Restless authors

You have a great relationship with your author. Her work is popular. She delivers on time. She turns up for promotions and signs books until her arm aches. She is polite to journalists, and even to members of the public. You love her, and she loves you.

But it's the little things that start to give her away. She doesn't return your calls. When you do get through, she is a little distant (and somehow a little too quick to end the call). You hear a rumour that she was spotted lunching with a mysterious stranger. And then she drops the bombshell. She doesn't think she wants to see you any more. She thinks she may be happier if you spent some time apart. She's been seeing . . . well, she's been seeing another publisher. You explode: "Turncoat! Judas! We never said this was an open relationship."

What can you do about the situation? If an author has come to the end of her contract, then the answer is, very little. Chocolates, flowers, offers of larger advances or a higher royalty rate might tempt her back. But if the author wants to walk, she will walk.

However, let's be honest. Why does the author want to jump ship at all? Does she have a complaint about, say, sales, royalties or marketing? A frank discussion may be in order. Has she been made an offer that she thinks you cannot match? Find out, and consider matching it if there is a commercial justification for doing so.

Or has their much-loved editor gone elsewhere, and perhaps the author wants to follow? Again, this might not be fatal if the author can be persuaded that you have an equally talented new editor in the wings. It is not unknown either for publishers to agree that authors and their former inhouse editors may continue working together, with the editor being commissioned for services on a freelance basis.

In short, as in any relationship that goes through a wobbly patch, sitting down with your author and talking things through is always the best starting point.

If this doesn't work, then take a look at what the author's contract says about future publications. Contracts often contain an Option/Next Works clause, under which the publisher and author agree to negotiate in good faith for the publication of future works. In practice, these clauses can be tricky to enforce (unless separate financial consideration has been paid by the publisher to the author for the Option), because forcing someone to negotiate is something of a contradiction in terms, and anyway an agreement to negotiate does not mean that a deal has to be concluded.

But the obligation can be used to persuade an author at least to talk to you, since it would be a breach of the Option clause not to talk at all. If you then offer the best deal available, the author may have to show good reason why she will not go with you. The penalty for an author's refusal either to negotiate or accept your better offer may be high—arguably, the author would have to reimburse the publisher for loss of profits on the new work, or repay any Option fee.



New editions and updates

Has the author really come to the end of her contract? If she is leaving to write an update or new edition of a work you have been publishing, then you may be able to call foul. Most author/publisher contracts contain provisions for new editions and updates. Indeed, many contain clauses under which the publisher can compel the author to produce a new edition and, if the author cannot or will not do so, allow the publisher to commission a new edition from a new author. Some contracts even allow the publisher to carry on using the author's name—for example, where it is an important component of the title.



Non-competition clauses

A well-drafted author/publisher contract should also contain a clause specifying that the author will not be involved in a work likely to compete with the work under contract. Clauses such as this are often hedged around with additional terms—for example, that the author is prohibited from producing works that "in the publisher's opinion" are likely to compete.

The enforceability of such prohibitions may well come down to whether the author's new work is genuinely competing with the old work. An author is unlikely to get away with producing an identical book for an identical market. But if he can argue that the new work does not compete, either because it is very different or because it is aimed at a different market, then that may be fair. An author who publishes a French language textbook for Key Stage 1 is unlikely to be competing with his own work if he then writes a French language textbook for universities.

As a side note, a contractor cannot generally impose a restraint that is wider than necessary for the protection of the business contracted for. Therefore, publishers can contract with an author that the author will not compete, through another publisher, with his own work, but not that the author will not compete with other works on the publisher's list. Using the same example, a French language publisher may publish to all levels of students, and may be very fed up that one of its schools authors is now writing university titles for another publisher, but there is little it can do.



Multiple book deals and unlawful restraint of trade

If an author is tied into a multiple book deal, then this may give the publisher power to restrain them from leaving before their quota of books is delivered. However, an author may try to challenge the arrangement as an unlawful restraint of trade.

Contracts in restraint of trade are, in the first instance, void and unenforceable. In so far as a multiple book contract restrains an author from producing books for other publishers, it arguably will be a restraint of trade. Such a contract is not void, though, if the party imposing the restraint has a legitimate interest that merits protection, and the restraint is reasonable. The burden of proof is on the publisher to show that the restraint goes no further than is reasonably necessary to protect its legitimate interest.

The music industry, rather than the publishing industry, has in recent years seen more challenges by artists to their contracts on this ground. Famously, George Michael successfully challenged the contract which he had signed before Wham! made the big time, and which kept him on a pittance while the group had hit after hit. However, he failed in an attempt to take a second bite of the cherry when he (by now a superstar) challenged his later contract, with Sony, which had been negotiated with the help of agents, lawyers and accountants. The court held that, given the advice he had received this time around, the contract was valid.

The point for publishers is that it is perfectly legitimate to tie authors into multiple book deals. The publisher wants to recoup its investment in the author, which it may only do over a period of time. But it should not push the point too far:

1 A tie-in for too many books could be a point of challenge. That said, most publishers might not want an overly long tie-in even if the law were different, given the risk of the author going off the boil.

2 Inequality of bargaining power between the contracting parties is a factor that a court may take into account. The change in George Michael's circumstances between signing his two contracts was a major factor in the different ways in which the court treated them. Therefore, different approaches may be needed when dealing with unknown and with established authors. With established authors and their agents, publishers can be fairly robust. With unknown authors, some care is needed. On the one hand, investment in an unknown is a greater risk, so the publisher can legitimately expect a greater return. On the other, the courts may be prepared to help callow authors who have been unfairly exploited.

3 Contracts that have gained a general commercial acceptance may not be subject to the restraint of trade doctrine. Or, to put it another way, if a restraint is one that is customary in the industry, then that is evidence that the restraint is reasonable. Publishers may therefore be comforted if they are simply applying common industry standards in the number of books they contract for.

European and UK rules against anti- competitive behaviour are closely related to these restraint of trade rules. Both prohibit agreements the effect of which is to distort competition. But the exceptions to the prohibitions mean that, in practice, there is much overlap with the factors that come into play in restraint of trade disputes.



Electronic versions

The brave new world of electronic publishing has seen disagreements and gaps in some contracts that can cause confusion on the balance between the rights of publisher and author. Publication on the web, as Stephen King has done, is one end of this; but the boundaries between print and electronic media are blurred with e-books, digital manuscripts and print-on-demand.

Old publishing contracts were usually concluded without a thought for the electronic dawn that was soon to rise, and they often do not cover non-print versions of a work. Two US cases show how the courts have tended to favour a restrictive interpretation of the rights granted, in the author's favour.

In New York Times v Tasini (2001), the New York Times, Time, Newsday and other publishers had placed on their websites articles commissioned from freelances for their periodicals. They had also sold the articles to companies with searchable databases. It was held that the authors had not granted the publishers electronic rights when they granted them periodical publication rights. The right to reproduce the articles on the websites and to sell them to database providers needed to be expressly granted by the authors, but was not. The publishers were ordered to pay damages by the New York Court.

In Random House v Rosetta Books (2001), William Styron, Kurt Vonnegut and Robert B Parker had standard author contracts with Random House, giving Random the right to "print, publish and sell the works in book form". Vonnegut's and Parker's contracts also contained "Xerox Rights", by which the publisher was granted the right to sub-license for publication, including by "Xerox and other forms of copying, either now in use or hereafter developed".

The authors later contracted with Rosetta Books to publish the same works in digital format on the web. Random sued, again in New York, for a preliminary injunction for copyright infringement. The court held that, particularly as the authors had reserved certain rights to themselves in the contracts, the grant of "book rights" could not be taken to cover any and all versions of the works, and did not cover electronic versions. The court added that the Xerox Rights did not help Random, because they referred only to new forms of copying, and it would be stretching the meaning to include new forms of publishing such as e-publishing. Random lost.

In both of these cases, on a careful reading of the contract terms, the publishers found that they were wrong to assume that their rights extended to electronic media. If in doubt, it is wise for the publisher and the author to agree terms for such rights.

Paradoxically, just as publishers were waking up to electronic rights, the topic lost much of its significance when Stephen King's experience of online self-publishing seemed to show that this was not a major threat. Still, electronic publishing remains vital for some sectors of publishing, such as academic and professional. Nor are mainstream publishers likely to be sanguine about their authors publishing competing editions online. On the other hand, authors sometimes want to retain electronic rights for fear that fusty publishers will not be equal to launching them into the perceived riches of the electronic ether.

A compromise position can sometimes be reached: that if a publisher has not made the work available online or in an e-book format after a certain period then this right will revert to the author.



Termination clauses

An author who is determined to challenge a contract may test the mechanism of its termination clause. These often say that either party may terminate if there is a material breach of the contract that is not corrected 30 days after notice of the breach has been given. The author comes up with a perceived breach—let's say, failure to pay interest on late-paid royalties—gives notice, and terminates when the baffled publisher fails to correct the perceived breach.

The success of the strategy depends on whether there is a real breach of the contract by the publisher. An imagined breach will not do, and publishers can legitimately resist this tactic if they are in the right. The author may be doing this to try to reach some sort of bargaining position to exit his or her contract.



Transfers of rights

When there is a transfer of lists between publishers, some authors have been known to try to escape from their original contracts. Publisher/ author agreements may contain a clause that gives the publisher the right to assign the contract, and it may be difficult for an author to resist assignment in these circumstances. Other contracts allow assignment with the author's consent, "not to be unreasonably withheld". The author may even have negotiated a non-assignment clause.

These latter cases are where a problem can arise, although the potential problem should have been picked up on the list purchaser's due diligence exercise. If there is a non-assignment clause in the contract, then the author can legitimately object to assignment. If there is a "reasonableness" clause then, as publisher, you may have a fight on your hands.

A transfer from BigPublisher to BigPublisher may not give an author a legitimate cause for complaint, but a transfer from BoutiquePublisher to BigPublisher, or from a specialist to a generalist, might do. There may even be an issue over whether the author's reasonableness has to be objective or subjective. If, for example, the autobiography of Lord Hutton were assigned to BBC Worldwide, could he legitimately object?

This article may give the impression that holding on to authors is like keeping worms in a colander. Nothing, of course, is further from the truth. Most authors do not try to leave, and even if they do, most publishers' contracts will prevent them from leaving without good reason. But try chocolates and flowers first.



David Daley is a legal adviser at HarperCollins. Richard Taylor is a partner at DLA solicitors and author of the bestselling How To Read a Church (Rider). He is very happy with his publisher.