M-Wakili

Ask a lawyer:
What should be included in a Royalty Agreement for a book author?

A Royalty Agreement is a crucial document that outlines the financial terms between a book author and a publisher. It defines the author's compensation for the use of their work and ensures a clear understanding of the financial aspects of the publishing process.

Table of Contents

  1. Introduction

  2. Key Provisions of a Royalty Agreement 2.1. Grant of Rights 2.2. Royalty Rate 2.3. Advance Payment 2.4. Reporting and Payment Schedule 2.5. Audit Rights 2.6. Termination Clause 2.7. Copyright Ownership 2.8. Subsidiary Rights 2.9. Warranties and Indemnities

  3. Case Laws

  4. Sample Royalty Agreement

  5. Conclusion

  6. TLDR

Introduction

In Kenya, the Copyright Act, 2001 governs the rights of authors and publishers. This Act provides a framework for protecting the intellectual property rights of authors and ensures that they receive fair compensation for their work. A Royalty Agreement is a legally binding contract that outlines the terms of the financial relationship between the author and the publisher. It is essential for both parties to have a clear understanding of the agreement's terms to avoid any future disputes.

Key Provisions of a Royalty Agreement

2.1. Grant of Rights

This section specifies the rights granted by the author to the publisher. It defines the scope of the publisher's rights to use the book, including the format, territory, and duration of the rights. For example, the agreement may grant the publisher the right to publish the book in print, electronic, and audio formats, in Kenya and internationally, for a specific period.

2.2. Royalty Rate

The royalty rate is the percentage of the book's net sales that the author will receive. The royalty rate can vary depending on the type of book, the publisher, and the author's bargaining power. It is typically expressed as a percentage of the book's net selling price. For example, the author may receive a 10% royalty on each copy of the book sold.

2.3. Advance Payment

An advance payment is a sum of money paid to the author by the publisher before the book is published. It is considered an advance against future royalties and is typically recoupable, meaning that the publisher will deduct the advance from the author's future royalty earnings. The advance payment can be a significant source of income for the author, especially for new or emerging authors.

2.4. Reporting and Payment Schedule

This section outlines the frequency and method of royalty reporting and payment. The publisher is typically required to provide the author with regular statements detailing the book's sales and the author's royalty earnings. The payment schedule specifies the frequency of royalty payments, which can be monthly, quarterly, or annually.

2.5. Audit Rights

The Royalty Agreement may include provisions granting the author the right to audit the publisher's sales records. This right allows the author to verify the accuracy of the publisher's royalty statements and ensure that they are receiving the correct amount of royalties.

2.6. Termination Clause

This clause outlines the conditions under which either party can terminate the agreement. It may include provisions for termination due to breach of contract, non-performance, or other specified events.

2.7. Copyright Ownership

The Royalty Agreement should clearly define the ownership of the copyright in the book. In most cases, the author retains ownership of the copyright, but they grant the publisher exclusive rights to publish and distribute the book.

2.8. Subsidiary Rights

Subsidiary rights refer to the rights to use the book in other formats or for other purposes, such as film, television, or merchandise. The Royalty Agreement may specify the author's share of any income generated from subsidiary rights.

2.9. Warranties and Indemnities

This section outlines the author's warranties and indemnities. The author typically warrants that they own the copyright to the book and that the book does not infringe on any third-party rights. They may also agree to indemnify the publisher against any claims arising from the book's publication.

Case Laws

2.9.1. **Case Law: ** The Authors Guild, Inc. v. Google, Inc. (2015)

This case, although not directly related to Kenyan law, provides valuable insights into the complexities of copyright and digital rights. The Authors Guild, representing authors, sued Google for copyright infringement due to Google's digitization of millions of books for its Google Books project. The US Supreme Court ruled in favor of Google, finding that the digitization process constituted fair use under US copyright law. This case highlights the importance of considering the fair use doctrine when negotiating royalty agreements, particularly in the digital age.

2.9.2. **Case Law: ** Kenya Copyright Board v. The Standard Group Ltd. (2013)

This Kenyan case involved a dispute between the Kenya Copyright Board (KECOBO) and The Standard Group Ltd. over the unauthorized reproduction and distribution of copyrighted works. The High Court ruled in favor of KECOBO, finding that The Standard Group Ltd. had infringed on the copyright of several authors. This case emphasizes the importance of obtaining proper authorization and licenses before using copyrighted works, including books.

Sample Royalty Agreement


ROYALTY AGREEMENT

This Royalty Agreement (the "Agreement") is made and entered into as of [Date], by and between [Author Full Name], residing at [Author Address] (the "Author"), and [Publisher Full Name], a company incorporated and existing under the laws of [Country], with its principal place of business at [Publisher Address] (the "Publisher").

WITNESSETH:

WHEREAS, the Author is the sole and exclusive owner of all right, title, and interest in and to the literary work entitled [Book Title] (the "Work"); and

WHEREAS, the Publisher desires to publish and distribute the Work in [Format] format in [Territory] (the "Territory");

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. Grant of Rights

The Author hereby grants to the Publisher the exclusive right and license to publish, distribute, and sell the Work in [Format] format in the Territory for a period of [Duration] years from the date of first publication (the "Term").

2. Royalty Rate

The Publisher shall pay the Author a royalty of [Royalty Rate]% of the net selling price of each copy of the Work sold in the Territory. The net selling price shall be defined as the selling price of the Work less all returns, discounts, and other deductions allowed by the Publisher.

3. Advance Payment

The Publisher shall pay the Author an advance payment of [Advance Amount] against future royalties. The advance payment shall be recoupable from the Author's future royalty earnings.

4. Reporting and Payment Schedule

The Publisher shall provide the Author with a royalty statement within [Number] days after the end of each [Period] (the "Reporting Period"). The royalty statement shall detail the number of copies of the Work sold during the Reporting Period, the net selling price of each copy, and the Author's royalty earnings. The Publisher shall pay the Author all accrued royalties within [Number] days after the end of each Reporting Period.

5. Audit Rights

The Author shall have the right to audit the Publisher's sales records relating to the Work upon reasonable notice and at the Author's expense. The audit shall be conducted by an independent auditor mutually acceptable to both parties.

6. Termination Clause

This Agreement may be terminated by either party upon [Number] days' written notice to the other party. This Agreement may also be terminated by either party for material breach of the Agreement by the other party.

7. Copyright Ownership

The Author shall retain ownership of the copyright in the Work. The Publisher shall have the exclusive right to publish and distribute the Work during the Term.

8. Subsidiary Rights

The Publisher shall have the right to exploit subsidiary rights in the Work, including but not limited to film, television, and merchandise rights. The Author shall receive [Percentage]% of any net income generated from the exploitation of subsidiary rights.

9. Warranties and Indemnities

The Author warrants and represents that:

  • The Author is the sole and exclusive owner of all right, title, and interest in and to the Work;

  • The Work is original and does not infringe on any third-party rights;

  • The Work is free and clear of any liens or encumbrances.

The Author agrees to indemnify and hold harmless the Publisher from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to any breach of the foregoing warranties or representations.

10. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of [Country].

11. Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

12. Amendments

This Agreement may be amended only by a written instrument signed by both parties.

13. Severability

If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall remain in full force and effect.

14. Notices

All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:

If to the Author:

[Author Full Name] [Author Address]

If to the Publisher:

[Publisher Full Name] [Publisher Address]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[Author Signature]

[Author Printed Name]

[Publisher Signature]

[Publisher Printed Name]


Conclusion

A well-drafted Royalty Agreement is essential for protecting the interests of both the author and the publisher. It ensures that the author receives fair compensation for their work and that the publisher has the necessary rights to publish and distribute the book. By carefully considering the key provisions outlined above, authors and publishers can create a mutually beneficial agreement that fosters a successful publishing relationship.

TLDR

A Royalty Agreement is a contract between an author and a publisher that outlines the financial terms of the publishing process. It includes provisions for the grant of rights, royalty rate, advance payment, reporting and payment schedule, audit rights, termination clause, copyright ownership, subsidiary rights, and warranties and indemnities.

Sources:

  • Copyright Act, 2001

  • The Authors Guild, Inc. v. Google, Inc.

  • Kenya Copyright Board v. The Standard Group Ltd.

  • Sample Royalty Agreement

Answered by mwakili.com