The Powerful Effects of Copyright Reversion

A common type of client I've seen in practice is the founder who sold IP (or company) to another, only to see the creation buried for one reason or another. The client usually wanted the rights back, so as to see the work grow. We invariably had to give the bad news: there was little to do but negotiate for a return (which we sometimes achieved). [Practice tip: build reversion rights into the sales contracts, though the buyer often chokes on such language].

Of course, we explored copyright reversion, which allows for reversion after 35 years for post 1978 works. But in the software area, 3 years might as well be forever. Few software products last 35 years (is Linux a work made for hire? Uh oh).

Paul Heald (Illinois) has done some really useful work in this area. His prior work shows the U-shape curve of books available on Amazon. Recent books are available, and books in the public domain (before the 1920s) are available, but books in copyright but not recent are not available, even those published as few as 20 years ago.

One theme of this work is obviously that copyright terms should be shorter, and that may well be true. But one of my initial takes was that the publishers are to blame - they are sitting on books that authors may well want to publish. Reversion rights are a way to handle this - authors can take over those books and get them published if they want.

In a new article, Paul Heald again looks at this market in a draft article called Copyright Reversion to Authors (and the Rosetta Effect): An Empirical Study of Reappearing Books (located here on SSRN). Here is the abstract:

Copyright keeps out-of-print books unavailable to the public, and commentators speculate that statutes transferring rights back to authors would provide incentives for the republication of books from unexploited back catalogs. This study compares the availability of books whose copyrights are eligible for statutory reversion under US law with books whose copyrights are still exercised by the original publisher. It finds that 17 USC § 203, which permits reversion to authors in year 35 after publication, and 17 USC § 304, which permits reversion 56 years after publication, significantly increase in-print status for important classes of books. Several reasons are offered as to why the § 203 effect seems stronger. The 2002 decision in Random House v. Rosetta Books, which worked a one-time de facto reversion of ebook rights to authors, has an even greater effect on in-print status than the statutory schemes.

Heald gathers three different data sets: bestselling authors, bestselling books, general population of reviewed books. He looks at whether they were available, who published them (big publisher v. independent), and where (paper or ebook). In the rest of the post, I'll briefly discuss the findings and some thoughts.

The study found what you might expect: reversion leads to more publication. Heald could not measure whether rights actually reverted, so he looked at time periods, whether reversion was possible or not. With this, you could do a comparison of the rate of publishing. One caveat, of course, is that newer works are more likely to be published, but Heald recognizes this, attempts to handle it somewhat, and discusses the implications.

The aggregate publication data is ambiguous - there's actually a lot of publishing that happened whether or not works were eligible for reversion to the authors. But the aggregation masked something important - who was publishing. A deeper look showed a shift to independent, electronic only publishing for many books. This, Heald attributes to Rosetta Stone, an important copyright case that acted as a reversion to authors for ebooks.

Once one looks at who is publishing, one can see marked differences between big publishers and independents during the reversion/non-reversion periods. One can also see changes in the years just preceding reversion, when the parties straighten out their rights ("fish or cut bait," if you will) leading up to reversion.

All told, the data shows that reversion can have an important impact in bringing works back into print, that big publishers will respond to reversion, and that the best sellers are more likely to be republished than the average book. There is a lot of interesting data here- the article is long, and covers reversion, Rosetta Stone, and all of the permutations in great depth.

As for implications, I think this article has something for everyone. For those who think copyright terms should be limited, it's pretty clear that shorter terms might spur publication. But for those who think that authors who earn a living from writing (and their heirs) should be able to enforce their rights to incentivize dissemination, there is good evidence here that reversion can help spur value for the initial creators (with the obvious counter that some bear hug their work to limit fair use). Indeed, we might favor the same or similar copyright terms but with shorter reversion, or with reversion upon nonuse. While authors can negotiate for such rights, building them in to the statute can avoid that sticky negotiation point while limiting economic costs since the work is, after all, not being published in the meantime.