Four sale-of-work issues are of immediate concern to writers:
- Disputed Copyrights
- All-Rights Sales
Disputed Copyrights: Discussion
Copyright law is based on the principle that the copyright to one’s work is divisible, meaning that there are different rights that can be sold separately. For example, an author can sell North American serial rights for an article to a magazine or newspaper and this right allows that publication to publish the article in North America. The author can also sell other rights to the same article to the same or different publishers, such as anthology rights, Spainish translation rights, European print rights, web display rights, and so forth.
Because rights are divisible, an author need not transfer the copyright title in bulk. Rather, each of the many, independent rights that comprise one’s copyright may be sold individually to a buyer.
But in the new information age, new kinds of electronic rights are coming into existence. And some publishers—especially the largest and most powerful—are claiming that their purchase of certain specific print rights automatically gives them certain additional electronic rights. In some instances they are even claiming they own electronic rights that did not even exist at the time print rights to the work were purchased from the author.
For example, some publishers claim that their purchase of what used to be called First North American Serial rights for newspaper and magazine articles automatically grants them the right to use the article on their web site, or to sell the article to an electronic database such as Nexis.
With the support of the National Writers Union, a number of freelance writers have filed suit in New York charging some of the largest publishers and purveyors of full-text, online information databases with violating the writers’ copyrights. In Tasini vs New York Times, these writers are arguing that by reselling their work to databases and computer networks without paying them, the sellers are denying them an important new market in which they could earn part of their freelance writing income.
While we hope that the lawsuit, protests, and union educational campaigns will establish principles of fairness and justice in electronic publishing, the NWU is also interested in finding practical solutions to problems. Therefore, in line with the principles set forth in this document, we have established the Publication Rights Clearinghouse (PRC), a collective-licensing agency inspired by the music industry’s ASCAP. The goal of PRC is to create a transaction-based writers’ electronic-rights marketing and royalty collection system that will defend writers rights while facilitating the sale and purchase of an author’s work.
Disputed Copyright: We Advocate
While most book contracts signed today explicitly deal with electronic distribution rights, many articles are still sold without explicit understandings on such rights.
- Written Agreements. An author should always sell intellectual property rights by written agreement. However, in some cases a journalist might have to sell rights to a publisher via an oral agreement, and in in such cases it should be assumed by all parties that in the absence of a specific written agreement, the writer is granting One-Time North American Print Publication Rights only.
- One-time rights. The grant of One-Time North American Print Publication Rights, or Primary/Exclusive Book Print Rights, does not include the right to distribute the material electronically, nor does it include the right to sell electronic distribution rights to others.
- Electronic rights are separate. Electronic rights are separate and distinct from all other rights. In addition, electronic rights may be sold on a non-exclusive basis. None of these electronic distribution rights is automatically included in the purchase of another right.
- Electronic rights remain divisible. Like translation rights or dramatic rights, electronic rights may be divided into separate sub-categories. Some of these include resale on full- text article databases, posting via a computer network, digital copying or publication on a CD-ROM, digital tape, laser disc, the web, or other electronic media.
- Responsible behavior by online sellers. Data carriers and networks should determine whether a vendor of intellectual property has the legal right to sell it before allowing the vendor to use the carrier’s links and networks. The carrier should at least require each vendor to sign a statement that the vendor has that legal right.
- A data carrier should also be legally required to prevent its links and networks from being used for the illegal sale of intellectual property. If a carrier is properly notified by an author that a vendor lacks the legal right to sell a particular piece of that author’s intellectual property, the data carrier should be required to suspend electronic transmission of that piece until the matter is adjudicated. Vendors who are convicted of repeated copyright violations should be denied vending access by data carriers.
A “work made for hire” (usually called Work-For-Hire, and abreviated WFH in this booklet) is an exception to the general copyright principle that the author of a work automatically owns all copyrights to it.
The WFH exception species circumstances under which all copyrights to the author’s work automatically belong to the writer’s employer rather than the author. For example, when a staff reporter writes an article for a newspaper, the publisher owns the copyright. Or when a technical writer produces an instruction manual for a product, the copyright is owned by the manufacturer who hired the writer to write the manual.
Copyright law specifically limits the WFH exception to certain kinds of work listed in the law, but some publishers try to inappropriately apply to work it was never intended to cover. For example, a magazine might try to force a freelance writer to sign a contract that stipulates that the author’s article is a “work-made-for-hire” (and therefore all copyrights are automatically owned by the magazine).
But a freelance writer is not an employee of the magazine, and so the WFH exception cannot apply and is illegal usurpation of the author’s rights. To demand that an author of a work intended for general mass publication is coercive, unfair, and improper. This kind of illegitimate practice is often used as a subterfuge for gaining electronic distribution rights without fair payment.
[The NWU distinguishes between acceptable and unacceptable WFH situations. There are two criteria that determine the legitimacy of a WFH contract employment status and the kind of work.
Something written by an employee at the direction of the employer is a legitimate Work-For-Hire. But freelance writers and other independent contractors are, by definition, not “employees.”
For most purposes, we can use the IRS reporting method as a way of determining employment status. If someone is paid on a “W2” basis, meaning that withholding taxes are deducted from the paycheck and a W2 form is filed with the IRS at the end of the year, that person is usually considered an employee. If someone is paid on a “1099” basis, meaning that there are no payroll deductions and a 1099 form is filed with the IRS, that person is usually considered an independent contractor.
But payment and reporting methods do not adequately address copyright WFH issues.
For example, suppose a a publisher commissions a freelance author to write a book or article and the publisher insists on paying the author on a W2 basis. But even though the IRS standard is met, this does not create a legitimate employer-employee relationship for copyright purposes because the commission is for one (or more) specific works, whereas “employment” is an on-going relationship in which the author works at the employer’s direction on whatever projects the employer assigns. This form of so-called employment is simply an illegitimate attempt by the publisher to unilaterally abrogate all of the author’s copyrights by claiming an employer-employee relationship on the basis of an IRS form where no such relationship actually exists.
Furthermore, employee status is a two-way street. When publishers hire writers as employees they incur the legal obligation to provide unemployment, workers compenstation, and disability insurance, standard work hours and overtime pay, paid holidays, and so forth; as well as a moral obligation to provide other benefits such as health, pension, and paid vacations. Some states, such as California, require by law that anyone working under a WFH contract be covered by unemployment, disability, and workers comp insurance.
The Kind of Work
Copyright law lists 9 specific types of commissioned work that can be considered WFH if the author agrees in writing to do so. For these nine types of work, employment status (W2 or 1099) is irrelevant. The requirement is that the work be one of the nine specified types and that the author agree in writing that the work is a WFH.
Examples of legitimate WFH would include technical manuals accompanying a product, a report describing the results of someone’s research, or written material that is not offered for sale directly to the public, such as advertising copy, grant proposals, and corporate newsletters and reports.
Note, however, that books and publications intended for general consuption are not included in the list of nine acceptable WFH genres. In this context, “general consuption” refers to books, newspapers, magazines, and analogous electronic formats in which the author’s work is the primary content the reader is buying as opposed.
Work-for-Hire: We Advocate
- Oppose WFH contracts. That writers refuse to accept illegitimate WFH contracts and that they report publishers who try to use them to the union and copyright office.
- Separate copyright from employment mode. That copyright law be clarified to state that payment on a “W2” basis does not, in and of itself, establish an employer-employee relationship for copyright purposes.
- Enforce current laws. Penalties for illegitimate WFH contracts be increased and enforced.
- Appropriate benefits. That writers who are working under legitimate WFH contracts receive unemployment, workers compensation, and disability insurance coverage in all states.
Many publishers are now demanding that writers sell them “all rights” to the author’s work. In other words, every conceivable type of copy right is transfered to the publisher in a single transaction. Publishers are adopting this approach so that they can freely use the author’s work in a variety of media formats in addition to print, particularly electronic formats such as the web and database retrieval.
All-Rights Sales: Discussion
In theory, there is nothing inherently wrong with a writer selling all rights to a work in one transaction. But in real life as the publishers are actually implementing all rights sales there are very serious problems:
Price. Publishers are forcing writers to sell them all rights for the same price they used to pay for first print rights. Since many writers make a significant portion of their income from selling subsidiary rights, the seizure of all subsidiary rights by the publisher without paying for them amounts to a serious hidden pay cut.
Non-existant rights. Many publishers not only demand that the writer turn over all all rights, they include language in the contract specifying that the writer give up rights to any formats or media that might be invented at some time in the future. This is egregiously unfair because it is impossible to know the value of rights that do not yet exist. How can anyone set a fair market price for rights that have not been invented.
Denial of publication. Publishers are demanding all rights so that they are free to use what they want at any time, place, or manner they might see fit. But most of the rights that they grab with an all-rights contract go unused and unexploited. They want web and database rights but may have no interest in arranging for Spainish translation, anthology, reprint, or other similar subsidiary rights. But their ownership of those rights precludes the author from finding and exploiting those markets. Which means that the author’s work is not published in media and formats that it could have appeared in.
For these and other, reasons writers hate all-rights contracts. But publishers are using their economic power to coerce authors into signing them. Publishers are in essence saying, “take it or leave it.” Which means that freelance authors are experiencing a drastic cut in income. It was never easy to make a living as a freelancer, and now it’s fast becoming impossible. This is bad not just for writers, but for society as a whole. Staff writers work at the direction of their employers. The content of what they write is determined by the publisher, corporation, institution, or government agency that hires them. Freelancers, however, have always provided an independent voice. But if freelancers cannot make a living, then those independent voices are stilled.
All-Rights Sales: We Advocate
- No all-rights contracts. Writers should not sign all-rights contracts. Publishers should not try to coerce or demand that writers sell all-rights. Copyright law should be amended to make all-rights contracts illegal.
- Right itemization. There is nothing wrong with selling or transferring multiple rights in a single transaction for a single price, the rights being sold or transferred should be individually itemized. This is simply good, standard business practice whereby what is being sold is specified. Copyright law should be amended to require that rights being sold or transferred be specifically and individually itemized so that both buyer and seller know what has been transferred.
- Non-exlusive subsidiary rights. When a primary right (such as first print rights or first web rights) are sold along with one or more subsidiary rights, the subsidiary rights should be sold/transferred on a non-exclusive basis. That is, the writer retains the right to use or sell those subsidiary rights to others on a non-exclusive basis.
- Time certain reversion. If subsidiary rights are sold on an exclusive basis, the exclusive use of those rights by the purchaser should be limited to a reasonable time period.
- Reversion of un-used rights. If subsidiary rights are sold on an exclusive basis without a reasonable time limit, any rights not used by the purchaser within a reasonable time should automatically revert back to the author.
- No selling of that which does not exist. Writers should not sell rights to formats and media that do not yet exist. Publishers should not try to coerce or demand that writers sell rights to non-existent technologies that have not yet been invented. Copyright law should be amended to make the sale of rights to non-existent, “herinafter to be invented,” technologies illegal.
Piracy occurs when someone sells illegal copies of intellectual property without even the pretense of a valid copyright. New technologies have made it so much easier to duplicate, or plagarize, an author’s work that this problem has been raised to a new order of magnitude.
Piracy: We Advocate
- Cooperation against piracy. Writers should form, or ally with, organizations similar to those of long standing in the music industry, and currently under development in the film industry, to monitor use and track down out-and-out pirates who illegally resell or plagarize other people’s work.
- Action against pirates. The electronic marketplaces should be structured so that it is feasible to immediately suspend electronic distribution of a protested work by a publisher, vendor, or distributor pending adjudication.
- Denial of access. Data carriers should be required to deny commercial access to pirates convicted in a court of law of persistent and flagrant copyright infringement. In other words, convicted pirates would be allowed to use the infosphere for personal use, but prevented from selling material over the net. The mail service may provide a model since it is illegal to use the mails for criminal activity.
- National sanctions. The electronic marketplace should be designed so that effective sanctions can be imposed against nations that condone or refuse to prosecute intellectual piracy on the part of their citizens.