Tuesday, May 1, 2012
No Sales: Can Book Contract Be Terminated?
Print on Demand. We looked at the contract clause you forwarded and unfortunately it appears that termination for insufficient demand is made at the publisher's discretion. The termination/reversion clause also specifically states that print on demand is enough to justify the publisher's rights under the agreement. This is an onerous (but likely enforceable) reversion clause. A more equitable termination provision would have stated that you are justified to terminate if sales are under a certain number of units -- say less than 25 books per quarter -- for three or four consecutive quarters. (The issue of reversion clauses was recently discussed at this blog.)
Throw in the towel? That doesn't mean you still can't terminate the contract. But you must come up with evidence that the publisher committed some material breach of the publishing agreement. Typically, that means a failure to pay royalties. Just because there's nothing in the contact that details an obligation to make timely payment and accounting, these obligations are implied and may be your route to reclaiming rights. You should have a publishing attorney review the contract to determine if that is a basis or if there is another basis for reversion. The attorney would also review your contract's "assignment" provision to make sure that the successor publishers have the rights they claim to have. There may also be creative theories available. Though it's a longshot, a California court may be open to the argument that an exclusive licensee (the publisher) has an implied obligation to exploit the licensed work.
Can they keep the copyright forever? No, but they may be able to keep it until 2033. A copyright owner who transfers rights is entitled to reclaim them after 35 years. See our recent blog entry.