ARE CONTRACTS ENOUGH? AN EMPIRICAL STUDY OF AUTHOR RIGHTS IN AUSTRALIAN PUBLISHING AGREEMENTS.

• Date: 01 August 2020
• Author: Yuvaraj, Joshua

Contents I Introduction: Reversion's Potential II Reversion Rights in Publishing Contracts A Reversion Clause Types and Controversies 1 Out-of-Print Clauses (a) When Will a Title Be 'Out of Print'? 2 Other 'Use-It-or-Lose-It' Rights 3 Liquidation Rights B Previous Studies of Contractual Reversion Practice III Exploratory Study into Australian Publishing Contracts A Research Questions B Methods 1 Data Selection 2 Data Coding 3 Reliability Testing 4 Exclusions C Results 1 Publishers Took Extremely Broad Rights (a) Contracts Were Exceptionally Long (b) Contracts Overwhelmingly Took Exclusive Licences--and Sometimes Even Entire Copyrights (c) Most Contracts Took Rights across All Territories (d) Most Contracts Took Rights in All Languages (e) These Broad Grants Stacked Up 2 Out-of-Print Rights Were Common--but Slow to Evolve (a) Most Contracts Gave Authors Out-of-Print Reversion Rights (b) Out-of-Print Status (Nearly Always) Determined by Technical Availability Criteria (c) We Observed Reduced Consensus about What 'Out of Print' Means (d) Objective Criteria Were Mostly Based on the Number of Copies Sold (e) Some Authors Are Still Required to Pay to Reclaim Their Rights 3 Authors Typically Face Long Waits before They Can Reclaim Their Rights (a) Some Contracts Required Authors to Wait after Initial Publication (b) Books Must Sometimes Be Long Out of Print before Authors Can Initiate the Reversion Process (c) Most Contracts Required Notice to Reprint Books (d) The Different Types of Notice Could Stack Up Too 4 Other 'Use-It-or-Lose-It' Reversion Clauses 5 Reversion in the Event of Liquidation IV Discussion A Publishing Contracts Do Not Adequately Safeguard Author Interests B These Problems Could Be Ameliorated by Introducing Minimum Author Reversion Rights 1 Rights to Revert Where a Book Is No Longer Being Meaningfully Exploited 2 'Use-It-or-Lose-It' Rights 3 A Right to Revert When the Publisher Enters Liquidation 4 Reversion for Failure to Pay Royalties or Provide Reasonably Transparent Royalty Statements 5 Reversion after Time V Conclusion I INTRODUCTION: REVERSION'S POTENTIAL

We expect copyright to fulfil a variety of aims. We want it to incentivise investments in the initial creation and production of works, and then in their ongoing availability, so society can benefit from widespread access to knowledge and culture. We also intend copyright to recognise and reward authors for their creative contributions. (1) Yet copyright laws worldwide are under sustained attack for doing a poor job of achieving these aims. Many creators are struggling financially, threatening their ability to continue their creative work. Writers' incomes in particular are in sustained sharp decline throughout the English language world, and it is growing harder to make a living from writing. (2) Many publishers are also struggling to continue in the market, competing with a handful of behemoth rivals that enjoy vastly different economies of scale. (3) The economics of independent print publishing in Australia are particularly unforgiving: a 'bestseller' might shift perhaps 7,000 copies, making it hard even to keep the lights on. (4) If such publishers were to disappear, it would further reduce competition, thereby making it still more difficult for authors to sustain their craft--and reducing the diversity of voices that get to be heard. At the same time, copyright makes certain works, particularly older works, difficult to access. Long copyrights lead to 'orphaning', whereby the owners of works cannot be found to seek permission to use them. Other times rightsholders are ascertainable but uninterested in licensing their catalogues, since transaction costs would outweigh likely revenues. An increasing corpus of evidence also shows that older books can be far less available than equivalents in the public domain, suggesting that copyright sometimes stands in the way of new investments in making works available. (5)

Rights reversion--returning rights in copyrighted works to their creators --is a promising avenue for addressing each of these problems. By freeing up rights to new exploitations, reversion could help recover currently lost culture, give authors new opportunities to financially benefit from their works, and facilitate new investment opportunities. (6) Whilst reversion has interesting potential for many creators, in this article we focus specifically on its potential for authors publishing books.

Madeleine St John's The Women in Black usefully illustrates reversion's promise. First published in 1993, it quickly went out of print despite another of St John's novels being shortlisted for the 1997 Booker Prize. Australian independent publisher Text Publishing rediscovered the title, acquired the rights, and republished it as part of its Text Classics series in 2012, 19 years after its original release. (7) Since then it has sold over 100,000 copies in physical and digital forms, been developed into a musical and a feature-length film, and translation rights have been sold in Germany, Italy, France and Israel. (8) This book's potential was realised, new creative work was made possible and substantial economic value was unlocked through the rights becoming available for new investment. Of course, not all out of print books will find a new publisher eager to invest. Yet entitlements to reclaim rights to out of print titles create possibilities for new investments, new income, and new access.

Reversion rights predate copyright itself, with the earliest located dated 1694. (9) However, they have not always had the broad potential they have today. In the pre-digital era, high marginal costs of copying and distribution used to mean most books disappeared quickly from sale. (10) Authors might have had legal rights to reclaim their out of print titles, but that meant little unless another publisher was interested in making the substantial investments necessary to bring them back to market. Now there are vastly more options. Digital printing makes smaller print runs financially feasible--right down to single copies via print on demand ('POD')--enabling books to be physically available for longer. Further, the marginal costs of digital production and global instantaneous delivery are virtually zero, opening new opportunities for online sales, including in foreign markets, via publishers or author-to-reader direct. Technological advances give rise to new licensing opportunities, too--for example, to public libraries for 'eLending'. This has become big business, with market leader OverDrive facilitating over 185 million ebook loans in 2018 alone. (11) Rapid improvements in AI technologies are also creating new opportunities. While AI-powered translation is not yet close to being substitutable for human expertise, it is already being used to reduce the costs of translating books for foreign language markets. (12) In the audio realm, AI-powered text-to-speech technologies are already on the market, (13) and for those who still want a human reader, high quality online home recording is drastically reducing the costs of audiobook production. (14) All this creates new investment and revenue opportunities, but what if the original publisher controls the rights and is not interested in pursuing them? In that case, taking advantage of these new possibilities depends on appropriately drawn reversion rights.

Reversion's potential is being recognised by lawmakers the world over. The European Union ('EU') has just enacted a directive requiring member states to enact reversion rights entitling creators to recover copyrights that have been assigned but not exploited. (15) In Canada, two parliamentary committees recently recommended a law that would allow creators to terminate their contracts after 25 years. (16) And a majority of the world's nations already have some form of statutory reversion law benefiting authors or their heirs. (17) Yet common law countries are lagging behind. With the exception of a single narrow right in each of the United States ('US') and Canada, (18) authors in the Anglosphere are legally entitled to recover their rights only if and as their publishing agreements permit. Author advocacy associations have expressed growing concern that such contracts, in their current forms, do not adequately protect author rights. The CREATOR principles adopted by the United Kingdom's ('UK') Society of Authors' (19) and 'Ten Principles for Fair Contracts' of the International Authors Forum (20) both call for fundamental changes to author-publisher contracts, particularly around reversion. By contrast, some rightsholders contend there is nothing to worry about--that author interests are adequately taken care of by their contracts. (21) In this article we explore whether contracts are indeed enough, or whether there is a case for additional statutory rights.

Part II identifies the main types of reversion right and reviews the literature analysing reversion in publishing contracts to date. Part III sets out the method and results of our new exploratory study of publishing contracts, analysing the rights taken, provisions for returning them to authors, and their evolution over time. This makes a vital contribution to the existing literature: such contracts govern author rights in Australia, and without analysing them, we have no way of knowing what those rights are, or when and how they apply. In Part IV, we argue that problems identified in our study suggest that contracts should not be the sole repositories of author rights. We conclude by proposing various potential statutory reversion rights that could benefit authors, publishers and the public, together with the key issues that would need to be resolved if they were to be implemented into law.

II REVERSION RIGHTS IN PUBLISHING CONTRACTS

Rights reversion can have any number of different triggers. In the Anglosphere, the only existing statutory reversion rights are time based: applying...