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

Gerald M. Levine, Co-Author

Most publishing contracts provide for both the establishment and termination of the author/publisher relationship.  Why should an author be concerned about the “out of print” clause?  The Grant of Rights in the contract is likely to be “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.

Most books do not have a long shelf life.  If a publisher concludes that a book has exhausted its economic value it will let it go “out of print.” When first reviewing the publishing contract the Author (or her agent or lawyer) should make sure the out of print clause includes a “reversion of rights” provision.  Once the book is no longer on sale in the publisher’s exclusive market the Author should send a demand for reversion of rights.  The reversion of rights may be automatic but usually the author is required to make a demand on the Publisher.  After receiving notice the Publisher may have six months to a year in which to reprint the book or license a new edition, but if the book is not on sale within the stipulated time the rights revert to the Author.

What does “out of print” mean?  Is a a book in print if there are only a few copies available for sale? What if the book is available for electronic download to an e-reader but there are no print copies for sale? A typical out of print 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.

“Available for sale” in “regular sales channels” is too indefinite. What if there is 1 copy “available for sale” or 2 copies in “regular sales channels.” The royalty statement may provide  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.    For electronic books [d)] it is preferable to require a minimum number of units sold; one hundred units over a one year period is too small and postpones when the Author can send the Reversion Notice.

A provision which is better for the Author is:

“If the Work is no longer 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 U.S. print edition of the Work within [a period to be negotiated].  If the Work is not on sale by the Publisher or licensee in a U.S. print edition within [stipulated period] then all rights granted hereunder shall terminate and revert to the Author.”

The contract should also provide that in the event the book is out of print and the contract is terminated the Author can purchase remaining copies at the remainder price or manufacturing cost and production materials at cost.
 
For electronic editions: try to negotiate a number larger than 100 copies sold per year or “the Work shall not be deemed in print unless at least [a stipulated high rather than low number of copies] are sold in the previous two successive accounting periods.”

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