A publisher of a print book cannot produce that work as an ebook if they do not have the legal right to do so. This article explains the background to ebook rights: the right to publish in digital format and the territorial rights to distribute the ebook. (Part 3 of Ebook (un)availability.)

Publishing contracts

When an author takes his or her precious manuscript to a publisher, it is the author’s intellectual property (IP) that is being peddled in exchange for editorial, production, marketing and sales services. Most authors need a publisher’s expertise, contacts and the economies of scale that come from publishing many books, naturally preferring to focus on writing. The publisher agrees to invest (literally) in the author’s IP, and so a publishing contract is drawn up.

Publishing contracts vary widely in their content, but all, in some form, include clauses covering IP. In most countries with IP laws, copyright automatically rests with an author – authors do not need to register their work for copyright purposes. To use an author’s work – to publish it in a book, for example – a publisher must obtain the author’s permission to do so, and publishers generally choose a legally binding contract to do so, to protect themselves. The permission may be in the form of:

  • Copyright assignment – the author sells the publisher the copyright in the work, usually in exchange for sales royalties or other payment. In this case, the publisher now owns the copyright in the work (but not the entire IP – the author still owns the moral rights, which cannot be sold or given away). This assignment, however, traditionally only remained with the publisher for as long as the work remained in print – most publishing contracts stipulate that all rights revert to the author once the work is out of print (generally defined in specific ways such as no sales over a period of time).
  • Exclusive licence – the author retains the copyright but licenses the publisher to use the work, usually in exchange for payment, and promises that the work will not be licensed to anyone else. Generally, the effect is the same as copyright assignment for most practical purposes, but the author retains ownership and may have more say over the use of the work or the term of the licence, depending on the other terms in the contract.
  • Non-exclusive licence – the work is licensed to the publisher, usually in return for payment, but the author reserves the right to license the work to other publishers.  These contracts are rare in most book publishing; very few publishers are interested in investing in a work that may be produced by competitors.

The other increasingly common publishing agreement is the Creative Commons Licence, in which an author makes the work available to anyone for free, as long as they receive acknowledgement as the author. This is more common in academic publishing (where writing and publishing are part of an academic’s job) than other forms of publishing, where an author hopes for some recompense for their otherwise unpaid work.

The copyright clauses in a publishing contract are not the whole story: they are accompanied by specific clauses outlining how, where and for how long the publisher may use the work. In particular, there are clauses governing the format(s) in which the work may be produced, and the territories in which the work may be distributed. Publishers generally have always tried to secure all rights to a work, in all formats in all territories, but many authors and literary agents have limited these rights for any number of reasonable and valid reasons.

Digital rights

Most publishing contracts of the last twenty years or so will include the right to publish in unspecified digital formats. However, even some of those contracts, and of course older contracts, only cover the rights to publish a book in printed paper format. Well-established publishers have had to spend some time in digging up old contracts (often buried in paper archives) to check what kind of rights they hold on each and every book. If the publisher does not hold the digital rights to a book, they will generally approach the author (or their estate) and request an amendment to the contract. In most cases, the author will say yes, but not all. (About 6 months ago, JK Rowling was reportedly considering allowing her books to be published in digital format, but it hasn’t happened yet.) There are also some literary agents advocating separate negotiation of digital rights.

Even if a publisher holds the digital rights, some contracts still need to be amended. Many royalties clauses have not adequately covered revenue from digital sales (putting this into secondary rights clauses akin to film rights rather than ‘ordinary’ sales revenue). Clauses covering reversion of rights to the author when the book is out of print may need to be redefined since “out of print” no longer applies in the digital world.

So just because a publisher publishes a book in print, it may not (yet) have the full legal right to publish the same book in digital format. These processes can take time; additional complicating factors are the need to update digital rights management systems and royalty tracking and payment systems. Most publishers are actively grappling with digital rights and all that entails; for a few, however, it is all just too hard.

Territorial rights

The majority of contracts between book publishers and authors cover “worldwide” rights. However, that does not mean that the publisher has the right to distribute a book, in any format, worldwide. The publishing contract usually gives the publisher the right to sell or license subsidiary rights to the work, including territorial rights.

In traditional print publishing, a publisher usually takes on a book because it thinks it can sell the book into its main markets. Publishers are of course most active in their own countries, where they know the market’s tastes and book-buying habits, and have established contacts in the supply chain. Selling into other countries is accomplished in a number of ways, however attempting to sell from afar through an intermediary is rarely lucrative. Before the advent of online retailing, generally someone was needed “on the ground”, someone who knows local market conditions: an agent, distributor, or branch. Managing these relationships can take more time and effort than it is worth, and so publishers came up with another solution: sales of territorial rights.

Rights sales are the main business of large trade fairs such as the Frankfurt Book Fair, particularly territorial rights in the form of translation and reprint rights. These rights are traded between publishers. A publisher will buy from a foreign publisher the (usually exclusive) right to produce and distribute a book in their own particular territory. If it’s in the same language, it’s called a “reprint”. This gives publishers access to books they would not otherwise produce, and allows publishers (and authors) to make money from sales in a country into which they would not otherwise sell. It’s been a pretty good system for print books, but it does mean that many books have territorial restrictions in place which do not make much sense in the online world. Many publishers want digital sales to mirror the print territorial restrictions – what publisher would buy print rights to a book when (a) they cannot also have the digital rights, and (b) the digital rights-holder can sell into their territory (reaping the sales benefit of their marketing spend)? And who wants to risk a lawsuit for breach of contract if these rights are ignored? Accordingly, publishers have been at pains to educate ebook distributors on territorial rights, who are in turn imposing territory restrictions – much to the frustration of the ebook-buying public (who will find ways to circumvent these restrictions).

(Territorial restrictions on book distribution in the legal rights sense should not be confused with territorial restrictions which may exist for other reasons. Selling an ebook across borders introduces tax and currency factors, and some ebook vendors prefer to avoid these issues by imposing their own territorial restrictions. The launch of Google eBooks solely in the US to date is more to do with a phased roll-out and testing than territorial rights.)

The biggest problem arises when the territory factor is not dealt with on a book-by-book basis, as it is on Amazon, but on some other basis. For example, Waterstone’s in the UK recently stopped selling ebooks to customers who do not have a UK address so that they do not breach territorial rights; however, many of these ebooks are likely to be published with worldwide rights.

Territorial rights are likely, ultimately, to disappear in favour of worldwide rights even for print books, as the digital supply chain will render even this obsolete. (Translation rights are likely to remain, but on a worldwide basis.) At the same time, ebook vendors’ platforms will become more sophisticated and able to deal with differing rights arrangements on individual books. For the time being, however, we have to live with being unable to buy any available ebook no matter where we are.

© 2010 Linda Kythe Nix. All rights reserved.