When an author sells the underlying copyright to a third party, where does the publisher now send the royalties?
<p>A book publishing contract typically starts with an author who owns a copyright and licenses it to a publisher for the term of the copyright. The publisher (or the literary agent) sends royalty checks to the author. (I'm using royalties as a stand-in here for all the various obligations the publisher typically owes under a contract.)</p>
<p>Here's the wrinkle: Suppose the author, while alive, transfers the underlying copyright to a third party. Where does the publisher send the royalty check? To the author, or to the new copyright owner?</p>
<p>Another way of asking the question: Does the publisher's contractual obligation flow to the individual person (the author) who signed the publishing contract, or does it flow to the owner of the copyright, whoever that may be? If the first is true, then a separate transfer of contractual obligations would presumably be needed to vest the third party with all rights. But if the second is true, then the shift of royalties (obligations) would be automatic.</p>
<p>(A related question: In the normal case, the author still owns the copyright when he dies, at which point the heirs succeed to the author's rights under the publishing contract. No problem. But if the copyright ownership has been transferred to a third party during author's lifetime, does that third party have any claim to the royalties going forward?)</p>
<p>Geographically, this question pertains to the U.S. (but it would be interesting to hear if other jurisdictions have different approaches).</p>

<p>Any obligation to pay royalties comes from the agreement between the publisher and the copyright holder. In a particular agreement, &quot;the Author&quot; is defined as the specific person, and the royalties clause says that &quot;During the legal period of copyright Publisher shall pay to the Author...&quot;. Whether or not Author retains copyright (merely grants a non-exclusive license) or transfers copyright to Publisher is specified in the agreement. If (per the hypothetical) Author has the right to transfer copyright i.e. has not transferred copyright to the Publisher, this does not extinguish the Publisher's original obligation to pay royalties – unless that is what the copyright agreement says (I've never seen such a clause, but who knows). Change the Royalties clause to read &quot;shall pay the owner of the copyright&quot;, then you get a different result.</p>

<blockquote>
<p>Where does the publisher send the royalty check? To the author, or to
the new copyright owner?</p>
</blockquote>
<p>To the new owner, as soon as the publisher is informed of the change in ownership of the copyright.</p>
<p>If the published sends to check to the author because the published hasn't yet been informed of the transfer (usually something that only happens once or twice until it is cleared up), the author has to hold the funds received in a constructive trust for the new copyright owner and pay them over to the new copyright owner promptly.</p>
<blockquote>
<p>Does the publisher's contractual obligation flow to the individual
person (the author) who signed the publishing contract, or does it
flow to the owner of the copyright, whoever that may be? If the first
is true, then a separate transfer of contractual obligations would
presumably be needed to vest the third party with all rights. But if
the second is true, then the shift of royalties (obligations) would be
automatic.</p>
</blockquote>
<p>The contract of sale would make this fine distinction irrelevant 99% of the time anyway by expressly providing for an assignment of all contracts licensing the copyright, but this assignment would very likely be implied in law even if the transfer of copyright contract was very poorly drafted and omitted this provision (unless the contract expressly provided for some other disposition of the license fees which would be extremely unlikely since it defeats the point of transferring the copyright anyway, except for a possible reservation of a final payment covering some time period before and after the transfer for administrative expediency - for example, I have some works for which I earn royalties of about $25 every four months, and it wouldn't be worth the trouble to split the transition period check if I sold my copyrights in those works).</p>
<blockquote>
<p>In the normal case, the author still owns the copyright when he dies,
at which point the heirs succeed to the author's rights under the
publishing contract. No problem. But if the copyright ownership has
been transferred to a third party during author's lifetime, does that
third party have any claim to the royalties going forward?</p>
</blockquote>
<p>If the copyright has been sold to a third-party during life then this intellectual property isn't part of the estate of the author and doesn't pass to the author's heirs, just like any other property that someone transfers during life. The heirs have no claim to the royalties going forward.</p>
<p>In non-U.S. jurisdictions, there are two separate kinds of rights associated with copyright. A transferrable economic right that can be transferred to third-parties and works as explained above, and separate noneconomic rights called &quot;<a href="https://www.copyright.gov/policy/moralrights/" rel="noreferrer">moral rights</a>&quot; that are non-transferrable. As explained at that U.S. government link discussing the possibility of amending U.S. law to provide for moral rights:</p>
<blockquote>
<p>Chief among these rights are the right of an author to be credited as
the author of their work (the right of attribution) and the right to
prevent prejudicial distortions of the work (the right of integrity).</p>
</blockquote>
<p>U.S. practice, rather than treating moral rights as something legally enforceable, treats moral rights as a question of academic ethics and industry custom (sometimes further implemented in the performing arts by collective bargaining agreements between industry-wide labor unions of people in professions who are legally &quot;authors&quot; in countries with a moral rights regime, and associations of the people who hire them).</p>
<p>I am not familiar with the law governing moral rights after an author's death because U.S. copyright law doesn't give rise to moral rights, so I've never had occasion to deal with the issue.</p>

<h2>It would need to be in the contract in <a href="/questions/tagged/germany" class="post-tag" title="show questions tagged &#39;germany&#39;" aria-label="show questions tagged &#39;germany&#39;" rel="tag" aria-labelledby="germany-container">germany</a></h2>
<p>In Germany, all royalties stem from a license contract for usage rights. Due to how usage rights are handled, you can't sell the exclusive usage right twice: once you sold it, you can't even use the work yourself unless it is specified that you can. You can't sell a non-time-limited non-exclusive usage right and then an exclusive right without canceling the other license first. <strong>As a result, there's no situation where you can <em>sell your copyright</em></strong>, which takes the shape of an exclusive, non-cancelable contract without royalties, while such other license exists. It takes a special contract that accounts for the previous contract, and that would also address how incoming royalties from the previous contract are to be handled - if they are to be forwarded or allowed to be kept would need to be spelled out.</p>

copyright copyright-transfer