One of the big bugaboos of publishing companies lately has been authors whose contracts pre-date the coming of e-books (and, more importantly, e-book rights) deciding to take their e-book rights elsewhere. This has happened with both low profile authors and those as high-profile as (the estates of) Catherine Cookson and Ian Fleming.
It touched off a major to-do last year when agent Philip Wylie announced he was starting his own e-publishing company for backlist titles—and then promptly folded it when he got the better royalty terms he was looking for from the books’ print publishers. And a case relating to those rights over ten years ago, in which authors sought to publish backlist titles through the e-publisher RosettaBooks, was settled in authors’ favor after a court’s preliminary ruling put the writing clearly on the wall.
Now the Bookseller’s FutureBook has a piece by a couple of solicitors looking at how publishers might use a “no-compete” clause built into such contracts to try to shut backlist e-books down.
Non-compete clauses are designed to protect the rights granted to the publisher by prohibiting the author from exploiting potentially competing rights or granting potentially competing rights to another publisher. A typical non-compete clause may, for example, prohibit an author from publishing any work which may compete with or affect prejudicially the sales of the work or the exploitation of the rights that have been granted to the publisher. A non-compete clause drafted in this way could therefore arguably prohibit an author from publishing an ebook version of a work if it could be shown that sales of that ebook version would prejudicially affect the sales of the printed work. Although there is some expectation that ebook sales may well cannibalise print sales, at present statistical information to substantiate such a claim may be difficult to gather. However, as industry statistics on ebook sales versus print sales and market trends improve, substantiating such a claim could prove increasingly easy.
It goes into detail about the possible pros and cons of such a move, and whether the phrase “any other work” in such agreements might introduce legal ambiguity. It all seems a bit slimy to me, but then my sympathies tend to be with the authors in any author vs. publisher issue, in no small part because I’m friends with a number of authors.
And while the article is quite clear on how publishers could wield these contracts if they wanted to, I find myself wondering if doing so even if they were perfectly entitled would be the wisest possible move. If those authors are still alive and writing new books, becoming the subject of legal action by their own publisher could have the effect of saving past e-books at the cost of future ones: is an author going to want to write more books for a publisher who is suing them?
A well-drafted non-compete clause which survives the above hurdles could act as a powerful deterrent to authors deciding to exploit ebook rights independently rather than strike a deal with the publisher. Therefore, although a non-compete clause will not guarantee a publisher the rights to publish the ebook version of an author’s work, it may prove to be a useful weapon in the publisher’s arsenal when attempting to acquire those rights.
If, as a publisher, you’re thinking in terms of “weapons” against your authors, you really should stop and think for a moment about your priorities. Mutually-assured destruction is no way to run a business.
Interesting article. If publishers go the route of non-compete action, it seems they are saying something about how they see their role. It’s not to bring books to readers for sure.
I predict that this will fizzle as a tactic, as you say if they are looking for weapons, they need to find a mirror.
The enforceability of noncompete clauses varies widely in the United States too. For example, in California (where I live), noncompetition clauses in contracts are generally presumptively unlawful except in some fairly narrow cases.
Also, courts in the United States are much less likely than they used to be to be willing to enforce so-called “contracts of adhesion” — that is, contracts drafted by a party of superior bargaining power and foisted on the other party on a “take it or leave” it basis with little ability to meaningfully negotiate its terms. If a court determines that the terms of a contract and the conditions under which it was prepared make it a contract of adhesion, one of the possible remedies is to declare the whole contract unenforceable.
So, at least in the US, publishers would be wise to exercise care about using this strategy, I think. Apart from the fact that mutually assured destruction is indeed a bad business decision, the publishers also run a very real risk of losing far more than they gain with this strategy.
(Disclaimer: I am a paralegal and a mediator, but not a lawyer.)
Even outside of CA, noncompete clauses are void, just by precedent rather than by statute. You can’t enforce a contract that prevents you from seeking *future* work in your chosen profession.
— C
This isn’t a non-competing employment clause, though. It’s an agreement not to compete with the people who are publishing your book for you. I’d think that legally that would be a little different matter.
In the EU non compete clauses are very hard to enforce, especially over 2 years in length. They are seen as serious restraint of trade.
If anything, this sounds like the same kind of chicanery as arguing that since your processor makes a “copy” of a computer game’s source code, then modifying the game in any way constitutes a copyright violation which can be punished by DMCA activity.