10 Legal Considerations for Filmmakers: Introduction
Whether you are a new or experienced filmmaker, there are a number of important legal considerations to keep in mind as you go through the stages of filmmaking, which include development, financing, filming, post-production, and distribution.
1. What is a “Chain of Title”?
A Chain of Title refers to the documents that establish ownership rights in a property, such as the concept for a film or TV series. Such rights are sometimes transferred from the creator of the property to a producer through a contract called an “option agreement”. As a producer, an option agreement may be appropriate where you want to produce a film or TV series based on an existing property (such as a book), but do not yet have the funding to do so, including the money needed to pay the creator for their rights in the property. The option agreement will normally provide the producer with an exclusive time-limited right to buy the rights needed to produce a production based on the existing property. With the option in hand, the producer can seek financing, and may choose to exercise the option once financing is obtained (so long as the option term has not expired).
For more information, here’s our blog about option agreements
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2. What do I need to know about music?
Will your project include music? If the answer is “yes”, you need to ask if it will be original music, existing music, or both? If original music is going to be used, consider whether you will need a composer agreement and whether the music will be licensed or purchased outright. Also consider if the composer will be given some or all of the publisher’s share of the performance rights royalties (perhaps in exchange for paying the composer below their normal rates)? If you plan on using existing music, you should understand the difference between master use rights (the right to use the master recording) and synchronization rights (the right to use the composition). One option to save on costs might be to purchase synchronization rights and have a new master recording created.
For more information, here are our music law blogs (click on Music)
3. What kind of insurance do I need?
In addition to production insurance, Errors and Omissions insurance is important to understand. This type of producer’s liability insurance is often required if your content is going to be exhibited in theatres or on television, and helps to protect producers from lawsuits pertaining to the production.
For more information, visit our E&O blog
4. What do I need to know about crew agreements?
Some key aspects of crew agreements include clarifying the job description, fee and payment schedule, termination, effect of termination, and confidentiality.
Here is our blog about assigning intellectual property and waiving moral rights in the crew context.
5. What do I need to know about actor agreements?
When dealing with actor agreements, important considerations include the dates the actor is required to perform, the fixed fee (guaranteed salary) and contingent compensation (the potential for a share of profits), residuals, whether the fee is “pay or play”, credits, approvals, grant of rights, termination, and dispute mechanisms.
6. After all of my pitching, what do I do if someone wants to give me money to make my project?
Investment agreements, which set out the terms for someone providing money for a production to be made, should include defining gross receipts and net profit, credits, other benefits (such as potential waterfall entitlements) and remedies.
Our blog post focused on how investors may be compensated can be found here.
7. 10 Legal Considerations for Filmmakers: If and when should I incorporate?
People may run their business as a sole proprietorship, partnership (if there are multiple partners) or as a corporation, which creates a new legal entity that is separate from its owner(s). One reason to incorporate is to access Canadian tax credits. If incorporating is on your mind, it is often a good idea to speak to an accountant and/or a tax credit consultant! Let us know if you want a referral.
8. How should I organize my relationship with my co-producer?
You may want to enter into a short-form memo of understanding or a full-fledged co-production agreement with your producing partner. As always, it is always best to set out the terms of an agreement in writing to avoid future troubles. Regardless of whether you choose a memo or a formal written agreement, the focus is to determine the rights and responsibilities of each co-producer. It’s best to ensure your expectations are aligned before its too late.
Here is our blog on co-production agreements.
9. What should I know about distribution?
So, you have officially produced a film. Now what? One way to get it shown across the country (and the world) is through a distribution company—a company that specializes in making the types of sales which eventually lead to an audience paying to watch the film. Some common red flags in distribution agreements include inconsistency between what you are told and what is in the agreement, uncapped expenses, insufficient clarity in defining the distributor or sales agent’s obligations, audit rights, as well as balanced rights and termination provisions.
We have a blog post centered on sales agency and distribution agreements.
10. Do I need permission for showing X or saying Y?
It is important to understand when you need to seek permission to include certain dialogue or show certain third party owned content within a production you have made. Better to ask ahead of time for advice on this front as opposed to dealing with these challenges after production has wrapped.
10 Legal Considerations for Filmmakers: Conclusion
That’s a wrap, but if you have any questions about anything raised in this blog, please get in touch with us. Also, you can watch this video featuring our lawyer Byron Pascoe speaking about these topics –
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Author: Ian Harris, Entertainment Lawyer
Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Music, Film & Television, Animation, Interactive Digital Media, Game, Publishing and Software industries. For more information and additional blogs, please visit www.edwardslaw.ca
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