Interview with Steve Gillen
Recorded at Textbook & Academic Authors Association 2016 Conference
For podcast release Monday, July 11, 2016
KENNEALLY: Whereas Steve Gillen has seen his share and more of book contracts, therefore he is highly qualified to share his views on the ways authors should approach negotiations and what they should look out for in the fine print they find there.
Welcome to Copyright Clearance Center’s podcast series. I’m Christopher Kenneally for Beyond the Book. Over his career advising clients in a wide variety of publishing and entertainment transactions and disputes, Steve Gillen has explored the dark corners of contractual law and sheds light on what he finds there in a new publication from the Textbook and Academic Authors Association, Guide to Textbook Publishing Contracts. He joins me now in San Antonio, Texas, where TAA is holding its annual conference. Welcome to Beyond the Book, Steve.
GILLEN: Thanks, Chris. Thanks for inviting me.
KENNEALLY: We’re looking forward to chatting with you, because contracts are about copyright, and we’re about copyright at Copyright Clearance Center. Let’s tell people just a little bit about your background and about TAA. Steve Gillen teaches electronic media law at the University of Cincinnati College Conservatory of Music. He worked for nearly 20 years in publishing prior to entering private legal practice in the middle 1990s. He is presently a partner at Wood Herron & Evans, a 145-year-old Cincinnati law firm focused on intellectual property.
The Textbook and Academic Authors Association, TAA, provides professional development resources, events, and networking opportunities for textbook authors and authors of scholarly journal articles and books. TAA is the only national nonprofit membership association dedicated solely to assisting these authors. Steve Gillen is a long-time member of the TAA council, and this book is available, Steve, from the TAA website. We’ll link to it from our own page on beyondthebook.com.
Let’s talk about some of the key messages here. I suppose one important message you set out at first is one that most authors probably will say, well, is he serious? The message you have is you’ve got more leverage than you think you have. But there’s a caveat – you have to do your homework.
GILLEN: That’s right, Chris. I think authors don’t appreciate the fact that a typical educational publisher, the typical cycle for their product is anywhere from two to perhaps five years. What that means is that sales drop off precipitously after the first or second year. So for most publishers, they have every year a 20-30% hole in their top-line revenue that they have to fill year after year after year. That’s not an easy thing to do. They fill it with new books and they fill it with revisions of existing books. But it’s a constant pressure on the editors as a consequence of that to sign new titles.
For an author who’s been approached by an editor with an offer of a contract for a book proposal that they submitted, they’ve already made the first cut. By the time that the editor gets to the point of making that offer or that invitation, they’ve already got considerable time and considerable effort invested in the process. They may have had the proposal reviewed. They’ve had it considered internally by a committee, perhaps, or by a superior at the publishing company. They have worked up a pro forma profit and loss statement for it. They have submitted it for approval by a publishing committee, perhaps, or by a superior. Then they’ve come back to the author. At this point, they’ve got, as I say, a bit of effort and quite a bit of time invested in the process. If they don’t end up signing the author that they have spent all this time on, they’re back to square one. If it’s late in the year, they may not have an opportunity to recover from that.
KENNEALLY: I certainly know, Steve, that for journalists who see a book contract, they say, where’s a pen? They want to sign right away. It’s something they’ve dreamed about since they were kids, practically – certainly in school. Is it the same for textbook and academic authors? Are they just in a rush to sign?
GILLEN: They’re absolutely in a rush to sign. They fall all over themselves most of the time. And I think that’s because they just don’t appreciate how much leverage they have.
KENNEALLY: But the point there – the caveat, as we said – is to do your homework. Obviously one way to do your homework is to read the book that Steve’s put together here. But talk about what you mean there. Is there a certain way of thinking that they should approach all those contracts with?
GILLEN: Absolutely. You can have leverage, but it’s not going to do you any good if you don’t know what has value to you. If it’s money that is the primary driver – if this is all about royalties and advances and grants – then that’s where you need to focus your efforts. But it may not be about money for a lot of textbook authors. Some of them – they’re at universities where publishing a textbook, particularly a market-leading textbook, would be considered in advancement and promotion and tenure considerations. If that’s the case, if this is a publication that they need for promotion or for tenure, then the focus ought to be not so much money, perhaps, but making sure that the book actually sees the light of day. So your attention is going to be focused on things like the manuscript acceptability clause and making sure that you maintain as much control over the content and the message that the book ends up delivering as is possible.
Alternatively, if the faculty member is also a professional that derives a significant amount of business from a consulting practice, they’re going to want to make sure that the non-compete in the publishing contract does not unreasonably constrain their ability to engage in the other kinds of things that they do, and they’re going to want that book to be representative of their professional capabilities and to serve as a good marketing piece for them.
KENNEALLY: So really they want to go in looking at the whole picture, thinking about their career, not just the specific book. But the other thing they need to be thinking about is, as you say, what’s important to them. So there really is no single solution. There’s no super formula that gets them the contract that they want. All those elements you spoke about – the royalties and the manuscript acceptability and so forth on and so on – those are all key elements in the contract. Before we talk about some of them particularly, let’s talk about a negotiating strategy. I guess, again, the idea that they can negotiate may be something that certainly it’s empowering, but it may surprise some of these authors.
GILLEN: Yes, I think it surprises most of them. But it needn’t, as I’ve explained. The other thing that they need to understand is that the publishing contract has been drafted, in all likelihood, by lawyers representing the publisher. It was the publisher paying their fee, and it was the publisher’s interest that they were protecting. So at every turn in the contract where there’s an opportunity to draft a provision that favors the publisher, that’s exactly what they’ve done. Part of the responsibility of the author, really, to themselves is to be sure that they understand where that’s what’s happened and push back on that, because as often as not, the publishers have asked for things that go beyond what they actually need or ever intend to use.
KENNEALLY: That’s really about these kind of all-rights contracts or rights that are taken throughout perpetuity and in all universes. So really I think the point you make in the book is that the author should ask the publisher exactly what they mean when they are going to acquire this right. What are they going to do with that right?
GILLEN: Right. When it comes to intellectual property, intangible property, it’s not a zero-sum game. There are many opportunities to exploit a work, many different ways to exploit it. And the publisher, perhaps out of laziness, perhaps out of conservatism – unwarranted conservatism – they’ll ask for the sun, the moon, and the stars throughout the universe, as you suggest, with no intent of ever exploiting a lot of those rights. It’s not reasonable for them – I think maybe they don’t appreciate that it costs something to ask for rights that they don’t intend to exploit, but they do that anyway.
So it’s certainly reasonable to push back and say, look, tell me about your publishing plan. Do you intend to do a French translation? Do you intend to do a digital version of this book? Do you intend to do an audiovisual version of this book? And if you don’t, then you don’t need to hold those rights.
Now, you need at the same time to be realistic about this as an author. If the rights that you’re negotiating over to hold back to yourself – if those are rights that you’re not in a position or don’t have any interest in exploiting, then they don’t have a lot of value to you, either. So while you might make the point, and you might use that as a bargaining chip for something else that you really do want, it’s not necessarily something to fall on your sword over.
KENNEALLY: You brought up non-competes. I’m interested in that topic, because it’s an area where a lot of professionals are pushing back these days. How do you suggest that an author try to make that non-compete as favorable to them as possible?
GILLEN: One negotiating strategy is to say, OK, I will as an author agree to a non-compete, but I’d like you to agree to a non-compete as well, Mr. Publisher or Mrs. Publisher. I’d like you to agree not to sign any books that would compete with mine. Now, they’re not going to like that idea, and they will never, probably, agree to it unless you have an extraordinary amount of leverage. But it sets the stage for perhaps softening the non-compete that they have proposed initially, which will say something like you agree not to write another book or assist in the writing of another book or allow your name to be used in association with another book or another work that might tend to compete with this book as we decide in our sole discretion. What might be more reasonable is to say that you would agree not to do another book-length work in printed form at a particular curricular level that would tend to materially interfere with the sale of your work. There’s an objective standard of interference and materiality standard, and you’ve specified the curricular level and so on.
KENNEALLY: I think that point about being specific, as specific as you can be, is really the important point there. We’re speaking right now with Steve Gillen, who is the author of a book just published by the Textbook and Academic Authors Association, which is a Guide to Textbook Publishing Contracts. Not surprisingly, Steve, you bring up copyright in the book – copyright and the reversion of rights to publish. Talk about whether or not an author should expect to hold copyright, and if not, what that would mean, and then we’ll get into the subject of reversions.
GILLEN: I think as a practical matter that given the rights that the author grants, it isn’t particularly important who nominally holds the copyright. It’s the grant of rights that really is going to be determinant, because that’s an exclusive grant. If you nominally hold the copyright, but you’ve granted all rights to the publisher, you basically have nothing but a certificate that happens to have your name on it instead of theirs, but doesn’t convey to you any rights that have any particular value. There are at the edges, at the margins, perhaps, some advantages if there is a dispute in holding the copyright even nominally. But I don’t know that you ought to trade a lot of your leverage for that advantage.
In terms of reversion, that used to be easy. The publishing contract memorializes a relationship between an author on the one hand, who contributes a manuscript, and a publisher on the other hand, who finances the development of that publication and handles the printing and distribution and so on, invests financially in the book.
What the author gets from that is a contract right to receive royalties, typically. But that’s a share of the proceeds realized by the publisher. If the publisher never makes any effort with the book, then obviously there are no proceeds. The author has already done all of his or her work and invested a significant amount of time and effort in getting to that point, but may never realize any benefit from that if the publisher isn’t reasonably aggressive in exploiting the rights in the marketplace.
That may happen initially. At some point over the life of a book, the publisher may lose its enthusiasm or the market may diminish for that book. In times past, when we were dealing primarily with printed and bound books that had some heft and took up some physical space, you could take some assurance as an author that if the publisher was maintaining an inventory in a warehouse and paying for it that they were going to continue to invest some effort in commercializing that book. Nowadays, the work can be maintained electronically. It doesn’t take any space. It doesn’t cost anything. There aren’t printing and manufacturing costs. So a publisher has no real cost in holding onto a book indefinitely, tying up the rights to the book and depriving the author of other opportunities to benefit from it.
The old nomenclature of out of stock, out of print doesn’t really make sense anymore, because if it’s available for sale when an order’s received, that doesn’t provide much assurance to the author that the rights are still being exploited as aggressively as they ought to be. So instead of the reversion language that we used to see, where out of print was the driver and the publisher was the decider, we need some other way of measuring the publisher’s continuing investment in the book. Typically that’s some minimum threshold of sales or royalties generated over a number of consecutive royalty periods.
KENNEALLY: Finally, Steve Gillen, I wonder if you can talk about a point that comes out of that, which is this digitization of publishing. In the digital world we live in, now we have this virtual stock, not the physical stock. That’s changed publishing a great deal. It’s also changed the relationship that authors and publishers have with each other. Any thoughts about that as you look at textbook publishing in the future?
GILLEN: I think that everybody is nervous about it. I don’t think the markets have settled yet. We don’t have the same sort of uniform platform that they have in trade publishing with the Kindle and other very popular devices. The educational publishers tend to be much more proprietary about the learning systems that they are using, and so an integrated learning system from Cengage won’t necessarily work with a Pearson or a McGraw-Hill book. I think that everybody is anticipating that digital works will eventually take over the market, as they have in trade book publishing and in music publishing, but we’re not there yet, I don’t think.
KENNEALLY: In fact, it seems to be happening more slowly than people anticipated it would.
GILLEN: That’s right. But that doesn’t keep everybody from worrying about it, and I think the publishers are, as a consequence, more aggressive in maintaining maximum flexibility to deal with digital works as the market and the business models develop in ways that may not be readily apparent to them, and authors are worried simultaneously about giving up too much before they really understand how the market is going to develop.
KENNEALLY: Well, as the market develops, as the technologies change and evolve, we’ll look to Steve Gillen and TAA for updates to this book. But in the meantime, you can get a new copy of the book Guide to Textbook Publishing Contracts, written by Steve Gillen, who is an attorney at the Cincinnati law firm of Wood Herron & Evans and also a long-time member of the TAA council. He’s here in San Antonio, Texas, for the annual TAA conference. Steve, nice to see you and nice to chat with you.
GILLEN: Thanks, Chris. Good to see you as always.
KENNEALLY: Beyond the Book is produced by Copyright Clearance Center. With its subsidiaries RightsDirect in the Netherlands and Ixxus in the United Kingdom, CCC is a global leader in content workflow, document delivery, text and data mining, and rights licensing technology. You can follow Beyond the Book on Twitter, like us on Facebook, and subscribe to the free podcast series on iTunes or at our website, beyondthebook.com.
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