In order to secure meaningful distribution for a film, a producer must be able to prove that he or she owns, or has a license to use, EVERY piece of intellectual property in the film. “Intellectual property” includes many things, such as the right to use the screenplay, the right to use the music in the soundtrack, the right to use the title of the film, the right to use any brand names that appear in the film, ownership of the actors’ performances and many other issues. It is critical that a producer be very conscious and organized with regard to intellectual property.
What is a Copyright?
Copyright is a form of legal protection given to many kinds of creative works. In order to be protected under copyright, a work must be:
1. “original” which means that it was not substantially copied from any other source;
2. “fixed in a tangible medium of expression” which means that it exists in some reasonably permanent or stable form, such as a film or video recording; and
3. have a minimum degree of creativity. Not everything can be protected by copyright, but a surprisingly large variety of works can be.
The copyright owner has the exclusive legal right to 1) reproduce the work, 2) publicly display the work, 3) distribute copies of the work, 4) publicly perform the work, and 5) prepare “derivative works.”
What is a “derivative work?”
Any creative work that is based on a pre-existing copyrighted work is a “derivative work.” For e\xample, if a film is based on a novel, then the film is a “derivative work” of that novel, and the film producer will need the author’s permission. A similar concept applies to every piece of copyrighted material that a film might contain, from music to acting performances, to a painting that is in the background of a shot, and even certain buildings or other architectural works that might appear in a shot.
How do I get permission?
A producer should locate the current owner of the copyright. Whether the copyright owner allows the producer to use the material for free or for a fee, the producer must have written permission. An attorney can assist in drafting an appropriate document. Depending on the situation, that document might be called a “license,” a “release” or a “rights agreement.” Either way, the most important provisions are the “Grant of Rights,” “Representations and Warranties,” “Price,” and “Screen Credit.”
Grant of Rights
There are two basic ways to transfer copyright rights: an assignment and a license. A copyright assignment refers to the transfer of all the rights to a copyright. A copyright license refers to the transfer of some of the rights to a copyright. For example, a “license” to use a piece of music might allow the producer only the rights to use the music in the film’s soundtrack, while the record label would retain the rights to use the music for CD sales, radio play, etc. An exclusive license means the producer is the only person who can exploit the rights granted, while a non-exclusive license means the licensor/copyright owner can give permission to several people to exploit a certain copyright. For example, a producer would want an exclusive license to adapt a novel, so that no other filmmaker can make a similar film at the same time. However, for a piece of background music, a non-exclusive license might be sufficient. Technically a non-exclusive license can be made orally or in writing, but it is almost impossible to secure meaningful distribution without WRITTEN evidence that the producer holds rights to use EVERY piece of intellectual property in the film.
Representations and Warranties
This is the part of the agreement where the current copyright owner represents and warrants that he or she actually owns the copyrights and can freely transfer over the rights to the producer. A producer can check on the state of copyright ownership by getting familiar with the Library of Congress database.
A producer might pay an up front fee for the use of copyrighted material, or might grant a royalty in any proceeds from the film, or even a combination of both.
The copyright owner might ask for screen credit in exchange for the producer’s use of the work. It is important to be careful about granting too many screen credit rights too early in production, especially for general areas such as “Producer” or “Executive Producer” because distributors and investors often have specific screen credit requirements. For example, an investor might require a credit as being the only “Executive Producer.” If a producer has already agreed to give an executive producer credit to someone else, this could interfere with the producer’s ability to close a good investment deal.
An agreement may deal with the right to write the screen play, the right to write any sequels or television versions, or the rights to produce live stage versions, novelizations, and derivative works based on the screenplay. In some instances, rather than actually licensing a screenplay, a producer might “option” a novel or screenplay. An “option” means that the producer has paid an author a fee to “tie up” the story, for a limited period of time so that no one else can produce it while the producer searches for finance or distribution. Eventually, the producer will either let the option expire, or will “exercise” the option by entering into an agreement to produce the screenplay into a film.
Is a copyright assignment or a license always necessary?
Whether or not a producer needs to obtain copyright permission depends on the source of the film concept. For example, a producer will need a copyright assignment or a license if the film is based on any kind of existing work such as a novel, short story, stage play or a remake of an older movie.
On the other hand, a producer will not need a copyright assignment or a license if the film is made from his or her own original idea or a true event. For example, if you were to write a screenplay from scratch, that screenplay would belong to you. However, as a producer you will still need to license the screenplay to the LLC that holds the film. If a producer writes a film with a partner, it will be important to have a co-authorship agreement describing how the authors plan to share the rights related to the screenplay.
True events cannot be owned by anyone, and therefore do not implicate copyright issues, although an author’s description of the event is protected. A producer should be careful about portrayals of real individuals, living or dead. There is a highly complicated legal interaction between the right of free speech under the First Amendment to the U. S. Constitution, and the right of individual people (and sometimes even companies) to live free from defamation and to enjoy certain rights of privacy and publicity. The individual a film portrays could potentially sue the producer for defamation or violation of privacy or publicity rights, and even a small chance of potential liability will make investors and distributors nervous. If possible, a producer should try to get written permission from the individuals portrayed in a film, especially if those individuals are not public figures.
Works Made for Hire
Anyone working directly on the production, such as actors, directors, DPs and anyone else who could create a copyrightable material, should have “work made for hire” status, if appropriate. “Work made for hire” means that an artist’s work will be the original property of the production company, as if the production company had created that work itself. Actors and crew might work under union contracts, but these contracts do NOT create a “work made for hire” status. An attorney can help a producer to draft the specialized contracts that provide for this status.
Obtaining all the required rights to use music in your film can be very complicated. The composer will have rights, the recording label will have rights, and there are often others with rights to be considered. There are a number of ways to obtain permission to use a piece of music. One is to directly contact the musician or the appropriate agent or record label. Certain types of rights can also be obtained through the major music clearing houses, known as “The American Society of Composers Authors and Publishers” (“ASCAP”), or “BMI“. The cost of using a piece of music can vary greatly depending on the music, the musician and the specific type of film production. Sometimes a producer will “fall in love” with a piece of music before beginning production, only to discover that the music license will cost more than the entire film’s budget! So either don’t fall in love, or check out your music costs early. One more note on music: there is a myth in the artistic community that it is legal to use under 10 seconds, or a few bars, of a song without obtaining permission. This myth is not true concerning music, or any other type of copyrighted material you may want to use without permission.
Trademarks are words or symbols that identify the goods or services of a business in commerce. Famous examples are Coke, McDonalds, the MGM lion. Trademarked products are often licensed for use in films but increasingly, product manufacturers will pay for the opportunity to have their products featured (otherwise known as “product placement”). As a film maker, you have broad free speech rights and will be given some flexibility in displaying trademarks in your movie. However, watch out for scenes that may disparage another company’s trademark or in any way imply that the production is affiliated that other company. It is best to ask your attorney.
Once a producer finishes a film, the producer automatically has copyright protection over the completed film. However, a producer can obtain important additional benefits and protections by registering the film with the United States Copyright Office. The process of copyright registration is simple, the filing fee for basic registration is currently $30, and the proper forms can be obtained online through the Library of Congress.
Writers Guild of (“WGA”) Registration
A WGA registration can serve as evidence of when a screenplay was created in case there is ever a dispute over the authorship. This registration does not hurt, but should not be confused with, nor is it a substitute for, the important rights that come from copyright registration. The WGA can be found at the Writers Guild of America – West and Writers Guild of America – East.
While this section on copyright contains much complicated information, a good attorney can simplify this process.
2 The Lights, Cameras, Illinois! Program, in partnership with Illinois-based financial institutions, presents Lights, Cameras, Illinois! to encourage the film and television industry to make major motion pictures, television/cable and commercial productions in the State of Illinois by providing loans at below market rates. Questions about the program should be directed to Chuck Hagopian, Jr., 100 West Randolph Street, Suite 15-600, Chicago, IL 60601, 312-814-1793, firstname.lastname@example.org
3 These issues are provided merely as examples of SOME of the requirements to be satisfied in connection with the sale of stock or membership interests. This is not a complete list of issues and under no circumstances should a producer attempt to create a PPM or to raise equity funds without the assistance of qualified securities counsel.
These seminars and materials were provided through the support of the Chicago Community Trust, Illinois Arts Council, and Sara Lee Foundation – Lead Corporate Sponsor.