Royalties for commoners?
The legalisation of copyright rip-off

Prepare yourself for a nasty shock. If you have ever had an article published in a journal, your intellectual property may well be being sold for profit by third parties who have no contractual obligations to you. And, possibly even more devastating, it’s all perfectly legal.

To add insult to injury, there may also be author copyright payments being collected for works you created, from which you are not going to receive even a token percentage. Or asked for consent. Or even informed.

Nor is this situation restricted to an author’s country of residence, or country of original publication. Which will largely explain why an author may not be aware of this issue, particularly where material is being resold in a different country to that of original publication.

I am an Australian resident and citizen, who occassionally freelances for a broad range of journals, and has published academic articles in many countries including Australia and USA. A few months ago, when doing some background research, I inadvertently discovered that re-sellers in Britain, America and Australia are offering digitised copies of my work. No consent was given by the rightsholder (me). None of the payments made by re-sellers were received, although various sums were collected by different and multiple copyright collection agencies on the understanding they were author royalties.

How can this be legal?

Many commercial and academic publishers are signatories to reproduction rights organization (RRO) agreements, administered by national bodies created under legislation of different countries who are signatories to the Berne Convention; many of these have reciprocal agreements with each other. Anything that is published by a signatory publication in any one of those member countries can be used legally in any other of them, without any further consents or permissions needed, or notifications required.

In addition to ‘educational usage’ and ‘fair dealing’, the RRO agreements also provide scope for the commercial re-sale of published material without the necessity to obtain additional consents, but with the presumption of an unspecified amount of royalty payment. Which, incidently is determined by the third-party reseller. Not the author, nor publisher.

In the USA, the Copyright Clearance Center (CCC) not only provides a permissions service for individual usage of copyrighted items, but also collects royalties for the use of published works under various licences, including reproduction rights. Identical functions are performed by similar organizations in each of the 150 Berne Convention member countries.

However, the practices in each of these counties are conducted under the copyright laws of each individual one, and here there is wide variation. In Britain, resellers of intellectual property are required to provide only the publication name and ISSN from which works are extracted. In the USA and Australia, the identity of the creator of the work is also required. It is manifestly obvious that without the identity of the author, it will not be possible for the author to receive any royalty payment.

So where’s the money?

The ‘paper trail’ is one worthy of a le Carré novel, although the plot summary can be condensed as follows:

• An author writes for a journal. They may or may not be paid an honorarium. The publishers of the journal are signatories to international reciprocal reproduction licences. Third party organizations are then able to re-sell the author’s intellectual property under those licenses.
• The selling organization pays royalties to the copyright collecting agency in their county of operation. That initial organization exacts a percentage to cover their administrative costs. The percentage varies from 14.7% in Australia, 15 – 25% in USA, and varying amounts in other countries. (The additional 10% manual-handling fee charged by the CCC can be eliminated by pre-registration of works. The 1% deducted in Australia for developing a ‘cultural fund’ is not negotiable.)
• In cases of international licences, the initial collecting agency forwards the residual amount to the collecting agency in the publishing journal’s country of origin, together with any information it has collected regarding authorship. In Britain, the author’s name isn’t recorded, only information regarding the publication.
• The receiving copyright collecting agency then deducts another percentage to cover their operating costs, and on-forwards the rapidly decreasing amount, possibly to the collection agency in yet another country if the author is resident elsewhere. Any remaining funds are paid to the original publisher, for dispersal to authors. This may, or may not, have been negotiated or contracted. In some instances, a collection agency may have provision to pay an author directly, but only where the author is resident in the collection agency jurisdiction.

Jennifer Richardson, a Lead Rightsholder Relations Representative for the Copyright Clearance Center, advises that there are provisions to make payments directly to an author where it has been predetermined that the author is also the rightsholder. Which may be problematic if an article has been published in a signatory journal.

Is this news to you?

This writer contacted a number of editors of the journals where her work had been published and subsequently extracted for re-sale. It is notable that none of these editors were aware that their publication was a signatory to the rights licensing agreements; none were aware that there were royalty payments due. Therefore it was no surprise that none of them had ever made an author payment under the royalties provisions.

Significant for many writers were the reactions of these editors. One denied that as editor they had any responsibility for ‘copyright’ beyond checking that submissions were original work.

Another stated that as an honorarium had been paid, no other payments would be due in the event that any such payments were ever received. The question of a change of practice was labelled as a “moot point”. Further investigation revealed that CCC had forwarded significant sums to this particular publication. Clearly the organization has internal communications issues requiring resolution.

Ironically, yet another editor – who has published monographs on the application of copyright, lectures on the topic, and writes a regular column on the same – refused to discuss the issue of royalty payments, even in a theoretical sense, passing the buck (if you’ll forgive the poor pun) to the Executive Publisher.

A startling array of reactions occurred, although a prize should be awarded to the editor who stated that it was an ‘interesting situation’, and wished this writer “luck in sorting it all out”. All further correspondence went unanswered.

It would seem that the labyrinth of international copyright and related royalty payments has bewildered not only authors.

Where is an author’s legal protection?

In a case where materials have crossed international boundaries, perhaps the World Intellectual Property Organization (WIPO) would be an obvious choice for guidance. Indeed, WIPO’s website states “international copyright protection is automatic, it exists as soon as a work is created, and this principle applies in all the countries party to the Berne Convention." (Interestingly perhaps is the lack of information regarding violations occurring in non-signatory countries.)

However, Boris Kokin, Senior Legal Counsellor for the Copyright Law Division of WIPO indicated that the Organization does not provide any legal advice beyond that shown on its website. “In accordance with its mandate, WIPO does not deal with concrete cases of usage or violation of copyright and provide any assistance in this respect”. Kokin advises “consulting a practicing lawyer”.

Clearly this would not create a difficulty for the Dan Browns or J.K. Rowlings of the Republic of Letters, but for the freelance writer, the extent of any recovered royalty payments would be unlikely to justify the expense.

Do you want the good news or the bad news?

Do royalty payments fall under the umbrella of Contract Law or copyright law? A number of publishers believe that authors have no automatic entitlement to royalty beyond that negotiated and in writing.

In addition to situations where works are being re-sold on an individual item basis, there is also the matter of publications selling rights – without author compensation – to online databases. Carmen Miller, a writer and information industry consultant noted that for quite some decades, freelance writers who have not signed contracts to the contrary retain their rights to their work under U.S. copyright law.

However, Jonathan Tasini found he had to take legal action to recover royalties. In 2001 the landmark case, New York Times Co. v. Tasini, the U.S. Supreme Court ruled in favour of members of the National Writers Union (NWU) and against the New York Times, Newsday Inc., Time Inc., University Microfilms and LexisNexis, with a settlement in the order of US$18 million.

More recently in October 2006, the Supreme Court of Canada ruled in favor of authors in the class-action suit Heather Robertson, et al. v. Thomson Corporation, et al. Another multimillion dollar settlement was granted, applying to Subject Works that were first published after 1977. It is manifestly obvious that any rights assignments made from that era would not have included digitised material or online transmission.

That ten year battle by Robinson and fellow freelancers consumed CAN$4 million in legal fees, deducted from the settlement. Dr Jeremy Fisher of the Australian Writers Association notes that the settlement specifically excluded authors external to Northern America. Of further interest to the international writing community is the fact that part of the unsuccessful defence rested on whether or not the Canadian courts had jurisdiction over American publishers. WIPO and its officers are not listed amongst any of the court documents.

Unfortunately, in each case class legal action was required to recover royalties. For all but the notably few commercially successful professional creator of copyrightable works, the time, effort and costs for an individual are rarely warranted.

Is there any solution?

For publishers, participation in blanket licensing rights raises the profile of your publications through the possibility of wider circulation of the contents of your journals. But this is a two-edged sword. There may be an increased workload in distributing royalty payments to your authors.

Google provides a snapshot of the range of royalty agreements in existence. A search using ‘author royalty payments’ displays a spectrum ranging from unbridled generosity (“Publisher shall pay Author all royalties earned, on a monthly basis, by the last day of the subsequent month” – Fulter Publishing) to insultingly pitiful (not named here for obvious reasons). Does your publication have a policy in place? With an accompanying mechanism for actioning it?

Editors who do not believe that payment of royalties are their concern take note. It is in your own professional and ethical interests to ensure that your publisher has adequately addressed royalty issues. You are the first point of contact for your authors who may have concerns and questions.

Despite the fact that it may be viewed as somewhat impertinent, it does not seem unreasonable to suggest that agencies collecting royalties on behalf of authors may need to develop closer working relationships with each other, for the benefit of authors on whose behalf they are acting. And who, by default, finance the existence of the respective agencies. Additionally, perhaps WIPO could extend its ‘administrative’ role to include facilitating a more author-friendly system internationally.

For Australian authors, join CAL immediately and provide them with a listing of your works for which you retain rights. Membership of CAL is free. Authors in other countries should contact their national collection agencies for further information as to similar arrangements. If these are not in existance, start advocating for their introduction.

In addition, for authors the membership of a writer or author organization may be a good investment. Many such groups include legal representation, or contribute to litigation costs. Members of the (American) National Writers Union (NWU) are now secure in the knowledge that at least their works on Contentville.com (provided by EBSCO) will be compensated directly, through NWU’s Publication Rights Clearinghouse (PRC), as a result of a negotiated agreement between the Union and the aggregator. In Australia, the Australian Society of Authors offers membership at an annual cost.

However, the best advice for authors is to read any contracts very carefully. If you wish to retain the rights to your literary works, an explicit statement to that effect should be included with any submissions, together with your instructions regarding any royalty payments that may be erroneously delivered to your publisher.

Authors should not be surprised if their editor is not aware of their rights. Be cognizant of the fact that many editors have discretionary power to agree (or disagree) to contract amendments. In some instances, particularly in the case of the journals of professional organizations, the editor may be a casual, temporary contractor with limited powers dictated by the organization’s executive. However, they DO have the right to approach the executive with their recommendations for contract amendment. Not to mention an ethical imperative.

If there is no room to negotiate assignation or retention of reproduction or other rights, ensure that in the event that there is no clause for payment of royalties, one that is mutually acceptable is inserted. The extent of future potential earnings cannot be gauged at the time and point of submission. Just ask J.K. Rowling or Dan Brown.

Copyright Clearance Center (USA): http://www.copyright.com/

Copyright Clearance Office (USA): http://www.copyright.gov/

Copyright Agency Limited (Australia): http://www.copyright.com.au

Australian Copyright Council: http://www.copyright.org.au

Access Copyright (Canada): http://www.accesscopyright.ca/

Canadian Intellectual Property Office
http://strategis.ic.gc.ca/sc_mrksv/cipo/cp/cp_main-e.html

Copyright Board of Canada: http://www.cb-cda.gc.ca/

Copyright Licensing Agency (UK): http://www.cla.co.uk/

Intellectual Property Portal (UK): http://www.intellectual-property.gov.uk/

Australian Society of Authors: http://www.asauthors.org/

Writers Union of Canada: http://www.writersunion.ca/

Canadian Authors Association: http://www.canauthors.org/

Society of Authors (UK): http://www.societyofauthors.net/

National Writers Union (USA): http://www.nwu.org/nwu/

New York Times Co. v. Tasini and Robertson, et al. v. Thomson Corporation, et al
http://www.cbc.ca/arts/media/story/2006/10/12/robertson-freelancer-scoc.html

Thomson et al. Settlement agreement (p38 for list of publishers)
http://www.freelancerights.com/files/Settlement_agre.pdf

International Federation of Reproduction Rights Organizations: http://www.ifrro.org/

World Intellectual Property Organization: http://www.wipo.int/

A different version of this article was submitted for publication on November 11, 2006. This was published under the title The Global Copyright Shell Game in Volume 30 (1) January 2007 pp 1-5, Editorial Eye, by EEI Communications. 66 Canal Center Plaza, Suite 200, Alexandria VA. 22314-5507, (703) 683-0683. The rights granted to EEI were "first North American publication rights" only. By agreement with the publisher, a link to the published article will appear HERE after February 2007.