Wednesday, April 28, 2010

Terms to Know: Non-Compete Clause

Continuing my recent trend of contract-related content, today's post focuses on another aspect of the standard book publishing contract: the non-compete clause.

Those of you who have read Agent Kristin's blog may already be familiar with this clause (she's written about it here and, more recently, here). For those of you who haven't, it's like this: book publishers want to protect their interests in their authors, and the non-compete clause is an effective way of ensuring this.

Under the NCC, an author generally can't reproduce any material from the book named in the contract, since doing so would damage the publisher's sales or infringe on their newly acquired rights. Example: if Fancy Pants Publishing acquires your book, 99 Ways to Defeat A Ninja, and you try to have High Fullutent Press publish an excerpt, or a graphic novel version, or some such other work that incorporates material from the first book or competes with FPP's sales, you're in violation of their NCC.

Kristin's second post (above) raises an even more interesting issue, one I inadvertently touched on in Monday's post: namely, that if your agent has withheld e-rights (or graphic novel rights, or any other subsidiary right), the language of the newer NCCs may prevent you from exercising those rights with other companies. If Fancy Pants Publishing has your hardcover and trade paperback, they're not going to want to see you reduce their sales by publishing the graphic novel and e-book with High Fullutent Press.

Now, in the case of Styron, the contract language was too old to include e-book rights, so I imagine the NCC in that contract/those contracts isn't broad enough to include e-books, either. But if your agent specifically withheld e-rights after 1995 or so, the NCC language may be new enough to allow publishers to invoke it to prevent you from publishing your e-books elsewhere. Food for thought, at any rate, and I again invite any agents in the house to weigh in on this... well, weighty issue.

9 comments:

  1. I'm afraid you are wrong about what the non-competion clause covers. It covers OTHER books, not the same book.

    The examples you give are different rights an author can sell for the same copyrighted material which is perfectly legal.

    The Styron case was essentially the publisher trying to bully their way into controlling ebook rights that weren't covered in the contract.

    Check here for a quick definition.

    http://www.mbbp.com/resources/iptech/publishing_contracts.html

    This is a very simple definition, but I didn't have time to check the sites I normally use for publishing legal language.

    Try Googling "non-competition clause publishing" if you'd like to learn more.

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  2. Hi Marilynn,

    I wrote: "Under the NCC, an author generally can't reproduce any material from the book named in the contract, since doing so would damage the publisher's sales or infringe on their newly acquired rights."

    This is correct, regardless of whether you're trying to publish a different "version" of the current book (for example, lifting it wholesale from the trade paper to make the graphic novel) or publishing a (theoretically entirely) different book that still reproduces material from the original.

    The content is what's at stake here, regardless of how it's repackaged.

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  3. I still disagree with you.

    The non-competition clause certainly doesn't allow massive cannibalization of the book contracted, and most contracts specify how much of the book the author may post online or eleswhere for promotion, but that doesn't mean you can't sell the other rights to the book-- ebook, audio, different print versions (trade, massmarket, graphic novel, etc.

    In fact, every day, authors and their agents are selling those rights, and it is perfectly legal unless they have been very stupid not to specify what rights they are selling as well as defining what non-competetion is and isn't in relation to what they are selling.

    I suggest you check out the following information.

    A good definition:

    http://saperlaw.com/blog/2007/09/28/negotiating-book-publishing-agreements/

    A bit more:

    http://ckwebb.com/books/author-advice-the-non-compete-clause/

    ReplyDelete
  4. Hi Marilynn,

    I'm not disagreeing with you that agents sell different rights to different publishers; as you mention, one house can publish a physical book and another can publish the audio book. Many agents make their livings selling only subsidiary rights.

    However, there are contracts—as I mention in my link to Kristin's post, where she explains the problem in more depth—containing language that may be used in an attempt to limit an author's exercising his/her reserved rights, say to a graphic novel version of the book or the e-book.

    Did you read Kristin's post? I'm interested to see where you disagree with her explanation of why this is problematic.

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  5. Yes, I read her blog and yours every day.

    Nothing I said disagreed with her. She was talking about publishers using the non-competition clause to threaten authors and agents who want to sell ebook and other rights elsewhere. I agree. They do.

    What I'm saying is that the publishers are blowing smoke on an issue that was partially settled by "Random House versus Rosetta" which declared an ebook a separate right.

    Brief explanation of this lawsuit here:

    http://www.publaw.com/erights4.html

    Since an ebook is a separate version, it is no more competition than a massmarket is of its hardcover version, and that has been part of publishing for many years.

    If the publisher doesn't buy ebook rights, they can't stop their sale to someone else. At best, they can stipulate a certain delay of other rights.

    Right now, the big publishers are acting like bullies by claiming that the ebook or any other right version are in violation of the non-competition clause, but the Styron lawsuit settlement shows that they aren't willing to fight it out in court because they won't win.

    It's up to the agent and the author to decide if they will or won't buckle under to the threat of a lawsuit in a case like this.

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  6. I know there's a little debate going on here, but either way, I found this post very helpful, as yours always are. Thanks for sharing your expertise!

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  7. What sticky and, often times, shady things contracts are.

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  8. I guess the most important thing an author has to do is be aware of their rights. Knowledge is power.

    If you don't know you have a right--it can be the same thing as not having the right.

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  9. I'm not disagreeing with you that agents sell different rights to different publishers; as you mention, one house can publish a physical book and another can publish the audio book. Many agents make their livings selling only subsidiary rights.
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    ReplyDelete