Editor's Note: Beginning with this issue of the "PMA Newsletter," Jonathan Kirsch, general counsel of PMA and a specialist in publishing law, will discuss recent developments in publishing law and answer legal questions from PMA members. You may send your questions to the PMA office or directly to Jonathan Kirsch at kirschlaw@aol.com. Thanks to the ongoing revolution in printing and publishing technologies, some of the standard clauses in book contracts are no longer fully functional and others may be regarded as obsolete. One such provision is the so-called "out-of-print" clause, which generally provides that the publisher's right to print and sell a book comes to an end when the book goes out of print. However, most out-of-print clauses in common use do not adequately address the emerging technology of "print-on-demand" publishing, and a publisher who relies on an outdated contract faces the risk of losing the right to sell the author's book through print-on-demand channels when the book goes out-of-print in conventional editions.

What Is "Print-on-Demand" Publishing?

Print-on-demand publishing is a promising new form of book publishing that allows the publisher to make single-copy sales of a book to a consumer through a bookstore, a publisher's catalogue, or an on-line service. The contents of the book are printed out and bound, and the finished product is handed or mailed to the consumer only at the time of purchase. The book may be transmitted in digital form by modem from the publisher's database to a retail outlet, where it is printed out and bound on special equipment, or else the book might be manufactured and mailed from a central location. But, either way, the publisher need not print or ship the book in commercial quantities, maintain an inventory of printed books, or accept returns of unsold books! Although print-on-demand publishing is still in its infancy, the advantages to publisher and consumer alike are so compelling that it promises to become an increasingly important part of the publishing industry.

Is a "Print-on-Demand" Book an Electronic or Print Product?

Most book contracts do not squarely address and define "print-on-demand" publishing as a specific right. Arguably, it is a hybrid of both print and electronic publishing, since it begins with a digital file on an electronic database and ends with a printed book. If the publisher is acquiring all rights in the author's work-or if the publisher is acquiring both print and electronic rights-then the right to sell the author's work through print-on-demand channels is probably included in the grant of rights. But any publisher who is relying on an older contract that does not specifically mention print-on-demand rights ought to take a fresh look at the contract to make sure that print-on-demand rights are secured from the author in the "grant of rights" clause.

When and How a Publisher Might Lose"Print-on-Demand" Rights

Even if the publisher acquires the right to issue a book both in conventional print editions and through "print-on-demand" channels, a problem may arise if the publisher allows the book to go out of print in all print editions and sells the book only through print-on-demand. Under these circumstances, the publisher who relies on an old and obsolete publishing contract may lose the right to sell single copies of the book as a print-on-demand product. The out-of-print clause in most book contracts defines when a book is regarded as no longer "in print," and what happens when a book goes out of print. Most such clauses permit the publisher to put a new edition back into print within a specified period of time-and, thus, to keep the contract in full force and effect-but if the publisher declines or fails to do so, then the rights originally granted to the publisher under the book contract will usually revert to the author. (That's why the out-of-print clause is sometimes called a "reversionary clause.") At that point, the publisher will no longer be permitted to print, publish and sell copies of the author's book. Most out-of-print clauses in common use in the publishing industry define when a book is "in" or "out" of print in terms that relate to conventional print editions, if the contract defines the terms at all: "The Work shall not be deemed out of print so long as the Work is available for sale either for stock in Publisher's, distributor's or licensee's warehouse, or in regular sales channel," according to one commonly-used clause. But the old definitions of "out of print" simply do not apply to the new print-on-demand technologies that are beginning to emerge in the publishing industry. Thus, if the publisher allows the book to go out of print in the old-fashioned sense, there is a distinct risk that all rights in the author's work will revert to the author, and then the publisher will not be entitled to continue to sell the book through print-on-demand channels.

A Sample "Out-of-Print" Definition for the Computer Age

To solve the problem, the out-of-print clause must be revised and redrafted to avoid any ambiguity about the rights of the publisher under these circumstances. Here is a sample out-of-print definition that I have begun to use on behalf of publishers in order to preserve print-on-demand rights even if the book is no longer published in conventional book formats: The Work shall not be deemed out of print within the meaning of this section so long as the Work is available for sale either (a) from stock in Publisher's, distributor's, or licensee's warehouse, or in regular sales channels, and/or (b) by single-copy sales through "print-on-demand" channels. Be forewarned, however, that authors and agents may balk at a definition of "out of print" that permits the publisher to own and control the rights in a book indefinitely, even though it may sell only a few copies through print-on-demand channels. Some authors and agents may seek to exclude single-copy sales through print-on-demand channels from the definition of when a book remains in print, or else they may ask for a clause to require a minimum number of sales or a minimum royalty payment to keep a book publishing contract in effect even though the book is sold only through print-on-demand channels. That's exactly why the out-of-print clause is no longer mere "boilerplate" and is often the focus of heated negotiation between authors and publishers in the Computer Age!

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