Copyrights are awarded automatically. But authors can suffer from significant inequality of bargaining power and asymmetry of information in their dealings with cultural investors (such as publishers). That can mean they end up transferring all or most of their rights as condition of distribution or investment. What authors transfer can be disproportionate to what they get in return. As this recent European Commission report has found, that contributes to low incomes.
Australia takes an almost completely ‘laissez-faire’ approach to authors’ contracts. As I explained in an earlier post, that’s French for ‘let people do as they choose’, but it can mean ‘freedom to sign away your rights, before anyone knows what the work is worth, often in exchange for not much at all’. We do have some minimum protections that apply to all contracts, such as a requirement that they not be ‘unconscionable’, but that’s a very low bar indeed.
It doesn’t have to be this way
Elsewhere, many countries take a much more proactive approach. Recognising that authors are so often at a disadvantage in dealing with investors, their laws have author-protective laws to help level the playing field.
Here I’m going to introduce some of those methods to jog thinking about what we could do differently in Australia to make things fairer for authors, and help them secure a bigger share of copyright’s rewards.
For those interested in drilling down further, I link to some useful materials in the final paragraph – from those, you can look more deeply into everything I mention (and find out more about all kinds of other protections that I haven’t had room to mention here).
I’ve classified the different forms of protection into three categories: direct remuneration protections, reversion, and other limitations on transfer. I’ve excluded mechanisms that exist outside of copyright, although some of these hold intriguing possibilities for authors. Great labour organisation is one. Screenwriters benefit significantly from unionisation (and some of you will vividly remember the Writers Guild strike of 2007-2008). Some countries have provided for the use of collective agreements to improve conditions for authors. I’ll save those options for mulling over later.
In reading this, remember: not a single one of these author protections currently exists in Australian copyright law. There’s lots of room for improvement!
Laws that directly support authors getting paid
While Australia has some very high earning authors, for the most part incomes are low and falling: to an average of just $12,900 from writing work in 2013/14.
Non-employee authors have no minimum wage or payment protections, and there’s nothing in Australian copyright law to put a floor on the payments they receive from their copyrights.
Some other countries do much more to ensure authors get a fair share. There’s too many to enumerate, but here are some of the most interesting versions:
The right to be paid
In Poland, if the contract doesn’t say the transfer was for free, then the author is entitled to be paid for it. If the payment amount is unspecified, it is to be based on the rights granted and resulting proceeds/benefits from use of the work.
The right to share in the proceeds of unexpectedly successful works
‘Bestseller’ provisions, enabling authors to share in the benefits where their works prove unexpectedly successful, exist most famously in the Netherlands and Germany. Essentially, they give authors the right to additional payment where works are so successful that what was initially agreed becomes ‘seriously disproportionate’ (Netherlands) or ‘evidently disproportionate’ (Germany) to the actual revenues.
The right to ‘proportional remuneration’
Some countries (including Spain, Italy and France) give authors a right to ‘proportional remuneration’ from their works’ exploitation. This should be familiar to many trade authors who are used royalties as a percentage of the RRP. In these systems, lump sums are generally also permitted where that’s unjustifiable in the circumstances or impossible to calculate.
The right to ‘reasonable’ or ‘fair’ remuneration
Authors in Germany have an inalienable right to ‘reasonable’ remuneration, taking into account factors such as the frequency, extent, time and duration of use. In the Netherlands, the equivalent right is to ‘fair’ remuneration. If contracts don’t meet these minimum standards, authors are entitled to extra payment.
The right to transparency
It’s not much comfort to have a right to ‘fair’, ‘reasonable’ or ‘proportional’ payment if there’s no way of working out how much that is – and whether you’re getting your fair share. In recognition of that, a growing number of nations have enacted transparency rights for authors. In Germany, for example, authors have the right to information about their works’ exploitation and resulting revenues – not just from their contracting partners, but from relevant third parties as well. The Polish law is similar. A similar entitlement has been proposed in the next EU Copyright Directive. If it gets up, authors will have greater transparency rights throughout Europe. This echoes writers’ organisations calls for publishers to improve practice around royalty statements to ensure better transparency and accountability.
Reversion allows authors to reclaim copyrights that they’d previously transferred. Many authors will be familiar with reversion clauses, which often appear in publishing contracts and typically allow the author to ask for their rights back where a book has gone out of ‘print’. Such clauses don’t work well in this world of print-on-demand and ebook options (which is one of the reasons why the Authors Guild has been calling for reform). If they don’t have a reversion clause, or the reversion clause doesn’t apply, authors have to rely on negotiations with rightsholders to reach a deal.
By contrast, a number of other countries recognise that authors have a positive right to reclaim their rights in certain circumstances – regardless of what the contract says. There are three main situations where those rights kick in: when enough time has passed, where the owner has failed to appropriately exploit the work, and where exploitation is contrary to the author’s interests.
In the US, authors have the right to terminate transfers of copyright 35 years after grant. A fee is payable, and there are a few hoops to jump through, but for those willing and able to do so, this puts a ceiling of 35 years on every grant. (Contrast that to Australian practice, which regularly sees authors transfer rights for their entire lifetime plus another 70 years.)
Canada takes a time-based approach too, automatically reverting rights 25 years after authors’ deaths. That’s probably not much comfort to the creator themselves, but it might be of interest to their kids or grandkids. Since it’s automatic, estates don’t have to comply with any legalities or pay any fees – the ownership simply transfers to the author’s heirs, and they can make new arrangements to exploit the work.
Over in Europe, Dutch law gives authors the right to void contractual clauses that provide for ‘unreasonably long’ terms. German law enables authors to convert exclusive-licenses to non-exclusive ones after 10 years, where their payment was a fixed sum instead of royalties. Polish law enables authors to terminate contracts of five years or longer, as well as indefinite contracts, upon giving one year’s notice (unless the contract stipulates otherwise).
Reversion upon failure to exploit
European countries widely protect authors from investors’ failures to exploit. Such ‘use-it-or-lose-it’ provisions exist broadly throughout Europe, including in Germany, Spain, Belgium, Austria, Luxembourg, Portugal and the Nordics. The German law, for example, provides that an author can terminate a contract and get their rights back if there has been no appropriate exploitation within two years of a contract being signed. There’s also an EU-wide equivalent for music performers (which kicks in after 50 years) where record producers aren’t effectively exploiting their recordings.
Reversion where exploitation is contrary to author’s interests
Rights also sometimes exist allowing authors to terminate where their works are exploited in ways counter to their wishes. In Poland for example, authors can bring contracts to an end if the exploitation is contrary to their ‘fundamental interests’. France and Germany also have similar laws in place. (For a fuller description of European reversion systems, see Dusollier at 77-79.)
Other limitations on transfer
Various countries also impose other limits on copyright transfers. Again, there’s too many to mention, but here are a few interesting variants:
If the contract doesn’t clearly specify what’s being transferred, it won’t be valid
In France for example, each right that’s intended to be included must be enumerated separately. (That is, it’s not enough just to say that the copyright will be transferred; each right – to reproduce, to communicate to the public, to perform in public etc – must be set out explicitly.) The scope, purpose, territory and duration of the transfer must be set out for each as well. Spain requires similar specificity. Germany and the Netherlands don’t go quite as far, but still require courts to interpret transfers as including only the rights required for the purpose at issue in the contract.
Authors can only transfer uses that were known or foreseeable at the time the contract was agreed
France, Germany, Italy, Spain, Hungary and Poland are among those with this kind of protection. It means, for example, that a contract assigning the reproduction right to a publisher before the advent of digital publishing would not also grant the right to exploit it as an ebook. When the ebook industry emerged, authors in those countries would have had an opportunity to make a fresh deal for those rights.
All this describes just some of the author-protective mechanisms that currently exist around the globe. Australia has exactly none of them. We do have a Public Lending Right, which exists outside of copyright law. It is a much-valued revenue stream by Australian authors, largely because the PLR money is divvied up on the basis of a statutory formula: that means it cannot be extracted from them via contracts. For everything that actually sits within copyright however, authors have virtually no protections.
This is an ideal time to reflect on exactly who and what our law protects. Copyright is broader and longer than it has ever been before. But our current approaches permit the lion’s share of its benefits to be diverted to owners, taking no steps to install even minimum protections for the authors at the centre of the copyright equation – even though we know creative labour markets feature inequalities of bargaining power and asymmetry of information that make it difficult for authors to assert their rights. And remember this isn’t new – we’ve known about it for almost as long as copyright has existed..!
The mechanisms described here are far from perfect, and don’t always result in the desired outcomes. For example, when Giubault looked at German practice, she found that, as of 2013, 69% of German authors reported receiving less than 10% of their books’ RRP. That still isn’t good enough. The law has since been updated to provide greater guidance on what is ‘reasonable’, but there may be room for further tweaking.
Author-protective laws can also have unintended consequences. Dusollier and Senftleben spoke about some of them at our recent conference in New York (which you can watch from here). Laws that need to be enforced by the author (rather than applying automatically) tend to be most problematic. Authors may well be reluctant to initiate action against their publishers, given the mutual importance of those relationships and the very personal links that can develop over time. Where creators have exercised such rights, there have been some reports of ‘blackballing’ within their industries. High enforcement costs can be another disincentive to authors in deciding whether to exercise their rights.
None of that is reason to abrogate our responsibilities to authors. We should be taking inspiration from these international examples, trying to better understand their effects, and taking into account the lessons learnt by expert cultural economists (such as Professors Ruth Towse and David Throsby) whose understanding of the realities of creative labour markets can help us predict the kind of mechanisms most likely to achieve their desired results. That’s some of the work my team and I will be doing over the next four years.
Want to explore further? A few sources
I’ve drawn the facts above from various sources. See:
- the national copyright laws of the relevant jurisdictions (English versions of all of that primary material is freely available on the WIPO website)
- ‘Contractual Arrangements Applicable to Creators: Law and Practice of Selected Member States’, led by Professor Séverine Dusollier for the European Parliament.
- ‘Remuneration of authors of books and scientific journals, translators, journalists and visual artists for the use of their works’ led by Professor Lucie Giubault for the European Commission
- See also these brief remarks on the recent changes to Dutch and German laws
- You should also check out the remarks of Séverine Dusollier and Martin Senftleben at our conference in New York last September during the panel on improving copyright for creators, which you can watch here.