ManagingIntellectual Propertyin the Book Publishing IndustryA business-oriented information bookletCreative industries – Booklet No. 1

ManagingIntellectual Propertyin the Book Publishing IndustryA business-oriented information bookletCreative industries – Booklet No. 1

Managing Intellectual Propertyin the Book Publishing Industry

Managing Intellectual Property in the Book Publishing Industry3TA B L E O F C O N T E N T SPREFACE5INTRODUCTION7SECTION A11Basic Notions of Copyright and other Relevant Rightsin the Book Publishing IndustryCopyrightWhat is copyright?What rights does copyright provide?Who owns copyright?How long does copyright last?Are some works free of copyright?Does copyright protect titles, names and l Information and Trade Secrets28Further Business and Legal Considerations28SECTION B30The Book Publishing Value ChainPublishing Across the Digital Landscape3036SECTION C38Publishers’ Responsibilities in Negotiating AgreementsC.i. Managing Primary RightsGrant of rights and specificationCommissioned worksDelivery and publication datesAcceptabilityWarranties and indemnitiesPayments to authors and other creatorsOther publisher issuesTerminationConcluding an agreement3839394041424343454546

Managing Intellectual Property in the Book Publishing Industry4C.ii. Managing Secondary and Third-Party RightsOperating a secure permissions systemText excerptsIllustrations and web contentDrawn artworkPhotographsFine artPicture acknowledgementsWeb contentConclusionC.iii. Managing Subsidiary Rights4747485050515252525353SECTION D58The Collective Administration of Rights58SECTION E62Business Models: Payment to Authors, Permissions and Subsidary RightsE.i . Payment to AuthorsFee-based paymentRoyalty paymentE.ii. PermissionsText materialE.iii. Subsidiary RightsText extractsIllustrationsAdaptations and exploitations62626365696971767778SECTION F81Copyright Compliance81SECTION G84Conclusion84

Managing Intellectual Property in the Book Publishing Industry5P R E FAC EThe World Intellectual Property Organization (WIPO) is pleased to present thisintroductory guide for publishers who wish to increase their understanding of howto manage intellectual property rights in a business context. The book offerspractical information to help publishers both to exploit intellectual property rightsas economic assets, and to avoid infringing the rights of others. While focusingprimarily on publishers of trade books, the concepts covered are equally relevantto publishers of other printed literature, such as textbooks, newspapers,magazines and corporate literature.The authors begin by introducing basic notions of intellectual property, drawing onexamples from the publishing world, before focusing more closely on the bundleof rights covered by copyright. The legal relationships inherent in these rights areconsidered in relation to each of the different stages of the economic value chainof book publishing, from creation to consumption.The second part of the book covers the negotiation of copyright-based contractsand licenses. This starts with the primary or “head” contract between an authorand publisher; followed by the authorizations required to incorporate other copyrightmaterial, such as images or excerpts, into a publication; through to the licensing ofsubsidiary rights for the purposes of creating, for example, a film or merchandizingbased on the original publication. In the final chapters, the authors present a seriesof concrete business models. They offer practical guidance on the nitty-gritty of how tocalculate royalty and other payments, including a number of illustrative payment scales.The information is based on conventional practices of publishing houses and doesnot seek to cover all business models of publishing. In particular, a detaileddiscussion of the complex issues relating to digital and electronic publishing liesoutside the scope of the current publication.

Managing Intellectual Property in the Book Publishing Industry6The guide sets out broad principles of intellectual property law in a non-prescriptivemanner. These descriptions should not, however, be understood as legal statementswith universal value, nor should the guide be used as a substitute for professionaladvice on specific legal issues or on national copyright legislation.1This is the first publication in WIPO’s Creative Industries series. It was written bytwo experienced publishers, Ms. Monica Seeber, Consultant, The Academic andNon-Fiction Authors’ Association of South Africa (ANFASA), South Africa, andMr. Richard Balkwill, Consultant, Centre for International Publishing Studies, OxfordBrookes, and Associate, Rightscom, United Kingdom. The International PublishersAssociation (IPA) also contributed valuable input.1Publishers should consult their local authorities and national legislation for detailed information and advice ontroublesome matters. National publishers’ association should also be a good source of advice.

Managing Intellectual Property in the Book Publishing Industry7INTRODUCTIONAt the heart of the book publishing industry lies the ability of a publisher to selector commission content that the reading public will be ready to purchase, which willsatisfy their interests in a variety of thematic areas. Book publishers produce thiscontent in print and/or in other formats (electronic versions of books, periodicals,websites, blogs, etc.) and use sales and marketing skills to sell this content to readers.Book publishers are creators, acquirers, custodians, and managers – owners and users –of intellectual property rights. They possess certain rights in the books they produceand sell, and they hold other rights on behalf of third parties. Their business involvesexploiting the rights of others, just as they equally seek to defend and protect what istheirs and what they have been entrusted to defend. Publishers therefore have aprofessional interest in exploiting these rights to the best advantage of their authors aswell as themselves. They are thus obliged to treat the rights of others with respect.This is a moral obligation, which is equivalent to their legal responsibilities. There is alsoa responsibility to society, for intellectual property rights are central to the promotion ofcultural advancement and the flow of knowledge and information.For any enterprise in the business of creating or using the products of the mind, apoorly-managed intellectual property portfolio can be detrimental to the success ofits business. For this reason it is essential for publishers to protect their company’sintellectual property assets, as they will in turn work for them and be their most vitaland valuable asset in the business of publishing books.The value of a publishing company is not calculated according to the land, propertyor equipment it owns, or even the books stacked in the warehouse. Its mostvaluable assets are those that will continue to generate income when thewarehouse shelves have long been emptied, namely the rights the company owns orcontrols. These include:

Managing Intellectual Property in the Book Publishing Industry8contracts with authors which grant the publisher the right to publishand sell their works;the titles in the publishing house catalogue and its backlist;the potential revenue streams from sub-licensing arrangements; andthe potential to publish for other and different readers through digital meanslike print-on-demand, or in digital format (i.e. by way of the Internet).Of all the intellectual property rights relevant to the book publishing industry,copyright remains the most significant. Typically, the first owner of copyright in anycreated work – a novel, a biography, a letter, a drawing, a photograph, a song, aconcerto – is the person who created it, (leaving aside national legislation whichgives the employer the copyright in an employee’s work created in the course ofemployment, and other cases). The publisher will have to enter into a legalrelationship with the creator – author/writer of a manuscript – in order to publish thework and issue copies of it in sufficient quantities to satisfy the needs of the public.The publisher does this by virtue of a contract in which the author either assignscopyright to the publisher or, more usually, grants to the publisher an exclusive, ornon-exclusive, license. There are, however, notable exceptions and these are coveredin more detail in Section C.i.There is no law that can protect an idea which has not yet been expressed. Hencecopyright does not protect ideas. The underlying principle of intellectual property lawis to protect and reward the products of the mind, but an idea has to be expressedin some form before it can be the subject of legal protection. Thus, the letter mustbe written; the landscape must be drawn, painted or photographed; the song mustbe taken down in musical notation or recorded before its creator can claim rightsover it.Books often contain more than one copyright: in the literary content (the text) andalso in different artistic works if it contains drawings, paintings or photographs. Eachone of these copyright works is the subject of a contractual agreement permitting itsreproduction and publication, and, where the publisher does not himself acquire therights contractually, he acquires a license to exploit them. He therefore needs agood understanding of the different types of contracts that cover all these rights.

Managing Intellectual Property in the Book Publishing Industry9It is imperative that the publisher understands that he is more than merely thepackager of information, bringing it from its creative source to the marketplace. Moreimportantly, the publisher gives substance, and adds value to the original creativework and is thus a vital link in the book value chain as we shall see in Section C.Yet many book publishers have a feeling of deep insecurity when it comes tointellectual property. They know that it is a crucial part of their business but they alsoknow that it is complex and has many pitfalls for the incautious. Nevertheless, thebook publisher must regard the intellectual property system as a significant businesstool to skillfully and strategically optimize his operations. Publishers shouldappreciate intellectual property since it underpins the entire structure of theknowledge and information industries of which publishing is just one part.Publishers must therefore be familiar with the way their country administersintellectual property and in particular its national copyright legislation. For example,while the general principles of copyright law are applicable worldwide, legislationvaries from country to country. Some common international regulation is necessaryto avoid conflict between different national laws and this is particularly so in theinformation age, with the blurring of boundaries and the explosive growth of transborder information dissemination.Hence the publisher must become acquainted with the basic notions of intellectualproperty law. This is because the publisher, in order to do business, needs toacquire from the author the exclusive rights of reproduction and distribution, whichare recognized at the international level by the Berne Convention for the Protectionof Literary and Artistic Works (the Berne Convention), and with regard to publishingin the digital environment, the WIPO Copyright Treaty (WCT)2.However regulation of the contract between author and publisher is left tonational legislation. While in some legal traditions there are few, if any, rules on theform and content of that legal relationship, other countries dispose of detailedlegislation on the formalities of the publishing contract and its content, as well as2For more information on the Berne Convention and the WCT please see

Managing Intellectual Property in the Book Publishing Industry10the rights and obligations of the parties and the way the contract ends. Furtherinformation on the basic notions of copyright and other relevant rights in the bookpublishing industry is provided in Section A below.

Managing Intellectual Property in the Book Publishing Industry11SECTION ABasic Notions of Copyright and other Relevant Rightsin the Book Publishing IndustryIntellectual property is a global overall term defining creations of the mind – inother words, ‘things’ that people create from their personal imagination: a story, awood carving, a song, a dance routine, or an invention. The collection of intellectualproperty laws, i.e. patent, trademark, and copyright law, are the commercial and legalframeworks that have been built around these creations.Without some fundamental understanding of how the system of intellectual propertyfunctions, publishers, as well as authors, will find maneuvering the corridors ofpublishing houses a significant challenge. This section thus provides an overview ofthe general principles of copyright and in a few words identifies other relevant rights,i.e. trademarks, confidential information/trade secrets, that may have an impact ona publishing business.Intellectual property laws enable authors and other rights owners to protect theircontributions and to control or license their use by others. For example, a writer mayallow a publishing company to use his work, but terms and payments need to bedefined, as do any limits on the extent of that use and on the duration of the license.Book publishers are usually licensees of other people’s works. Although they canacquire copyright from creators through an outright assignment, they may need tomake ‘publishing agreements’ (i.e. a license agreement) with a variety of rightsowners – writers, artists, designers, photographers, picture libraries, or otherpublishers. These assignments or licenses specify what the publisher can do anddefine any limits that have been set by each rights owner. Yet a publisher is not

Managing Int

good understanding of the different types of contracts that cover all these rights. Managing Intellectual Property in the Book Publishing Industry . 9 It is imperative that the publisher understands that he is more than merely the packager of information, bringing it from its creative source to the marketplace. More importantly, the publisher gives substance, and adds value to the original .