Specifically, I'm trying to understand what happens in the following example. Say Author Z creates a copyrighted Book Z and develops a coaching program + methodology around Program Z. I then become "certified" to teach Program Z and sign a contract whereby "any derivative works are the sole property of Author Z" How far to the tentacles of this agreement reach? For example, were I to write my own Book ABCXYZ that incorporates fair use material from Book Z (maybe 1 chapter on the general subject) while also adding a substantial amount of new material above and beyond the Z material alone, does this trigger the derivative clause and grant Author Z full rights to my entire Book XYZ? Or does the "derivative" clause only grant permission to the portion of my book that uses the Z material specifically?
This is a tricky question as you are entering a gray area if you are using material from Book Z to inspire your own book. Derivatives works are highly litigated and there is case law that you could turn to to help you make this decision but based on your example its going to be a fine line. You would have to be able to distinguish the products as two very separate works. Since the original book Z is inspiring your new book this may be hard to do. It might actually be easier to talk with the original author about your future plans and develop an agreement between the two of you where he waives any claims he might have here in exchange for recognition in your book. Just an idea--FYI- this is NOT LEGAL ADVICE. You should consult with an attorney in more detail here.