When You Sign Away Your Copyright To A Publisher, What If They Hold You Hostage Over It?

from the yikes dept

We're always amused to hear people talking about how copyright "protects the creator," when we mostly see cases where the original creators have effectively sold off their copyrights to giant gatekeepers: record labels, movie studios, book publishers, etc. That can lead to some unfortunate situations for the actual creators, such as the following story, sent in by someone who prefers to remain anonymous. Phil Foglio, author of a series of "Girl Genius" novels, recently found out that the American publisher of the books, Night Shade Books, is going out of business and is trying to sell off its contracts. However, the publisher looking to buy wanted to renegotiate the contracts in a ridiculous manner, massively decreasing Foglio's royalties. What follows, however, would make for an interesting game theory case study:
A certain percentage of Night Shade authors have to agree to this hose job before the deal goes through. Yay! We're safe! You'd have to be an idiot to sign onto this! True– So let's bring out a stick and threaten you! If they don't get enough authors willing to eat this crap, then Night Shade has no choice but to declare Chapter 7 bankruptcy.

Then all the books in question go into a legal limbo. No one has the rights until the bankruptcy is resolved, which might take years- or possibly, NEVER! This has happened before to way better authors than us. This means that once said books go out of print, the authors can't resell them. Can't reprint them. Can't sell any adaptation rights. Can't write any sequels.
A rock and a hard place, basically. If enough authors sign the deal, then bad royalty rates are forced upon them. If not enough authors sign the deal because the royalty rates are crazy, then the copyright may end up in limbo limiting what Foglio can do with the work. And I thought copyright was supposed to protect the artist?

Reader Comments

The First Word

the REAL problem

We don't transfer Copyright via the publisher contract NOW. At least not unless the author is writing in a world (on spec) that is owned BY the publisher, but that's a special situation and doesn't occur often, overall.

Way too many people don't understand what an actual contract says. Every one of mine says that the material is still my copyright. The only thing I actually do is temporarily (2-7 years, in most cases) license the ability to reproduce and distribute my titles to a publisher, only as long as the publisher keeps up their end of the contract (payment, book availability, etc.). By definition, the bankrupt publisher going out of business stops royalty payments and often takes books off sale, therefore breaching their end of contract at that point. The contract says the publisher can aid me in defending my copyright...but they are under no obligation to do so, since it's my copyright. My contracts also say that the license cannot be sold and immediately reverts TO me in a case of bankruptcy or dissolution/sale of the publisher. Sounds good? It does.

Now, the problem comes in the form of the way bankruptcy courts function and their mistaken ideas about authors and contracts. They view contracts as "assets" of the publisher and don't pay attention to the time limits on the contracts. If the contract runs out while held by the courts, they still hold it as if it has value that doesn't exist to the business going bankrupt. Further, ownership of the actual valuable object (copyright) is misattributed to the publisher, where it never actually existed. Moreover, authors are not treated like the debtors they are, IMO. The publisher, almost without exception, owes the authors money. So, it's adding insult to injury. The bankruptcy courts not only hold up the rightful ownership of the stories, but they further don't protect author earnings and instead rule that authors get paid last in line. IOW, not at all, by the time the big fish have their bites of the pie.

Some people will argue that bankruptcy law trumps contract law, but that only goes so far in argument. Any way you look at it, they are holding the property of a debtor to satisfy the bills of a bankrupt entity. Something seriously whacked in execution there, any way you dissect it.

Brenna
—Brenna Lyons

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  1. icon
    Spaceman Spiff (profile), 12 Apr 2013 @ 2:16pm

    Leasing a copyright?

    I think it's time that authors and other content creators started leasing their copyrights, with a clause that if the company that has the lease goes into bankruptcy, the copyright immediately reverts to the author/creator. I'm not an attorney, so I don't know if this is possible, but it seems reasonable to me!

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