Entertainment Law FINAL

Option/Purchase Agreement

**Primary purpose: An option agreement is an agreement whereby one party receives an exclusive right to buy something for a certain period of time. During that period of time that party can exercise the option by paying the other party an agreed upon purchase price. *Generally used by filmmakers to acquire an existing literary property - book (published or unpublished), graphic novel, short story, play, game, completed screenplay, etc. from a author or other owner.

Breakdown of a contract: (hint, there's 4)

**Who are the parties (at least 2). Do they have the legal capacity to make a contract? Over 18? Mentally impaired at the time of signing or intoxicated? **Terms - need to be specific, not vague or ambiguous **Offer - a promise to do or refrain from doing something in exchange for something of value **Acceptance - has to be clear the offer was accepted. A response to an offer that changes the terms is a counter offer.

➢ Can a copyrighted work can be used in another work without the copyright owner's permission?

**Yes, if it falls under the Fair Use Doctrine.

Basic elements of each contract should follow these three rules:

1. Consideration - what each party gives or gets from entering into the contract. 2. Purpose of the contract has to be legal. 3. Implied covenant of good faith and fair dealing.

Rights of Privacy - The three claims:

1. Intrusion upon seclusion - Basically invasion of privacy 2. Public disclose of private facts - Publication (i.e. disclosure to others) of private facts about the private life of the subject. 3. False Light - Publishing information about or concerning the subject which was presented as factual but which is actually false or created a false impression about the subject.

Advertising Credit, Restrictions & Obligations Statement

A complete written summary of all restrictions and obligations for all individuals and entities affiliated with the Picture, pertaining to the following: Advertising Credit Obligations Name & Likeness Provisions Dubbing / Subtitling Restrictions Cutting / Editing Restrictions Premiere / Festival Obligations Publicity Services

Negative Pick-up

A contract between a producer and distributor in which the distributor commits to distribute a film for an agreed price. The producer uses that agreement to obtain a production money loan from a bank.

What is a contract?

A contract is an agreement that a court will enforce. Depending on the contract, its subject matter and other factors, a court (most commonly) would award the non-breaching party damages to compensate them for the loss. Not all agreements are enforceable contracts.

Secured Creditor Definition

A creditor who holds security (such as collateral) to cover the amount owed.

PPM - Private Placement Memo

A memorandum use to disclose material facts in connection with the securities offering.

What is a parody?

A parody is a copyrightable work that imitates or mimics the style or author of another copyrighted work for purposes of criticism or comment. **"Parody needs to mimic the original to make its point, and so has some claim to use the creation of its victim's (or collective victims') imagination."

Why is satire different from parody?

A satire is not a parody. A parody is a commentary or criticism about a work. It requires an imitation of the work. Satire, even when it uses a creative work as the vehicle for the message, offers commentary and criticism about the world, not that specific creative and copyrighted work.

What is a Shopping Agreement?

A shopping agreement is an agreement whereby a filmmaker will get the right to "shop" a project to buyers (studios, networks, financiers) to see if they can set up the project. If the filmmaker is successful they will be attached to the project usually as a producer or the production company.

Private Placement

An offer or sale of a security that is not required to be registered with either the state or federal securities regulatory authorities. Terms of the offering will be explained in a Private Placement Memo along with other pertinent facts about the project and the market for the film.

Promissory Note Definition

An unconditional promise to repay the borrowed amount in a specific time, plus interest. The obligation to pay is not tied to the success of the film.

What is rights clearance?

It is the process of licensing intellectual property for use in a film.

What is script clearance?

It is the process of reading and breaking down a script to identify all items that represent possible legal conflicts if used as is.

What is Copyright?

It's a form of Intellectual Property ➢Intellectual Property (IP): It is the products of the mind or personality, such as copyright, trademark, patent, rights in ideas, rights of publicity and privacy rights.

Lab Access Letter

Lab Access Letter grant the Distributor irrevocable and unrestricted access to all applicable materials.

What are the two forms of defamation?

Libel = the written, televised or otherwise recorded form Slander = the spoken form

Credits

List of the main and end credits (inclusive of all logos including Distributor's) of the Picture as they appear on the final version of the Picture as approved by Distributor, with an approved lay-out illustration of the screen and advertising credits with relative size and prominence in percentage. If applicable, the final screen credits as they appear on screen shall be entirely guild / union compliant (e.g., WGA, DGA, SAG, IATSE, PGA, etc.).

All forms needed in delivery:

MPA Certification Shortform Assignment of Rights Music License Music Cue Sheet Final Cast & Crew List Logos Guild / Union Approval Statements Credits Certificate of Origin Advertising Credit, Restrictions & Obligations Statement Title Report and Copyright Report Copyright Line Copyright Certificate Billing BLock Lab Access Letter Chain of Title Errors and Omissions Insurance

Disadvantages of Loans

Money must be paid back regardless of success or failure of film. Risk of losing the collateral (hopefully just film elements but could be a mortgage on your house). Often are expensive (high interest, bank costs).

Copyright Certificates

One (1) U.S. Copyright Registration Certificate for the screenplay and one (1) for the motion picture. Producer shall provide a copy of the application (Form CO if registered electronically) along with proof of the submission to the U.S. copyright office, including proof of payment acceptance.

Title Report and Copyright Report

One (1) current Title Report from Thomson & Thomson or Dennis Angel showing that Producer has good clear title to the Picture and all underlying rights.

Certificate of Origin

One (1) original notarized Certificates of Origin issued by an authorized agent in the country of origin.

Shortform Assignment of Rights

One (1) original notarized assignments of the rights granted to Distributor in and to the Picture under the Agreement.

Final Cast & Crew List

One complete and final list of all cast members and the name of the character portrayed by the actor) and all crew members, in Microsoft Word or Excel format. The list shall include the names of each individual, contact information, affiliation to the Picture, and union affiliation (if any).

Music Cue Sheet

One final Music Cue Sheet including all music in the Picture in substantially the form provided by Distributor upon Producer's. The Music Cue Sheet shall contain the title of each composition (inclusive of samples), composers, publishers, copyright owners, form of usage (e.g., background instrumental, visual vocal, etc.), performing rights society (e.g., BMI, ASCAP, etc.), film footage and running time.

Split Rights Definition

Splitting rights in media and markets, territory and duration.

Errors and Omissions Insurance (producer's liability insurance)

The policy must not contain coverage exclusions for title, music or home video distribution nor any other non-standard exclusions. The policy must be written on an "occurrence."

Recoupment Definition

The right of a party to recoup certain monies paid against owed. Ex. - a distributor will recoup an advance paid to the producer out of the producer's share of income from sales of the movie.

Pre-sale definition

The sale of a particular film rights for a fixed payment to receive upon delivery. Presales are done at any point including price production of the film.

Items that need to be cleared in a report:

Character Names Business/Organization Names Product Names Locations Telephone numbers Domain names/e-mail addresses License plates Trademarks, logos, signs Copyright protected material - artwork, photos, music, movie clips, etc.

Chain of Title Summary and Affidavit

Complete chain of title documents evidencing that Producer has full right, title, and interest in and to the Picture and all underlying property with respect thereto, and proof of payment of all fees due in connection with the purchase of the screenplay and all underlying materials upon which the screenplay is based (e.g., option payments, purchase price, etc.)

Two kinds of copyright in music:

There are two copyrights in each piece of recorded music: First, copyright in the musical composition - i.e., the musical work. This is the combination of music and lyrics as would be seen in a music sheet. Second, copyright in the recording itself. Generally owned by the record company.

Advantages of Loans

There is no obligation to share profits or ownership with the lender/financing source. Avoids security law issues.

Delivery

Delivery consists of the physical film elements of a film together with the documentation (legal delivery) needed for a distributor to promote and exploit a film.

Collections Account Management Agreement (CAMA) Definition

Essentially a form of escrow where the escrow holder is given detailed instructions on how and to whom to distribute monies received from distribution.

What is Clearance?

Essentially the process of making sure you have the rights to include everything that is in your film.

Billing Block

Final billing block, containing all required logos and the Copyright Notice for the Picture.

E&O example

For example, after Avatar was released in 2009, a man spoke out and claimed that he had actually pitched this multi award winning movie to Avatar producer, James Cameron a few years earlier. An E&O policy would provide a lawyer in this instance and would pay the legal fees and judgement costs if the filmmaker lost.

MPA Certification

If Picture has received an MPA ratings, one (1) certification from the MPA on the film's official MPA rating.

Guild / Union Approval Statements

If Picture was produced under the jurisdiction of any guild / union, Producer shall deliver the documentation evidencing the credits (main and end titles) have been approved by each respective guild / union.

Indemnification Definition

In contract law, indemnity is a contractual obligation of one party to compensate the loss incurred to the other party due to the acts of the indemnitor or any other party. The duty to indemnify is usually, but not always, coextensive with the contractual duty to "hold harmless" or "save harmless."

Music Licenses

PDF copies of the Music Licenses (synchronization, master and mechanical) for all music used in the Picture and proof of payment of the licensing fees. All licenses shall provide for all media necessary to effect the terms of the Agreement including but not limited to DVD / Video, Internet, and future media as hereinafter devised. Licenses shall be provided on a full buy-out basis, without any future payment obligations including "step" payments, video bonuses, box office bonuses, etc.

Four Part Fair Use Test (PART 1)

Part 1: The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. Transitive forms of the work: A. Results in the creation of an entirely new work (as opposed to an adaptation of an existing work, which is merely derivative and not transformative); or A. Uses the original work for a new and different purpose.

The Four Part Fair Use Test (PART 2)

Part 2: The nature of the copyrighted work.

The Four Part Fair Use Test (PART 3)

Part 3: The amount and substantiality of the portion used in relation to the copyrighted work as a whole.

The Four Part Fair Use Test (PART 4)

Part 4: The effect of the use upon the potential market for or value of the copyrighted work. The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

When are trademarks allowed to be used?

Permission to use a trademark or a logo is not required so long as: It is used as it was intended to be used; Does not mislead the audience; Or tarnish and/or blur the trademark (Also, producers do not have the right to commit trade liable. *Trade liable is when a product or service is falsely accused of some bad attributes. Producers also cannot engage in trademark dilution.)

Logos

Producer shall deliver all logos required to appear in the feature, trailer, or on any artwork or advertising shall be delivered. Camera-ready artwork for all static logos and logo bugs shall be delivered both an EPS and JPEG file.

Sales Agent vs. Producer's Representative

Sales Agent - companies (or individuals) who specialize in licensing films to distributors in foreign territories (i.e. territories other than the U.S. and sometimes Canada). Producer's Representative -- companies (or individuals) who specialize in representing producers to U.S. distributors.

Clearance Process:

Script clearance company identifies potential problems. Then, it's the production company's responsibility to decide when to seek a release, when to consult counsel and when to ignore. A script clearance report is not legal advice. Have the report reviewed by the production attorney to advise on the risks and assist the production in deciding what risks are and are not acceptable.

Securities Definition

Securities are documents that represent an interest or an ownership right in something else.

Shopping Agreement provisions:

Shorter term - 90 days to one year. Right to extend the option period usually up to 90 day and conditioned on the filmmaker being in negotiations with a real buyer. The property being shopped. Development. Purchase terms. In shopping agreements, the seller won't simply get a purchase price but will be part of the production, usually receiving fees and credit. How much the seller will actually be involved in the production varies. Key terms are often not negotiated until there is a sale.

The "Option" Part of an Option/Purchase Agreement:

The "Option" Part: How long an option period? Option fee - the amount paid for the option. Option extension - a second option period that a buyer can exercise if the buyer wants more time to develop or sell the project Permitted option activities. What can the filmmaker do during the option period? What rights? Must be clear that the rights being optioned match the rights being purchased.

The "Purchase" Part of an Option/Purchase Agreement:

The "Purchase" Part: Purchase price - what is the buyer going to pay for the rights being acquired? (Can be anything from a simple flat amount for all rights to different fees for different rights such as a film release or television movie to a combination of fees to a number based on budget.) Reserved rights. Book authors will usually retain certain rights such as print and electronic publication rights, the right to write sequels, stage rights and radio rights. Short form option and short form assignment exhibits.

Copyright Line

The approved copyright line for the Picture, as submitted to the Library of Congress (e.g., © 2014 Name of Copyright Holder).

Life Story Rights - Right to fictionalize and dramatize the story explained: (video included)

The filmmaker needs to be able to change and add characters, combine characters, change names, locations, add story lines, etc. As with all rights acquisition agreements, the filmmaker needs the right to assign Avoid giving the owner approval rights over their story or the project https://youtu.be/Q3_LZBq9lfo

Life Story Rights Agreement

The form of a life story rights agreement is usually an option purchase agreement. Key provisions: Option Fee/Option term/Purchase price What rights are the filmmaker optioning? An entire life, or a particular story or portion? Does the owner have any materials they can supply to help tell the story? Letters, photographs, diaries, etc. Are there other people whose rights need to be obtained - family or friends? Have the owner agree to help get interviews and/or releases from them. Does the filmmaker want to have the owner consult during production? Fee for the consulting services?

Chain of Title example

To obtain a clean chain of title, a filmmaker will also need to secure copyright ownership of any work performed by the cast and crew that make a creative contribution to the film. This is typically accomplished with employment agreements that producers, directors, screenwriters, actors, and other crew members sign. These agreements should have an explicit "work for hire" clause, which states that the production company owns the copyright to the work product created by the employee. Just because the filmmaker paid an actor, does not mean there is an enforceable agreement in place granting the producer the right to depict the actor in the movie or in related works such as trailers and advertising.

C Corporation Definition

Under United States federal income tax law, is any corporation that is taxed separately from its owners.

Trademark and Lanham Act explanation:

Under federal trademark law the owner of a mark can sue if the use creates a false designation of origin or implies a sponsorship or affiliation between the trademark, its owner, and the third party using the mark.

S Corporation Definition

United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes. **

affidavit definition

a written statement confirmed by oath or affirmation, for use as evidence in court.

Chain of Title video explanation

https://youtu.be/Jp3YvOQ_VVs If the Picture is based on any material deemed to be in the Public Domain, Producer shall deliver a legal opinion from a reputable attorney. Chain of Title must conform to Distributor's sample Summary and Affidavit.

Public Domain Video

https://youtu.be/PMp_-OX15Jc

What is the right of publicity?

the inherent right of individuals to control the commercial use of their identity (name, likeness, voice, etc.). In some state the right survives the death of the individual. Conversely, right of privacy for the most part, dies with the death of the subject. Violation of the right of publicity - the unauthorized use of an individual's personal attributes for commercial purposes.

Litigation definition

the process of taking legal action

What are personality rights?

the rights of publicity and privacy. all individuals have the right to control the way they are presented in public unless they are public figures or are participants in matters of public interest. Both private and public figures have the right to be accurately depicted and the right to prevent commercial exploitation of their names, likenesses and other attributes. Violations of these rights are tort claims. Damages can include things like emotional distress or punitive damages.

Arbitration definition

type of adjudication where two parties will try to settle a dispute with a third party, known as the arbitrator

Tangible Means of Expression

➢ Literary works including screenplays, novels, magazine articles, poems ➢ Motion pictures, television shows, podcasts, YouTube videos, and other audiovisual works ➢ Musical works, including any accompanying words ➢ Dramatic works such as plays, including any accompanying music ➢ Pantomimes and choreographic works ➢ Pictorial, graphics, and sculptural works ➢ Sound recordings, which are works that result from the fixation of a series of musical, spoken, or other sounds ➢ Architectural works ➢ Websites ➢ Other original works in other tangible means of expression (fabrics, jewelry, maps, etc.)

What is publication?

➢ Occurs when one or more copies are distributed to the public by: ○ Sale ○ Rental ○ Lease ○ Lending ➢ Or when an offering is made to distribute copies to a group for further distribution or public performance.

Some Fair Use Myths!

➢ Texts under 2000 words are fine. ➢ So are music clips under 5 seconds. ➢ You can include anything in your work as long as you aren't the one selling the final product. ➢ Giving credit obviates the need for asking for permission.

Fair use is permitted for:

➢Criticism ➢Comment ➢News Reporting ➢Teaching ➢Scholarship ➢Research

How long does copyright protection last?

➢Currently, life of the author + 70 years ➢But if the author is a corporation the term is 95 years from the date of publication or 120 years from the date of creation. Whichever is shorter.

What is De Minimus Use?

➢De Minimum Use: is the taking of an insignificant amount of a copyrighted work - an amount so small or trifling that no harm was done even though no permission was received.

What is Fair Use?

➢Fair use is a defense to claims of copyright infringement .➢Throughout the filmmaking process, you constantly need to consider if you need permission to use something. ➢If you don't have permission, what makes you believe you can you use the material without permission?

What is Not Protected by Copyright?

➢Ideas ○ the expression of the idea in a tangible means (picture, written word, etc.) - protected ***The actual idea - not protected

What does copyright protect?

➢It protects "an original work of authorship fixed in a tangible medium of expression." ➢Original work of authorship: a work that is independently created by an author and possesses at least some minimal degree of creativity.

Who is the copyright author?

➢The creator of the work is the author unless they create the work in their capacity as an employee within the course and scope of their employment ➢In limited circumstances, if you have a written agreement stating that the commissioned work is to be a work-for-hire, then the author is the party hiring the writer ➢Joint authors

What Rights do you Get in your Copyrighted Work?

➢The owner of a copyright gets six exclusive rights in their work ○ Make copies of the work ○ Distribute the work ○ Perform the work publicly ○ Create derivative works ➢Two other Rights less important for filmmakers ○ Publicly display the work ○ Digital audio transmission of a sound recording

What is considered Public Domain?

➢Things owned by the public. Includes: ○ Registration has expired as a result of age or technical flaws ○ Historical facts and theories ○ Works created by the U.S. Government ○ Abandonment ○ Titles, names, short phrases and slogans ○ Raw data ○ Scènes à Faire: common scenes typical of an artistic genre and thus appearing in numerous works