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A Very Nice Literary Agent Indulges in Polite Rants About Queries, Writers, and the Publishing Industry

Agenting 101: Bring Back Term of License?

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STATUS: Getting the blog done early so I can concentrate on a ton of reading today.

What’s playing on the iPod right now? NINE IN THE AFTERNOON by Panic! At The Disco

I’ve only been in publishing for close to going on 10 years. In light of some agents who have done this job since the early 70s, I’m a baby indeed.

But I have heard that back in the day, Publishers utilized a term of license rather than a term of copyright with an Out Of Print clause.

In fact, all foreign contracts use a term of license (5 years is common), with the exception of UK and ANZ (which stands for Australia/New Zealand) which often use an OOP instead.

What is a term of license? Simply put, a term of license is a clause in the publishing contract that states that the contract will expire 5 or 7 years from the date of the agreement and all rights revert back to the author.

In other words, no matter how well the book is doing, all rights revert on that date unless the publisher and author would like to renegotiate the terms and create a new contract with a new term of license.

Interesting, no?

In this rapidly changing digital age, a return to a term of license might be an attractive alternative. Whatever terms that are negotiated today will have to come up for renegotiating upon term expiration.

Some pros?
–There is a set reversion date no matter what.
–If the book does well, there is the possibility of renegotiation for better terms for the next agreement.

Some Cons?
–Most books, in general, go out of print in about 2 or 3 years via the OOP clause and rights revert. With a term of license, the out of print work could be tied up for 2 to 5 years longer than if there had been a sales threshold that triggered the reversion earlier.
–The next negotiation might be for lesser rates than what you locked in with your initial or previous contract.

Food for thought. Also, I don’t see publishers jumping on the “return to term of license” train anytime soon.


7 Responses

  1. Michael Arnzen said:

    Excellent thoughts. I think this is really important with electronic rights. Once ebooks are distributed through different vendors, some chaos seems to happen with perpetuating the licenses and their renewal.

  2. Cam Snow said:

    One quick question: When the copyright reverts back to the author, by either method, what happens to the cover artwork? Does the publishing house retain the right to that or does it go to the author?

    I know it is small, but often books are instantly recognizable by th front cover image.

  3. Marilynn Byerly said:

    With a vast majority of publishers holding onto electronic rights and those rights, as well as using POD for back list, are considered keeping a book in print, I seriously doubt the OOP clause means anything these days.

    I seriously doubt that publishers will accept losing those rights with “term of license” agreements.

    But I am rooting for you and anyone who fights for it.

  4. AM said:

    Very interesting.

    Couldn’t the bestselling authors negotiate a whichever-comes-first clause? Is this one of the reasons why publishers offer some authors huge advances – so they will agree to the OOP terms rather than the terms of license?

    And if I may, just to be sure that I understand:

    Using your OOP example, let’s say a first time author’s book goes out of print because less than 150 copies sold within a six-month period. The rights revert to the author. The author is then free to negotiate an e-book release and it sells stupendously well.

    The initial publisher has no rights – correct? The author’s agent could renegotiate with any publisher for another printed release and retain the e-book rights?

    If my example is accurate, shouldn’t publishers prefer the terms of license for first time authors in today’s market?

    I am assuming publishers prefer the OOP terms just in case a new author becomes a mega-bestseller. And OOP was a safe bet in yesterday’s distribution model because a novel only sold as well as the number of copies in print, but that’s not necessarily true anymore.

    With the current transformation in the distribution model, wouldn’t it be in publishers best interest to use a terms of license (with new authors), but allow authors to seek distribution alternatives?

    I don’t want to give anyone any ideas – especially about terms that I wouldn’t want to be held to myself – but I am trying to understand the thinking of the industry that I will one day be trying to enter.

    Again, thanks for your posts.

  5. Madeleine said:

    That’s an interesting concept…

    (Okay, I’m only saying this because you mentioned being corrected for typos before: Your last sentence is missing the word “see”. Just a tid bit!)

  6. Dal Jeanis said:

    Cam –

    It wouldn’t go to the author. The artwork might revert to the artist, but the publisher would own the “Work Product” of the cover composition.

    Not a big issue, since any new printing of the book would probably want to bring the book out under a new “branding statement” anyway.

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