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Term > Territory - Pg. 196

The Publishing Contract 196 Imagine that you are hungry and have just picked an orange off a tree, but you aren't sure it's edible. Someone comes along and wants to buy some or all of the orange, incorporating uncertainty about the orange's condition into the purchase. If he buys an option on the orange, the orange would stay in your hands, and he would pay a certain fee for the right to have the option, after you have peeled the orange and he has tasted it, to buy the fruit. If he buys it subject to reversion, he takes the orange from your hands, paying you outright for the right to the fruit on the inside, but he must give you any part of the orange he can't finish. Whether the rights are put into an option or a reversion framework is somewhat value-neutral--it is the specific terms of the option or the reversion that make it more or less to the benefit of a given party. Under the option, the rights still belong to the developer, and the publisher has the option to purchase them for a given price and/ or subject to certain conditions. Under the reversion, the publisher receives a grant of the rights but can lose those rights if it doesn't meet certain conditions. Giving the publisher a license that reverts back to you if he doesn't use it for one year is a better deal than if you hold on to the rights but the publisher gets an automatic option if sales are greater than $10,000 (a threshold it is almost sure to reach). Low option fees or a lot of successive options can also be counter to a developer's interest: five successive two-year options means that the publisher can pay an option fee every two years to lock up rights for a full ten years. All things being equal, however, while possession isn't quite 9/10s of the law with intellectual property, there are all sorts of formalities to getting a property back, and the process sometimes gives rise to conflict. Devel- opers will want the publisher to specify some release window in their contract, after which the developer can regain the rights. Rights commonly subject to reversion/option: · Platforms · Languages · Territories · Sequels · Entertainment rights As a general rule, the more successful a release is, the more rights the publisher receives gratis; frequently, all reversions can be overridden if total royalties from all projects are greater than a pre-specified amount.