Contract Provisions: The Out of Print and Reversion of Rights Clause

October 27, 2010

Most publishing contracts provide for both the establishment of the author/publisher relationship and its termination. Why should an author be concerned with the “out of print” clause if it rings the death knell of the book with that publisher?

As I noted in “Publishing Contracts: Grant and Reservation of Rights” the author usually grants rights to the publisher for the “full term of copyright plus renewals and extensions.” The current term of copyright is life of the author plus 70 years, which is a long time. [More about the author’s death and next of kin rights will be discussed in a later Note.] Most books, however, do not have a long shelf life. If your book is no longer selling in the market in which the Publisher has exclusive rights you will certainty want to invoke a provision in the contract to regain the rights granted. The “out of print” clause usually includes a “reversion of rights” provision, but it is not self-executing. The author must demand the reversion by giving notice.

What does it mean that a book is “out of print”? Is a book in print only if there are warehoused copies available for sale? What if the book is available for electronic download to a digital reader but there are no print copies for sale? A typical contract provision reads

The Work shall not be deemed “out of print” within the meaning of this Paragraph as long as a) the Work is available for sale in the United States either from stock in the Publisher’s or licensee’s warehouse, or b) the full-length, English language print edition of the Work is available for sale in the United States in regular sales channels, or c) a new full-length, English language U.S. print edition of the Work is in process, if published within six (6) months of Publisher’s receipt of Author’s notice, or d) sales of the work in electronic book form equal or exceed 100 units per year.

Whether a Work is “available for sale” or in “regular sales channels” [a) and b)] is too indefinite. What if there is 1 copy “available for sale” or 2 copies in “regular sales channels.” The royalty statement may provide the information if it shows the number of copies originally printed and the total number sold, but some copies may have been used for promotion or sold to the author. Subparagraph (c) is satisfactory and standard. For sales of electronic books [d)] it is preferable to require the maximum number of units; one hundred units over a one year period is too small and lengthens the time before the author can send the Reversion Notice.

Better for the Author:

If the Work shall no longer be in print and for sale after [number of years to be negotiated] from the date of first publication, then the Author may give written notice to the Publisher of her desire to terminate the publishing agreement, and in such event the Publisher shall declare whether it intends to reprint or license a reprint of the Work within [a period to be negotiated]. If the Publisher within such time does not reprint the Work or license a reprint to be published within [a period to be negotiated] then all rights granted hereunder shall terminate and revert to the Author after [the stipulated period].

For electronic editions: try to negotiate a number larger than 100 copies sold plus “the Work shall not be deemed in print unless at least [a stipulated number of copies] are sold in the previous two successive accounting periods.”