Several issues are more significant for publishers of children’s books than for publishers of other kinds of titles, because children’s books have greater potential for merchandising, cartoons, multimedia products, and trademarking. These issues (like other issues) must be addressed in a thorough, written agreement since no one can know, in advance, which book will lead to the next Harry Potter series or Barney character, with all the attendant merchandising deals for pillowcases, motion pictures, cartoon series, and more. Failure to plan for success may result in regret that someone else is reaping the substantial rewards of a hit book. In what follows, I am assuming that the contributions from a party or parties other than the publisher involve both text and illustrations, including cover art. Also, because I am writing from the point of view of a publisher, I am advocating that the publisher own all rights. This does not mean that I am anti-artist. I represent many artists as well, and if I were writing to them, I would advocate that they negotiate to retain all their rights. Someone has to own the rights, and there are no absolutes in terms of which party "should" have certain rights, receive certain income, etc. There are no "standard" agreements when it comes to creativity. And there is no such concept as "fair" in these deals. It is up to each party to negotiate agreements in their own interest. But whichever party owns the rights, the other party can negotiate to be paid on those rights. Some, but not all, of the issues that are especially important in a publishing agreement for a children’s book are covered below.
The Grant of Rights
The creator of any copyrightable work (in this instance, illustrations and/or text, including contributions made by editors) starts out owning all rights of copyright in that work. Thus, if the publisher is to acquire exclusive rights to their illustrations/text, it can only be via a valid, written transfer agreement signed by the creator or creators (assuming that the relationship is not one of bona fide employment). The scope of the granting language is therefore all-important. If the contract the publisher is using is more than a year or so old or if it is one copied from a form book or passed around by colleagues, it may not cover the relevant issues or it may not cover them with sufficient thoroughness. What none of the parties want is a situation in which the rights are not clear (see "A Legal Nightmare: The Unwritten License" under "Articles for Writers and Publishers" on my site). If the author, artist, illustrator, or editor are separate individuals, then the publisher must either make separate deals, trying to get each of them to agree to the same provisions, or have one agreement that is entered into by the author, artist, illustrator, and/or editor with all its provisions collectively and individually binding on all those parties. As noted above, the fact that the publisher may end up owning all the rights does not preclude the author, artist, illustrator, and/or editor from participating in the revenue derived from those rights. Those parties will have to negotiate for them because granting rights does not automatically mean that the granting party is going to be paid from the exploitation of those rights. But it’s very important to note that unless the publisher affirmatively acquires exclusive rights by virtue of a thorough, written, and signed agreement, it will not share in income derived from non-granted rights.
Ownership of the Copyright
The issue of which party is going to own the right of copyright in and to that party’s contribution is related to the issue of the grant of rights (read "Who Shall Own the Copyright in a Book Publishing Agreement?" also on my site). Often a publisher is tempted to rely on simply calling a relationship with a creator a "work made for hire relationship," but this will not stand up unless the publisher has "specially ordered and commissioned" the creator’s contribution and the relationship otherwise qualifies under the rules set forth in the United States copyright law. Thus, if a contributor has already written the text and/or drawn the illustrations and then approaches a publisher, that relationship will not qualify as a work made for hire. (For information on structuring works made for hire contracts, see articles about this topic on my site under the link "Articles for Writers and Publishers.") No matter which way the copyright ownership issues shake out, it’s important that the contract cover the rights of the parties inter se (i.e., between them). Such provisions, which are often overlooked, should deal with derivative works and restrictions on the use of the copyright, if appropriate, among other things.
Ownership of the Rights of Trademark
Issues relating to trademark rights in characters and the ability to register them are beyond the scope of this article, but it is essential that the publishing agreement expressly cover these rights and that they be clearly transferred to the publisher since they can be extremely valuable for a long, long time.
Revised Editions & Next Book Provisions
Rights to revised works are always a thorny issue. Clearly a successful book begets further books in a series, so the publisher’s contract must ensure that there is no confusion about what an author, artist, illustrator, and/or editor can do in the future if they have granted certain rights to a publisher. For publishers with multiple grants from individual authors, artists, illustrators, and/or editors, resolving these issues can become particularly difficult (read "Co-Author Issues in Book Contracts" and "Next Book Provisions in Book Contracts").
Penalties are severe for failure to comply with the Children’s Online Privacy Protection Act (COPPA). If you have a Web site that’s subject to the requirements of that law–which it seems apparent that you would if you publish children’s books–you must comply with these rather stringent requirements (read "The Children’s Online Privacy Protection Act" and "Verifiable Parental Consent Under COPPA" on the link "About The Internet and Electronic Rights" on my site).
Don’t Snatch Failure from the Jaws of Success
The way many publishers set up their children’s book contracts creates a situation where they lose if the book is a failure, but if the book is the one in a hundred that is successful, they lose as well since they have failed to adequately acquire and preserve their contractual and intellectual property rights. Thoroughly drafted agreements covering the many issues that can arise in a complex relationship are necessary to give the publisher (as well as the creators) an opportunity to benefit from that success. This article is not intended as legal advice. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States law. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney-client relationship.