursed for costs and expenses (including reasonable attorney fees) incurred in defending the action.

Disagreements. Like many marriages, serious disagreements might arise between collaborators. This can be disruptive, expensive and even emotionally damaging. One way to deal with this problem is for the authors to acknowledge that the ultimate decision as to the acceptability of the manuscript will be vested in the publisher. Under the editorial guidance of the publisher, or other party (e.g., a book doctor), if the collaborators are still unable to resolve their differences, they can elect to terminate their agreement or submit the matter to mediation or arbitration, or both. As a rule, mediation fosters communication. Both mediation and arbitration are generally less expensive than litigation.

Miscellaneous. Other issues that should be addressed up front include prequel and sequel rights, nondisclosure and noncompete clauses, how expenses will be borne, repayment of the advance if the manuscript is rejected, death and disability, and how to value a withdrawing author’s contribution. Both parties should take steps to ensure the factual accuracy of manuscript. Thus, if you are a professional writer working with the subject of the book, the subject should be required to read the manuscript to ensure accuracy. Since verifiable truth is a complete defense to libel, your collaboration agreement should also require that both parties retain copies of all recorded interviews, transcripts, books, notes, letter and other research materials used in preparation of the book. If there is a lawsuit, you will need to prove the truth of the statements that appear in your book (see §9.12.1, The Copyright Permission and Libel Handbook (John Wiley & Sons)).

How to Avoid Accidental Coauthorship

Because no written agreement is needed to create a joint work, when two or more creative people work together on a single work, there is a chance that they will be considered joint authors. Alternatively, if there is no joint authorship, since a work is owned initially by the person who created it, a court may determine that each individual author owns what he or she created or contributed. Fortunately, there are straightforward methods to obtain ownership of such materials.

If you decide you employ the services of other writers or creators, you may wish to employ those individuals on a “work for hire” basis (see my article entitled Work for Hire Agreements). This will ensure that you own and control the copyright to their contributions. Work for hire agreements must be signed before any work is begun. Otherwise, you run the risk of having the work for hire agreement ignored by a court of law. As a fall back position, in the event the work is determined not to be "work-for-hire," it is essential to obtain a written assignment of all of the rights. Depending upon the facts, when working with an independent contractor you may only need a license of certain usage rights – either on an exclusive or nonexclusive basis (see sample Short Form Copyright Assignment Form).

Conclusion

While two heads may be better than one, without the benefit of a well-drafted collaboration agreement, working with a collaborator can be one big headache. With no binding agreement between the parties, the job of ascertaining the parties’ intent is then left to the courts. If the work is joint work, the default copyright rules will apply. If the work doesn’t qualify as a joint work, and there’s no clear understanding what the parties intended, courts will impose obligations on the parties.

The collaboration agreement provides a chance for you — preferably, under the guidance of a publishing attorney — to fashion your own private body of law to govern your creative relationship. Ideally, the time to address the major issues confronting contributors and collaborators is before the actual creative process begins. Although collaborators might not feel comfortable discussing long-term financial issues or the eventuality of a dispute, or even the death of a coauthor, it is always easier and less expensive to deal with these issues up front, rather than later, after a dispute arises.

© 2004. Lloyd J. Jassin. All Rights Reserved.

Lloyd J. Jassin represents agents, authors, and book publishers on a wide range of publishing and licensing issues. His practice includes drafting and negotiating publishing and entertainment industry agreements, copyright counseling, manuscript (libel) vetting, trademark registration, prosecution and litigation. Before law school, Lloyd was Director of Publicity of Prentice Hall Press. He is the coauthor of The Copyright Permission and Libel Handbook (John Wiley & Sons), counsel to the Publishers Marketing Association (PMA), and Vice Chair of the Small Press Center. Contact: Jassin@copylaw.com (E-mail); or visit http://www.copylaw.com/

Notice: This article discusses general legal issues of interest and is not designed to give any specific legal advice concerning any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.