Season 1 Episode 9: Daniel Steven on Publishing Law

Derek: Good morning ladies and gentlemen and welcome back to another episode of Behind the Business Book. I’m your host Derek Lewis, and today I have with me an expert guest, Washington DC-based attorney Daniel Steven. He’s one of the country’s leading experts on intellectual property rights, especially in publishing and media. He has represented authors, publishers, artists, ghostwriters, filmmakers, newspaper companies, and I don’t even know who else. Formerly a book editor as well as publisher at a division of Thomson Reuters, he was also publisher and vice president of a VC funded startup, and he is currently the legal columnist and chair of the Committee for Contracts and Grievances for the Mystery Writers of America, and if all of that weren’t enough, he is also the author of four books.

Dan, welcome, and thank you for your time this morning.

Dan: I’m happy to be here today Derek.

Derek: As an intellectual property rights attorney, let’s talk about what publishing law looks like. Why is it important that authors have at least a basic grasp of intellectual property rights?

Dan: The short answer is that authors should know their rights in order that they not be taken advantage of by publishers and by distributors, and all of the other entities in the chain that starts with the author and ends up with the reader. Unfortunately almost any intellectual property or publishing attorney would tell you that there is a dearth of knowledge among writers about publishing law, certainly with regard to copyright law, with regard to trademark, and with regard to publishing agreements, what should be in a publishing agreement, what should not be in a publishing agreement, and what the industry standards are for all of these things.

Like anything else, publishing and writing is a craft, and people should spend the time, do their homework, to educate themselves in their craft before they jump in headfirst and then find out later that they didn’t have sufficient knowledge to make the best of it. That’s something that we see quite commonly in our practice.

I would point out one of the most frustrating things that we have is the multiplicity of small presses now, independent publishers, that pop up all the time. That’s good in one sense, it’s nice to have them, but many of them simply have no idea about how to structure a publishing agreement. We wince when we see these publishing agreements that have been cobbled together by one company from another company’s publishing agreement, or something they saw on the internet, without understanding any of the significant of the terms, and then inevitably they get into trouble, and finally they consult a lawyer after it’s too late, often, to remedy the problems.

Derek: Yeah, what’s that saying about an ounce of prevention worth a pound of the cure?

Dan: That’s exactly right. We understand, especially if you’re a startup, it’s tough to budget for attorney’s fees, and to have a lawyer write or vet your contract. It’s much easier just to copy somebody else’s and save the money. We understand that but we also see the damage at the other end. That’s why we encourage people, obviously, it’s in our interest but it’s also in their interest, to get a publishing agreement written and examined by a publishing agreement, and the same applies to authors. They should not blindly sign a publishing agreement or a ghostwriting agreement, or any legal document having to do with the publishing industry, without knowing what they’re doing.

Derek: Do you have a story handy, a horror story, of, I guess maybe a typical example of what this looks like whenever the author doesn’t, and then they find themselves in the middle of a bad spot, and whenever then they come into your practice and then realized that with just a little bit of advice they could have avoided the whole debacle?

Dan: I could go on for a long time on that, Derek. One of the things that happens often is that an author will sign an option clause without understanding the significance of that, and then find that they’re stuck with a publishing company that didn’t work for them, that didn’t market their book, and that they’re generally dissatisfied with, and find that they must offer their next book to that very same publisher upon the same terms as the first book, and there’s not a damn thing they can do about it, because they didn’t understand the significance of an option clause, which frankly, most agents will get deleted now, but they don’t know that.

Another area where we often see an issue is where an author doesn’t understand the significance of the indemnity clause that is in a standard publishing agreement, a warranty and indemnity clause, and they will go ahead and use something in their book without getting the permission from the copyright holder because they think it’s fair use and it’s not, or even if they think it’s not fair use, they just don’t bother getting the permission, and then there’s a copyright lawsuit filed against both the publisher and the author, or sometimes just the publisher, and the publisher turns around and says, “Well, you must pay us for our attorney’s fees in defending this case because you signed an indemnity clause in the publishing agreement.” In some cases that can bankrupt an author if the book sells well enough and the damages are high enough.

I could go on. Virtually any clause in a publishing agreement can come back to haunt an author if they don’t understand what it means and why it’s there. That should be kept in mind by everyone.

Derek: Dan, like you say, we could probably spend an hour on each one of these different topics, but let me throw at you the three most common legal related questions or issues that I hear from authors. They are concerned about a nondisclosure agreement, an NDA. They are concerned about filing for copyright protection, and then they also want to know what is legal for them to quote, so the fair use doctrine, what’s legal for them to quote and not quote. Can you hit those three?

Dan: Certainly. You’re going to have to stop me if I go on too long on some of these, Derek, but let’s go with the NDA first, an NDA, or nondisclosure agreement. That is a clause that is commonly seen for nonfiction books, obviously not in fiction books very much, and it is totally negotiable. You don’t have to sign it. You can limit it. You can ask that it be deleted. Really, an NDA is tied with the non-compete clause that you also see in agreements. The way that works is that the publisher doesn’t want you, the author, to write something on the same topic or a similar topic while the first book is out there in print. That makes sense obviously to the publisher. They’re spending money to publish and promote the book, and they don’t want something else out there. The nondisclosure comes in in that they don’t want the offer to disclose any of the underlying facts or research that was used in that book to another publisher for the same reasons. It’s anti-competitive to have these clauses in there, but it’s perfectly legal to have it assuming that the author agrees to it.

What we normally try to do is limit the ambit of those clauses so that, for instance, a broad clause will say that the author cannot publish any book on the broad area of the subject within, as long as the books in print. What we would do is we would limit it to a more narrow subject area of just that book, so if it’s a business book, it might be a business book on the stock market, you would limit it to just the stock market book, not to just a general business book. You would also say that even if the book is still in print, that after a period of time, the author could still publish a book on the same topic with another publisher because the first book has had enough time to run its course and supposedly has earned the money that the publisher needs. That’s just in general with regard to an NDA.

With the right to copyright, most office still don’t understand that whether they register the copyright or not, or whether the publisher registers it, as long as they are the creator of the work the copyright attaches automatically. The registration of copyright, which is customarily done when the book is published, although it can be done at anytime before, gives the author and/or the publisher, to whom the rights have been assigned for the purpose of publication, additional rights that they don’t have without registration.

It doesn’t mean that they now have copyright. It means that if there is an infringement it is possible to sue because in general, in the United States you cannot sue for infringement unless you have registered. In addition you can get what are called statutory damages, damages that you don’t have to prove the actual damages, just the mere fact that it has occurred, you get a certain amount of money. You get your attorney fees if you have registered your copyright before the infringement or within three months of the first publication. Now we’re drilling down into more esoterica but the key thing to remember is that the book should be registered before it gets into the hands of the ultimate consumer.

Some people are very cautious. As soon as they finish the manuscript they register it online. That’s how it’s done. It’s all done online for thirty-five bucks. It’s fairly easy and you can do that. Some people don’t even bother with that because typically a publisher will register the copyright in the author’s name upon publication. Let me give an exception to that.

In the business book world, or in what we call professional publishing, very often the publisher will take copyright. What does that mean? It means that the author will actually assign all rights in copyright to the publisher in perpetuity for the full term of copyright, and agree that the book can be registered in the name of the publisher. You will see that. In a business book you might see that in the flyleaf, copyright Simon and Schuster, rather than the actual author although the author’s name is on the book.

That’s negotiable. It really doesn’t matter much to the author because the author’s name is still going to be on it, and even if they didn’t do that, they would still be assigning the rights to the publisher for as long as the book was in print, even though the copyright is registered in the author’s name. The key thing to understand, the key take away, let’s put it that way, is that the author has copyright from the day that the manuscript is fixed in any medium, whether it’s on disk or on paper, and typically the publishing agreement will state that the author assigns that copyright to the publisher for a period of time, and then specifies which rights of copyright are being assigned, because copyright can be sliced and diced in many ways.

I’m sure anybody who’s listening to this knows that there is a difference between film rights and audio rights, between publishing rights in the United States and publishing rights overseas, translation rights, merchandising rights. Many of these are what are called subsidiary rights and they can be carved up. Some can be kept. Some can be assigned to the publisher. All of this is negotiable and it’s something that the author needs to have an understanding of if they don’t have an agent or a publishing attorney representing them.

I’ve covered a lot of topics, but that’s an overview of some of the things that an author needs to understand about copyright, that it is probably the most important thing in the publishing agreement because that is the intellectual property of the author. If you write a book, you have an intellectual property interest in it, a property interest no different than owning a car or a house. That property right is defined by the copyright law of the United States, and that is what the publishing agreement is taking from you for a period of time, which is, again, defined in the publishing agreement.

One of the elements of copyright is fair use. That is probably the most misunderstood part of copyright law in the United States, and frankly this doesn’t really apply overseas. They have a whole different concept of what is fair use, but in the United States fair use only applies to criticism, comment, news reporting, teaching, scholarship, or research, and to the extent that the work is being used in any of those areas. Let me repeat that, criticism, comment, news reporting, teaching, scholarship, or research. The copyright law of the United States says that those uses can take a certain amount of someone else’s property, copyrighted material, and use it in a separate work to a limited extent. The extent, of course, is the gray area.

The copyright law provides four factors to determine whether any specific use is to be considered a fair use and you don’t need permission. Again, criticism, comment, news reporting, teaching, scholarship or research, if you use it in those areas, and you don’t use a substantial amount of the material, it is not necessary that you obtain permission from the actual copyright owner. Unfortunately, you will see all kinds of people, even publishing companies, who will say, “Well, you can use four hundred words of anything and that’s fair use.” Actually it’s not if it’s for commercial use, and it’s not for any of the other items that I talked about, the criticism, comment, etc.

It’s a term that has been thrown around so much that the lines are so blurred, that it is almost impossible to tell anymore what is fair use. It’s easier to say what is not fair use. If you see that a substantial amount of someone else’s material are being used in another publication, and it is for commercial purpose, chances are it is not fair use, and it is an infringement.

The best example I can give of this would be something like song lyrics. This is something that probably doesn’t come up in a business book so much, but very often it’s used in fiction, where people will use a song lyric at the beginning of a chapter, or throughout a book. A song may have fifty lines of lyrics, or twenty-five lines of lyrics. If you use five lines of them, that’s a substantial part, and that is necessary use because it is a substantial percentage of the greater body of the work. If you’re dealing with Homer’s Odyssey, or Iliad, and you’re using five lines of that, and obviously that’s in the public domain anyway, but if it was a huge poem like that then it might be fair use because it is such a small percentage of the amount of the work. If you are using even a large percentage but it is being used in a critical review, that might be fair use.

You have to look at all the factors involved in fair use. What we generally tell people is be very careful before deciding that something is fair use without researching it and understanding exactly what the law behind fair use is.

Derek: If somebody did want to use a song lyric, or if they did want to quote a substantial part of someone else’s book, say it was a business book on financial markets and they wanted to talk about, what’s that term whenever you look at the psychology of, econometrics? I forget. Anyway, say they wanted to quote a substantial part of somebody else’s book. How would they get around that?

Dan: They can’t get around it.

Derek: I’m sorry. How would they do it, not get around it, not circumvent the law, but how would they comply with the law and still be able to write the book they’re trying to write?

Dan: If the book is, which it typically is, it’s for commercial purposes, and it is not criticism, comment, scholarship, or research, it’s something that you’re putting on the market to sell to people, which most business books are, it would be a very rare situation that taking someone else’s work and using it in your own book would be fair use. A very small amount probably would pass because it would meet another test, which is called that the de minimus test. If something is so small that even if it doesn’t qualify as fair use, it’s just too small to take notice of, that’s probably what you would do. If you were taking any significant percentage of someone else’s work, or critical percentage, a critical phrase, or a paragraph that’s from someone else’s work, chances are that’s an infringement.

The way to get around that, or to use the term get around it, is to get permission. You simply contact the publisher and say, “I’d like to use a portion of that book in my book. Will you give permission, and if so, what will it cost?” That’s the real answer. Unless you’re writing a scholarly article, or it’s in a news article, or it’s a review, you shouldn’t be using someone else’s material because it’s not going to be fair use.

Derek: Let’s actually go back to a point you were talking about earlier about carving up the copyright and subsidiary rights. Let’s assume that somebody’s a brand-new author, and they really don’t understand the difference between the copyright for a book versus film rights, domestic versus international, print versus digital. Can you just give a couple of examples of whenever somebody is entering into an agreement with an agent, or a publisher, or especially a small publishing house, like you said, who might not have a vetted legal contract. What should they be looking for, the rights to keep versus the rights that they should expect to assign?

Dan: The easy answer is always try to keep as many rights as you can. That’s going to work out very quickly because the publishing agreement that the author receives is going to state what rights the publisher is expecting to take. If the publisher is simply wanting print rights, then it’s easy, because then the author is keeping all the other rights, but if, as we often see, the press says that the author is assigning all rights, all subsidiary rights, then that’s when the author, having done their homework, should say, “Wait a minute. I don’t want to do that. I’m happy to give you print rights that I’m going to keep, for instance, foreign rights, and I’m going to keep translation rights, because I think I can sell those myself and I don’t want you to handle them right now until I’m more certain that you’re going to be the publisher for me in the future.”

For a business book, or for nonfiction, certainly film rights are generally not an issue. There is always exceptions. For instance, think of Andrew Lewis’s book Liar’s Poker. That is a nonfiction book about the stock market and how people acted in the stock market. That sounds pretty boring, right? Of course it was made into a movie. You never know, but for the typical business book your main focus should be print rights, how long the print rights are for, and that gets into the reversion rights for an out-of-print clause, and you also want to consider whether the book is going to be something that might be worthwhile in the audio market, and whether it be worthwhile overseas, either in English or translated overseas, the foreign rights.

I would say those are the three most important things for a business book writer to be concentrating on. Obviously print rights, typically now, include more than just paper print. They include digital, and every publisher is going to want both of those. Most publishers are also going to want to keep the audio rights, but foreign rights and translation rights are generally negotiable. If you have done your research and you see that the publisher has, in the past, done pretty well with publishing books in the foreign market and in the translation market, you might want the publisher to have those rights, in which case typically very be a fifty-fifty split on sale of those rights to the overseas publishers or the translated version. Or, you can decide that you would rather handle them than yourself, in which case, generally you’d have to hire an agent to market those, so that’s something that you have to spin aside between those two options.

Those are the three things to be concerned with in general and subsidiary rights, the print/digital rights, the audio rights, and foreign and translation rights.

Derek: That’s really good to know, Dan. I hadn’t even considered breaking up the audio and the print before, but that makes sense, especially if the author thinks that they can move forward with one or the other and do a better job than the publisher could.

Dan: Yeah. That generally is going to happen when you’re dealing with a very small publisher because the very small presses, obviously, they don’t have their own, like the big six publishers, actually the big five now, they all have their own audio divisions. A small press, it doesn’t. All a small press is going to do is license the rights to the book to an audio publication company. You can do the same thing. If the book is successful, why not do it yourself? This is, again, something that has to be evaluated on a case-by-case basis based on the publisher you’re dealing with.

Derek: Let me throw a horror story at you that I heard firsthand from an author, and then you tell me what they probably should have done to prevent this. They went with a traditional publisher, had an awful experience. No, I take that back. I’m getting to stories mixed up. They actually had a decent experience. The publisher did a print run of, I don’t know, say ten thousand copies of the book, and the book completely sold out because the author was just a phenomenal marketer, so they did another ten thousand copies.

This is a very specialty, a very niche field, so they weren’t expecting a whole lot, and then the author came through and surprised them again and it completely sold out. Then the author said, “I still want to sell more, let’s do another print run,” and the publisher said, “No. We really feel that the market is tapped out. We’re not going to print any more of these books.” He didn’t have the rights to go back and do the print himself. He even said, “I’ll pay for y’all to print the book. I’m selling these books like hotcakes. I need more printed,” and they refused.

There he was. He had huge market, he still saw, potentially, and the publisher was unwilling to do any more print runs for the book. Of course, he had a non-complete clause in there. He couldn’t go write substantially the same book, so he was up a creek without a paddle.

Dan: That is really an odd situation if it was a semi-standard publishing agreement because any industry-standard publishing agreement has a reversion clause in it called the out-of-print clause. The out-of-print clause is exactly there for the purpose of remedying the situation you have just outlined. If the book is out-of-print, in other words if it’s, the key is the definition of that, but if it’s out-of-print than the author has a right, the rights will revert to the author that were assigned to the publisher, and then the author can find another publishing company or self-publish the book themselves.

This happens routinely because most books go out-of-print very quick. It’s just a matter of how you define the out-of-print clause as to when and how the author can get the rights back. If there was an out-of-print clause in the contract that you’re discussing the author could simply say, “Okay, now I’ve got my rights back. I’ll go ahead and publish the book.” That would’ve also ended the non-compete clause because a non-compete clause would only last during the term of the agreement, and once the rights go back the agreement is over.

That’s how that would be remedied. Again, much of this is on my website,, you can read articles on all these subjects, but one of the things that came up in the last ten, fifteen years with digital publishing is if you define being in print as being able to get the POD copy, or a digital copy, then the books never out-of-print, because even though you can’t get a physical copy anymore, as long as you can download a digital copy, it costs nothing to the publisher, and you’re stuck. You may be getting nothing out of the book even though you feel that if you put it back in print, a real print, you’d be able to sell the book and use it for other purposes.

Let me just briefly say this was a big issue with something called the Simon and Schuster rights grab several years ago. Simon and Schuster had a definition that included digital printing as being part of an out-of-print definition, and agents rebelled, and finally Simon and Schuster caved in on this issue. Nowadays, basically, if a digital copy is deemed to be part of being in print, there’s additional clause that says if that’s so, then the digital version must sell X number of copies a year for it to still meet the definition of an print, or produce X dollars in revenue each year for it to constitute being in print. That should be part of any out-of-print definition.

I would say that the out-of-print clause in a publishing agreement, it’s really the second or third most important thing in the contract. When you get past the assignment of rights, and the subsidiary rights, the next thing you have to concentrate on is that out-of-print clause. Some out-of-print clauses say even if it’s out-of-print, the publisher has to be given notice and for six months they can decide to re-license it or put it back into print, and then you don’t get the right back. There’s all kinds of little ways that they try to delay this sort of thing, but all of that’s negotiable. Generally an agent or publishing attorney is going to get a favorable out-of-print clause for the author in the publishing agreement.

The situation you’ve outlined is one that should not, and would not, happen.

Derek: It sounds like if he’d have just even had a lawyer review the contract they would have spotted that right off the bat, and he could’ve been avoided that entire situation, and have ended the relationship with the publisher on a good note instead of quite a soured note that he did.

Dan: Exactly. Right. Again, I hearken back to what I said before. What is the most important thing for an author? It is their property right in the book. That should be the paramount factor in looking at a publishing agreement. That means that you look at what you’re giving up, what you’re assigning to the publisher, and how you, and when, and if you get those rights back. That’s your property, and that’s what should be looked at even though you’re in the first flush of being thrilled that a publisher has offered to buy your book.

Derek: Yeah. You do kind of get that golden glow, and you’re willing to almost give up your first child for that chance of having a real publisher pick your book up.

Dan: That’s right. Just sign here. Sign here. Everything’s fine. That’s what happens.

Derek: Yeah, I imagine. Well, Dan, let me run you through the gamut of the three standard questions I try to ask everybody, and then I’d like you to share, I’ll get to that in just a second. Let me run through the standard questions. What’s one of your favorite business books or a business related book that you would recommend to everybody listening?

Dan: My specialty is not business books so I can’t say that I’m up on them or that I read them. I will say a book that I think is a business book, in a way, and which I think is an important book that everyone should read is Outliers by Malcolm Gladwell. That I think applies to any author of a business book because if you look at the issue of outliers, as Gladwell talks about, it’s going to give you ideas about topics and subjects that you could write your business book about. It’s important of course for non-business authors because it tells you a lot about humans and human society.

Derek: Don’t you just love the fact that he’s not only a brilliant writer, but he’s a good writer? There are a lot of books that are informative but they are so dense to get through. Malcolm Gladwell is one of those who can take all of this information and present it in such a way that makes you want to keep reading the book.

Dan: Exactly. I endorse that entirely, and I also would point out that another thing that I’d recommend to business book writers is that they read history, because I’ve had several business book authors who have, basically their background was in history. They were either in some cases history professors or they just had an interest in history, and it led them to subjects that segued right into business issues. It’s just my personal experience that that’s very helpful, studying, for instance, what the Rockefellers did at the turn-of-the-century, and the robber barons of that time, it lead an author I know into describing the modern version of the Rockefeller, the Jeff Bezos, and the Steve jobs, people like that. I would recommend that to any prospective business author.

Derek: You know what? In that vein there’s a book, and good God it’s probably five pounds right here in my hands, that I’m trying to get through. It’s a well-written book, it’s just a lot of it. It’s called The Power Broker about Robert Moses and he almost single-handedly built New York.

Dan: New York.

Derek: Yeah. Exactly. It’s a fascinating, fascinating man, fascinating biography. It’s really amazing just how much influence individual people can have, and still have. Here we are a century later after a lot of what he did, or almost a century later. Yeah, that’s great advice. Thank you for-

Dan: Actually when I was with a publishing company, actually with Thomson Reuters publishing company, it was a professional publishing company, but we published some books that were actually technically biographies, but were slated as business books, because they talked so much about business principles in studying the biography of the person. I think that ties it right in what you were saying.

Derek: That’s one of the neat things about business books is whatever you get, well, what actually is a business book? It can be a biography that has an economic bent or a business spent, and that can range all the way from business and history all the way to self-help and personal development. It’s a really neat genre to try to nail down because you almost can’t.

Dan: I agree.

Derek: Dan, before I’m let you go, you mentioned your website. Would you mention it again and then tell people if there’s any other way that they can connect with you, get a hold of you, and what kinds of inquiries or business that you would welcome in your practice?

Dan: Right. My publishing website is, interestingly enough, called

Derek: Easy to remember.

Dan: Two words together, publish, lawyer, and, .com. There’s a link on that to my attorney website. If someone is interested in contacting me they can then click through to my attorney website where there is a contact app for them to contact me. I routinely reviewed publishing agreements for a fixed fee, which again, that is also on my website, and represent all aspects of authors and people in media, startup websites, anything to do with media and intellectual property we handle here at my office.

Derek: Awesome. Well Dan, I really appreciate your time today. I appreciate your insights. I appreciate you being able to condense what I know is hours’ and hours’ worth of conversation and information into a working knowledge for those of us without the privilege of a law background.

Dan: I’m happy to help, Derek. I hope that all goes well with everybody who’s writing a book. They should keep writing because it’s probably the most satisfying pursuit that I can think of.

Derek: I absolutely second that. All right Dan, thank you again. You have a great afternoon.

Dan: You too. All right. Bye-bye.