Copyright and Contract Law in International Publishing

An abridged version of this post was published on December 9, 2019 at 

It is a truism that publishing is an international business, and the Frankfurt Buchmesse itself, held this past October, is a strong indication of this global dimension, with separate halls for different countries and international stands, presentations going on simultaneously in German and English (and no doubt several other languages) throughout the conference areas. One book and one author can have enormous influence and engender demand in many countries—and the chance to bring out an important book for a local domestic market that was originally written in a different language and published in another country can be an important market opportunity, one which publishers and translators will be working hard at during this bookfair.

In my prior career at a major science publisher the market was truly the entire world of scientific researchers and academics, most of whom are able to navigate in English (naturally there are also important scholarly materials published in German, French, Spanish and Mandarin, but English does have broad currency in science). On the legal side, we know that the laws of copyright and contracts are ultimately local and national, notwithstanding the intended normative effect of international intellectual property treaties. If we are dealing with authors, publishers and distributors in different countries, there are important legal questions about which law governs these relationships—and copyright enforcement brings even different questions (is an infringement in one country necessarily an infringement in another?). Collective licensing through the collecting or rights societies such as VG Wort in Germany, the CLA in the UK, and the CCC in the US, can also operate quite differently and with differing sets of rights and markets.

How can publishers navigate the differences in national laws while trying to manage an international business? What rights and permissions are they actually acquiring through contract and their negotiations, or through collective licensing arrangements, and what rights can they use or enforce in local markets, particularly where author and publisher reside and rely on different countries and legal traditions? This article suggests some general approaches and considerations, but does not and cannot substitute for specialized legal advice for either authors or publishers in particular markets.

Copyright laws governing the scope of protection for authors such as the minimum duration of rights are largely normalized in the international treaties, including the Berne Treaty, the WIPO Copyright Treaty of 1996, and the TRIPS standards. However these treaties are silent about the nature of the contractual rights that can be negotiated between authors and publishers, and ultimately with distributors and other agents—and there are no international contract treaties (although some treaties touch on contractual issues in passing and the EU does have some EU-wide contract regulations). Authors of literary works are clearly protected under copyright and authors’ rights regimes, whereas there are significant national variations concerning protections for performers and film creators (neighboring rights principles are sometimes used instead of copyright).

Authors in certain countries such as Germany and France often cannot fully transfer copyright interests to publishers, although they often can provide exclusive commercial licenses. Some author’s rights countries even require certain contractual provisions or elements be included in publishing contracts. As Lindner and Nordemann note in “Cross-Border Copyright Licensing” (published by Elgar in 2018 and edited by Scollo Lavizzari and Viljoen), some of these copyright contract rules “have … been adopted with a view to protecting the author as a party with a weaker bargaining position…”(Section 2.17). Such laws also often require significant detail and specification of rights granted, and do not permit sweeping statements that we may be more used to in the US/UK copyright tradition such as “all rights in all languages and media throughout the world”. It might be difficult, for example, for a German author to transfer a new and unknown usage right. The ability to bring a copyright infringement case may in some countries require some degree of approval or participation by authors even if enforcement rights have been assigned to publishers (see the discussion in footnote 104 in the Lindner/Nordemann chapter).

The recent 2019 European copyright directive, the Digital Single Market, is meant (in part) to reinforce the importance and centrality of the author, journalist and artist when dealing with technology platforms, and some may view this as widening the gap between Europe and more market-oriented IP regimes such as the US, where the technology-focused industries are more influential in business media coverage and the stock markets, and thus often have an outsized impact in government interactions and advocacy. The DSM also places EU-wide requirements for greater transparency in author-publisher contracts, particularly around issues such as royalty statements and remuneration from collective license arrangements. These very specific requirements may not represent a significant departure for German publishers, as to some extent these obligations are based on previous German copyright-contract laws, but will require review and possible contract adjustments by other publishers.

Freedom of contract principles, which predominate in market-oriented countries, suggest that authors and publishers are generally free to negotiate and to waive terms and conditions, limited only by the limits of imagination. The laws of certain author’s rights countries however do require certain provisions and note that some rights cannot be waived. Contract parties are also generally free to agree to adopt the laws of a particular country to govern the interpretation of their contract (“governing law” clauses), and there are often provisions utilized by courts in determining governing law when this is not explicitly chosen in a particular contract. Such “default” governing law provisions often look to the location of the parties, the country in which the transfer or contract is negotiated or effective, or the country in which the underlying “performance” of the contract. In an author-publisher contract, however, regardless of where the publisher is located, a significant amount of performance on the part of the author will be conducted in the country where the author is located. This is made more complicated of course when a work has multiple authors in multiple countries.

Given this legal diversity, how can publishers organize their contract negotiations and considerations of local legal variations?  Certainly one approach can be to simply insist that the law of the country where the publisher is located must govern the publishing contract, in part on the theory that the author (if that author is located in a different country) is knowingly reaching out to a publisher in a different legal environment, and in part on the theory that, characteristically, the publisher is engaging in almost all of the “post-creation” activities particularly around distribution, and therefore understandably relies on their own local laws concerning these core commercial issues. If challenged in a court case, however, a court in a country with strong protective traditions around author’s right issues may not agree that local laws may be discounted completely. Another approach might be to accept that governing law will always reside with the author, which will require some significant business flexibility if for example further distribution rights or royalty provisions are inconsistent.

In my view, distinguishing between the differing stages of the work on a book could be helpful in looking at the applicable law issue. Putting aside the work-for-hire contractor scenario where a writer has been hired to create a specific section of an overall book, the creative aspects for most fiction and many non-fiction works in trade publishing are initiated by an author who is resident in a particular country, and often well before that author has considered whether they might negotiate a contract with a publisher in another country with a very different legal tradition. The author will be relying on their local tradition in thinking about the rights they have in their work and how those rights can be negotiated, often bolstered by advice and guidance from local authors groups and organizations, including collective organizations. It seems reasonable to me that in such circumstances, local copyright laws regarding core authorship questions (what qualifies as authorship, the inherent rights and duration of those rights) are or should be recognized as broadly applicable.

It seems to me, however, that when that author (or perhaps an agent on their behalf) has decided to negotiate with a publisher in a different country with a different legal tradition, they can be viewed as entering into a transaction that likely will be viewed under the relevant legal conditions of the publisher, including such matters as distribution, sub-licensing and enforcement. Therefore I’d suggest we look at applicable law issues in a “bifurcated” fashion, and consider that any adjustments required for full distribution or enforcement in a given country be understood as enabling an adjustment in the consideration of applicable laws.

This is a simplistic approach, and there are difficult nuances with respect to the rights being transferred or licensed to a publisher—after all an author may say that the author cannot transfer rights that they do not have or that cannot be transferred by contract.  Nonetheless I think it would be fair to assume that in an international negotiation the parties would want to give each other the benefit of the bargain, and that an author would want the publisher to have a strong position in the distribution and marketing of the work. This would suggest that the law of the country in which the publisher resides should broadly govern questions about distribution. Perhaps this could be understood as a transfer of rights or an exclusive license to the maximum extent permissible under any contrary governing law, with the burden of interpretation and default principles switching to the publisher’s venue after the execution of the underlying author-publisher contract.

This approach is not as radical as it might appear at first glance—in the absence of explicit governing law provisions, a court would have to provide a substitute legal framework, and would likely look to those questions noted above regarding performance of the contract—in which event the question about whether the dispute is around authorship or around distribution might rightfully be regarded as “performance”.

Whether this bifurcated approach is used or not by publishers, it is critical for publishers to review and consider which venues and laws would be relevant for their publishing contracts, which would be relevant for their authors, what would make sense for their down-stream licensees, and what possible conflicts or paths of divergence might exist—ultimately an assessment of the uncertainty and risk. It might very well be that there could be substantive differences which have only a modest business impact—so if a royalty statement has to be re-designed to reflect clearer accounting of collective licensing revenue, for example, perhaps that could be done in the context of a refresh of the entire royalty system, and done in a way that would not require costly changes. There are other possibilities as well, for example greater harmonization through treaties or treaty amendments, where a broad spectrum of stakeholder views could be adequately taken into consideration.