© 2017 by Duarte Entertainment & Media Law

Development

Business and Legal Checklist

 

Most film, television or other motion picture production begins with an existing intellectual property which will be adapted to a motion picture medium. The original property may be a cartoon, short story, novel, play, poem, song or just about any other form of expression. The following is a brief list of the basic business and legal steps in the initial development of a property for a motion picture production, from identifying the property to the start of pre-production. The issues are listed in an order which may not necessarily be the order in which they are addressed by a production company or its lawyer. Not all of the steps are necessarily undertaken by a lawyer.

 

□ Identify any property upon which the production will be based and locate the rightful owner(s) and author(s). Copyright and trade-marks can exist outside of a formal registration system. Therefore, care must be taken to identify authorship and ownership from all available sources. The production company should:

 

□ identify protected versus public domain properties

□ conduct the necessary copyright and trade-mark registration searches

□ search trade publications

□ identify and examine the transfers, assignments, licensing or other dispositions or devolution of rights from the first authors(s) and owner(s) to the current owner(s) (the so-called "chain of title").

 

□ Once the rights required by the production company are identified, identify the current owners(s) of such rights since they may not belong to the author or original copyright owner. Determine which of the following rights, among others, the production company will need and for how long:

 

□ single production or multiple production (e.g., sequels, remakes, television series) rights

□ single media, multiple media and/or new media rights

□ related rights (e.g., publishing, merchandising, music and soundtrack)

□ exclusivity or non-exclusivity of the rights

□ translation and adaptation rights, including waivers of the "moral rights" of the authors.

 

□ Determine that the required rights are not encumbered by:

 

□ pre-existing agreements with others (e.g., options given to other production companies, publishing licences, agency agreements) or

□ operation of law (e.g., subject to the rights of creditors under bankruptcy).  Bankruptcy, copyright, executions, personal property security, bulk sales and other searches may be required.

 

□ Determine that the title of the property is available for use in the motion picture adaptation. A title search and a legal opinion regarding the availability of the title for use may be required.

 

□ Review producer's errors and omissions liability insurance concerns and clearance procedures with legal counsel. Special consideration should be given to the depiction of living persons, defamation issues, related use of other protected material and, generally, to the ability of the production company to secure producer's errors and omissions liability insurance in light of any conflicting ownership claims or other issues.

 

□ Option or purchase the required rights. The production company should:

 

□ determine the requirements for government assistance or subsidy of the intended production and secure warranties of eligibility (e.g., Canadian citizenship of the author)

□ contract for at least the minimum required terms if the property is from a writer governed by the Writers Guild of Canada or any other guild to which the production company is bound

□ secure sufficient option periods and exclusivity to allow for development and to satisfy investors' and institutional lenders' rules or practices

□ negotiate and establish the option price, exercise price of the option, royalties and revenue participation (e.g., net profit share) to the author(s) and owner(s) of rights

□ set any preconditions to payment (e.g., verification of ownership or authorship may be a precondition)

□ obtain life story and publicity releases from certain living persons to be depicted in the production.

 

□ Obtain written releases from conflicting or potentially conflicting holders of rights to the property. Examples of such releases include:

 

□ publishers' releases of any claims against the rights acquired or optioned by the production company

□ certificates of authorship from authors not participating directly as a party to the agreement with the production company, verifying that their agreement with the owner(s) is in good standing

□ releases from prior writers (which may be required under guild agreements or may be otherwise desirable).

 

□ Secure additional development financing. The production company should:

 

□ determine eligibility for and availability of private or public sources of financing

□ determine if financing is to be in investments or loans

□ determine if co-productions and other forms of joint ventures are appropriate or available.

 

□ Engage the screenwriter(s), script editor(s), researcher(s), artist(s) and other required contractors or employees. The production company should:

 

□ determine if the personnel will be engaged under union or non-union agreements

□ acquire necessary rights and define rights reserved by the contactor/employee, if any

□ negotiate and establish the fee, work delivery dates, royalties and revenue participation (e.g., net profit share) to the employee or contractor.

 

□ Register interests in copyrights and trade-marks. The production company should:

 

□ determine place(s) of registration (e.g., Canada, the United States)

□ register options, licences or assignments of rights, as applicable.

 

Written by Tony Duarte

© 2015 Thomson Reuters Canada Limited

Excerpted from “Canadian Film & Television Business & Legal Practice”, Thomson Reuters: Toronto, 2015

 

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