It’s always a great time for producers to thank the crews who have worked long hours and put in so much effort to help bring your vision to the screen.
Another time we reward crew is with production agreements. Generally speaking, the fees producers pay crews compensate them for all services provided, for all intellectual property rights created as a result of those services, and for transferring those rights to you. What are some of the rights being granted? Glad you asked!
From the inception of the idea that will evolve into the final delivery of a series or film, the single purpose production company (the “prodco”) must gather the intellectual property rights of everyone involved. This is done so the prodco has a complete chain of title — an unbroken series of transfers of rights between the original creators of those rights and the prodco.
The reasons why a prodco must have a complete chain of title include:
· financing — a third party (such as a bank) will need to be satisfied that all rights are accounted for (their security for the loan includes those rights);
· certainty — producers don’t want someone walking out of the woodwork saying that their rights were never assigned and that they want more money;
· distribution and exhibition — a TV network will think twice about airing a new series if an assistant director is claiming that she never assigned her rights in her work to the prodco (for example, if her agreement transfers rights to the prodco upon full payment and she hasn’t been paid in full); and
· insurance — if the distributors and exhibitors require Errors and Omissions insurance you won’t be able to get it without a complete chain of title.
In Canada, according to the Copyright Act, copyright vests with the employer when works by an employee are made in the course of employment. On the other hand, the default position for independent contractors is that contractors retain their intellectual property unless they are specifically assigned. As most, if not all, of a prodco’s crew (including the producers) are contractors, ensuring that the IP is specifically assigned to the prodco (upon creation) is critical.
A related matter is moral rights (please, no lawyer / moral jokes). Canadian law recognizes two types of moral rights which are held by a work’s creator; the right of attribution (to be associated by name, pseudonym or to remain anonymous) and the right to the integrity of the work (changes to or uses of the work that would harm the reputation of its creator).
You don’t want to buy the rights to a script from a scriptwriter, to create a film based on that script, if the scriptwriter still controls changes to the script or what gets filmed. Perhaps part of your deal involves giving the writer a cameo but, otherwise, the prodco needs full control of the project in order to efficiently produce the film.
Unlike the legal rights in IP, moral rights cannot be assigned but can be “waived” (given up) in whole or in part. Further, an assignment of intellectual property does not on its own establish a waiver of either of the moral rights.
To sum up, broadly speaking, ensure your crew assign their intellectual property to the prodco and waive all of their moral rights… before they are paid anything. This suggestion does not hold true for their holiday gift.
Also, feel free to email us for sample clauses, or to review that agreement precedent you have been using for years, but may never have read, particularly if that precedent came from a U.S. source.
Edwards PC, Creative Law is a boutique law firm provides legal services to Music, Film, Animation, TV, Digital Media, Game, Software and Publishing industry clients. For more information and blogs, please visit www.edwardslaw.ca
© 2017 Edwards PC
* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.