Joint copyright and right to royalties

[Jip]

Hi

I wrote a book with two others and the three of us own the text copyright (or so it says at the end of the book). Design and layout copyright is owned by the publisher. I wasn't involved with the contractual negotiations, I just wrote what was required.

All three of us were equal directors/shareholders of the company that contracted with the publisher. The company never paid me for any of the work I did on the book and I stupidly surrendered my shareholding after the book had been published (in the belief that they would at least pay me for the work I had done on the book). They are now refusing to pay me anything. I assume the contract assigned our copyright to the publishers but can I claim any royalties or part of the advance?

Thanks

[AndyJ]

Hi Jip,

It is hard to answer this without knowing more about what was in the contract, and any other written or verbal agreements. From what you have told us, it doesn't sound as if you signed the publishing contract. If you did, quite possibly without knowing what it contained, then it could be that you personally signed over your copyright to the publishers at the same time. Have you tried speaking to the publishers? They should at least be able to provide a copy of the contract.

Was the limited company formed before or after the book was completed? If it was before then it is possible that the copyright in your contribution (and those of your fellow writers) could be owned by the company if it was seen as having been written in the course of your employment. This is highly dubious if you were not paid as an employee, but a possibility. It would also be useful to know what the company's articles of association said about the purpose of the company. You can obtain a copy of these from Companies House, along with any accounts which have been filed for the company to date.

If you wrote your contribution before the company was formed then the only way your copyright can have been transferred, either to the company or to the publishers, is through a written and signed document called an assignment. If you didn't sign one of these, it's hard to see how the company can legally have further assigned your copyright to the publishers, unless you personally signed the publishing contract and the assignment was contained within it. Again, the contract probably holds the key to that puzzle.

And the fact that you are no longer a director of the company doesn't necessarily extinguish your entitlement to royalties. Again, I suggest you speak directly with the publishers about this, if your fellow writers are refusing to help.

It might also be worth contacting the Authors Licensing and Collecting Society (ALCS) to see if they hold any unclaimed royalties for you.

If the publisher did buy the copyright, then there should have been a lump sum payment for this, and unless there was any contrary agreement between you at the time you were a director, a share of this should have come to you at that time. However as it appears that you may have given up your shareholding by then, it may be tricky to establish exactly what you are entitled to. I think that at the very least you are owed a share of the advance. It would also be useful to know how well the book has sold, since if it is only a few copies, it won't make it worth mounting a legal challenge over the amount of royalties (that is, one third of the total) involved. This is because some if not all of the early royalties will need to be set against the advance from the publishers. Again the publishing contract should contain details about this.

Unfortunately we have insufficient information on which provide further detailed advice.

[Jip]

Dear AndyJ

Thank you so much for your lengthy reply. I do have the contract which I did not sign. Another director/shareholder (and one of the joint authors) signed it. Interestingly, only they are listed as 'the author' in the contract. The contract also says the copyright belongs to 'the proprietor' (the company I was a shareholder of) but I was never paid for any of the work I did for the company. The contract assigns the rights to the publisher. I started and completed the work after the company was formed but before my resignation as director/shareholder. The book was first published 6 weeks before my resignation. I wonder if I can claim that the director who signed the contract did so without getting permission from the other two authors and passed it off as their own work. I definitely didn't assign or transfer or licence them my copyright when I left the company. And as I've said, I was never paid for any work I did for the company. A small advance was paid whilst I was still a director/shareholder but probably not worth going to court for a couple of grand.

Thanks for your help.

Kind regards

Jip

[AndyJ]

Hi again Jip,

Thanks for the additional information. It sounds as if you may have a good case here, although on exactly what grounds - breach of contract, copyright or possibly deception - is at present unclear.

I think the important stage to examine is how and why you were brought into this project. You say that you started and completed the work after the company was formed. If you were a director/shareholder of the company at this stage (when you started work on the book) then it is possible, as I mentioned before, that it might be presumed that you were working for the company, and therefore the company would be the first owner of copyright under section 11(2) of the Copyright Designs and Patents Act 1988.

11 First ownership of copyright.

(1) The author of a work is the first owner of any copyright in it, subject to the following provisions.

(2) Where a literary, dramatic, musical or artistic work, or a film, is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.

(3) This section does not apply to Crown copyright or Parliamentary copyright (see sections 163 and 165) or to copyright which subsists by virtue of section 168 (copyright of certain international organisations).

Although I mentioned this was dubious, much would depend on what you were told/agreed to at the time you were first brought on board. If the sole purpose of the company was to produce the book and get it published, then this would lend weight to the presumption that the company owned the copyright from the outset.

If this is the case, then you would have expected to receive remuneration for your work either in a wage (which doesn't appear to be the case), or as a series of dividends as a shareholder. Exactly how this was supposed to have played out should either have be set out in the Articles of Association of the company, or in some less formal agreement between the directors at the time the company was formed. I suspect neither of these things was done formally. Therefore any case you may have would be based on your understanding of the agreement. Verbal contracts can be notoriously difficult to resolve if the two sides (or possibly three in this case) have different recollections and understanding of what was agreed, and nothing was committed to paper. The courts often have to deduce what was agreed by the subsequent behaviour of the participants, and what they may reasonably have thought they had agreed to.

And then of course there is the possibility that you have been hoodwinked, and there was never intention of paying you for your services. The reasons why you resigned your directorship would be relevant here. If this were to be the case, then this could amount to, at the least a deception, or more seriously, a criminal conspiracy.

Anyway the bottom line is that this is not something we can resolve via the forum. If you feel there is a reasonable amount of money at stake here, you should consult a solicitor about the way forward. You should be able to get a free 20 minute consultation in order to lay out the facts and allow the solicitor to say if he/she thinks there are any grounds for a cause of action. You need to find a solicitor who deals with commercial and IP law, rather than a family solicitor, in order to get the best advice.

Good luck.

[Lumberjack]

I would also recommend you join the ALCS (Author's Licensing & Collecting Society Ltd). Especially if you have written quite a few articles or books. I joined three years ago. They didn't want any joining fees from me, they just take them out of the amount they collected on my behalf. Last year, even after they deducted their fees, I still got more than £100! They do all the work, and the author just sits back and gets the payment once a year.

[Nick Cooper]

Authors are also advised to register for UK & Irish Public Lending Right payments. I almost didn't bother, but the last payment I got uplifted my royalties for the same period by around 25%.

[Lumberjack]

Are they connected with ALCS? Do they deduct fees from whatever they recover? When I joined ALCS, I was never asked to pay anything, and my joining fee was deducted from my first payment.

[Nick Cooper]

Are they connected with ALCS? Do they deduct fees from whatever they recover? When I joined ALCS, I was never asked to pay anything, and my joining fee was deducted from my first payment.

No. Even the ALCS website explicitly states that they do not handle UK and Irish PLR payments, although they do collect for a small number of other countries. UK/Irish PLR payments are essentially fee-free, at least in the sense that you get 7.67 pence for evey library loan, with no further deductions. There is no joining fee.

[Lumberjack]

Thanks, that is a great piece of info.