Rights: New Writers, Old Product Line, Not Work-for-Hire

[Tav_Behemoth]

This is a continuation of issues raised in The world (of rights) is a complicated place, but in the time I've been questing for a response, that thread has slipped into non-revivability.

Here's the question I posed to the SFWA Contracts committee, and their reply. I'll field questions about this and suggest future directions as a reply, rather than as part of this post.

Question.  Having recently become a small publisher of role-playing game books, I'm hoping to draft a model contract similar to SFWA's, designed to safeguard the rights of gaming writers who create original material using settings and concepts that were originally created by others. As it stands, many companies in this field handle this issue with work-for-hire contracts, which often leads to unfortunate and, I feel, unnecessary, violations of the writer's bill of rights.

The issues that are relevant here seem similar to the ones involved in writing a "franchise" novel. I'm wondering if you could point me towards work the SFWA contracts committee has done on these issues and/or others who have given thought to how to handle fair allocation of rights in an environment of derivative work. People who have a particular interest in gaming as well as SF might be especially helpful for me to talk to.

SFWA's official response.  For a variety of reasons, we cannot respond, as SFWA, to your question.  We can, however, give you some things to think about, as your goals are laudatory and the field warrants some conceptual advances.

Accordingly, this email is not legal, financial, or business advice; nor should what follows be construed as in any sense representing a position that SFWA or any SFWA individual.

Context: thinking about the issues.  There are two distinct issues represented by works in a franchise universe: (1) the actual fictional work to be created, and (2) the deployment of existing intellectual products ("IPs") -- such as the setting, characters, world premise, gadgets, and so on -- the possible creation of additional IPs, and how those IPs are owned or compensated.

Structural approach to solution: two contracts.  As to Item 1, the work itself, you can use any standard book or story contract ("Work Contract").

The challenges relate to Item 2, the IPs.  For this, we invite you to consider creating a master cross-licensing agreement ("IP Contract") that controls use of the marks (registered and otherwise) found in the media universe and developed by the author for the universe in the particular work(s) of fiction.  More about this below.

The Work Contract then needs simply a paragraph stating that it is a commissioned work under the IP environment and uses/ licenses/ grants licenses based on the IP Contract.

Reasoning.  Several elements:

1.         Most publishing arrangements are silent on use of marks and IPs generally.  This is a hole, in that as series and universe works become more prevalent (and profitable!), "branding" as part of a larger universe of related products is more important than the "branding" as works by a given author.

2.         A two-contract approach distinguishes what is uniquely the author's (that author's words) from what is either borrowed or created-via-contract.  That's useful and allows protection of the Work under established principles and using established contractual forms.

3.         A book, that is a novel, shouldn't be thought of as the work-for-hire doctrine.  Such a posture may not pass Constitutional scrutiny (and seems essentially unfair).  

4.         Existing intellectual property law is entirely unsettled, with massive splits in decisions arising from different circuits regarding how characters and settings should be protected (or not) under copyright law, further complicated by fair use and parody.  Basically, it's a mess and a moving target influenced far more by where a lawsuit might be filed than by substance.  

5.         Hammering at an IP Contract now improves editorial guidance for later books (both by this author and others) by forcing everyone to pay attention to what is going on.  It's also possible --- not difficult, really -- to envision what the provisions would be: (a) you use the IPs for this Work and this Work only, (b) if you create new IPs, they belong to the Universe Owner, not the Author, but are licensed back for this Work, (c) universe owner can have editorial veto over Author's deployment of established IPs, (d) IPs can be specifically enumerated (list) or described by reference (e.g. mentioned in any of the following previously published works, A, B, C ...)

David Smith  1/6/05

For the committee

[jdagna]

Thank you for posting this!

So... if I'm reading this right, basically what you're looking at is a contract (or set of contracts) that:

1) gives the writer permission to use the existing IP in question
2) gives the publisher permission to publish the writer's work
3) specifies the IP owner's rights to create derivatives of the writer's unique IP (such as characters, etc.)

I'm interested in this, since I'm currently working on a written contract for a writer who's producing a novel set in Pax Draconis.  I want to make sure he can't later take this novel somewhere else (since the name and setting are my work), but he's paying for the printing and wants to retain copyright (which is great for me).  We've been moving along with some vague verbal agreements, but I really want something in writing to protect against any misunderstanding or future disagreement.

Hopefully, I'll have a draft of something that's ready to sign by this weekend, and I'll post it here.  But any thoughts and suggestions people have would be much appreciated.

[daMoose_Neo]

What I have going on with my artists in Twilight is fairly similar, as I have some very specific characters and character designs in some artwork, but many are donating the pieces w/ only right to print extended to me, not full.
What I have worked out with them is the ability to use any piece themselves: postcards, shirts, prints, compilations, etc.
In the case of pieces with my characters, those rights cannot be extended to others. The generic pieces, without my characters though may be used however the artist wishes, including selling print rights to other publishers.
Such a deal doesn't work out too badly. My artists don't feel gyped on the pieces they're donating, they have the freedom to accept which pieces they wish to work on (so they can create a lot of generic work if they want or go specific), and I end up with my pieces and my interests intact.

[jdagna]

OK, I've done a little more work on this.  First, I found a contract posted by a POD publisher that would make an excellent publisher/author agreement with only a little modification.  It's located at: http://www.sirius-books.com/epex-contract.html

Now, it does grant exclusive publishing rights (but only for a year), and you could easily make that non-exclusive.  Likewise, the payment sections could be changed to reflect whatever agreement the author/publisher had on that topic.

And, as mentioned in Tav's post, just about any standard contract could be used for that portion.

The IP issue is still the trickiest one and I haven't found a good license to mimic, so I'm going to outline it here...  The IPHolder is the originator of the material in question and the Author is the person creating some new derivative work.

Section 1: Declarations
IP Holder: specify a list of published works and trademarks.  If other unpublished IP needs to be specified, they can be named piece by piece.
Author: you could specify that anyone not covered in the first part is the author's IP... however, I think that's going to create too much room for debate if that's all you do.  The author should add a list characters, things, concepts, places and plots that are specifically his, with the assertion that anything not specifically listed by him is his if not contained in the .

Section 2: Permissions, Payments and Limitations
IP Holder: grants author some or all of the following
- right to use the IP in question
- right to use IP and/or IP Holder's name in marketing and promotion
- right to assign his rights in the contract to another entity (and/or a default assignment in case of death or whatever)


Author: grants IP Holder some or all of the following:
- right to use author's IP in further derivative works
- right to allow others to use the author's IP in further derivative works
- right to use Author's name or IP in marketing and promotions
- right to assign his rights in the contract to another entity (and/or a default assignment in case of death or whatever)

Presumably, Author may not license his derivative work without also obtaining IP Holder's permission and vice versa, though you could grant rights to do that.  Additionally, each item of rights could be given to some IP items and not to others.  For example, the Author might give the IP Holder rights to use some characters in derivative works, but not others.

Payment would be worked out as agreed between the two.

Section 3: Indemnification
IP Holder asserts that he owns all rights to his IP and is not violating any laws in licensing it.
Author asserts the same about his derivative work.
Neither party is legally/financially liable for misconduct by the other in these regards.
In the case of a copyright violation of Author's work, IP Holder may choose to pursue it legally at his cost, but is not obligated to do so.  Author may choose to puruse it at his cost, either separately from or jointly with IP Holder, but is not obligated to do so.

Section 4: Term and Termination
This section would have to depend a lot on the individuals.  You should probably state that rights last indefinitely, passing along to heis and assigns and all that good stuff.  All you can cancel is someone's ability to continue deriving new works.  

The only other option I see cancels the Author's license from IP Holder, which leaves him with an unusable work, since he no longer owns enough of it to do anything with it.  IP Holder loses rights to derive from the Author's work (if he ever had that right), but he retains his original IP.  Actually, I don't have a problem with that, but I'm one of those barbarians who's not entirely against work for hire either. :) Suggestions here would be appreciated.

Section 5: Misc Legal Stuff
This would be stuff like which state/country's courts have jurisdiction over disputes (or arbitation/mediation), and the disclaimer that if any section of the contract is found to be invalid, the rest still stands, and so on.

So... any thoughts?  Am I missing something?

[Tav_Behemoth]

Rock on, Justin! Glad you're running with this ball. Here's the part that stands out for me right now; others may occur to me as I actually start gearing up to write a similar contract for Behemoth3, stealing from your prior effort all the way :)

The only other option I see cancels the Author's license from IP Holder, which leaves him with an unusable work, since he no longer owns enough of it to do anything with it.  IP Holder loses rights to derive from the Author's work (if he ever had that right), but he retains his original IP.  Actually, I don't have a problem with that, but I'm one of those barbarians who's not entirely against work for hire either. :)

If you're precise and specific enough about the IP designation, the author should be able to do a search-and-replace & be able to re-market the work they did for you in a "generic" form. For example, I've written short stories as book proposals for Wizards of the Coast, and then shopped them around to fiction magazines after changing "Specific-Fantasy-World-God" to "Real-World-God-that-Fantasy-God-is-Based-On" and so forth. If you check out the things that Wizards has designated as their intellectual property, they're very specific phrases that have no prior meaning outside of D&D and can be successfully defended as belonging to their brand.

Your world (with which I admit unfamiliarity) would have to be extremely unique for the basic text of a novel set there not to be re-usable in this way.

[jdagna]

If you're precise and specific enough about the IP designation, the author should be able to do a search-and-replace & be able to re-market the work they did for you in a "generic" form. For example, I've written short stories as book proposals for Wizards of the Coast, and then shopped them around to fiction magazines after changing "Specific-Fantasy-World-God" to "Real-World-God-that-Fantasy-God-is-Based-On" and so forth. If you check out the things that Wizards has designated as their intellectual property, they're very specific phrases that have no prior meaning outside of D&D and can be successfully defended as belonging to their brand.

Your world (with which I admit unfamiliarity) would have to be extremely unique for the basic text of a novel set there not to be re-usable in this way.

That is true, and I think even stories written in my game world could be converted to something more generic, though perhaps with a little more work, since it has some fairly specific races and magic concepts.  I tend to see the IP extending somewhat beyond specific terms/names to the concepts behind them, though I'm certainly no lawyer (and from what I hear, no lawyer could make a statement about that with 100% certainty anyway).  And Lord knows I've filed off a few serial numbers on concepts I use in the setting.

But the important thing is that a clause like the one I was thinking of wouldn't entirely screw the author of the derivative work if the contract were terminated.

[daMoose_Neo]

Is it possible to copyright/trademark "Scenario"? I know specific names, images and general identities are protectable, but I've noticed on several recent video games they're including "scenario" when listing their copy and trade protections.
If possible, that may be something to leave off of your IP Ownership request so that the author can then shop it around. You'd own names, characters, worlds, and general universe, the Author would own the Scenario upon which the book is based. Thus, one search and replace later and the Scenario has a new setting, characters, and they're mediums instead of wizards.

[madelf]

Perhaps I'm being dense... but what does the author really gain from all this convoluted back and forth licensing of IP?

If the author can't sell the derivitive work, or the new IP added to it, to someone else without the publisher's permission... then what's the point? What's the difference between that and a more traditional contract?

And so it's clear, I'm not trying to be confrontational here. I'm just trying to figure out what can balance the best results with the least complication. It's just that, so far, I don't see where this sheme does that.

What am I missing?

[jdagna]

Calvin, remember that there are two separate contract issues.

In the IP contract, the author gains the right to use the old IP in his new, derivative work.

In the publishing contract, the details of publishing are established independently from IP licensing.  What I'm doing is publishing the derivative works that use my IP, while letting the author hold onto the copyright.  So in that case, the author may not be getting a lot of extra stuff out of it.  (Although, the publishing contract I'm using only gives me publishing rights on  a yearly basis, renewed as long as we're happy.  If I stop publishing it, then...)

With the IP license and his own copyright in hand, the author could pursue any publishing arrangement he wants to.  He could publish it himself or find another publisher.  He could also give the print rights to one publisher, the audio book rights to another, and the e-book rights to a third publisher.  

The original IP contract could limit the author's options here, but it doesn't in the version I outlined, and I don't see much of a reason to do that.  The contract I outlined would let the author publish the work in question however he chose to... but extends the rights onto the work in question so that future works would need their own IP contract (which gives the IP Holder an opportunity to reject potentially undesirable uses).

And this does mean that if the IP Holder wants a royalty, it would need to be specified in the IP License, and be based on whatever the author gets paid.

[madelf]

Justin,

I understand the example includes two contracts. That's half of what doesn't make sense to me. Why would a single business transaction (and I'm seeing "You write a book for me expanding my current IP," as a single transaction) need two seperate contracts? It just sounds like a bad idea from the start. Why not nail everything down in one place?

Now if we're just identifying two issues, that I can see. But I don't see where they aren't issues covered by any type of contract with the right provisions plugged into it.

So the author needs a license from the publisher to use his IP. In what writing contract involving a pre-existing line would he not have to?
And if the publisher is holding onto the right to publish that IP (and likely any new derivitive IP too), then what does the author gain by holding the copyright? If he can't do anything with it without the publisher's permission, then what's the point of holding it?

Now even if (in your specific case) you're willing to let the author have the rights to publish something based on your "world" elsewhere (though I'm not sure that's a good idea no matter how generous you want to be*), it still seems like having two contracts is just making things more complex than necessary. And it's also a rare situation that a publisher would do that. Normally they're going to want to control the new IP as part of the larger scope of the "world" that's being developed, and I'm not sure this set-up works well at all for that (at best I think the contract would need a clause for expanding the list of IP items the publisher is licensing from the author in case the author comes up with something in the course of writing that the publisher would need to include in future, derivitive works. At worst I could see trying to pin down all those bits and pieces of IP in advance as a disaster waiting to happen).


*It might not be a terrible idea if you are viewing this book as simply a licensed "spin-off" of your IP (much like a comic writer licensing movie rights) which you do not intend to become a part of your own product line. But you'd still have the risk of being left out in the cold if the author came up with something cool that you really, really wanted to include in your game but it wasn't spelled out in the IP contract, and he decides (for whatever reason) that he doesn't want to license it to you after the fact. Then you've got people wondering why the game books don't let them do what was in the novel.
But it's mainly in the case of something like a setting book or such, as part of a product line, that I can't see such a setup working.


Still... (specifics clauses of specific peoples' planned projects aside) my main gripe is that this two-contract method just doesn't really sound like it does anything that couldn't be done by one contract. And also doesn't seem to really give the author anything that any other contract couldn't.

Or to phrase it another way, it seems to me like it's actually all about the specifics of the contract in the first place and (as I've said previously) it doesn't really matter what kind of contract you use. Just identify what rights each party gets and doesn't get, and be done with it.

But then I don't really have any vested interest in this thing at present anyway, so I think, having said my piece, I'll just bow out and let other people plan things out their own way.

[Tav_Behemoth]

Calvin,

Check out two parts of the SFWA reply:

3. A book, that is a novel, shouldn't be thought of as the work-for-hire doctrine. Such a posture may not pass Constitutional scrutiny (and seems essentially unfair).

4. Existing intellectual property law is entirely unsettled, with massive splits in decisions arising from different circuits regarding how characters and settings should be protected (or not) under copyright law, further complicated by fair use and parody. Basically, it's a mess and a moving target influenced far more by where a lawsuit might be filed than by substance.

In other words, existing approaches may not hold up in court (work for hire being a very specific loophole that might not be held to apply to novels or game books), or may not afford the protection you want them to (even if you as publisher hold the copyright, this might not prevent the author from publishing a work using your setting and characters).

This would imply that using a separate contract for IP could actually give you better protection & control than having one contract try to do it all. And it's simpler in that you can use an off-the-shelf contract, like the SFWA model contract or the one Justin mentioned above, to handle the "you write a book for me" half of things. Trying to take a standard contract, especially a work-for-hire contract, and then modify it to cover the other half of things -- "you get to use existing IP and create new IP, both of which belong to the publisher" -- seems to me to be much more complicated and tricky.

[madelf]

Novels and game books are two very different critters. Even so, the legal terminology that says what is and isn't work for hire is pretty straightforward. If work for hire can hold up in court at all, then I'm confident that it will hold up for these particular applications as well.

There have been publishers (though I don't know if there still are or not) who have employed writers to work, on site, cranking out novels for a salary. If that isn't work for hire, I don't know what is. Add to that the  lack of any legal requirement that work for hire has to take place on-site, and I think there's plenty of precedence for the work for hire novel.
I have seen websites that claim a novel can "never" be work for hire because it doesn't fall into one of the valid catagories, but I think that's hogwash. I believe, at the least, a novel intended as part of an on-going series would qualify as "a contribution to a collective work" (the collective work being the series of books - it's really no different than a magazine at that point). Based on the "contribution to a collective work" model, I think most game books fall easily within the allowed scope of work for hire, as well.

The big place where these have potential to fall apart is that work for hire cannot apply to a pre-existing work. A publisher cannot buy your existing manuscript as work for hire, they can only do it with works they have specifically commissioned you, in advance, to do as a made-to-order piece of writing.

And at the very worst it would just fall back on the long stinky court battle won by the one with the highest priced lawyers, just like any other legal battle - especially those involving IP. Likewise, if owning the copyright on a piece of work doesn't prevent someone else from publishing that work, then there's a whole lot more breaking down than any specific contractual design.

But all that aside, work for hire isn't really the issue being addressed at this point. It's certainly not a case of either work for hire or this set of contracts. We could use a typical "all rights" (or whatever rights) contract instead of work for hire and have the same debate.

Perhaps "more tricky" is in the eye of the beholder. I guess I just don't like the idea of having the terms of an agreement spread over more than one document (Even if somebody wanted to use boiler plate contracts -such as the SFWA one-, why not just paste in an additional section to handle dividing up the IP?), and I honestly don't see how you're not outlining the exact same things, no matter the number of contracts you use to do it, or how convoluted you want to make the passing back and forth of licenses.

[jdagna]

Ugh!  I had this long post written out and then I hit the back button and lost it.

Anyway, a response to Calvin's questions:

Why two contracts?
First, it's important to note that there's no reason why you have to have two contracts - you could put all the issues into one big one.

However, there are some good reasons.
1) Long contracts scare people.  None of us are really legal experts and most people who see a long contract tend to assume you're doing that to hide something in the fine print.  I've seen it in apartment leasing.  If you give a person a 4-page lease with all the apartment rules in it, they get nervous and question every item.  If you give them a 2-page lease with 1 page of general rules and 1 page of pool rules, they happily sign everything without feeling threatened.  Same legal effect, but much friendlier.
2) Re-usability.  For publishing, I have some people I'll have print rights only with, some I'll have electronic rights only and some I'll both print and electronic rights.  Two separate contracts make sense, and the people with print and PDF rights can just sign both.  This way I don't have to customize each and every contract, and I don't have to bloat up one giant contract with stuff not everyone needs.
3) Re-usability, part 2.  My artists have one main contract that defines what rights they give me and which they retain when they do work for me (about 3 pages).  To that, I add a second contract for each specific batch of work, specifying the type of art, the description and the price (1 page). This way, I don't have to do a full four-page contract everytime someone does something for me or everytime we set a new price - we just keep adding 1 pagers to the main contract.
4) Renewals.  Let's say you have a combined publishing/IP contract, and you want to change the publishing terms or rights to include, say, audio books.  You have to cancel the old contract and start a new one.  This isn't a huge inconvenience except that psychologically, people tend to think "Ah, a new contract.  Everything is negotiable again."  I've seen it happen more than once - some people try to dicker for new advantages every time they sign something.  (That's why our apartment complex uses leases that automatically renew into a month to month - if people have to sign a new one every year, they always want money off their rent, but if it just automatically continues on, they'll be perfectly happy for years without anything.)

Why let the author use a separate publisher?
This whole issue about author's rights started when someone asked why a commercially viable product had to sit around collecting dust because the publisher (who owned the rights) didn't want to reprint it.  Even if the initial author/IP Holder agreement gave the publishing rights to the IP Holder, having those rights expire independently of the IP license would let the author keep his own book in print even after the publisher lost interest.  

This may not be viable for all projects, but remember that we're working on a very generic contract here.  In my personal case, it makes sense.  The author is working on a novel set in my universe.  Even if I go out of business or stop publishing my game, the novel may be commercially viable all by itself.

Keep in mind that all of the open licenses out there, including d20, let authors publish through anyone they choose (and without even giving the open system's owner a say in content), and that hasn't been a problem.  You're right that you may not want to allow publishing rights for certain kinds of products, though.  Personally, I would not allow anyone to write a core game supplement without making it a work for hire situation where I can claim the copyright for their work - period.  Campaigns, novels, expansions and such would all be fine, but not something that I can't live without (in fact, my product line distinguishes those things as "supplements" as opposed to "campaigns" or "companions").  This is part of why my contract outline keeps specifying that you don't have to give all of the rights that you might.

What about new IP by the author that comes about during writing (after signing the IP license)?
If you look at my outline for the IP license, it grants the author default rights - basically it says "Anything not in the publisher's list is the author's."  The reason for listing the author's IP items is adding a second layer of protection - the IP Holder has specifically acknowledged those items and can't later come up with arguments to claim that they're his.  

If you'd like an example of why this double-layer of protection is useful, I can give you one.  

In any event, you could always initiate a new IP license to include new items  (and having this separate from the publishing contract saves paper if nothing else).

[madelf]

Those are a lot of good points, Justin.
I'm afraid (other than points of personal preference) you're really not leaving me much to argue with.

Nice job.