Can a publisher assign publishing rights in a book to another publisher if the publishing contract is silent?
A well-drafted publishing agreement will indicate whether the rights or obligations of the parties may be transferred to a third party. On the publisher’s side, this means the contract should contain a clear statement that the publisher may assign its rights under the agreement to another publisher.
But what if the contract is silent on this point? Can a publisher transfer its rights without obtaining the author’s consent?
Under U.S. law, most contracts are assignable, unless they say otherwise (or an assignment would damage the other party). However, contracts for intellectual property (like contracts for personal services) are treated differently: these agreements are not assignable unless they expressly say so.
The point was well made in the recent case, Cincom Systems v. Novelis Corp. (6th Cir. 2009), which involved the transfer of a software license between Cincom and Alcan Ohio to an Alcan successor, renamed Novelis, by statutory merger. As the court concluded: “Federal common law… is clear: the only legal entity that can hold a license from Cincom is Alcan Ohio. If any other legal entity holds the license without Cincom’s prior approval, that entity has infringed Cincom’s copyright because a transfer has occurred.”
A software license is a license of intellectual property because the rights being granted are rights to the licensor’s patents, copyrights and/or trade secrets in the code and documentation.
A publishing agreement is also a license of intellectual property (unless it is an outright assignment of rights, which is unusual in trade publishing but not uncommon in academic publishing). That is, generally an author grants the publisher a broad and exclusive license under the author’s copyright.
Therefore, as with software licenses and most other IP licenses, a publishing agreement generally cannot be assigned by the original publisher to another person, even a successor to its contracts and assets, unless the agreement clearly allows it.
The lesson: If a publisher wants to assign publishing rights to another house, for any reason, it must check its author contract to be sure this is authorized. If the contract doesn’t specifically allow assignment, the publisher should ask the author for written permission. If it fails to do this, its assignment of the publishing contract, and its successor publisher’s production of the book, could be held to constitute copyright infringement… and no publisher wants to go there!
For more information on licensing law, please contact Howard Zaharoff.