Question for FilmTVLaw.com:

Dear Sir, I have the budget raised for an independent feature, but need to know what the first steps should be to legally protect my project. How can I make sure production runs smoothly without any hitches?  

Answer by Brandon Blake, Entertainment Lawyer:

Having worked with feature filmmakers for more than 18 years, I know that perhaps the busiest time is during pre-production as a producer begins to think about all the requirements that will go into making a successful film or television pilot. I would be happy to discuss the production legal process and some steps to consider to secure your project legally. There are additional articles available as well at www.filmtvlaw.com, on my Entertainment Lawyer Q&A Blog. 

This article will address Production Legal, Legal Opinions for E&O Insurance, Chain of Title for film and television projects, and Negotiations with a Distributor and Sales Agent.

PRODUCTION LEGAL

Do not wait until the film is shot, or until you have a distributor, to get the legal paperwork in order. I have seen many producers get into trouble by being so eager to start production that they put off the documentation for the project until it is too late. That is an easy trap to fall into for any producer, no matter how experienced.

Remember, no matter how it feels at the moment, it is always easier to have contracts signed earlier, rather than later. Whether you are dealing with cast, writers, co-producers, or even crew, it is always easier to have contracts signed early in pre-production. Once production starts, and especially after production is over, some members of the production staff may decide not to sign, or to hold out for more backend or more deferred compensation, rather than signing.

This occurs because under copyright law, anyone that contributes to a copyright gains rights to that work, unless a valid, binding contract is signed. So, if there is a producer or writer, or even cast member or director of photography that has not signed a contract before the start of production, that person becomes recognized by copyright law as an “author” and part owner of the work.

LEGAL OPINION FOR E&O INSURANCE

At some point before the start of production, everyone that participates in the production will need to sign a contract if the project is going to get a commercial release. That is because distributors require E&O insurance (errors and omissions insurance), and before the insurance company will agree to cover a film the insurer will require that all production legal has been completed.

E&O insurance companies are the key to distribution, because without it, any reputable distributor will not take the risk of distributing the project. Of the items that an E&O insurance company requires, one is complete paperwork for every participant in the film, including for the “chain of title” for the project, and the other is an opinion letter from an entertainment lawyer specifying that the paperwork for the film is complete and that the production company is the sole owner of the project.

CHAIN OF TITLE

Of course, having copyrights and trademarks filed for the work are important too, and help to secure the rights to the project. Filing copyrights are not as easy as they once were, because now that the copyrights are filed online, the US Copyright Office has made many more options. The way that the copyrights are filed will determine whether your script is original or a “derivative work” or a “joint work”, all of which will eventually determine whether or not your production company has the right to distribute the film, or whether you need to seek licenses from other parties. Trademark is also important for protecting parts of some projects, and very important to animated projects and projects based on comic books or other graphic works.

Never let a third-party file a copyright or trademark on behalf of your company. For example, do not trust a writer or co-producer to handle that work on behalf of your production company. This is one of the leading causes of “chain of title” problems with film and television series. Make sure to hire your own attorney to handle all chain of title issues, because more often than not, co-producers and writers will succumb to temptation and will end up filing works in their own names, or as derivative works based on their own original stories, rather than as original works for the production company. This can create years of litigation and paperwork to correct after the fact.

NEGOTIATING WITH A DISTRIBUTOR AND SALES AGENT

When it comes to post-production and film sales, I routinely attend film markets around the world, including the Cannes Film Festival, AFM, Sundance, and Hong Kong FilmArt. Finding distributors and sales agents for projects is critical to the financial success of the project.

Just as critical is the negotiation of sales agent agreements and distribution agreements. After 18 years negotiating distribution and sales agreements, it is still incredible to me the number of terms in these agreements that are negotiable. And these negotiations equate to real revenue that comes back from the film. Properly negotiating a sales agreement or distribution agreement is very literally the difference between profit and loss for a filmmaker. Ultimately, no matter how well a title performs, a producer cannot make money if the sales agent or distributor does not pass through the money. This revenue stream is entirely controlled by the contract that is signed.

With the appropriate legal representation, any film and television series can be a success, and can generate revenue for the producers and investors. The key to success is starting early on the legal backbone of the project, and making sure all the key provisions are in place well before the start of production. I have been representing feature films for over 18 years with the law firm of BLAKE & WANG P.A. (www.filmtvlaw.com). As with any entertainment matter, please do not make a decision about complex issues without consulting an experienced entertainment lawyer first. Feel free to contact us for a quote.

- By Brandon Blake, Entertainment Lawyer