C.R.E.A.T.O.R. - fair contract terms

We are campaigning for a review of laws applicable to creator contracts, introduction of legislation to address unfair contract terms and fair sharing of reward throughout the value chain.

Authors' earnings are in decline. Poor contract terms are part of the problem.

We vet over a thousand contracts a year for our members and we see many where authors hand over rights for no advance and with no guarantee of exploitation by the publisher. Fairer reversion terms would also allow authors to monetise their own work.

But authors are not in a strong negotiating position. Authors frequently need to negotiate with monopolies or with dominant players in highly specialised markets, such as scientific publishers. Individual creators are therefore at an inherent disadvantage when negotiating the terms of their contracts. Many contracts are offered on a take-it-or-leave-it basis. Especially at the start of their careers, authors may have little or no advice and are thrilled to be offered publishing contracts.

As well as supporting members through clause-by-clause vetting of any contract, the SoA is campaigning to address the imbalance of the situation through negotiations with publishers and by pushing for legislation along with other creator organisations, such as www.fairtermsforcreators.org.

What we are asking for

Our aims to improve contracts are summarised in the C.R.E.A.T.O.R. acronym. These laws are not radical. They already exist throughout many European countries. These changes are easy and timely and we urge that they should be effected.

  • C - Clearer contracts, including written contracts which set out the exact scope of the rights granted.
     
  • R - fair Remuneration. Equitable and unwaivable remuneration for all forms of exploitation, to include bestseller clauses so if a work does far better than expected the creator shares in its success, even if copyright was assigned.
     
  • E - an obligation of Exploitation for each mode of exploitation. Also known as the ‘use it or lose it’ clause.
     
  • A - fair, understandable and proper Accounting terms.
     
  • T - Term. Reasonable and limited contract terms and regular reviews to take into account new forms of exploitation.
     
  • O - Ownership. Authors, including illustrators and translators, should be appropriately credited for all uses of their work and moral rights should be unwaivable. [Add link to Credit section]
     
  • R - All other clauses be subject to a general test of Reasonableness including a list of defined clauses which are automatically deemed to be void and a general safeguarding provision that

    any contract provision which, contrary to the requirement of good faith, causes a significant imbalance in the parties' rights and obligations arising under the contract to the detriment of the author, shall be regarded as unfair.

    One example would be indemnity clauses which put all the risk on the author.

What are we doing?

We launched the C.R.E.A.T.O.R campaign at a meeting of the All Party Parliamentary Writers Group on 7 July 2015.

Since then, Creators' Rights Alliance have adopted our campaign and we are working in tandem with partner organisations who represent the interests of other creators.

Legal reform in Europe

The EU Study of 2013 showed that the UK is lacking the legal frameworks which protect creators in many other EU countries. It also shows that EU creators are often subject to onerous contracts and do not receive a fair share of the reward for their creativity. The Study says:

European authors are in a difficult position as demonstrated throughout this study. This patchwork of national provisions also prejudices exploiters of copyright works due to the uncertainties they face in an industry that is becoming more and more global.

Many other European countries already have such legislation and to offer it to our authors is a powerful bargaining tool in EU negotiations.

Innovation depends on risk-taking. The decision to become an author will often mean eschewing the security of employment or a stable safe job. Innovators need to know, not only that their work is protected by intellectual property rights, but also that they will receive a fair reward if the work is ultimately successful. For that reason we support the provisions in relation to transparency and fairness (the so called “transparency triangle”) announced in the Draft Directive on copyright in the Digital Single Market (“the Directive”) Articles 14 to 16 and urge that they be brought into both EU and domestic legislation at the earliest opportunity. The triangle consists of:

  • Regular accounting
  • A contract adjustment mechanism (or “bestseller clause”) allowing authors to claim additional remuneration reflecting the commercial success of their works when the agreed remuneration is disproportionately low compared to the revenues derived from the exploitation of the works.
  • A dispute resolution mechanism.

Even more important, to incentivise innovation (and achieve the EU’s stated policy aim of improving the remuneration received by authors and performers), the Government should legislate for the overarching principle that authors and performers have the unwaivable right to receive adequate remuneration, (including through collectively managed rights) for each use of their works, and that such remuneration must be specified in their contracts. Creators and innovators should also have the right to have rights reverted if they are not being utilised by the transferee.

Authors are struggling. The 2016 EC study on authors’ remuneration which surveyed authors, journalists, translators and illustrators across Europe, found that:

  • Average annual incomes for UK authors, including advance, royalties and collecting society payments was about £12,500 in May 2015, when the survey was run.
  • Average annual incomes for UK journalists were also around £12,500, around half the average levels reported by journalists in Germany and Denmark, where there are far more legal protections for creators.
  • Average incomes for UK translators and visual artists were a little higher at around £17,850, but that is still well below the UK average wage.
  • The average total income from a UK author’s latest book was less than £6,000.
  • Only half of book authors view writing as their primary activity and their only or main source of income.
  • UK authors do not enjoy the same legal safeguards as their counterparts in other EU countries to ensure that contracts are fair.
  • The provision of legal safeguards improves an author’s financial position.

We welcome the three policy recommendations proposed in the report and would suggest that these also are brought in to EU and UK legislation.

  • A legal requirement for written contracts to specify in detail how a work can be exploited and how its author will be remunerated, and a right for the author to receive accounts.
  • Place limits on transfers of rights to future works and future modes of exploitation.
  • Allowing freelancers who work mainly for one or two employers to claim employee status and rights. (link to benefits page

Legal reform in the UK

Business-to-business legislation is in urgent need of review. The Consumer Rights Act has consolidated and clarified rights for consumers by taking laws out of many different pieces of legislation and putting them in one Act.

What has been left for business is a ragbag of legislation, much of which does not deal with the realities of digital business and the impossibility of negotiating terms with global businesses. It needs reform in the same thorough and systematic way that was applied to consumer contracts.

Industry Negotiations

We continue to meet with the Publishers Association, the Independent Publishers Guild and many individual publishers to discuss their contract terms.

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