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Buying & Selling Rights in Literary Works:A practical guide for publishers in Central and Eastern

Europe and the former Soviet Union

Lynette Owen

Rights & Contracts Director, Addison Wesley Longman Ltd

Center for Publishing Development

Open Society Institute - Budapest

1998

Lynette Owen


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Contents

Chapter 1: Introduction: Copyright as the background to rights trading

Chapter 2: How to obtain information about foreign books

Chapter 3: How to obtain information about foreign books

Chapter 4: Negotiating terms

Chapter 5: Sample contracts for the purchase of rights

Chapter 6: Ordering film and remitting payments abroad

Chapter 7: Selling rights to foreign publishers

Chapter 8: Sample contract for the sale of rights


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CHAPTER 1

INTRODUCTION: COPYRIGHT AS THE BACKGROUND TO RIGHTS

TRADING

My aim in this electronic handbook is twofold: to provide a brief introduction to the

concept of copyright as the framework behind the licensing of rights in literary works

and to provide a short practical guide for publishers in Central and Eastern Europe

and the former Soviet Union seeking to buy rights from abroad or to sell rights in

selected publications of their own to foreign publishers.

Historical differences in political circumstances and commercial practice

It is important to remember that whereas publishers in the capitalist countries have

long traded with each other through the medium of rights sales against a background

of very similar concepts of domestic copyright, publishers in those countries which

existed for many years under communist rule operated under a very different

philosophy of copyright, although all countries in Central and Eastern Europe (with

the exception of Albania) and the then Soviet Union had joined one or both of the two

international copyright conventions. They also operated under a completely different

publishing system; publishing houses were all owned and heavily regulated by the

state, in terms of what they published and how they were able to contract with and

pay domestic authors. This method of payment was also applied in adapted form

when rights were acquired from abroad, and in most countries in the region, rights

dealings were channeled through state copyright agencies.

That situation has now altered radically in all countries in the region; since the early

1990s a large number of privately-owned publishing houses in many of these

countries, some of which have survived and prospered whilst others have simply

disappeared overnight or collapsed leaving substantial debts. Some state-owned

publishing houses have been privatised through a variety of means - staff buy-outs,

the attraction of money from domestic investors, or in some cases partial or majority

ownership by foreign investors. Other publishing houses continue in state ownership,

although many of these are suffering from financial problems.

It is hardly surprising under these circumstances that the overall picture of the

publishing industry in the region has been volatile, with spectacular successes and


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failures, over enthusiastic publishing in a market which changed rapidly from

monopolies to bitter competition, and the rise of piracy which has damaged not only

the interests of foreign authors and publishers but also those of legitimate local

publishers. The dedicated core of the industry has struggled to survive in a world

where almost simultaneously the doors opened to provide access to a flood of western

publications while at the same time the removal of state subsidies on paper,

production costs and book pricing led to rapidly escalating costs and the central state

book distribution channels collapsed.

Given what has happened in the last few years, it is perhaps inevitable that dealing

with foreign publishers, in particular those unfamiliar with markets in the region, may

pose problems in terms of different procedures, terminology or contractual practice. Itis therefore vital that both sides seek to understand and adjust to each other's

circumstances.

Very few western publishers of literary of popular fiction or popular non-fiction

visited the region regularly (if at all) during the communist period; however, a

number of educational and academic publishers (particularly those specialising in

high-level scientific, technical and medical publications as well as language teaching

courses and dictionaries) visited regularly from the 1960s onwards, in particular

attending the Warsaw and Moscow book fairs which then represented the most

important showcases of western publications for eastern bloc publishers and

importers. Such publishers may have a deeper understanding of the difficulties posed

by changes in the region, but they are also perhaps less likely to be dealing with the

plethora of small private publishing, publishing houses which have appeared in recent

years. This is because private publishers have understandably tended to concentrate

on publishing translations of western mass market fiction and non-fiction which will

sell quickly in markets which are hungry for such material.

This resulted in an anomaly in that the western publishers and literary agents who

control the rights in mass market works were often those with the least understanding

of the upheaval in the markets concerned (at least in the early years) and this

undoubtedly led to a variety of problems generated by both sides. In many cases,

unrealistically high sums were demanded for rights by the western owner, often

boosted by playing off several potential licensees against each other; a practice

common in the west but often disastrous in less experienced and less affluent markets.

On the other hand, overoptimistic buying by local licensees, sometimes leading to


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large debts of licence fees or payment for condition copies printed by foreign

publishers (in some cases leading to the collapse of the local publishing house); in

other cases, unauthorised overprinting of locally-printed editions with failure to

account for the additional copies to the foreign rights holder; and more blatantly,

completely unauthorised translations of foreign bestsellers by publishers who

disappeared as quickly as they had appeared, often damaging the interests of local

publishers who had acquired rights in the same title legitimately.

There are still therefore a number of obstacles to be overcome and experience to be

gained on both sides in the field of rights trading before the comfortable "common

ground" which prevails as a background to licensing between western publishers will

be achieved.

COPYRIGHT: A BRIEF OVERVIEW

1) Concepts of copyright

a) The western view

Two basic philosophies of copyright underlie the domestic legislation prevalent in the

west - firstly, the Anglo-Saxon or common law concept of copyright as a property

right which allows the first owner (normally the author) to freely negotiate with

would-be users of the work as he or she chooses, including full assignment of

ownership of the copyright to a user such as a publishing house. Full assignment of

ownership in this way is particularly common amongst educational and academic

publishers. This concept of copyright also recognises the independent right of users,

allowing them for example to take legal action against any infringement of the rights

granted to them. This system of copyright law underpins the legislation of both the

United Kingdom and the United States. In some countries there is also a quite

independent right (the "publisher's right") in the typographical layout of a work, and

separate; egal action can be taken against any infringement of this right.

The other western concept of copyright is that of the droit dauteur commonly

employed in the legislation of continental Europe; this is much more heavily

weighted towards the rights of the author as creator and includes the concept of the

moral rights of the author (sometimes also referred to as the personal rights of the

author). These consist of the right of paternity (the right to be recognised as the author

of the work) and the right of integrity (the right not to have the work subjected to


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derogatory treatment). The exact regulation of such rights varies from country to

country (for example, in some countries they are perpetual and inalienable whereas

under UK legislation they can be waived; UK law also provides for them to expire at

the same time as the duration of copyright protection). Moral rights do not yet exist in

American copyright legislation.

b.) The communist view

During the time of communist rule, copyright legislation in the various countries in

the region viewed the author as the owner of the rights and restricted the grant of

rights to publishing houses, often specifying that they could acquire a right to publish

the work for a very limited period of time (perhaps as short as two years) or for a

specified print run. Additional rights such as the right to license translation rightsabroad were not normally granted to the local publishing house but controlled by a

central state literary agency in each country which handled all rights transactions to

and from foreign countries. Legislation in the region also provided for a wide range

of circumstances in which an author's work could be used either without permission

or payment, or without permission but wit payment made according to a regulated

scale of fees. Local authors were paid according to the type of work in question and

for a designated print run rather than the actual number of copies sold, and the

legislation included specific directions on what should be included in contracts signed

between authors and publishers. Moral rights were included in domestic legislation

but were normally inalienable and perpetual, based on the assumption that the state

(in the form of a central literary agency) would administer such rights if the author's

heirs were eventually unable to do so.

2) Duration of copyright

The period of copyright protection varies according to the domestic legislation of

each country; discrepancies can lead to a situation where a work is still protected in

on country but has passed into the public domain or "gone out of copyright" in

another. In the capitalist countries of the west, the period of protection was for many

years the lifetime of the author plus fifty years, but from July 1st 1995 this period was

harmonised in the countries of the European Union to the lifetime of the author plus

seventy years. This change means that once again copyright in the United Kingdom is

out of harmony with that of the United States; the USA still retains the fifty-year

period, although an extension to this period is now under discussion.

3) Copyright recognition between countries


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Recognition of copyright obligations between countries is achieved through common

membership of one or both of the international copyright conventions: the Berne

Convention (established in 1886) and the Universal Copyright Convention

(established in 1952); alternatively, through membership of a bilateral copyright

convention or trade treaty which includes provisions on copyright.

Each convention imposes basic requirements which must be complied with through

the medium of the domestic copyright legislation of each member state. The basic

requirements of Berne are a minimum period of copyright protection of the lifetime

of the author plus fifty years, and no formal copyright registration procedure. UCC

requires a minimum protection period of the lifetime of the author plus twenty five

years, a requirement for a copyright notice with the copyright symbol to appear onliterary works; it does allow for a formal copyright registration procedure. Most

western countries belong to both conventions. Unfortunately membership of one or

both of the conventions does not guarantee observance of copyright; piracy of

intellectual property is rife in many countries in the region, and in particular in

Poland, Russia and many other former Republics of the Soviet Union.

At the time of writing, Armenia, Azerbaijan, Kyrgyzstan, Turkmenistan and

Uzbekistan do not belong to either convention.

Since the fall of communism, almost all countries in the region have introduced new

domestic copyright legislation with the aim of introducing laws more appropriate for

countries moving from a command to a market economy. The new laws have

undoubtedly improved legal standards for the protection of intellectual property but

the provisions for enforcement have on the whole proved less than adequate to date.

Education of authorities such as the police and customs officers is crucial. A number

of countries (e.g. Russia) have had to introduce supplementary legislation providing

criminal penalties in an attempt to control the problem.

Those countries seeking to become members of the European Union have either

already introduced a term of protection of seventy years post mortem auctoris or are

seeking to do so.

4.) Copyright as a framework for rights trading

A publisher in any country subscribing to the philosophy of copyright through a

domestic copyright law is under a legal obligation to operate in accordance with the


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provisions of that law. If that publisher wishes to acquire rights from countries which

belong to a common international copyright convention, there is a clear obligation to

seek proper authorisation from the rights holder of the work in question. If a licence is

granted, the foreign rights holder must recognise that the work will receive protection

to the extent afforded by the domestic copyright legislation of the country of the

licensee. Thus, a British work translated into Russian will currently be protected for a

period of fifty years from the death of the author, even if the work is now protected

for a period of seventy years in the UK itself. A Russian work translated into English

in the UK would be entitled to a term of protection of the life of the author plus

seventy years.

In addition to the question of the copyright in the underlying foreign work, there willof course be a separate copyright in the translated text which will run for the lifetime

of the translator plus the term provided for in the domestic legislation in the country

of the licensee. In Central and Eastern Europe, The first owner of the copyright in the

translated text will normally be the translator, and publishers would be well advised

either to seek an assignment of copyright if their local legislation allows, or at least an

exclusive licence for the use of the translated text.


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CHAPTER 2

HOW TO OBTAIN INFORMATION ON FOREIGN BOOKS

One of the most problematic areas for many publishers in Central and Eastern Europe

has been how to obtain regular and up-to-date information on foreign books which

might be of interest to them for local publication.

In the years under communism, all publishers in the region were owned by the state

and many tended to have a monopoly in publishing in a particular subject area, e.g. a

single state medical publisher, a single state publisher for agriculture and so on. This

greatly simplified matters for a foreign publisher actively seeking to place rights inthe region since there was usually only one potential licensee in each country. Those

western publishers active in the region usually sent catalogues regularly to

appropriate state houses. From the perspective of publishers in the region, however,

the situation in the capitalist countries was confusing since many different publishers

in each western country published competing books in the same subject areas. In

addition, British and American publishers both published in the English language and

in some subject areas (in particular high level scientific and medical books)

publishers in Germany and the Netherlands also published original books in English.

This can still pose considerable problems for publishers in Central and Eastern

Europe seeking to sell rights in their own books abroad.

Publisher's catalogues

Since 1990. thousands of new private publishing houses have been established in the

countries of Central and Eastern Europe and the newly independent countries which

once formed part of the Soviet Union, and a number of existing state houses have

now been privatised. All have been forced to diversify in order to survive; some may

have commenced with a special publishing area in mind but may have been forced to

change direction due to fierce competition in the marketplace, a factor which did not

exist when publishing houses were state monopolies. Although the relaxation of state

control of the publishing houses combined with the fact that they change addresses,

staff and subject areas so frequently (and indeed may go out of business within a

short period whether by design or through bad luck) has made it extremely difficult

for many western publishers and literary agents to know that they exist or (once

contact has been established) to keep track of the changes. This can make the regular

supply of appropriate catalogues to appropriate recipients difficult. Obtaining


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catalogues from western publishers (and literary agents) is however the best way to

obtain regular and detailed information on their specialist subject areas and range of

authors, and to obtain a "feel" for the type and style of books which they publish.

Book fairs

Book fairs provide an ideal opportunity to obtain catalogues from western publishers

and also to see at first-hand what they are producing. The size and scope of book fairs

vary enormously; the Frankfurt Book Fair, held annually in October, is by far the

largest; in 1997, over 5500 publishing houses attended from all over the world,

exhibiting books in all subject areas at all levels. Other significant annual fairs in the

west are London (held in March; most major British publishers exhibit); Bologna

(held in April; an international fair for children's and educational books) andBookExpo America (formerly the American Booksellers Association Convention)

held in June; most major American houses exhibit. Within Central and Eastern

Europe there are now many different fairs; Warsaw, Prague, Budapest, Bucharest,

Moscow, Sofia and most recently the Baltic Book Fair, which rotates between the

three Baltic States. The Moscow Book Fair, now held annually, is much diminished in

size. Western attendance at these events (with the exception of Warsaw) has tended to

diminish; this is because of the cost and increasing number of these events, which

now tend to provide access only to domestic publishers rather than to a range of

publishers from different countries in the region. More publishers from Central and

Eastern Europe can now be found at western book fairs; Frankfurt in particular

remains the key event in the book industry calendar. Local fairs may however include

national exhibits of, British, America, French and German books organised by the

British Council, the USA, France Edition and the Brsenverein which give an

overview of new publications.

Most established western publishers employ specialist rights staff who are responsible

for promoting and negotiating the sale of rights and it is these staff who should be

contacted, either in person at book fairs or by mail when applying for rights.

Publishing directories

A major source of general information on the international publishing industry is that

of publishing directories. The two most important directories are Literary

Marketplace (covering American and Canadian publishers) and International Literary

Marketplace (covering publishers in the rest of the world). Both are published

annually by R. R. Bowker (an imprint of the Reed publishing group) and can be


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ordered from Bowker at Maypole Road, East Grinstead RH19 1HH, United

Kingdom. These directories contain a country-by-country listing of all major

publishers together with their addresses, telephone and fax numbers, names of key

staff and their areas of publishing interest. In most cases the entry also lists the date

the company was founded and the number of titles published in the previous year.

They provide an excellent starting point for identifying suitable foreign publishers but

unfortunately they are expensive (UK prices 155 pounds sterling and 165 pounds

sterling respectively for the 1998 editions).

Although the information on western publishers is generally excellent, the changing

situation in the publishing industries in Central and Eastern Europe means that the

coverage of publishers in those countries can be incomplete and out of date, makingthe directories less useful for western publishers actively seeking contacts in the

market. Publishers can include details of their houses in these directories free of

charge and entries can then be updated annually. To submit details for International

Literary Marketplace, contact the Marketing Department at Reed Reference

Publishing, 121 Chanlon Road, New Providence, NJ 07974, USA. UK and

Commonwealth publishers are also covered in Cassell's Directory of Publishing

published annually by Cassel PLC (Wellington House, 125 Strand, London WC2R

OBB, United Kingdom; price of 1998 edition 60 pounds sterling). Cassell also

produce a directory of European publishers from time to time.

Trade journals

Another source of information on new publications is through the medium of national

trade magazines and journals. In the UK the two main journals, both published

weekly, are The Bookseller (details of overseas subscription rates from J.Whitaker, 12

Dyott Street, London WC1A 1DF) and Publishing News (43 Museum Street, London

WC1A 1LY). In the United States the weekly journal is Publishers Weekly (249 West

17th Street, New York, NY 10011, USA); in Germany, the Brsenblatt (Grosser

Hirschgraben 17-21, Postfach 100442, 60311 Frankfurt am Main, Germany). Trade

journals usually include advertisements for major new titles placed by the publishers

themselves, regular editorial features on publishing areas such as children's books,

religious books etc.; weekly charts of bestselling titles, news features on the book

trade and (depending on the journal) individual book reviews.

Educational, academic and literary journals

In addition to the trade press, there are a number of other publications which provide


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lengthy reviews of selected titles; in the UK, three special Times publication, the

Times Literary Supplement (coverage of up market fiction and non fiction titles plus

some academic titles); The Higher (higher education titles) and the Times Educational

Supplement (school books and educational equipment). In addition there is the

London Review of Books which covers a range of serious literature. In the US there

is the New York Review of Books.

How can publishers in Central and Eastern Europe obtain access to these directories,

trade journals and other publications, particularly if the prices are high? It may well

be worth checking whether the national publishers's association or the local offices of

the British Council or the Soros Foundation either have them already or might be

prepared to purchase them for their libraries.

Another source of information may be lists of foreign publications drawn up by

specialist advisors to bodies such as the Soros Foundation, in particular for

educational and academic books in specific subject areas. Such lists are often used as

the basis of book selection for subsidised translation programmes.


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CHAPTER 3

HOW TO APPLY FOR RIGHTS

Who controls the rights?

The question of who owns or controls the rights in foreign titles can often be

problematic for publishers in the region. In the case of educational and academic

titles, the situation is usually fairly straightforward in that it is normally the

publishing house which controls the rights, either through a full assignment of

copyright ownership from the author or because the author has granted the publishing

house control of a wide range of rights in addition to basic publishing rights in the

original language. Relatively few authors in these categories are represented byliterary agents. Complete ownership of copyright by the publishing house will be

indicated by a copyright line in the book itself.

In the field of fiction and popular non-fiction, the situation may be far more complex;

ownership of copyright is normally retained by the author, but few authors wish to

deal with the sale of rights themselves. In some cases, control of translation rights

may still have been delegated to the original publisher, but in other cases these rights

may have been retained by a literary agent representing the author. Many western

publishers who publish titles whose rights are controlled elsewhere include in their

catalogues a "rights list" insert giving details of who controls the rights in each title;

others print this information alongside the catalogue entry for each title. Translation

rights in a British novel may be controlled by the author's agent. A novel by an

American author listed in the catalogue of a British publisher could have been

acquired under licence from an American publisher; in such cases, translation rights

may be held by the American publisher or perhaps by the American author's literary

agent, and it is these details which will be printed in the catalogue.

There may however be a further complication if British or American publishers or the

literary agents representing authors in their catalogues have chosen to further delegate

control of translation rights in particular territories to subagents; such agents issue

lists of titles themselves. If there is no clear referral address in a publisher's catalogue,

an enquiry to the Rights Department of the publishing house should establish whether

rights are controlled by the publisher or whether applications should be addressed

elsewhere.


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The situation on control of rights can be complex and it is understandably frustrating

if a would-be licensee writes to a western publishing house only to be referred to the

author's agent, then in turn to a local sub-agent. A number of publishers in the region

have urged western publishers and literary agents to deal direct rather than through a

chain of intermediaries, and more western publishers and literary agents representing

authors of books for the general market have now taken the step of visiting some of

the markets concerned. It must however be remembered that much of the income

generated by such publishers and agents on behalf of their authors comes from very

substantial rights deals between affluent capitalist markets, and there is thus a

temptation to subcontract the handling of rights sales in less lucrative markets to

"specialists", particularly when such markets are still perceived as volatile and risky.

How to apply

Let us assume that the publisher will be the first port of call in order to establish who

owns the rights. Application letters should be addressed to the Rights Manager; if

copies of Literary Marketplace or International Literary Marketplace are available,

the names of rights staff are normally listed in each publisher entry together with the

address and fax number of the publishing house.

It may be that a title has been identified from a review, or perhaps from a copy

available to the applicant in a library, but that the full address of the publishing house

is not available. The local offices of the British Council, the Soros Foundation or the

Commercial Department of the embassy of the appropriate country may be able to

assist in providing the address of the publishing house or at least the address of the

trade association of publishers in the country concerned who can forward on any

application. This last method is however a rather slow way in which to make an

application.

If the rights applicant has not yet had a chance to assess the book in question, the

initial application letter should ask if the rights are available and request a reading

copy; publishers normally supply these free of charge. It is helpful to specify clearly

what type of rights may be required: translation rights, reprint rights in the original

language or perhaps a bilingual edition if material in the local language is to be added

to, say, an English language course or a dictionary. If contact is being made with a

western publisher for the first time, it will be helpful to provide some information

about your company; how long it has been in existence, how many books have been

published, your areas of interest; it is also helpful to provide brief details of any


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licences you have acquired from other publishers in the same country.

If the rights are still available and controlled by the publisher, they will usually send a

reading copy and confirm an option on the relevant rights, often for a period of three

months. If an option is granted in this way, it can be assumed that the option holder

has an exclusive period of time in which to assess the book and its prospects in the

localmarket before it is offered to another publisher there. If the title in question is

already on option with another publisher in the country of the applicant, a second

option may reserved, or the publisher may simply not interest and contact the

applicant if the rights become available.

Some publishers specialising in language teaching materials or dictionaries may bereluctant to grant local reprint licences; this may be because they are seeking to set up

direct selling or local agency arrangements for their own editions in the market. There

is also a (justifiable) fear that a licensed low-cost edition could leak into other

markets and affect sales there.

If the book in question is either extremely topical or perhaps a new book by an author

with an international reputation, some publishers or agents may decide not to grant

sequential options but to offer the books to several publishers in the same country

simultaneously and to invite the best offer. This is termed a "multiple submission"; if

deadlines and minimum offers for the rights are specified, this is an "auction", a

technique frequently employed in western publishing for major authors or key

projects and much favoured by agents. If either of these techniques is employed, each

publisher must be told that they are competing for the book and the terms of the

competition.

If the applicant has already had an opportunity to study a book before approaching the

rights holder (e.g. a library copy) it will save considerable time if as many details as

possible are included in the initial application letter, for example the intended first

print run and the expected price in tenge. As it is now extremely difficult to predict a

fixed retail price for a book in most countries in the region given factors such as

inflation, devaluation of currency and the diversity of distribution channels, it is

important to clarify to the rights holder what price is being quoted. In most cases,

licensees prefer to work on the price that they themselves will receive from

distributors, which in practice will be around 30% lower than the price at which the

same book will be sold in a bookshop or on a street bookstall. The western publisher


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or agent needs to be very clear on this since royalties for licences between publishers

in capitalist countries tend to be based on the retail (or the recommended retail) rather

than on the distribution price, with royalty percentages calculated accordingly.

What about subsidies?

It may sometimes be possible to obtain rights in western titles via a subsidised

translation or local reprint scheme. Some western countries run subsidy programmes

to encourage translations of their books in countries where publishers might not

otherwise be able to undertake such editions. The organisation of each scheme varies

from country to country, as does the type of book eligible for a subsidy.

The USIS programme administered by the USIA (United States Information Agency)assists with the acquisition of translation and low-cost English language reprint rights

in a range of American titles designed to foster cultural understanding of the United

States; support is offered to titles in subjects such as philosophy, politics, sociology,

history and media studies. Information can be obtained from the Public Affairs

Officer at any American Embassy or direct from the Book Programs Division, USIA,

Washington, D.C. 20547, USA. The USIA often acts as an intermediary with the

rights holder to arrange the licence.

The French government runs a subsidy scheme for licences for French books via the

Ministre de la Culture et de la Francophonie, Direction du livre et de la lecture,

Bureau de la promotion du livre francais, 53 rue Verneuil, 75007 Paris, France. For

this scheme it is normally the Frenc publisher who will send in the application on

behalf of the licensee.

In Germany, a translation subsidy scheme is run by Internationes, Kennedyallee 91-

103, D-5300 Bonn 2, Germany. German fiction, quality non-fiction, books for young

people and scientific books are eligible, with application normally to be submitted via

the German publisher.

For a long time, no formal British licence subsidy scheme was available; the British

government Know-How Fund has provided aid funding to the publishing industries of

Central and Eastern Europe in the form of specialist training in the countries

concerned and through training attachments with British publishing houses. The

British Council is sometimes prepared to assist with the purchase of duplicate film, in

particular when this is required for a local reprint licence for an English language


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course.

The Know-How Fund also sponsored the Low-Priced British Books Scheme (LPBB)

which enabled British publishers to sell selected titles in the fields of business and

economics in English at special low prices in Central and Eastern Europe. However, it

was a condition of the scheme that English books subsidised in this way could not

then be licensed for translation in the region. In early 1998, the British Books for

Managers translation subsidy scheme was launched; details can be obtained from

Education for Change, United House, North Road, London N7 9DP, United

Kingdom.

In addition to this, the Soros Fundation has been prepared to assist with thetranslation of key titles in the humanities and social sciences.


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CHAPTER 4

NEGOTIATIONG TERMS

If the financial terms of a licence agreement are to be negotiated directly with a

foreign publisher rather than via a subsidy programme, the publisher or agent

controlling the rights will require basic details, i.e. the intended initial print run and

the estimated local price with confirmation whether this will be the price received by

the localpublisher from their distributors rather than the end price to the customer in

the bookshop.

External copyright materialIt will be important for the potential licensee to clarify whether the terms then quoted

by the foreign publisher are fully inclusive: for example, if the book in question

contains extensive amounts of text quoted from previously published sources (e.g. an

anthology of poetry or short stories, or a work of literary criticism containing many

quotations) or if it is heavily illustrated, do the terms include the reuse of that

material? It is often the case that the original publisher has had to obtain permission

and pay fees for the use of such material in his own edition and the permission

requested (or the permission actually granted) may have been restricted by the outside

copyright owners. For example, a British educational publisher producing a history

textbook for secondary school use may well have cleared permission for the use of

external copyright material from museums and commercial picture agencies only for

his own English language edition, and perhaps for the restricted geographical territory

of the United Kingdom and Commonwealth, or the world excluding the United

States. Many external copyright holders specify that reclearance is required for reuse

of the material in another language or under an imprint other than that of the original

applicant.

Partial clearance of this kind is often logical since the English language edition is

unlikely to sell outside those markets; to clear permission for world rights including

the right to sublicense in any language world-wide will probably more than double

the cost of permissions clearance. If restricted permission of this kind has been

obtained, the British publisher will not have the right to grant licences including the

reuse of this materially; it will be necessary to reclear permission and pay any

additional fees required by the external copyright holders. A warning sign here is a

long list of acknowledgements to external copyright holders printed in the book itself.


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The cost of such reclearance both in terms of administrative time and fees can be

considerable and can sometimes make a translation licence unciable. If a licence is to

proceed, it will be necessary to decide whether the original publisher will undertake

the reclearance work on behalf of the licensee and then recharge the total cost of

reclearance, including a small administrative charge (perhaps 10-15% of the total fees

charged); alternatively, whether they will provide the licensee with a list of the names

and addresses of the relevant copyright holders to enable the licensee to undertake the

reclearance work. A sympathetic western publisher may undertake the work and will

try to negotiate lower fees than those charged for the original clearance, since the

overall income from a licence may be modest; however, since many of the copyright

holders may be museums and commercial picture agencies, this cannot always beguaranteed.

For illustrated books of general interest, it may be that the western publisher has

commissioned photographs or illustrations especially for the book in question; in such

cases, they may well own the full copyright. This is very often so in the case of

publishers producing full colour books designed for coeditions, such as Dorling

Kindersley. Even if the publisher does not own the copyright, a publisher expecting to

license many foreign language editions may well have invested from the start in

clearing world rights in all languages with the external copyright holders. This

removes the need to undertake reclearance every time a foreign edition is licensed,

but the publisher may well recharge a proportion of the permission fees to each

licensee.

All this demonstrates that the rights situation for any book which clearly contains

material drawn from outside sources MUST be carefully checked with the foreign

publisher. If in doubt, ask "Do the financial terms you have quoted cover the right All

this demonstrates that the rights situation for any book which clearly contains

material drawn from outside sources MUST be carefully checked with the foreign

publisher. If in doubt, ask "Do the financial terms you have quoted cover the right to

include all textual and illustrative material drawn from outside sources in my licensed

edition, or are further fees payable? Who will be responsible for reclearing any

permission needed and paying any fees?"

Printing film

Another key factor which may affect whether agreement can be reached on terms


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may be the price of duplicate film if this is required, either for an illustrated book or

perhaps for a whole book such as a dictionary or language course which is to be

reprinted under licence in the original language. Film will almost certainly be needed

in the case of books containing colour illustrations; it may not be necessary for books

containing only black and white line drawings but may still be needed for books

containing black and white photographs if a highs quality of reproduction is required

(e.g. medical books containing radiographs). In all such cases, the question of film

should be discussed at the earliest stage of negotiations; if the film is unavailable or

prohibitively expensive it may not be possible to finalise the deal. The licensee will

be required to provide the exact technical specifications required so that the foreign

publisher can obtain an accurate quotation from the printer; the foreign publisher

should specify clearly how long the price quoted will be valid.

Many western publishers are not prepared to lend their own original film to licensees

in case of loss or damage while it is in transit or in the possession of the licensee;

there may also be a problem if the film is unavailable if the original publisher needs

to reprint his own edition. Some may be prepared to lend original film in return for a

hire fee and will almost certainly require that the film is insured whilst in transit and

in the possession of the licensee. The majority of publishers prefer to manufacture

duplicate film for licensees; the cost of this can be substantial in the case of full-

colour books and some publishers may require full or partial prepayment before

ordering the film, especially if they are dealing with a licensee for the first time.

The question of whether film will be bought must be clarified at an early stage of the

negotiations. If the price quoted is beyond the means of the licensee, they may wish

to reproduce the illustrations directly from the original edition of the book. Some

western publishers may refuse to agree to this if they feel that the resulting

reproduction quality will not be sufficiently high; some may require to see some

sample illustrations reproduced in this way before deciding whether to authorise

reproduction by this method.

LICENCE TERMS

Geographical market

Much depends on the language rights required and the licensee's ability to distribute.

For example, if the book is to be translated into Russian the question of the sales

territory must be carefully discussed.


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Western publishers may be reluctant to grant world Russian rights or rights for all the

former Soviet Republics unless they are sure that the licensee can realistically service

these markets. For translation rights in smaller geographical markets, foreign

publishers may be preparated to grant world rights.

Financial terms

The question of the level of financial terms for a licence and the payment structure

can be complex, particulary if the foreign publisher or literary agent from whom

rights are sought is not familiar with publishing circumstances in the region. In the

west the customary method of payment (for domestic authors and for most licences to

publishers in other western countries) is an advance payment made on signature of

the contract, followed by a royalty calculated as a percentage of either the full retail(or recommended retail) price of the book or perhaps as a higher percentage of the

sum received by the publisher after granting discount to distributors or retailers. In

either case, the royalties are calculated on the actual number of copies so in a given

period of time, rather than on the number of copies printed; sales are normally

calculated either once or twice a year. This system has been in use for many years in

capitalist countries and assumes that publishers can track actual sales very accurately,

including any adjustments which may have to be made if copies are returned to the

publisher's warehouse unsold. It assumes that the majority of publishers warehouse

their own books, have access to a stable distribution system and have computerised

stock control systems.

The whole question of stockholding and distribution has of course altered radically in

the countries of Central and Eastern Europe and the former Soviet Union in recent

years. Publishers no longer print quantities to order and deliver them immediately

into a state-controlled distribution system without holding stock themselves. A small

number of publishers in some countries have now been able to introduce

computerised stock control systems; they can then implement the "western" system of

an advance against periodic royalty accounting on actual sales. At the time of writing

they are however in the minority. It is also understandable that some western

publishers and literary agents (in particular those who have experienced problems

with some publishers in the region failing to pay, or printing more than the contracted

quantity and failing to account for the additional copies) have been nervous of

accepting a deferred payment system, preferring instead to negotiate a lump sum to

cover a specified print run, perhaps payable entirely on signature of the licence

contract or in two or more instalments. A common arrangement would be for half of


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the lump sum to be paid on signature of the contract and the balance on publication or

by an agreed "latest date"; alternatively, 25% on signature of the contract, 25% on

publication, 25% six months after publication and the balance twelve months after

publication. The more meticulous publishers and agents will tie each instalment to an

actual calendar date. The lump sum will normally be calculated on the basis of a

royalty percentage calculated on the estimated wholesale price provided by the

would-be licensee.

Many translation licences negotiated between western publishers are based on a

royalty calculated on the full retail price paid by the end user (less any tax element),

and the initial level of royalty here could vary from as low as 5% (for some children's

books) up to 7% for a novel or academic title. If calculations are to be made on awholesale rather than a retail price, the royalty percentage will normally be higher to

allow for the discrepancy of around 25-40! between the price received by the

publisher and the price at which the book will be bought by the end purchaser. The

lup sum payment might therefore be calculated on the basis of a royalty of 9-10% of

the wholesale price. Some publishers will include in their contracts an inflation-proof

clause to allow for a pro-rata top-up fee payable on publication if the final wholesale

price is higher than the price estimated when terms were negotiated. This is

understandable when dealing with countries where inflation is escalating.

The financial terms of a licence are open to negotiation between the parties; it may be

that initial deals with a new licensee impose quite stringent terms but that more

generous terms can be negotiated for later deals once the licensee has demonstrated

that they are a reliable partner. Some western publishers and literary agents have

unrealistic expectations of the market and may refuse to deal if they consider the

amounts too small; however, those unfamiliar with the market may need to recognise

that local publishers are often working in difficult circumstances and that licence fees

which seem low by western standards may represent a considerable investment for

the licensee. Some publishers may find it difficult to pay an advance because of cash

flow problems; they may seek to offer a higher royalty rate to compensate for this.

From the western publisher's perspective, an advance payment (even a modest one) is

a token of good faith that the deal will go ahead; most licensee fails to fulfil the

contract, as some compensation for the author and the western publisher. A higher

royalty may sound attractive but is of little use if the book never appears. Many

western publishers will refuse a licence without at least a token advance payment to

"seal the deal".


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Inclusion of additional rights

If the licensee requires any rights other than the basic right of publication in his own

language, this should be raised at the negotiation stage; most translation licence

contracts provided by publishers or agents familiar with the region will be restricted

to volume publication rights. This would mean that the right to sublicense rights

elsewhere (e.g. extracts from the translation in a magazine or newspaper, or perhaps

the inclusion of a translated poem or story from a collection in an anthology

published by another local publisher) are not automatically included. If the licensee

requires such rights and intends to derive revenue from exploiting them, a share of the

proceeds will have to be passed on to the licenser; that share could range from 50% to

as high as 90%.

A number of book club operations are now being launched in the countries of Central

and Eastern Europe; the giant German publishing group Bertelsmann has operations

in Poland, Hungary and the Czech Republic. If the local publisher acquires exclusive

volume publication rights from a western licensor, it should not be possible for the

licensor to make separate arrangements for a bookclub edition. If the book in question

is a likely candidate for book club use (bookclubs usually offer popular fiction and

non-fiction to their members) the licensee publisher should ask for bookclub rights to

be included in the contract to enable them to deal direct with any bookclub operation

in their country. The licensee would then be able to supply printed copies of the

translated edition to the book club; if these are supplied at a royalty-inclusive price to

the book club, an agreed royalty on the sum received should be paid to the western

licensor; if the book club pays a separate royalty to the local publisher, an agreed

proportion of that royalty should be passed on to the western licensor (usually from

50-80%).

Duration of licence

The duration of the licence is subject to negotiation. The contract may be for an

agreed number of copies, and it may then be possible to cover any additional copies

by an addendum to the original contract. If however the western licensor is prepared

to work on the basis of an advance against royalties on actual sales, paid once or

twice a year, the contract should contain a clear definition of the duration of the

contract. Few western publishers or agents are now prepared to agree to a licence for

the full term of copyright, even if there are clauses allowing for the reversion of rights

in the translation is allowed to go out of print or if the licensee breaches the contract.


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It is more common that the contract will be for an agreed number of years and there

may then be provision for renewal, subject to a renegotiation of the financial terms. A

minimum period of five years from the date of the contract would seem reasonable.

Currency

In the west, the licensor will normally specify payment in his own currency, e.g.

sterling for British publishers, dollars for US publishers, deutschmarks for German

publishers and so on. However, as the US dollar is normally the preferred hard

currency in Central and Eastern Europe, it may be easier to specify contract payments

in that currency. This should always be checked at negotiation stage if the licensor is

not a US publisher.

Publishers in most countries in the region may either hold hard currency accounts or

may use their local currency account to purchase hard currency for remittance abroad.

If an invoice is required for each payment as well as the licence contract itself, the

licensor should be alerted to this at negotiation stage so that they can provide suitable

documentation, bank account details etc.

Special points for same-language reprint licences

There may be occasions when a publisher wishes to acquire the right to reprint a book

exactly as it appeared in the original language, e.g. a language course or a dictionary.

The aim would be to make a well-known "branded" product such as an Oxford

University Press dictionary or a Longman language course available in the market at

a lower price than that of the original publiser's edition.

The advantage to the original foreign publisher may be to gain access to a market

where perhaps they do not have direct distribution facilities, either to the book trade

or perhaps to state schools where courses may require approval from the local

Ministry of Education. Not all western publishers of this type of material are now

prepared to grant these licences, particulary if they are seeking to undertake direct

distribution of their own editions either through an exclusive local distribution

arrangement or perhaps through a local representative of their own. There may also

be a fear of "leakage" into other markets, even if the locally-licensed edition carries a

market restriction notice; this is the down-side of freedom of movement across

borders after the collapse of communist rule. Western publishers, even if they are

prepared to grant licences, may be reluctant to do so for a wider market than the

country of the applicant. There are also problems in that reprint applications are


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almost always for the "star" titles in the list and there may be ill-feeling if a local

reprint licence is granted and then withdrawn when the western publisher wishes to

set up distribution arrangements for his own edition.

There is therefore no guarantee that all such licencer applications will be granted. The

potential of English language teaching material in the countries of Central and

Eastern Europe and the former Soviet Union is huge and (copy for copy) western

publishers make more from selling their own editions than from granting licences,

provided they can access the market.

If rights are granted, royalty rates are always likely to be higher than the rates for

translation licences, on the grounds that the book will simply be reproduced withoutthe licensee incurring any editorial or translation costs. If the financial terms are to be

based on a royalty on the distribution rather than the end retail price, the royalty level

is likely to be between 10-15%. If the local licensee wishes to publish under a joint

imprint or to use a "branded" name such as Oxford, Cambridge, Longman etc., this

must always be agreed with the foreign publisher and some publishers do charge a

separate fee for the use of their name.

Terms for coeditions

The question of negotiating financial terms for coeditions (where the foreign

publisher arranges to print copies of the translated edition on the basis of film

provided by the licensee) can be complex as policies vary from company to company.

Likely candidates will be illustrated children's storybooks and popular non-fiction

titles for both children and adults, heavily illustrated in colour. Topics could range

from art to cookery, gardening, do-it-yourself, popular health, craftwork, travel guides

and "how-it-works" titles.

A number of western publishers producing books of this kind have based their entire

businesses on coordinating the printing of many foreign language editions

simultaneously, thus producing very large print runs and reducing the unit printing

cost to each participant in the coedition. Publishers of this kind produce elaborate

advance sales material, usually in the form of a "dummy" book containing sample

pages and it is on the basis of this that they aim to presell rights in order to coordinate

as many editions as possible together with their own first printing. Other foreign

editions and recorders may be undertaken as subsequent printings. The origination of

books of this kind necessitates many editions worldwide in order to defray the very


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high costs of commissioning complex artwork or lavish photography.

Such publishers are therefore understandably reluctant to agree to foreign publishers

purchasing film and manufacturing their own editions, since this reduces the overall

size of a potential coedition. However, publishers unfamiliar with the region may not

be aware that - even on the basis of large combined printings - they may not be able

to offer a unit cost appropriate for markets where book prices are still substantially

lower than those in the west. In such cases it will make little sense for the western

publisher to insist on an unacceptable price. These publishers have an understandable

desire to control the print run, particularly when some of them have had experience of

publishers in the region who purchased film and then printed many more copies than

were specified in the licence contract.

If a coedition is likely to be viable, the foreign publisher will need to know how many

copies are required, on the basis of the licensee providing film of the translated text to

the specifications of the foreign publisher and laid out to fit round the illustrations as

they appear on each page (for this purpose, the foreign publisher will either supply

working copies of the original edition if this has already been published, or a grid

layout for each page.

The foreign publisher will quote a unit price for the required quantity; it is important

that it is clear whether this price includes elements such as the royalty, packing,

insurance and transport of the books to an agreed destination. Some publishers may

allow for an additional percentage of free copies for promotional purposes. Transport

is a particularly important element; the quotation could be ex-works (the unit price

per copy at the printers, without packing or transport); FOB (free on board) a port in

the country where the printer is located (this price will include packing and transport

to the docks, with the foreign publisher's responsibility ending when the consignment

is half-way over the rail of the ship and the licensee responsible for onward transport,

and insurance). The price most commonly quoted is CIF (cost, insurance and freight)

to a port in the country of the licensee, or to a port in the nearest country if the

country of the licensee is landlocked. This last price includes packing, insurance and

transport to the designated port, leaving the licensee responsible for unloading and

customs clearance charges and onward transport to a warehouse. Relatively few

publishers are prepared to quote a price delivered into the licensee's warehouse, since

they may be unfamiliar with local import arrangements and transport facilities,

particularly if the consignment has to pass through several different countries.


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Publishers are also unlikely to quote for transport by airfreight, since this can be

extremely expensive. Shipment of books to landlocked countries may therefore be

problematic.

The inclusion of the royalty element in the coedition price can be administratively

convenient for both sides, since the books are then purchased outright. The

disadvantage to the purchaser is that they have to pay the royalty in advance even if

the book does not sell successfully. For higher priced books, some publishers may be

prepared to specify the royalty element separately from the unit price of the book

itself, as an advance against royalties based on actual sales of the translation, but this

type of arrangement does presume that the licensee has adequate facilities to track

sales accurately. Some foreign publishers may be reluctant to agree to separateroyalty accounting in markets which they consider volatile or with untried local

partners.

As with straightforward licence agreements, it is important to establish at an early

stage of the negotiations in what currency prices will be specified. Many coedition

publishers undertake printing in countries other than their own; for example, many

British publishers print in Hong Kong and Singapore, whilst some publishers of art

books print in Italy. Many publishers are able to quote prices which include an

element to guard against possible currency fluctuations. If the licensee requires prices

to be quoted in US dollars, this should be discussed at an early stage with non-

American publishers. The publisher should always state clearly how long any price

quoted will remain valid.

The question of when payment should be made for coeditions is very important and

should be discussed at the earliest stage of the negotiations. Many publishers

specialising in this type of book may require that at least a proportion of the total

amount is paid at the point the coedition order is first placed. This not only represents

some security that the deal will go ahead, but also recognises the fact that the original

publisher will be investing a considerable amount of money in origination, paper and

printing on behalf of the various coedition partners. The exact timing of payments

may vary according to the policy of the western publisher; some may require half of

the total when the order is placed and the balance on shipment of the books or by an

agreed number of days after that date. Others may agree to accept one third of the

total when the order is confirmed, one third on commencement of the printing and the

balance an agreed number of days after shipment. Some publishers may require that


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payment is guaranteed against an irrevocable letter of credit drawn on a major bank in

their own country. This may seem to indicate a lack of trust on the part of the foreign

publisher, but the sums they are investing are substantial and they may

understandably be cautions when dealing with a new market and an untried licensee.

The question of timing is crucial to any coedition deal since the foreign publisher will

be coordinating orders for several overseas publishers. They will therefore impose

very tight schedules on each licensee for the supply of film of the translated text,

checking of proofs, provision of shipping instructions etc. as each stage of the

coedition progresses; if one coedition partner fails to meet a deadline, the entire

schedule for the printing could be delayed. Some coedition publishers include

expensive penalty clauses in their contracts to avoid delays.


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CHAPTER FIVE

SAMPLE CONTRACTS FOR THE PURCHASE OF RIGHTS

i) Translation licence: lump sum agreement

This contract covers a straightforward purchase of translation rights from a foreign

publisher, with manufacture to be undertaken by the licensee. Payment is on the basis

of a lump sum to cover an agreed print run.

MEMORANDUM OF AGREEMENT made this day of

19 Between:

(name und address of licensee)

(hereinafter termed the Publishers)

of the one part, and (name and address of foreign publisher)

(hereinafter termed the Proprietors) of the other part,

WHEREAS the Proprietors are the proprietors of a work by (name of author)

(hereinafter termed the Author) entitled:

(title of book)

(number) Edition

(hereinafter termed the Work),

NOW IT IS HEREBY MUTUALLY AGREED AS FOLLOWS: -

1. Subject to the terms detailed in this Agreement, the Proprietors hereby grant to the

Publishers the exclusive licence to translate, produce and publish a printing of

(number) copies only of the Work in hardback/paperback volume form in the

language under the Publisher's imprint (hereinafter termed the Translation) for sale in

(country of licensee) only/throughout the world. This Agreement does not grant any

rights with respect to subsequent editions of the Work.

2. For the right to produce the aforesaid x copies of the Translation, the


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Publishers shall pay to the Proprietors in accordance with the provisions of Clause 18

hereof a lump sum equivalent to a royalty of x per cent calculated on the

retail/wholesale price per copy received by the Publishers, which sum shall be paid in

the following manner, namely:

(a) The sum of x pounds sterling/USD shall be paid to the Proprietors on

signature of this Agreement.

(b) The sum of x pounds sterling/USD shall be paid to the Proprietors on

publication of the Translation or by (date) whichever is earlier.

The said payments are not recoverable in the event of any default by the Publishers incarrying out the terms of this Agreement.

Should the Translation be issued at a price higher than the estimated

publication/wholesale price of x (currency of licensee) the payment due under

Clause 2 (b) hereof shall be increased on publication by a percentage equivalent to the

increase in the publication/distribution price of the Translation.

3. This Agreement shall not come into effect until the Proprietors have received the

payment detailed in Clause 2 (a) hereof.

4. The Publishers shall arrange for the translation of the Work to be made faithfully

and accurately by a qualified and competent translator, whose name and

qualifications shall be sent to the Proprietors. Abbreviations, alterations and/or

additions shall only be made with the prior written consent of the Proprietors. The

Proprietors reserve the right to request the Publishers to submit the manuscript of the

Translation to the Proprietors for their approval before commencing the production of

the Translation.

5. The Publishers shall be responsible for obtaining, wherever necessary, permission

for the use in the Translation of copyright material from the Work controlled by third

parties. The Publishers shall also be responsible for paying any fees required for such

permissions and for ensuring that appropriate acknowledgement is made in the

Translation. The Proprietors reserve the right not to supply the Publishers with

duplicate production material for any illustrations contained in the Work until the

Proprietors have received written confirmation from the Publishers that such


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permission has been obtained.

6. The Publishers undertake to ensure that, wherever possible, the printing, paper and

binding of the Translation shall be of the highest quality.

7. The name of the Author shall appear with due prominence on the cover, jacket (if

any) and title page of every copy of the Translation issued and on the reverse of the

title page shall appear the following copyright notice: " (copyright details from

original edition)" together with the following acknowledgement: "This translation of

(title) is published by arrangement with (name of foreign publisher)."

8. x free copies of the Translation shall be sent to the Proprietors on publicationtogether with a note of the actual date of publication and the wholesale price of the

Translation.

9. In the event of the Publishers failing to issue the Translation within x months

from the date of this Agreement all rights granted under this Agreement shall revert to

the Proprietors without prejudice to any monies paid or due to the Proprietors.

10. The Publishers shall not dispose of any subsidiary rights in the Translation

without first obtaining the written consent of the Proprietors.

11. Should any of the payments detailed in this Agreement be three months overdue

the licence herein granted shall forthwith lapse and all rights conveyed by it shall,

without further notice, revert to the Proprietors.

12. The Proprietors hereby warrant to the Publishers that they have the right and

power to make this Agreement and that according to English law the Work will in no

way whatever give rise to a violation of any existing copyright, or a breach of any

existing agreement and that nothing in the Work is likely to give rise to a criminal

prosecution or to a civil action for damages or any other remedy and the Proprietors

will indemnify the Publishers against any loss, injury or expense arising out of any

breach or alleged breach of this warranty.

13. The Licence hereby granted to the Publishers shall not be transferred to or

extended to include any other party, nor shall the Translation appear under any

imprint other than that of the Publishers, except with the prior written consent of the


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Proprietors.

14. All rights in the Work other than those specifically granted to the Publishers under

this Agreement are reserved by the Proprietors.

15. The Publishers shall inform the Proprietors when the Translation goes out of print

and off the market, whereupon all rights shall revert to the Proprietors, but the

Publishers shall have the first option of producing and publishing a further printing of

the Translation on terms to be agreed between the parties hereto and shall not proceed

with the publication of such further printing until written permission has been

obtained from the Proprietors and terms agreed.

16. In the event of the Publishers going bankrupt or should they fail to comply with

any of the provisions of this Agreement and not rectify such failure within one month

of having received notice from the Proprietors to do so by a registered letter sent to

the Publishers at their address given at the commencement of this Agreement, then in

either event this Agreement automatically becomes null and void and the licence

granted to the Publishers herein shall revert to the Proprietors without prejudice to

any monies paid or due to the Proprietors.

17. If any difference shall arise between the Publishers and the Proprietors touching

the meaning of this Agreement or the rights and liabilities of the parties hereto, the

same shall be referred to the arbitration of two persons (one to be named by each

party) or their umpire, in accordance with the provisions of the Arbitration Act, 1979

or any subsisting statutory modification or re-enactment thereof, provided that any

dispute between the parties hereto no resolved by arbitration or agreement shall be

submitted to the jurisdiction of the English courts.

18. All sums which may become due to the Proprietors under this Agreement shall be

paid by the Publishers in sterling/US dollars at the official exchange rate in force on

the day of transfer without any deduction in respect of exchange or commission.

Should the Publishers be required by law to deduct tax they shall send a declaration to

this effect with the relevant statement of account showing the amount deducted.

19. This Agreement shall be governed by and interpreted and construed in accordance

with the laws of England.


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20. The Publishers agree to take any necessary steps to register the title of the Work in

the Author's/Proprietors' name under local copyright laws at the sole expense of the

Publishers. The Publishers also agree to protect such copyright and to prosecute at

their own expense any person who infringes such copyright.

Signed .................................................

For and on behalf of the Publishers

Signed ..................................................

For and on behalf of the Proprietors

Notes to contract

Preamble

This gives the names and addresses of the parties to the contract and details of the

work which is to be translated. For a non-fiction work which may subsequently be

revised, it is common for western publishers to restrict the licence contract to the

current edition only.

Clause 1

This outlines the exclusive rights which are being granted in terms of language,

geographical territory and an agreed print run; volume rights cover the right to

publish the work as a whole, and this would technically preclude the foreign publisher

from making any separate arrangements for a book club edition in the country of the

licensee. If rights are restricted to publication either in hardback or paperback volume

form, this could leave the Proprietors free to license rights to another publisher for the

alternative form of binding, although this would mean that the other publisher would

face the problem of the use of the translated text. If the market might warrant

publication of both editions, it would be preferable for the prime licensee to acquire

volume translation rights and require the right to sublicense rights in the alternative

binding to another local publisher via a modification to Clause 10.

Clause 2

This covers the financial arrangements; a lump sum to cover an agreed printing,

equivalent to an agreed royalty percentage based either on the retail price (i. e the

average price paid by the end purchaser in the bookshop) or on the price received by


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the licensee from distributors. Royalty percentages based on the latter price are likely

to be higher to allow for the 25-40% discount between two prices.

In this example payment is to be made in two instalments, the first on signature of the

agreement and the second on publication or by an agreed "latest date". The date to be

inserted here would normally be the estimated publication date of the translation, with

payment due on that date even if publication has not yet taken place; this is intended

as an incentive to prompt publication.

The timing and proportion of payment is of course negotiable, as is the currency

specified (see also Clause 18). If the licensee will find it easier to remit payment if all

figures are given in US dollars, this must be agreed with the foreign publisher if

dollars are not their native currency.

The payments are forfeited if the licensee fails to comply with the contract. There is

also provision for a pro-rata increase in the lump sum if the final price is higher than

the price estimated at the time terms are negotiated; this is an important factor if

inflation is escalating.

Clause 3

The contract is not legally binding until the initial payment has been made.

Clause 4

This clause is intended to ensure that the translation is made accurately and by a

competent translator. No changes may be made without permission; this is to enable

the foreign publisher to check that the author has no objection to the omission or

addition of material to make to book more suitable for the licensee's market. Changes

of this kind should be raised at the earliest possible stage in licence negotiations.

There is a provision for the foreign publisher to request a copy of the manuscript for

approval.

Clause 5

Many western books may contain illustrations or quoted text derived from external

sources. The licensee should check carefully with the foreign publisher whether the

reuse of this material is automatically included under the overall terms of the licence

or whether permission for reuse must be secured and further fees paid. It is important


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that this reclearance is undertaken prior to the supply of any duplicate film to comply

with contractual arrangements with external copyright owners such as commercial

picture agencies, museums etc.

As it stands, this clause puts the onus for reclearance and payment of fees on the

licensee, in which case the foreign publisher must supply a clear list of the names and

addresses of the external copyright owners and the material they control; they will not

however be able to provide exact details of the fees for reclearance for the licensed

edition since these will be set by the individual copyright holders. Some foreign

publishers may be prepared to undertake the reclearance work on behalf of licensees,

but may then recharge the cost of any fees incurred together with a handling charge.

In such cases this clause might be reworded to read:

"The Proprietors shall be responsible for obtaining, wherever necessary, permission

for the use in the Translation of copyright material from the Work controlled by their

parties. The cost of any fees required for such permissions will be recharged to the

Publishers whit an additional administrative charge and details of this arrangement

will be agreed separately between the parties. The Proprietors reserve the right not to

supply the Publishers with duplicate production material for the illustrations

contained in the Work until such permission has been obtained."

Clause 6

This requires that the production quality of the Translation will be to the highest

standard possible allowing for local circumstances.

Clause 7

The name of the original author must be properly credited; copyright details of the

original edition must be printed on the title verso together with an acknowledgement

to the original publisher. This is necessary since the copyright line may be in the

name of the author. Because of the current requirement under UK law for the author

to assert his or her moral rights, some UK publishers may require their licensees to

include a statement to this effect which will probably read: " x (the author)

hereby asserts his/her moral rights in accordance with the Copyright, Designs and

Patents Act 1988." The licensee will also need to include a copyright notice relating

to ownership of the translated text.

Clause 8


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This specifies the number of free copies which must be supplied on publication

together with details of the publication date and final publication or distribution price;

this is necessary in case a rise in price necessitates a supplementary royalty payment

(see Clause 2)

Clause 9

A realistic publication time limit should be inserted here. In practice, if there are

genuine reasons for a delay, most publishers will consider an extension if they are

given due warning.

Clause 10

Clause 1 has limited the rights granted to publication in volume form; sublicensing ofthe translated edition is not automatically included. If additional rights such as

paperback rights or bookclub rights are to be granted here, they must be discussed at

the earliest stage of the negotiations and the percentages of any rights revenue to be

passed on to the foreign publisher must be agreed.

Clause 11

The contract can be cancelled in the event of overdue payments. Some western

publishers and literary agents may seek to impose penalties for late payment in the

form of interest on the overdue sums.

Clause 12

This clause provides a warranty and indemnity to the licensee. The warranty is

provided in this example under English law since a British publisher could not be

expected to know the details of legislation in the country of the licensee. The wording

on legislation would have to adjusted for a licence acquired from another country

such as the United States, Germany etc.

Clause 13

The licence cannot be transferred without prior permission from the foreign publisher.

Clause 14

The licence is restricted to the rights outlined in Clause 1 .

Clause 15

Because the licence is restricted to a specific number of copies, provision is made


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here for a renewal of the licence on terms to be agreed.

Clause 16

This covers cancellation of the contract in the case of bankruptcy or breach of

contract by the licensee. Few western publisher automatically offer a reciprocal

clause covering cancellation in case of bankruptcy or breach of contract by

themselves, but this can be requested.

Clause 17

This clause provides for arbitration in the vase of a dispute between the parties. The

wording refers to British arbitration regulations and would have to be adjusted if the

licence is acquired from another country. A compromise may be to specify thatarbitration is in a neutral territory such as Stockholm.

Clause 18

This clause covers the practical arrangements for remitting payments; the currency

should be agreed with the foreign publisher. Some publishers may wish to insert here

the exact department to which payment should be remitted; large publishing houses

have specialist royalty departments which may be located at a different address from

that of the main office. If rights are being acquired and payment made via a literary

agent, it will be necessary to insert here details with the name and address of the

agent and the fact that agency commission is being deducted. Bank documents

detailing any tax deductions are required as the foreign publisher may be able to

reclaim the deduction in their own country against corporation tax. The question of

whether any tax should be deducted on royalty remittances will depend on what

taxation treaties are in place (if any) between the countries of the licensor and the

licensee. The UK Inland Revenue office has stated that it considers that the 1986

double taxation treaty between the United Kingdom and the Soviet Union still applies

to the former Republics of the Soviet Union until such time as new treaties are

signed; this would mean that no tax should be deducted from remittances to the

United Kingdom.

Clause 19

In this sample, this clause specifies that the contract is operable under English law; it

is customary that the law of the country of the seller prevails. The wording would

have to be adjusted for a licence acquired form another country; e.g. an American

publisher might specify that the contract was operable under the law of the state of


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New York. A compromise would be to specify that the contract is operable under the

law of the country of the summoned party.

Clause 20

This clause requires the licensee to comply with any local procedures necessary to

protect copyright in the title and to take action against any infringement.

ii) Same-language reprint licence: lump sum payment

If the licensee is seeking to acquire rights to reprint a book as it stands in the original

language (e.g. an English language dictionary) the contract will be very similar to the

translation contract given above. Some modifications will be required as follows:

a) the term "the Translation" should be altered throughout to read "the Licensed

Edition".

b) Clause 1 should be amended to read:

"Subject to the terms detailed in this Agreement, the Proprietors hereby grant to the

Publishers the exclusive licence to produce and publish a printing of (number)

copies only of the Work in hardback/paperback volume form in the (language, e.g.

English) under the Publishers' imprint/under the joint imprint of the Proprietors and

the Publishers, for sale in (country of licensee) only and this restricted circulation is

to be clearly indicated on the outside of the cover and on the reverse of the title page

of the Licensed Edition by the following words: Licensed for sale in (country of

licensee) only; not for export. This Agreement does not grant any rights with

respect to subsequent editions of the Work."

The question of publication under a joint imprint must be agreed in advance with the

foreign publisher and some publishers have been known to ch

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