The post Business Basics for Creatives™ appeared first on Morin Legal.

Grant of Rights

The grant of rights will generally consist of three main parts: (1) work made for hire; (2) assignment of rights; and, (3) moral rights waiver. These key elements provide the production company with layers of ownership in the work product of its creators. For example, if a work is not made for hire, then an assignment will transfer any rights in the work automatically to the production company. A moral rights waiver removes any possibility that a creator can prevent the production company from manipulating the work as it sees fit. Thus, ownership allows for flexibility in the creations. Distributors prefer that production companies own all rights in the work product of its creators so that they may access those rights for worldwide distribution.

Work Made For Hire

The United States Copyright Code defines a work made for hire as either a work prepared by an employee within the scope of employment, or, a work specially ordered or commissioned for use as part of a motion picture, if parties expressly agree in a written instrument that is signed by them that the work shall be considered a work made for hire[1]. Most employment agreements between creators and production companies will state in the grant of rights that the work is specially ordered or commissioned as part of a motion picture; thereby foregoing any need to dispute whether the freelancer is or is not an employee.

The default rule is a freelancer will own his or her creation unless he or she agrees to the contrary in writing[2]. An actor filmed a part for a production, which she understood was an adventure story set in ancient Arabia. Several months later, she received death threats, and an Egyptian cleric issued a fatwa calling for the death of everyone involved in the film. The producer had placed her performance with an overdub into another film offensive to Muslims. The actor filed suit and received a judgment in her favor. The court ruled that in the absence of a signed writing attesting to a work made for hire, an actor grants an implied license to the producer. If the producer uses the performance in a way so radically different from the one contemplated, the actor may assert a copyright interest in the performance and rescind the license, which sterilizes the performance[3].

If a production company asserts ownership in a creation, for which there is no executed agreement, courts examine the relationship between parties. If the relationship is that of employee and employer, then the creation is work made for hire and owned by the employer. If the relationship is that of an independent contractor, the freelancer owns the creation. Whether the creator is an employee or an independent contractor is an inquiry that is fact intensive and outcome unpredictable; therefore, it is best to clarify the relationship between parties in an executed agreement prior to commencing work to avoid a dispute, which can result in loss of ownership in rights to the work.

Courts consider the following factors in disputes over work product: (1) source of the instrumentalities and tools; (2) location of the work; (3) duration of the relationship between parties; (4) whether the hiring party has the right to assign additional projects to the hired party; (5) extent of the hired party’s discretion over when and how long to work; (6) method of payment; (7) hired party’s role in hiring and paying assistants; (8) whether work is part of the regular business of the hiring party; (9) provision of employee benefits; and, (10) tax treatment of the hired party. No one of these factors is determinative[4]. One court determined certain factors should weigh more heavily than others[5]. If work is prepared as an employee within the scope of employment, then the creation is a work made for hire and the employer owns the rights and is the legal author in the work.

Assignment

An assignment insures that rights, which do not vest solely, exclusively, and automatically, instead are assigned and transferred from the creator to the production company. Transfers are only valid if they are in writing and signed by the creator or authorized agent[6]. Recordation is optional and provides constructive notice of ownership in addition to other important benefits concerning access to rights[7]. Employment agreements are generally not recorded. Production companies may request individual assignments in which case they will likely require the creator to appoint them as the attorney-in-fact to execute transfers.

The Copyright Code provides for terminations in transfers granted by an author in a work of authorship. Since copyrights are descendible property, living heirs may terminate transfers after an author’s death; however, there are specific rules concerning how descendants must agree to terminate, when it may effect, and what constitutes valid notice[8].

Moral Rights Waiver

The United States recognizes a limited set of moral rights[9]; however they exist throughout the world. Moral rights provide creators with rights to create, to determine completeness, to withdraw, to attribution, and to integrity. In many places, moral rights are inalienable and innately ascribed to the creator. In context, moral rights entitle a creator to limit what a production company or film studio may do to alter the work, produce remakes, or sequels. Because production companies or film studios require control whether to market, sell, and distribute a film worldwide, creators typically waive moral rights.

Guild-Based Rights

A production company may or may not be a signatory. There is an approval process, which if granted will subject the production company to collective bargaining agreements with each respective guild. What a production company may or may not do with intellectual property is addressed in these agreements. The Screen Actors Guild provides circumstances in which actors’ portrayals may be “reused” by film studios. The Writers Guild Association provides “separated rights,” akin to copyrights, which allow writers to regain or exercise certain rights even when another party owns the work. The Directors Guild Association requires certain credits for directors. Production companies must review relevant provisions to insure that any particular uses of work will not violate any guild agreements.

Name and Likeness

The “name and likeness” provision addresses publicity rights. The grant of publicity rights enables the production company to advertise, publicize, and exploit the film. Publicity rights are the commercial value of an identity. Identity includes any personal characteristic or trait such as name, likeness, sobriquet, voice, image, and signature. Production companies will include a provision in their employment agreements to acquire access to publicity rights from players. For actors, the name and likeness provision is lengthy because it incorporates additional commercial applications, such as merchandising, tie-ins, and endorsements.

Other Approvals, Merchandising, Endorsements, Doubles, Dubbing, Outtakes, & Nudity

Actors probably have a higher number of issues related to consent, grant of rights, and other permissions in their employment agreements simply because there is a greater expectation upon them to sell a film. Save for a few directors or producers who are, in their own rights, celebrities, actors are the chief attraction to moviegoers. In addition to all of the above grants of rights in ownership to the work and publicity, production companies seek consent from actors for still or likeness approvals, merchandising, commercial tie-ins and endorsements, doubles, dubbing, outtakes, and nudity[10].

Approvals

Approvals include stills and likenesses. Stills are different from likenesses because the former involves an actual photographic capture of a real person, whereas the latter can be a computer-simulated image, such as CGI. Because so much of a celebrity’s life revolves around his or her image, receiving approvals for the use of such images can be the ultimate challenge. While the industry standard for turnaround of an approval is 3-5 business days, it may take several submissions before the production company receives the requisite approval.

Merchandising

Merchandising is one of the most successful ancillary businesses in motion pictures. Merchandise includes a myriad of products such as apparel, school supplies, novelties, and toys associated with the original intellectual property in a film. If an actor’s name or likeness is used in conjunction with the manufacture of merchandise, the employment agreement may provide the actor with a share of its revenue as part of compensation. Similarly, a royalty is provided where an actor’s voice is used in the soundtrack to the motion picture.

Commercial Tie-Ins; Endorsements

Actors may grant rights to use their name and likeness in connection with advertising or merchandising non-film products, commodities, services or series, with the caveat that they must first provide consent. Consent serves as an exercise of control by the actor in the event he or she does not wish to be affiliated with certain products or services. Actors may withhold consent at their sole discretion. The chief difference between commercial tie-ins and endorsements from merchandising is the former allows no profit share; while the latter serves an additional revenue stream.

Doubles, Dubbing, Outtakes, & Nudity

Actors also require consent for use of a body double, dubbing, outtakes, and nudity. Body doubles may be under less scrutiny if specialty or stunt performers. Actors, who speak foreign languages, or for whom English is not their first language, may insist on performing their own dubbing. Actors require prior, written consent for the use of outtakes, which are not shown in the film. Finally, there is a laundry list of consent items to consider when actors perform scenes requiring nudity or sexual acts. The Screen Actors’ Guild Minimum Basic Agreement requires actors receive written notice of such scenes prior to the first audition or interview, approve the appearance in writing, and approve any body doubles to be used in writing. Finally, the writing must include a general description of the depiction and sexual acts to be performed in the scene. In the event the actor has a change of heart then a body double may be used without the need for further consent. During shooting, actors require no still photography of the scene be permitted without their prior, written consent.

This concludes our overview of The Players. The next section will address The Production. Specifically, we will discuss permission to film on government and private properties, use of animals, and consent to film crowds, people, and protected elements on props. We will also take a look at telephone communications and what the law says in Georgia versus the rest of the United States.

The post Got Consent? Legal Issues in Film, Pt. 3: The Players appeared first on Morin Legal.

According to Merriam Webster, consent entered the English vocabulary in the 13th century from Latin and French. Consent means, “to give assent or approval; to agree to do or allow to do something; to give permission for something to happen or be done.” It has an abundance of synonyms; words such as agree, allow, approval, clearance, grant, license, permission, and permit all surface in the following discussion and are particularly found in the practice of law. Other words such as release may not be a synonym, but nonetheless its use evokes consent.

This article is split into five main sections by how a producer may encounter consent issues in filmmaking. Beginning with development, I discuss the story, from determining authorship to rights acquisition. Section two discusses the script and reviews clearance and title selection. The players bring up the mid section, which highlights consent in employment agreements. Section four discusses the production, from permits, to filming on location, use of animals, and releases. Saving the best for last, I discuss music in film, from commissioning new works, to working with artists, composers, publishers, record labels, and finally, music supervisors.

In each section, I will cite to case law that has surfaced since film entered the entertainment landscape. Courts interpret the law where the law is sometimes silent. My aim is to relate concepts so non-lawyers find the information useful as well as entertaining. I may also cite to statutes in an effort to educate, but will keep these footnotes in the minority where possible.

This article will publish in five separate sections over the next four weeks. If you enjoy this article, please sign up for my quarterly newsletter or follow me on social media where I will post updates with links to insertions. I will also share firm news, events, and pictures.

The Story

A story forms the foundation of a film. Stories take many forms; they can be written or spoken; they may have one or more authors; they may publish independently or as part of a collection. To develop a story, a producer must first determine the identity of its author, or authorship.

Authorship

A copyright attaches to an original work of authorship fixed in a tangible medium of expression[1]. There are eight (8) works of authorship listed under the U.S. copyright code, which include dramatic works[2], which are works intended for performance, such as plays and scripts. If a single writer completes the first draft of a script, he or she is the author and owner of that script. If another writer revises or polishes the first or subsequent drafts, then its result is a derivative work of that script. A derivative work is based upon one or more preexisting works and consists of editorial revisions, annotations, elaborations, or other modifications, which result in a complete work[3].

If two or more writers each intend to contribute parts, which then merge into an inseparable, interdependent whole, then each writer is a joint author[4] and owner[5] of that story. If each writer intends to contribute a separate, independent story, which when assembled with other stories becomes a collective work[6], then each writer is the author and owner to his or her story; however, there is an ownership interest in the collection[7]. Sin City, Love Actually, and Crash each contain vignettes that stand alone, but when combined tell even greater stories about other worlds or characters.

Screenwriters may capture stories in different phases of development. A screenwriter may pitch a story verbally to a producer, summarize the characters or plot in a written treatment, or develop a more complete script “on speculation.” Spec scripts, treatments, and pitches are preexisting works, in which screenwriters may register a federal copyright.

Federal copyright registration creates a presumption of ownership if the work is registered within five (5) years from the first date of publication[8]. Publication is the distribution of copies of a work to the public by sale or other transfer of ownership, or to a group of persons for purposes of further distribution, public performance, or public display[9]. One cannot sell or transfer what one does not own; therefore, registration of a work under the copyright law of the United States provides its applicant with ownership.

The owner of a federal copyright immediately benefits from six (6) exclusive rights[10]. Rights include the right to reproduce, prepare derivative works, distribute, perform work publicly, display work publicly, and perform sound recordings publicly by digital audio transmission. These rights derive their value in their exclusivity to the copyright owner, who has the right to exclude others from their use without permission. To access any or all of these rights, the producer must either have permission from the copyright owner or transfer ownership in the copyright to the work.

The right to exclude others lasts the duration of a copyright. Copyright duration begins from the date a work is created and lasts for the life of the author plus 70 years[11]. In the case of joint authors, copyright protection lasts for the life of the last surviving author plus 70 years[12]. If made under a work for hire or pseudonymous work, copyright protection lasts 95 years from first publication, or 120 years from creation, whichever expires first. If the identity of the author is revealed in a work registered pseudonymously, the period will convert to life plus 70 years[13].

Rights Acquisition

Producers generally prefer to acquire ownership in all audiovisual and allied rights to a preexisting work. Ownership is acquired through a transactional document, which is signed by the copyright owner and producer[14]. The writer remains the author in the preexisting work, but the producer now owns the motion picture and neighboring rights to develop it.

Preexisting works include include pitches, treatments, and spec scripts, as well as literary works not written for the screen such as novels. While most screenwriters seek relationships with producers, most novelists do not. Authors in literary works will more often have a relationship with a publisher. Publishers typically possess the authority to bargain motion picture rights on behalf of the author whom they represent by way of a publishing deal.

Authors or publishers will commonly reserve rights to all print, audio, and electronic text publication of the story, radio rights, stage rights, sound recorded rights in the case of audio books, and all rights, including those granted to the producer, in any sequels. Reserved rights enable the author or publisher to exploit the story in its original medium while accessing new audiences in motion pictures and other audiovisual mediums of expression.

The producer may hire additional writers to develop the script. These writers will generally agree to a work for hire agreement[15], which is a written document signed by both writer and producer that cedes ownership and authorship in the work to the producer[16], who specially orders or commissions the work as part of a motion picture. There is an exception for Writer’s Guild Association members, whose Minimum Basic Agreement provides “separated rights” that allow them under certain circumstances to regain or exercise certain rights akin to copyrights.

Rights Termination

Unlike a work made for hire, a transfer of rights can be terminated[17]. Termination need not be effected by the author, the author’s heirs may effect termination upon the author’s decease. Thus, there is a risk that at some point in the future transferred rights will terminate and revert to the author or author’s heirs. Copyright law provides producers, who lose their rights, with the right to reproduce, perform, or distribute a work created while under the authority of a transfer, but it will prohibit any new works, such as remakes or sequels[18].

Public Domain

Stories in the public domain are free to use. A story enters the public domain if its copyright expires, though for older stories other conditions exist which may thrust it into the public domain. An example of a story in the public domain because its copyright expired is most of Sir Arthur Conan Doyle’s Sherlock Holmes[19]. What is public domain in the United States may be copyrighted in a non-U.S. country. If a film requires the rights to distribute worldwide, then confirmation the story, which it is based upon, is public domain worldwide is essential.

True Stories

A copyright is an original work of authorship fixed in a tangible medium of expression. Expression is protected, not the idea or concept on which it is based. If I want to tell a true story, I am free to do so as long as my source material is not protected. Primary sources such as public records, court transcripts, witness testimonies, or trial documents are objective facts. Secondary sources such as books, autobiographies, or articles, are subjective interpretations of facts, and are therefore expressions, which may be copyrighted and if so, require consent.

Pitfalls exist when developing a true story that an entertainment attorney and insurance carrier will help the producer to identify. If a story is based in secondary sources, there is rights acquisition. If a story embellishes facts, there is possible defamation. If real names are used or private, embarrassing facts revealed, there is a chance of a privacy claim. If names are used commercially without permission, then a publicity claim might arise. To obtain errors and omissions insurance coverage, the producer must reduce or remove risk entirely.

Everything in Writing

Everything agreed to must be in writing to provide insurance carriers with clear chain of title. Clear chain of title requires documents that trace ownership in the story to the producer. In the case of a preexisting work, an assignment will record the transfer of motion picture rights from its author(s) to the producer. Assignments are accompanied by purchase agreements, or options. Option agreements document the interest in the preexisting work. If a preexisting work involves a publisher, then a release provides evidence the publisher releases all claims to the motion picture rights and consents that the producer reprint portions of text in print publication for advertising, publicizing, or exploiting the film.

In contrast, true stories that are based in primary sources require no assignment. The risk in true stories is working with people’s identities. Thus, a life rights agreement will insure the producer has permission to tell a true story without concern of a claim of defamation, or a violation of privacy or publicity rights arising from the film. If the true story pulls from secondary sources, then the producer may use both a life rights agreement and an option agreement with an assignment for any portion of the story based in copyrighted work.

Cautionary Tales

Authors may grant general but not specific rights. Warner Brothers Pictures learned a hard lesson when a character in their film, Maltese Falcon, subsequently appeared on television because the author licensed character rights in Sam Spade to CBS. The court found the film studio acquired rights to the general story, but not its characters; thus, the author was free to license those rights to third parties. Thus, rights not expressly granted in an agreement are not granted, but rather are reserved to the grantor, or author of the story[20].

Authors may bargain for reversion rights that specify conditions, which if met, terminate rights. In one case an author and film studio agreed to a completion deadline or the studio’s rights would revert to the author. The court found for RKO Teleradio Pictures, who only made minor changes after the deadline; thus, the author lost the case. This case established that a motion picture is complete when all photography and editing are done, musical score affixed, certificate of approval obtained, and the picture may be publicly exhibited[21].

Now that you have your story, it is time to clear the script! Script clearance includes personal rights and intellectual property rights. It is also time to select a title. Title selection is governed by trademarks, unfair competition, and through contract agreements by film professionals.

The post Got Consent? Legal Issues in Film, Pt. 1: The Story appeared first on Morin Legal.

Copyright for the Freelance Artist Pt 2, by Lee Morin, Esq.

CONTRACT BASICS for the Freelance Artist

THE IMPORTANCE OF EMPLOYMENT AGREEMENTS: The Case of Jack Kirby and Marvel Comics

Whether you transfer ownership of or merely grant permission to use the exclusive rights to your work depends on the contract agreements in place.  Heated debates have arisen where it concerns agreements between freelance artists and publishers that allowed publishers to exploit characters in the comic book industry.

Motion picture adaptations of literary superheroes are an example of derivative works, which provide the film industry with some of the highest earning films of late, grossing more than 15 billion dollars for Marvel, now Disney, since 2000[1].  Because copyright law provides that freelancers can terminate transfers of ownership in the exclusive rights to their work[2], heirs of freelance artist Jack Kirby sued Marvel to reclaim rights to characters Fantastic Four, Hulk, Iron Man, Silver Surfer, Spider Man, Thor, and X-Men[3].

Marvel argued that Kirby produced work as made for hire not subject to termination; thus, Marvel was author and owner; neither Kirby nor his heirs had any claim.  The heirs insisted that Kirby had not irrevocably transferred his rights to Marvel, rather that the transfer was subject to termination after 56 years[4]. After petitioning the Supreme Court for certiorari, parties settled their dispute on confidential terms[5].  Whether freelance artists may terminate transfers of ownership in their works created or published prior to 1978 remains to be seen.  Still, this is a lesson that illustrates the importance of the contract agreement.

THE 3 BASIC CONTRACT AGREEMENTS

When considering which contract agreement is best for you, keep in mind there are three main agreements, which freelancers can use to collaborate.

WORK MADE FOR HIRE

We have already mentioned works made for hire, which the copyright law defines as either a work prepared by an employee within the scope of his or her employment, or, “specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation […][6].”  If the latter, then the parties must sign an agreement attesting to such terms.  In a work made for hire, the employer or party commissioning the work is author and owner; thus, the freelancer does not have any rights to or in the work whatsoever.

ASSIGNMENT AGREEMENT

In the middle of the spectrum is the assignment agreement, which is a temporary transfer of ownership in the copyright of a work.  In an assignment, the freelancer retains authorship and is named as author of the work in its copyright registration; however, the entity to whom the copyright is assigned, whether a publishing company or individual, is owner of all exclusive rights granted in copyright to the work, and known as the claimant.

LICENSE AGREEMENT 

At the opposite end of the spectrum is a license agreement, in which the copyright holder grants an individual or publishing company certain or all exclusive rights to a work under certain conditions, specifying duration and the geographic territories, for fees.  In a license, the freelancer is the owner and the author of record in the copyright registration.  While the copyright code provides for termination of an assignment, termination in a license agreement is controlled by terms, to which parties agree, including payment, deliverables, or quality of product. 

WHICH CONTRACT AGREEMENT IS THE BEST FIT FOR YOU? 

One of the most frequently asked questions I encounter from freelance artists is which agreement is appropriate for their situation.  Many are recent graduates, just beginning their careers. They may have limited resources and market reach, which means they are more likely to benefit from agreeing to a work made for hire or assigning the rights in their work to an established publisher.  Whether you agree to an assignment, which provides for termination[7], or a work made for hire, which does not, ultimately depends on your bargaining power as an artist, which is generally low at the start of any career.

Once your work and reputation have had time to mature, then you may exercise more bargaining power and control over your work.  If you are fortunate enough to have a viable outlet in which to market your work, then you may attract the attention of others wishing to collaborate with you to bring your work into new artistic mediums.  In that case, a license may be your best option because you intend to retain certain rights to your work while exploiting others that can bring your work to new audiences.

An example of this scenario is your retaining print publishing rights while licensing the right to adapt your story, setting, characters, or artwork for film. Last year, I wrote a blog about how freelance artists can market their work to game developers.

In any of the above scenarios, I strongly suggest you hire an agent, who specializes in the industry, or an attorney, who specializes in intellectual property law and transactions, to best represent your interests. An agent may have the relationships that an attorney does not.  On the other hand, an attorney can help you learn how to read and negotiate a contract, which you eventually must be able to do yourself.  An attorney can also draft and provide customized licensing agreements, which can creatively parse your exclusive rights and serve as an instrument by which you make a lot of money.

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Our next blog will discuss copyright infringement, what it is, how to avoid it, and what happens if you sell or display fan art, cosplay, or perform anime music videos at a convention.  We will also address fansubs and selling fan art or cosplay via online vendors like Etsy and Ebay.

DISCLAIMER: THE INFORMATION CONTAINED IN THIS BLOG IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO LEGAL ADVICE.

The post Copyright for the Freelance Artist Pt. 2: Employment Agreements appeared first on Morin Legal.