8 Points to Smarter Client Contracts

A friend and colleague recently asked me if I had a contract template that I used for clients. I said that I didn't because my contracts are generally heavily tailored to the specifics of an engagement. However, I was able to point to seven different clauses that I like to include to protect myself. Here they are, plus an eight that my publication and IP lawyer, Anthony Elia, had suggested for future use as I was suing an ex-client:

1. Whether a work-made-for-hire contract or not, no rights should transfer until you get the final payment for the job. If the assignment consists of multiple parts and the client pushes back, you might consider transferring rights to parts as payment for them is completed, if you can separate them out. But if a client balks completely on such an arrangement, I walk. If they're not willing to say that they can only use material if I'm completely paid, then they're saying that they're not interested in upholding their end of the deal. I have better ways to spend my time.
2. I charge late fees for payment in arrears. Again, this should be a non-negotiable. Companies want to charge me late fees if I don't pay on time, and I don't see why I should underwrite someone else's financing.
3. Have a clean definition of the work and then an hourly fee for requests beyond that definition. If the client cannot agree to a clear work specification, then it is going to ask for more and more to be done for the same fee, either trying to push the boundaries to get more for its money or because it is confused and inefficient. In neither case am I willing to give something away for nothing in return. That's not to say that I don't do favors for regular clients. I do. But that's with an ongoing relationship where I get plenty of return for my investment.
4. Give a hard deadline for reviews, with drafts past that date getting contractual automatic acceptance. Generally, payment in corporate assignments keys on acceptance of parts of a project. You do not want to be waiting for money because someone or other won't bother to look at what you've done. This protects you against that, largely by acting as a goad to get the client to do the reviews it owes you. Make the deadlines reasonable, but not too long. I find that two weeks max is a good timetable for getting a review done.
5. You are the service provider, so make sure that any legal disputes, whether state or federal court, are in your home jurisdiction. You don't want to go to another state to sue for money owed you. Similarly, get your state's laws as the ones governing the contract. If the client won't go for that, then eliminate the requirement completely. Don't allow them to insist that you agree to jurisdiction in their area, because, frankly speaking, if legal issues come up, you're most likely to be the plaintiff, not the defendant.
6. Explicitly address expenses and any other item that might reduce your income. Don't expect to work such things out after the fact.
7. Make deadlines offset from when you actually get the expected payments. So if the first should be in a month, make it a month after you have the signed contract and deposit. Before you've signed the contract is when you have maximum leverage in negotiation. Once you start work, your leverage decreases exponentially with the time you've put in.
8. The final point is to try to include a clause that has the loser in a legal action responsible for the legal costs of the winner. I had thought this a danger, but my lawyer pointed out that the chances were overwhelmingly likely that I'd be the one having to take action, and getting costs covered if you have a good case becomes a goad to getting people to settle

Supreme Court to Hear Electronic Database Appeal

Those of you who have followed the trials and tribulations of the electronic database class action filed years ago by ASJA, the Authors Guild, and NWU may remember that the last news was that settlement objectors had been successful and a court had tossed the agreement as it stood. Each side had its points, and I'm not going to rehash them here (other than to note that my reluctance about the objection was not on principle but on pragmatism and what I feared it might effectively do). Now the Supreme Court is hearing an appeal on whether unregistered works can be part of the agreement.

It's pretty rare for the Court to take up any issue, but figure that their interest is not in freelance writers or publishers so much as clarifying issues of copyright or of class actions. The issue is whether those with unregistered works can sue, because under U.S. copyright law, you must have registered a work (even if after an infringement) to bring a legal action. At the same time, a contract is actually a form of private law. Because the lead plaintiffs had registered copyright, their suit was legal. So do the non-registered, who technically may not have had the right to sue, get bumped? Does the whole settlement go out the window? Or is a settlement agreed to by both parties acceptable? It certainly will be interesting to watch - I'm ready to sit down for oral arguments with a bowl of popcorn.

Check Google Books for Your Out of Print Titles

As you probably remember, Google settled the lawsuit brought by the Authors Guild and some publishers over Google Books, which displays up to 20% of the contents of out of print books online. Now you can sign up. Some notes:

• To be eligible, your work must be in their system.


• A full book gets you $60 plus the majority of revenue from ads placed around the display of the book.


• An "insert" gets paid only part of a fee. The definition of an insert is "any text and other material, such as forewords, essays, poems, quotations, letters, song lyrics, children’s Book illustrations, sheet music, charts, and graphs, if independently protected by U.S. copyright, contained in a Book, a government work or a public domain book published on or before January 5, 2009 and, if U.S. works, registered (alone or as part of another work) with the U.S. Copyright Office. Inserts do not include pictorial content (except for children’s Book illustrations), or any public domain or government works."


• If you want, you can also opt out of the settlement or file an objection or indicate that you plan to be at the fairness hearing, but you'd have to do it by May 5, 2009.


• Claims have to be filed by January 5, 2010.

Time to go check for your name and what might be up on the system. I just found out that the ASJA Guide to Freelance Writing, for which I suuppled the business planning chapter when I was still a member of the organization, is on there, so I'll be filing my claim, after thoroughly reviewing the settlement itself.

But if you do plan to get your little chunk of change, check the dates - if interested parties can file objections by May 5, there is the possibility that the settlement could be challenged. In any case, clearly no one is going to see any money until some time next year at the soonest.

Big Landmine in Google Agreement

The New York Times ran a story about how the settlement among Google, publishers, and the Authors Guild of the class action suit over scanning and indexing copyrighted books includes the ability to sell e-book versions of out-of-print titles. There is a huge problem here: publishers generally have no rights to books that went out-of-print. For a full explanation, please see my blog at BNET, where I just posted at length about the issue. I'm no lawyer, but I see the potential of another blow-up should some class members object - and I can see how many might object. Heck, I might add my name to an objection this time. I think the potential for this to become another debacle as happened with the class action lawsuit over magazine articles in databases is pretty strong.

When Is It Worth Chasing Online Infringement?

At a UK journalism site, there's an interesting Q&A with a lawyer about when it's worthwhile going after online infringement. Notice that the issue isn't whether you can, but whether you should bother. It's couched in terms of corporations, but just scale down the considerations (and the enforcement budgets), and there's something to learn for freelancers.

You could actually bring to this the idea of asymmetric threats, that you hear so often in a terrorism context. In this case, there is a low barrier to entry, both in money and time, for someone to infringe on copyright. And yet, protecting copyright faces a slope that quickly steepens, with costs of taking most legal action quickly going out of the reach for smallfry infringers that don't have deep pockets.

I think we could start to develop a methodology for deciding how and when to take action:

1. Review whether you have registered copyright for the item, or if you're still within the three month window of first publication. If the latter is the case, then immediately register the item, and don't wait until you "get around" to doing a group registration to save yourself a few dollars. If it wasn't registered and you've passed that three month period, then the best you can possibly do is use a DMCA take-down notice (check under Writers Resrouces on my blog site) to have the ISP remove the material, and maybe try bluffing to get some money.


2. Look at the infringer and decide whether it is an individual, small business, or mid-sized or large business.


3. Is the person or organization actually making money off your work, either by charging for it or using it as marketing?


4. Start with contacting the offender. If the person just seems to be a fan, either have them ask for permission and provide a link to your own site, or ask them to remove it. If the person doesn't, use a DMCA take-down notice. If the ISP is not in the United States, then you are out of luck and it's not worth pursuing any further.


5. If the site owner is a company making a business use of your work, send a demand letter, by certified mail, with an invoice for what you want to charge. Make removal of the material contingent on keeping the cost down (unless they decide to license it). If they want to settle for some smaller amount, take it and then use a DMCA take-down to get the material removed.


6. If the company is bigger than a mom-and-pop undertaking, then consider pressing your demand more strongly. But check wtih a lawyer how much it would cost to head to court. You may still decide that a DMCA action is the most effective use of your time.

Why reduce things to a specific process? Because that can take the gut knotting out of deciding what to do and let you quickly get to a point of knowing how you are going to handle a given situation.

So, all you conscientious and contentious writers and other creatives out there, does that make sense? Any sugestions for modifications?

Record Labels Keep Copyright Infringement Dollars - Nothing to Musicians

Although it's in the realm of music, I think it behooves any independent creative person to know what's going on in other industries. According to a story in Home Theater, little to none of the millions that record labels have taken through copyright infringement suits ends up in the hands of the musicians and composers who created the works in the first place:

For example, three of the four majors banked $270 million in the lawsuit against Napster (barring Sony BMG, because BMG owns Napster). And all four have made deals with YouTube. But musicians are still waiting for the penny to drop—into their pockets, that is. Their managers and lawyers are now threatening to file lawsuits of their own, this time with the labels as defendants.

Sure, there will be complications of who is owned how much, but the concerning thing is that a) they will take as much time as they can as interest mounts in the bank, and b) the "legal expenses" are eating up most of the proceeds. Now, if they can successfully sue, then they probably registered copyright in a timely manner. That would mean that they could have - and, I'd bet, did - sue for legal expenses. So they get money for legal expenses, and then hold on to all the money for legal expenses? Sounds like the sort of double-dipping that recording labels are known for. Any bets as to whether publishers would be more forthcoming in similar circumstances?