Production Due Diligence 101

Helpful and informative independent filmmaker sources

For Movies, Webisodes, Live Streaming, and YouTube® Videos

Why?

To get a studio or distributor or YouTube to accept your movie.

To save yourself and your movie from months in court, the loss of all profit, and a great financial loss.

Suppose you overlook a trademarked image in the background, the trademark owner doesn't like its use in your movie, or simply didn't agree to its use, so sues you for all of the money you will ever make.

Suppose you lack a Likeness Agreement with one of your actors, or all of them, and he sues you just because he can.

Suppose someone helped develop your screenplay, but his name isn't on it. A year later the movie makes a profit, he thinks he has been screwed, and he sues you for copyright infringement because you failed to get an agreement to use his work.

The list is long for things that can go wrong. If you know what they are, then you can find standard agreements and use them or you can enlist the help of an entertainment attorney, and save yourself a lot of grief.

If your movie is successful, this increases the chance that you may be sued. People generally don't sue dry wells. But you can be sued even if your movie is a financial loss.

To sell rights to a movie, or to distribute it, you must provide a "clear" copy of the movie, meaning that it has all necessary permissions, releases, and is unencumbered (not subject to any legal claims or leins). This typically also means that bills and salaries have been paid, and all financial committments are known.

This article contains what I know about doing due diligence on a production, for the written screenplay, the actors, and the movie. It may not list all of the things that can create legal liabilities for you. For a full listing, and for your specific movie or use, see an entertainment attorney.

Next page: The list of due diligence items.

  1  Page go right 2

Or click a Page selection on the top menu.

The list of due diligence items

Doing due diligence makes sure that nothing can come back to bite you, meaning in this litigiuous environment, that someone doesn't sue you, resulting in monetary loss or stop showing. To sell rights to a movie, or to distribute it, you must provide a "clear" copy of the movie, meaning that it has all necessary permissions, releases, and is unencombered (not subject to any legal claims or leins). Review by your entertainment attorney is recommended.

Due diligence and legal considerations involve the following:

  • If you use an actor's image to promote the movie, or is used in any other way, you must have a Likeness Release from that actor. So any excerpt used in a trailer must have a likeness release.
  • When any original or made for hire music is used, your movie must be reviewed by a musicologist to make as certain as possible that no infringements on other's property has occurred, and provide a signed and certified document of the assessment and the musicologist's qualifications. (See Forensic Musicologist, and IP Inbrief.) Sometimes a local music professor skilled in the field can do this service.
  • You must provide a copy of applicable music performing rights.
  • You must provide a copy of applicable music synchronization rights.
  • You must provide a copy of applicable music adaptation rights.
  • You must provide a copy of applicable music mechanical rights.
  • You must provide a copy of applicable music Master Use and Reuse fees and licensing.
  • You must provide a copy of rights for stock footage, and royalty free footage, and evidence of the public domain status of any other footage used that you did not record.
  • If the story is based on a novel (adaptation), you must have the Adaptation or "Motion Picture Rights."
  • If the story is based on real life, even if it is fictionalized, then you must have a Release from all people who are depicted. If the depiction could be considered defamatory, the person depicted needs to be fully aware of the defamatory nature of the depiction.In your dialogue and representation of any real people, you must be careful not to defame, libel, or slander (all similar things) anyone, even if you think it is true.
  • You must have releases for any recognizable person shown in the foreground who is not a character in the movie (unrecognizable background characters are OK).
  • If you show identifiable products in the movie, which are not product placements, you should have a release from the sponsoring company. Some products are identifiable just from their appearance, even if a product name is not shown.
  • You may need to provide E&O insurance (errors and omissions) for the movie.
  • You must own the script property and the movie, and have copyright on both. There usually can be no leins or other encumbrances against it. If there are, these must be made known.

Next page: Copyright.

 

 

 

 

1 Page go left  2  Page go right 3

Or click a Page selection on the top menu.

Copyright

Most writing and other creative works are automatically copyrighted, according to US copyright law. Whoever writes it, legally owns it, and a person can sue or stop production if his work was used without an agreement. Copyright can be legally transferred by written agreement to another person or company. For music, see the next section on music rights.

Things that can't be copyrighted by an original writer include ideas, titles, movie concepts, and a work for hire. Ideas and concepts can easily be thought up by others, so it is impossible to copyright them. The work does not have to be a complete work. A synopsis that outlines the story plot points, situations, character descriptions, etc., is copyrighted, and is legally protected. Even character descriptions are copyrighted, but misuse would be very difficult to prove.

Creative works that can be copyrighted: "...original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture."

Registered copyright: Submission of the material (screenplay, movie, other recorded work), either in print or online, to the Copyright Office is essential when you sell rights. Companies, distributors, and unions insist on proper copyrights. The Writer's Guild registration will help Writers Guild members defend their work, but this is not a substitute for a formal copyright. Copyright numbers should appear on the script front page. Registration must be accomplished within 5 years of first publication to be considered to have legal standing in court. Current cost is $35.00.

Unregistered work misuse: If a work is used without permission, and you sue, you will have to prove original ownership. This lessens your power before the court.

Work for hire that is not paid for, remains the work of the original author until the agreement is fulfilled.

Multiple authors: Copyright law recognizes that there may be more than one author of a creative work, but leaves the financial agreement, and any transfer of rights agreement, to the authors. Otherwise it is a 50/50 split, and the author transferring rights to the other, or his estate if he is not surviving, must do so in writing.

Uncompleted work, or works in progress: A work should be substantially completed when you submit it for copyright. Screenplays are often works in progress until the last day of filming, and many people may have input. The original screenplay purchased for the movie should be copyrighted before rights are purchased. The production company should own the copyright before it begins altering the script. If other writers or creative contributors work with the story line, the production company has to sort out who gets financial and creative credit.

Adaptation Rights, Motion Picture Rights, and other sources: If the story is based on a novel (adaptation), or a previous movie, you must have the Adaptation or Motion Picture Rights. "Motion Picture Rights" are Adaptation Rights. These rights are obtained (negotiated) from the publisher, studio, distributor, or the author, depending on what rights the author provided to the publisher, studio, or distributor. You may have to pay a screenwriter to do the adaptation as a work for hire.

Public Domain: If material you want to use is in the public domain, you must provide evidence that it is in the public domain. Public Domain means that there are no copyright or usage rights issues. Just because it can be found on the Internet, doesn't mean that it is public domain. People who don't know copyright law, or don't care, often put other's work on the Internet, or put their own work on the Internet without posting a copyright notice. To determine the status of public domain media, check with the publisher. Often even they don't know. Try to find the source. If it is public domain material, then you can use it or adapt it as you wish.

Open Source: If some material is licensed as Open Source, such as a software program whose display and actions fit your on screen action, then you have to provide the rights agreement associated with the material. There are several versions of open source licensing. While allowing free and unrestricted personal use, some restrict distribution, some restrict changing the product, and some restrict using the product in a way that is profitable for you (commercial), without obtaining additional licensing. To obtained additional rights to use the product, contact the supplier or creator.

Real Life: If the story is based on real life, even if it is fictionalized, then you must have a Release from all people who are depicted. If the depiction could be considered defamatory, the person depicted needs to be fully aware of the defamatory nature of the depiction.

Assigning rights: The original writer(s) has full control of what rights are assigned, and all rights are negotiable. Most movie studios and distributors put in a standard "all rights," in the agreement, and this is the way it is typically done. The writer can explicitly list rights in the contract, and then add, "All other rights reserved," so that if the company wants to do anything else with the screenplay, they have to renegotiate. Typical rights are the right to credit and placement in first place as writer, North American distribution rights, Foreign distribution rights (which may be broken down by region), adaptation rights (which permits series and derivative works). The writer can also stipulate ways in which the screenplay may or may not be modified, and what happens if the screenplay is not produced within a specific period of time. Writers might also keep rights to certain characters, rights to secondary product sales (like toys and memorabilia ), etc. Negotiations are typically handled through a lawyer or agent.

YouTube and technology, fair use, and live streaming: Fair Use allows you to use snippets of other's copyrighted material for the purpose of commenting on, criticizing, or as a parody on a copyrighted work, as long as proper attribution is given. For example, you might quote a few lines from a relevant song, book, poem, article, or movie. Parody permits extensive use of the source. Such uses can be done without permission from the copyright owner, but technology may block that. YouTube will for sure. For example, if you are legitimately live streaming some event, and a portion of a movie displays in the background, or music sounds in the background, technology may shut off the live stream to protect the server owner from copyright infringement or piracy claims. See the note below, and the following paragraphs for more on the use of technology to prevent copyright infringement.

Courts uphold copyright infringement claims for copyrighted sound that is in the background on movies and recordings. What's Legal: When Are Background Sounds With A Copyright In Video Clips OK? If you find it necessary to leave the copyrighted sound in, then you will need a Master Use License. See the next page about music rights.

Technology is in common use on many Web streaming sites, to prevent being sued over copyright infringement. Technology recognizes music, movies, text, and recorded voice that have copyright, or even may have been put on the Web before, and prevents the sending or displaying of that information. This makes live streaming from a dance club, sports arena, political rallies, theaters, and any other venue where copyrighted media may be in use, even if only in the background, subject to interruption. There is no recourse - it's just down.

This can also be a problem for freely distributed documentaries and movie shorts that might just happen to have a sports show (sports games are copyrighted) or other copyrighted material playing in the background. The server may not send it out. For example, the copyright for the very commonly sung, Happy Birthday, is owned by a group that is popularly reported to be very litigious.

The government is supportive of this effort, and will take down entire Web sites if it even thinks they are distributing copyrighted material. This big brother effort is brought to us all by piracy: university students, peer-to-peer users, foreign nationals, and people who just don't want to pay for copyrighted material - all who download illegal stuff. Large companies put huge pressure on the government, and are very active in creating disruptive technologies. They don't want anyone to ever see or hear anything unless they are making $. Technologies such as HDMI and DRM try to make it impossible for people to do, but there are many ways around those and the Internet makes illegal distribution very easy to do. The Web is the new distribution venue, and sooner or later everyone will be there. This is a battle that makes it difficult for everyone.

Beware the technology grinch. If you use your own server, then you avoid the problem of being stopped, and you are OK as long as you do not send out copyrighted material. If you use YouTube, you may need to clear it with them ahead of time, and even then the technology grinch may get you.

Next page: Music, recorded sound, and footage rights for new media.

2 Page go left  3  Page go right 4

Or click a Page selection on the top menu.

Music, recorded sound, and footage rights for new media

Music, recordings of sound effects, and even telephone answering messages, are just like any other creative work when it comes to copyright. As soon as it is created, it is copyrighted. Since music is commonly used by others in a variety of media, a complex system has developed for rights. These rights are held or recorded by agencies who have the responsibility for obtaining permissions and assigning reproduction rights, and negotiating related financial transactions.

Original composers of music may inadvertently create a composition that is like some existing copyrighted composition. If any original music or made for hire music is used, your movie score (basically your sound track with any unique music) should be reviewed by a musicologist to make as certain as possible that no infringements on other's property has occurred, and provide a signed and certified document of the assessment and of the musicologist's qualifications. (See Forensic Musicologist, and IP Inbrief.) Sometimes a local music professor skilled in the field can do this service.

Very commonly, existing music is used, or re-recorded by someone hired to re-record it.

Getting the rights to use other's music for reproduction or re-recording:

Performing rights: You must provide a copy of applicable music performing rights. Performing rights applies to live performance. This doesn't apply to movies, but would apply to live streaming, live theater, events, etc. "Performing rights are the right to perform music in public. It is part of copyright law and demands payment to the music’s composer/lyricist and publisher (with the royalties generally split 50/50 between the two). Public performance means that a musician or group who is not the copyright holder is performing a piece of music live, as opposed to the playback of a pre-recorded song. Performances are considered "public" if they take place in a public place and the audience is outside of a normal circle of friends and family, including concerts, nightclubs, restaurants etc. Public performance also includes broadcast and cable television, radio, and any other transmitted performance of a live song." In the US, the performing rights societies are ASCAP, BMI, and SESAC. Wikipedia article: Performing rights.

Synchronization and Master Use rights: Synchronization is "synchronizing" the composition to a film, TV commercial, radio, live streaming, or spoken voiceover. Synchronization and Master Use rights apply to any recording that you do, whether using the original recording or making your own. You must provide a copy of applicable music synchronization, Master Use and Reuse fees and licensing. Note that if you create and record your own sound effects, even if they sound similar to sound effects in an existing recording, unless those sounds are so unique you would not have found them yourself, you are not subject to licensing or copyright infringement. Today's technology makes it easy to determine whether it is original or not.

If a specific recorded version of a composition is used, you must also get permission from the record company in the form of a "Master Use" license. The synchronization royalty is paid to songwriters and publishers for use of a song used as background music for a movie, TV show, commercial, or live streaming.

Mechanical Rights: You must furnish a Compulsory License for music that is copied by you. Suppose you want to make a new recording of Roy Orbison's Pretty Woman, but you want to improve on it or reinterpret it, but not use his recording. But you won't "...change the basic melody or fundamental character of the work." To reproduce a song in this way, you need to get the mechanical rights. Mechanical rights can be obtained through the Harry Fox Agency, RightsFlow®, and easySongLicensing.com.

Music Adaptation Rights: You must provide a copy of applicable Music Adaptation Rights. Music Adaptation Rights are obtained when you want to rewrite someone's song so that the melody, instruments, or fundamental character is changed by addition, subtraction, or changing lyrics, or changing the melody. Music Adaptation Rights can be obtained through obtained through the Harry Fox Agency, and RightsFlow. For specific information on licensing, see Music Licensing at easySongLicensing.com

Background sounds with copyright: Courts uphold copyright infringement claims for copyrighted sound that is in the background on movies and recordings. VideoMaker.com article: What's Legal: When Are Background Sounds With A Copyright In Video Clips OK? If you find it necessary to leave the copyrighted sound in, then you will need a Master Use License. See the next page about music rights.

Work for hire: Work for hire music rights are negotiated between the music creator and the hiring company or person. Commonly the creator retains copyright and all other rights, while the hiring company retains the right to use and profit from the recording in their movie.

Stock footage, royalty free footage, and public domain footage

You must provide a copy of rights for stock footage, and royalty free footage, and evidence of the public domain status of any other footage used that you did not record. These rights are obtained by the supplier of these products, except for public domain. For public domain, note where the product is found. Note that many publishers and distributors make copies of public domain products and change or adapt them in some way so that they are now under their copyright. But just because a product is in some publisher or distributor's portfolio, that doesn't mean that they have copyright. Contact the publisher or distributor to determine the copyright status.

- Dorian

End.

Reference, Legal

Companies mentioned, or commonly mentioned on this Web site:

Amazon.com® is a Registered Trademark of Amazon.com, Inc.
AOL® is a Registered Trademark of AOL Inc.
Apple® is a Registered Trademark of Apple Inc., registered in the U.S. and other countries.
BOXEE® is a Registered Word Mark of Boxee Inc.
BlackMagic® is a Registered Trademark of BLACKMAGIC DESIGN® PTY LTD
BLOCKBUSTER® is Registered Trademark of Blockbuster L.L.C.
Canon is a Registered Trademark of Canon Inc.
CINEMANOW™ is a trademark of BBY Solutions, Inc.
Comcast® is a Registered Trademark of Comcast Corporation
Disney is a business name of Disney Enterprises, Inc.
Fandango℠ is a proprietary service mark of Fandango, Inc.
FIos® is a Registered Trademark of Verizon Trademark Service
HBO® is Registered Trademark of Home Box Office, Inc.
HULU® is Registered Trademark of HULU®, LLC.
iTunes® is a Registered Trademark of Apple®
Moviefone® and Moviefone.com® are Registered Service Marks of AOL Inc.
MOVIES.COM® is a Registered Trademark of Fandango, Inc.
MOVIEWEB® is a Registered Service Mark of MovieWeb, Inc.
NETFLIX® is a Registered Trademark of NETFLIX®, INC.
NIKON® is a Registered Trademark of Nikon Corporation
Panasonic® is a Registered Trademark of Panasonic Corporation
REDBOX® is a Registered Trademark of Redbox Automated Retail, LLC
RightsFlow® is a registered trademark of RightsFlow Inc.
ROKU® is a Registered Word Mark of Roku, Inc.
Sony® is a Registered Word Mark of Sony Corporation
Sundance Institute is not trademarked, but is used since 1981 by Sundance Institute, which hosts the Sundance Film Festival
Sundance Channel® is a Registered trademark of Sundance Enterprises, Inc.
TiVo® is a Registered trademarks of TiVo Inc.
VUDU™ is a trademark of VUDU, Inc.
XBOX® is Registered Trademark of Microsoft Corporation.
YouTube® is a Registered Trademark and Service Mark of Google, Inc.
Any trademark not listed out of oversight is a Trademark or Registered Trademark of it's respective owner.

Mention of any business in this article is not intended to endorse, disparage, or favor any business.

Movie names that are mentioned are not given reference citations. This is because numerous studios are involved in production, and they then assign distribution rights to multiple distributors, and these rights can be sold to other distributors. For production and distribution information on any movie mentioned, consult the Internet Movie Database, or other authoritative listing.

4 Page go left  5  Page go right 6

Or click a Page selection on the top menu.

5 Page go left  6  Page go right 7

Or click a Page selection on the top menu.

6 Page go left  7  

Or click a Page selection on the top menu.



In this article:

moviestreamproductions.com Webutation

MSP Insider Articles

  • Recent
  • Make Your Own Movie: Part 1, Production
  • Make Your Own Movie: Part 2, Distribution
  • Can There Only Be one? Regional production
  • What is the future of HEVC?
  •  

    Movie Stream Productions and MSP Insider are productions of TechGenie Media, LLC - www.techgeniemedia.com

    Copyright © 2011 TechGenie Media.

    Home and About us.