Legally Speaking, It Depends – Ownership of Things

It is easy to be complacent when creating new works and put off thinking about just who ends up owning the end results of all that hard labor. It is understandable, especially in arenas as complex and collaborative as the film industry, where tons of items necessary for the production process are created in the course of constructing the main thing as well as all the ancillary products to be fashioned spinning off from from when the main object comes into existence. But there are some unexpected hiccups and unintended consequences that can easily arise if ignored. The end results could have disastrous outcomes for those who “think” they own it all and act accordingly.

Scripts in all their various versions, screenplay notes, revisions, treatments, outlines and all the paperwork they entail or inspire are usually the first in a long line of created materials that are not the end goal creation when striving to make a movie. We have already discussed some of the ownership issues about scripts and how handling them properly is key to exploitation of rights down the road. But they are just the first objects on the road.

Storyboards, costume designs, pre-vis, props, set designs, construction, and a host of other objects and artwork are made because of the goal film but are not end results unto themselves. Their creation is integral to the final product, but the fact that they are created by someone, means there is an ownership value and control that has to be accounted for, if they are to be fully exploited as intended.

Then, there are the elements of the film production itself. The exposed film or digital files accumulating on the set. The backup drives filled with material, the multiple version each shot goes through as it is edited, color corrected, effected and married with others into the finished version. There is the sound that was recorded on set or elsewhere that is multiplied, altered, redubbed, enhanced, sweetened, and mixed along with the musical compositions recorded and integrated into the film tracks for the final release. Along with all the dubbed tracks for foreign release and various re-edits for foreign territories' requirements, there are a lot of versions of even the single goal film a production entity must account for and retain control of.

And don't forget the ancillary products directly associated with the film: the trailers, posters, advertisements for radio, TV, print and online, the tie-in products for marketing, down to the t-shirts, tote bags and other gifts and gimmies that are generated during a festival run or awards campaign. There's a lot of “stuff” created because of a film that aren't “the” film but need to be owned and controlled properly.

Of course the key is to make sure things are set out properly and that the necessary rights are granted to the required parties. It is nearly all done in contractual structures and somewhat rote manner, so not many tend to think of these things regularly, but, a minor mistake along the way can have serious consequences.

Luckily there are some things in place that make this easier. Sometimes.

The film industry in the United States has long been a strong lobbying group with the government. To facilitate their dominant commercial structure. the U.S. Congress added a clause to the copyright statutes that sets out exceptions to the usual artist created works ownership issues. Nine categories of works have been set aside to allow an employer, following the strict guideline of formalities, to usurp the rights of the traditional copyright author and pretend to be the author themselves. This is the “Work made for hire” section of the copyright act. Audio visual works are one of those nine categories of exceptions and “motion pictures” are explicitly listed as examples of such works.

In essence, if the proper rules are followed, film companies can employ creators either as direct employees or as specially contracted independent contractors to create works intended to be integrated in a collaborative whole. Even if the created work doesn't end up directly part of the end result, as long as it is part of the process the film company can act as if it created the work itself and use it to its heart's content (if it ever had a heart).

Most film companies work with an arrogance that whatever they do, they are protected by this work made for hire umbrella, but that's not always the case. There are certain created works that do not align exactly with the statutory requirements. Assuming they are also works made for hire might end up causing unforseen problems when the real copyright owners decide to act on their rights differently than the filmmakers intend.

Just as an example, let's say we have a company that creates tie-in products or spin offs to help market an already produced film. These are going into specialty toy stores. The film tanks and the movie studio pulls the production, leaving the creators with thousands of dolls in their warehouse. The toy makers decide to donate the excess dolls to homeless kids shelters to brighten the urchins' days as Christmas nears and get the shelf space back. The film company is furious for the action/publicity that they now have to deal with. Could they have kept the toy company from dumping the toys?

Not so fast with your answer...

Creating a toy for an already existing film is arguably not covered by work made for hire since they are not intended toward the creation of a unified whole work. These are extras added on. If no licensing of images issues are at play, the toy company is perfectly in their rights to do with their own creations what they will.

Proper contracts could avoid situations like this, but, sloppy contracts often are the cause of headaches for film productions. This example is only one type of issue where inattention could cause a big problem. Don't think that it's only the small or poorly run companies that could suffer this dilemma.

I said above, that the U.S. is unique (it was the section title). Work made for hire is only available in the United States. If you create films in other countries, you need to abide by the laws that rule there. Sometimes that can create interesting and unintended consequences.

Star Wars and its sequels and prequels resulted in lots of products being made both for the production and ancillary exploitation of products. A lot of the production of the films in the series was done (and is currently still being done) in the United Kingdom. Therefore, a lot of the materials that were made for the film were created there as well. One of these items was a run of 50 or so storm trooper helmets. They were used in the processes leading to the film, in the filming itself, and elsewhere.

All was good, the film was a great success and everyone was happy, until the little shop that made the helmets started selling new runs of their works outside of the Lucas Film marketing juggernaut. Of course there was a lawsuit – the final ruling is here, Lucasfilm v. Ainsworth, No. [2011] UKSC 39, U.K. Supreme Court if you want to look it up yourself. But you might not believe the end result.

Turns out, according to U.K. law, a helmet isn't a sculptural work but a functional device. That distinction meant that after only 25 years, the design copyright runs out on those helmets. Therefore, the helmet maker can sell his newly cast works anyway he wants to as long as it's only in the U.K.

You can imagine that this result was not at all what the film producers intended nor expected, but when you overlook or misinterpret the laws that apply, you can end up losing the battle.

What should we take away from this? I usually have a flippant favorite saying, “Paper over everything.” It's meant to refer to get everything in writing. Make sure all agreements are clear and explicitly spelled out. But there's an underlying implication that for the words on the paper to have the intended consequence you need to assure that you know the issues.

Often, there is redundant language in contractual terms to allow for the cases where the intended course isn't available. You'll nearly always see a catch-all assignment clause at the end that contains the statutory work-made-for-hire language for ownership issues. This is a prudent step, but, these two alternatives are not exactly equal and so you should realize which one governs the relationship in reality or you could face another problem of ownership down the line.

But that's for another column.

More articles by Christopher Schiller

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