The following publishing industry article addresses some of the
legal issues arising for publishing lawyers, entertainment attorneys,
authors, and others as a result of the prevalence of e-mail, the
Internet, and so-called "digital" and "electronic publishing". As usual,
publishing law generally and the law of the digital right and
electronic right specifically, governing these commercial activities,
has been slow to catch up to the activity itself. Yet most of the
publishing industry "gray areas" can be resolved by imposing old
common-sense interpretations upon new publishing lawyer and
entertainment lawyer industry constructs, including the digital right
and electronic right, and others. And if after reviewing this article
you believe you have a non-jargonized handle on the distinction between
"digital right" and "electronic right" in the publishing context, then I
look forward to hearing from you and reading your article, too.
1. "Electronic Right[s]" And "Digital Right[s]" Are Not Self-Defining.
All
publishing lawyers, entertainment attorneys, authors, and others must
be very careful about the use of jargon - publishing industry jargon, or
otherwise. Electronic and digital publishing is a recent phenomenon.
Although as a publishing lawyer and entertainment attorney and unlike
some others, I tend to use the phrase "electronic right" or even
"digital right" in the singular number, there probably tends to be no
single consensus as to what constitutes and collectively comprises the
singular "electronic right" or "digital right". There has not been
sufficient time for the publishing, media, or entertainment industries
to fully crystallize accurate and complete definitions of phrases like
"electronic publishing", "web publishing", "electronic right[s]",
"e-rights", "digital rights", or "first electronic rights".
These
phrases are therefore usually just assumed or, worse yet, just plain
fudged. Anyone who suggests that these phrases alone are already
self-defining, would be wrong.
Accordingly, anyone, including a
publishing lawyer or paralegal representing a book publisher or
entertainment lawyer representing a studio or producer, who says that an
author should do - or not do - something in the realm of the
"electronic right" or "digital right" because it is "industry-standard",
should automatically be treated with suspicion and skepticism.
The
fact of the matter is, this is a great era for authors as well as
author-side publishing lawyers and entertainment attorneys, and they
should seize the moment. The fact that "industry-standard" definitions
of the electronic right and digital right have yet to fully crystallize,
(if indeed they ever do), means that authors and author-side publishing
lawyers and entertainment attorneys can take advantage of this moment
in history.
Of course, authors can also be taken advantage of, too
- particularly those not represented by a publishing lawyer or
entertainment attorney. There is a long and unfortunate history of that
happening, well prior to the advent of the electronic right and digital
right. It has probably happened since the days of the Gutenberg Press.
Every
author should be represented by a publishing lawyer, entertainment
attorney, or other counsel before signing any publishing or other
agreement, provided that their own economic resources will allow it.
(But I am admittedly biased in that regard). Part of the publishing
lawyer and entertainment attorney's function in representing the author,
is to tease apart the different strands that collectively comprise the
electronic right or digital right. This must be done with updated
reference to current technology. If your advisor on this point is
instead a family member with a Smith-Corona cartridge typewriter or a
Commodore PET, rather than an entertainment attorney or publishing
lawyer, then it may be time to seek a new advisor.
Even authors
who cannot afford publishing lawyer or entertainment attorney counsel,
however, should avoid agreeing in writing to give broad contractual
grants to publishers of "electronic publishing" - or the "electronic
right", or "electronic rights" or "digital rights", or the "digital
right". Rather, in the words of "Tears For Fears", the author and author
counsel had "better break it down again". Before agreeing to grant
anyone the author's "digital right: or "electronic right", or any
elements thereof, the author and his or her publishing lawyer and
entertainment attorney need to make a list of all the possible and
manifold electronic ways that the written work could be disseminated,
exploited, or digitally or electronically otherwise used. Notice that
the author's list will likely vary, month to month, given the fast pace
of technological advancements. For example, these kinds of questions can
be considered by the author and publishing lawyer and entertainment
attorney alike:
Electronic Digital Right Question #1, Asked By The
Publishing Lawyer/Entertainment Attorney To The Author: Can the work be
published in whole or in part on the Internet? In the context of an
"e-zine"? Otherwise? If so, how? For what purpose? Free to the reader?
For a charge to the reader?
Electronic Digital Right Question #2,
Asked By The Publishing Lawyer/Entertainment Attorney To The Author: Can
the work be disseminated through private e-mail lists or "listservs"?
Free to the reader? For a charge to the reader?
Electronic Digital
Right Question #3, Asked By The Publishing Lawyer/Entertainment
Attorney To The Author: Can the work be distributed on CD-Rom? By whom?
In what manner and context?
Electronic Digital Right Question #4,
Asked By The Publishing Lawyer/Entertainment Attorney To The Author: To
what extent does the author, himself or herself, wish to self-publish
this work, either before or after granting any electronic right or any
individual "electronic publishing" rights therein to someone else? Will
such self-publication occur on or through the author's website?
Otherwise?
Electronic Digital Right Question #5, Asked By The
Publishing Lawyer/Entertainment Attorney To The Author: Even if the
author does not self-publish, to what extent does the author wish to be
able to use and disseminate this writing for his or her own portfolio,
publicity, or self-marketing purposes, and perhaps disseminate that same
writing (or excerpts thereof) electronically? Should that be deemed
invasive of, or competitive with, the electronic right as otherwise
contractually and collectively constituted?
The above list is
illustrative but not exhaustive. Any author and any publishing lawyer
and entertainment attorney will likely think of other elements of the
electronic and digital right and other uses as well. The number of
possible uses and complexities of the electronic right[s] and digital
right[s] definitions will increase as technology advances. In addition,
different authors will have different responses to the publishing lawyer
and entertainment attorney, to each of the carefully-itemized
questions. Moreover, the same author may be concerned with the
electronic right in the context of one of his/her works, but may not
care so much in the context of a second and different work not as
susceptible to digital right exploitation. Therefore, the author must
self-examine on these types of electronic and digital right questions
before responding to the author's publishing lawyer or entertainment
attorney and then entering into each individual deal. Only by doing so
can the author avoid the pitfalls and perils of relying upon lingo, and
relying upon someone else to dictate to them what is the electronic
right or digital right "industry standard". As the publishing lawyer and
entertainment attorney should opine, "There is no such thing as
'industry standard' in the context of a bilaterally-negotiated contract.
The only standard that you the author should be worried about is the
motivational 'standard' known as: 'if you don't ask, you don't get'".
Finally,
the author should be aware that while the electronic right, digital
right, and components thereof can be expressly granted, they can also be
expressly reserved to the author, by a mere stroke of the pen or
keystroke made by the publishing lawyer or entertainment attorney. For
example, if an author wants to expressly reserve the "portfolio uses"
mentioned in Electronic Digital Right Question #5 above, then the author
should ask his or her publishing lawyer or entertainment attorney to
clearly recite this reservation of the author portfolio
electronic/digital right in the contract, and leave nothing to chance.
In addition, if the author has some negotiating leverage, the author,
through the publishing lawyer or entertainment attorney, may be able to
negotiate the "safety net" of a "savings clause" which provides words to
the effect that: "all rights not expressly granted to publisher, be it
an electronic right or digital right or otherwise, are specifically
reserved to author for his/her sole use and benefit". That way, the
"default provision" of the contract may automatically capture un-granted
rights including any electronic or digital right for the author's later
use. This publishing lawyer and entertainment attorney drafting
technique has likely saved empires in the past.
2. Publishers and
Entertainment Companies Are Revising Their Boilerplate Agreements, As We
Speak, In An Effort To Secure The Electronic Right[s].
It is
well-known and should come as no surprise that right now, as we speak,
publishers and their in-house and outside counsel publishing lawyers and
entertainment attorneys are furiously re-drafting their boilerplate
contracts to more thoroughly capture the digital and electronic right -
that is, all of an author's digital and electronic rights. The typical
publishing agreement drafted by a company-side publishing lawyer or
entertainment attorney will recite a broad grant of rights, then
followed by a whole laundry-list of "including but not limited to"
examples. If the author receives such an onerous-looking rights passage
from a publisher or the publisher's publishing lawyer or entertainment
attorney, the author should not be intimidated. Rather, the author
should look at it as an opportunity to make some money and have some
fun. The author can first compare the list suggested in Electronic
Digital Right Questions #1 through #5 above, to the publisher's own
laundry-list and the author's own imagination. Then, the author can
decide which if any of the separate digital or electronic rights the
author wants to fight to keep for himself or herself.
If the
publisher tells the author to blindly subscribe to their entire digital
or electronic right[s] clause (or clauses), then the author still has
the ultimate leverage, which is to walk away from the proposed deal
prior to signature. Of course, this strategic approach wouldn't be
advisable in most cases - unless perhaps if the author has other written
offers from other publishers already on the table. However, an author
shouldn't be forced by any publisher or any company-side publishing
lawyer or entertainment attorney to sign away the electronic right,
digital right, or any other rights that the author would rather keep -
particularly rights which the author never specifically intended to shop
to the publisher in the first instance.
The author should keep in
mind the psychology and motivations of the publishers and their
publishing lawyer and entertainment attorney counsel when doing all of
this. A Vice-President (or above) at the publishing company probably
woke up one recent morning, and realized that his/her company lost a
great deal of money on a particular project by not taking a prospective
license or assignment of an electronic right or digital right from
another author. The VP probably then blamed the company's in-house legal
department publishing lawyers or entertainment attorneys, who in turn
started frantically re-drafting the company boilerplate to assuage the
angry publishing executive and thereby keep their jobs. When in-house
publishing lawyers, entertainment attorneys, or others engage in this
type of practice (some may call it "drafting from fear"), they tend to
go overboard.
Accordingly, what you will probably see is a
proverbial "kitchen sink" electronic right clause which has been
newly-drafted and perhaps even insufficiently reviewed by the
company-side publishing lawyers and entertainment attorneys, internally
and themselves - wherein the publisher will ask the author for every
possible electronic and digital right and every other thing, including
(without limitation) the kitchen sink. The only response to such a
broad-band electronic right or digital right clause is a careful,
deliberate, and methodical reply.
Using the approach outlined in
Section #1 above, the author and the author's publishing lawyer or
entertainment attorney counsel must separately tease apart each use and
component of the electronic right and digital right that the publisher's
broad-band clause might otherwise capture, and then opine to the
publisher a "yes" or a "no" on each line-item. In other words, the
author, through his or her publishing lawyer or entertainment attorney,
should exercise his or her line-item veto. It's the author's writing
that we are talking about, after all. The author should be the one to
convert the singular "electronic right" or "digital right" into the
laundry-list of electronic rights. That's why I use the singular number
when referring to "electronic right" or "digital right" - I like to let
the technologically-advanced author have all the fun making the list.
That way, too, the author can tell me what he or she thinks the phrases
actually mean, and what the difference between the two meanings really
is, if anything.
Next, a few words in defense of the publishers and the publishing lawyers that work for them!
Up
to now, this article discussed how phrases like the "digital right" or
"electronic right" should not be assumed to be self-defining, even by
and between publishing lawyers and entertainment attorneys, and how it
is incumbent upon authors to reserve needed rights like the digital
right or the electronic right to themselves in the context of a
publishing deal. Next up, let's examine concepts such as the digital
right or electronic right from the perspective of the publishing lawyer
and entertainment attorney, and the standpoint of fairness - who between
author and publisher should in fact hold on to the digital right and
electronic right, once and assuming that they are first properly
defined?
3. Yes, Digital Right And Electronic Right Uses Do Compete With Traditional Book Publishing Uses.
A
publishing lawyer or entertainment attorney may be called upon to
handle an author-side deal. A publishing lawyer or entertainment
attorney may also be called upon to handle, under different factual
circumstances, a publisher-side deal. So, now, a few words in defense of
publishers, I suppose.
There is a perception in the author and
Internet communities that publishers should not be taking broad grants
of the digital right or electronic right from authors, since "digital
rights and electronic rights do not compete or interfere with
traditional book publishing and other media rights".
Not true. Not
anymore. For proof of that fact, ask a few veteran news desk editors
whether or not they followed, or were otherwise concerned about, what
appeared on the Drudge Report during the Clinton administration. Ask the
CFO's or in-house publishing lawyers of a few traditional encyclopedia
companies how they feel about Wikipedia.
Incidentally, although as
a publishing lawyer and entertainment attorney and unlike some others, I
tend to use the phrase "electronic right" or even "digital right" in
the singular number, there probably tends to be no single consensus as
to what constitutes and collectively comprises the singular "electronic
right" or "digital right". There has not been sufficient time for the
publishing, media, or entertainment industries to fully crystallize
accurate and complete definitions of phrases like "electronic
publishing", "web publishing", "electronic right[s]", "e-rights",
"digital right[s]", or "first electronic rights".
Nevertheless,
electronic media and specifically the digital right and electronic
right, have already changed our history. You can be sure that they will
have some effect, at a minimum, on most author's individual publishing
deals henceforth, and will be the fodder of publishing lawyer and
entertainment attorney discussion for years to come. The fact is,
electronic uses inherent in the digital right and the electronic right
already do compete with older, more traditional uses - particularly
because digital and electronic uses are cheaper and faster to deploy,
and can potentially reach millions of users in less than, as Jackson
Browne might say, the blink of an eye.
Commerce is increasingly
relying upon the Internet and other electronic phenomena, and the
linchpin of this reliance is the digital right and electronic right.
After all, you are reading this article, and ostensibly gleaning some
information or material from it. The Web, for example, has already put a
sizable dent in dictionary and encyclopedia sales, and anyone who tells
you otherwise is probably an employee in a dictionary or encyclopedia
publishing company or publishing lawyer in-houser in denial of the
digital and electronic right, trying to protect his/her stock options.
As the recent and well-known Stephen King pilot program will attest,
fiction is the next subject matter area to be affected. Many of us book
lovers including publishing lawyers and entertainment attorneys don't
like to think about it, but bound hard-copy books may soon become the
sole province of book collectors and publishing lawyer vanity bookcases
alone. The vast majority of book readers, however, may so wholly embrace
the digital right and electronic right that they soon even lose the
patience to wait for their "amazon.com" mailed shipment.
Very few
people who work in the publishing, media, and entertainment industries,
including as amongst fair-minded publishing lawyers and entertainment
attorneys, should dispute that electronic uses inherent in the digital
right and electronic right can easily cannibalize the older and more
traditional forms and formats. This cannibalization will only increase,
not decrease, as time goes on. Again, the author should put
himself/herself in the mind-set of the publisher or its in-house
publishing lawyer, when having this digital right/electronic right
argument with the publisher or publishing lawyer. The publisher
otherwise may want to invest marketing and personnel support in the
author's work, and perhaps even pay the author an advance for the
writing. In their view, though, the publisher's publishing lawyer or
entertainment attorney argues, why should they do so, and not also
capture the author's digital right or electronic right?
The last
thing that the publisher or its publishing lawyer or entertainment
attorney wants to do is to pay the author - and then discover that the
author has "scooped" the publication with the author-reserved digital
right or electronic right, stolen the publisher's proverbial fire, and
undermined the publisher's investment in the author and the writing. The
concern of the publisher and the book company's in-house publishing
lawyer or outside entertainment attorney is rational and valid. If the
publisher allows the author to potentially undercut the book by
exploiting author's reserved digital right or electronic right, then the
publisher is threatening the publisher's own investment in the author
and in the written work. (And on some subliminal level at least, the
company's in-house publishing lawyer also knows that this could come out
of his or her future comp).
Compromises are available. One
traditional compromise effected between publishing lawyers or
entertainment attorneys is a so-called "hold-back" on the digital right
or electronic right, whereby the author promises not to use or
license-out any author-reserved digital right or electronic right for a
certain period of time following publication. The author will need some
leverage to get a publisher to agree to such a compromise, though. And a
publishing lawyer or entertainment attorney should draft the clause -
the author's publishing lawyer or entertainment attorney, not the
publisher's counsel!
An author may think that small "portfolio"
uses (e.g., tucked inside greeting cards, on an author's personal web
site, etc.) are so minor, that they will never compete with publishing
rights granted for the same work, and may tell the publisher or the
company's publishing lawyer or entertainment attorney as much. The
greeting card example does seem innocuous enough, but the publisher and
its entertainment or publishing lawyer will likely not agree with the
author regarding the author's personal web site. It is the electronic
right or the digital right that really scares publishers and their
publishing lawyers and entertainment attorneys, and is perceived as
threatening to their long-term investment in the author and his or her
work.
The distinction to be made here is between hard-copy
portfolio uses, and digital right or electronic right "portfolio uses".
The fact is that computer-uploaded text is so easy and quick to
transmit, receive, and read. The posted content's popularity could also
spread like digital wildfire, so quickly - for example, if a company
hyper-links to the author's site, or if "Yahoo" bumps the author's site
up in their search-engine pecking-order. Many successes have already
been made by virtue of digital right and electronic right
self-publishing, and more will follow. Traditional (book) publishers and
their publishing lawyers and entertainment attorneys already realize
this fact. Accordingly, traditional book publishers and their counsel
also realize that once they acknowledge an author's reservation of a
"self-promotion" digital right or electronic right, they risk losing
control of a potential wildfire dissemination method. Again, this would
put the publisher's investment at risk - but smart business people and
companies and the publishing lawyers and entertainment attorneys that
represent them, don't put their own investments at risk.
4. The
Party To The Contract That Has The Better And More Immediate Means and
Resources To Exploit The Electronic Rights, Should Be The One Who Takes
The Electronic Rights.
Here is the final point. If a contracting
party has no means and resources to exploit a digital right or
electronic right or a given bundle of them, then that same party has no
business taking (or reserving to themselves) those same digital or
electronic rights by contract or even negotiating such a position by and
between publishing lawyers or entertainment attorneys. To analogize, if
I am a screenwriter who options or sells my script to the Acme
Production Company, LLC, through an entertainment lawyer, how should I
react if Acme asks me to specifically and contractually grant them
"theme park rights" in my literary property in the negotiation between
the entertainment attorneys? (Don't laugh - this practice is now very
prevalent in film and entertainment deals).
Well, if Acme doesn't
have its own theme park, I (or my entertainment attorney) now have a
powerful argument for reserving the theme park rights to myself instead.
"Hey, Acme", I (or my entertainment attorney) say, "... how do you have
the unmitigated gall to ask me for my theme park rights, when you don't
even have the ability to exploit or use them yourself? You don't even
have a theme park!" I (or my entertainment attorney) then make it clear
to Acme that I don't intend to be giving them any trophies that they can
put on a shelf to collect proverbial dust.
The same argument can
work in the publishing context, particularly as argued between
publishing lawyers and entertainment attorneys, regarding the digital
right or the electronic right. The author can proverbially cross-examine
the publisher (or try to cross-examine the company's publishing lawyer
or entertainment attorney) as to what successful past uses they have
made of other author's digital rights or electronic rights across
multiple books. The company President may fudge the answer, but the
publishing lawyer or entertainment attorney representing the publisher
must answer truthfully. (One good reason to negotiate through counsel).
If
the true answer to the question is "none", then the author can use the
"trophy" argument stated above. If the true answer is, alternatively,
"some", then the author has a negotiating opportunity to compel the
publisher and its publishing lawyer and entertainment attorney to
contractually commit to digitally and electronically publish the
author's work, too. The author can argue: "I won't grant you the digital
right or electronic right unless you, publisher, contractually commit
in advance as to how specifically you will exploit them, and how much
money you will spend in their development and marketing". The author or
the author's publishing lawyer or entertainment attorney can then carve
those electronic right and digital right commitments right directly into
the contract, if the author has the leverage to do so. Again, one
should not try this at home - but instead use a publishing lawyer or
entertainment attorney.
Needless to say, once the author makes the
publisher commit, presumably through publishing lawyer or entertainment
attorney counsel, to a development budget or other marketing or
"release" commitment for the digital right or the electronic right, then
both the author and the publisher might thereby also have some basis
for numerical valuation of the rights themselves. And, it is an entirely
reasonable argument for an author or author's publishing lawyer or
entertainment attorney to say to a publisher that: "I will license/sell
you the following listed digital right[s] or electronic right[s] if you
pay me the following additional amounts for them:_____________________.
And in the blank space, the rights can be listed like menu options as
they have been broken out in Item #1 above, each to which separate
dollar values - that is, price-tags - are now assigned.
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