By Cathy Jewell, WIPO.
We all love movies – the “global passion” of this year’s World IP Day theme. But where does IP fit into the picture?
The answer is – everywhere! IP rights shape each stage of the film-maker’s journey from script to screen (see From Script to Screen: The Importance of Rights Documentation in the Distribution of Films ). They help producers attract the funds needed to get a film project off the ground; enable directors, screenwriters and actors, as well as the many artists and technicians who work behind the scenes, to earn a living; and spur the technological innovations that push the boundaries of creativity and make the seemingly impossible, possible.
Copyright – protecting the rights of the creators
Of all the IP rights, copyright is the linchpin of the film-making enterprise. Among other things, it protects creators or owners of rights by preventing others from using their works without their permission.
You only have to take a look at the long list of credits at the end of a movie to get a hint of the army of people involved in making it. It is a complex, collaborative endeavor that gives rise to many different layers of rights that relate to different elements of a production, such as the screenplay, the music, the direction and the performances.
The rights connected to each of these need to be licensed, transferred, and documented to allow the producer – the person responsible for turning creative ideas into a marketable concept – to claim ownership of the film, raise the necessary finance to make the film, and license distribution rights so it reaches the widest possible audience.
Producers are responsible for getting a film project off the ground. While they may not be the author of the original idea for the screenplay, without their vision and enthusiasm, a film project is unlikely to ever see the light of day. Throughout the film-making process, producers negotiate multiple agreements that define how the IP rights arising from the input of the various creative contributors will be used and remunerated. These agreements are underpinned by copyright law and contract law and are known as chain of title documentation. (See Securing Rights - From Script to Screen for a more detailed list of the types of agreements producers need to negotiate).
It starts with the script
The journey begins with the search for a good story or script. Ideally, the producer will find a script that is ready to shoot, but usually the services of a professional screenwriter are required to create the screenplay. A script can be a new work, or based on an existing work, such as a novel, a play or a comic book.
The script itself is always considered an original creation to which IP rights are attached. The producer typically hires a script writer to produce a short narrative canvas for the film and a first draft; the agreement may also specify any further drafts, re-writes or polishes that are expected for agreed fees. The legal status of the writer’s contract varies according to prevailing copyright and related rights legislation.
If the movie is an adaptation of an existing work, the producer will conclude an option agreement to secure the right to use this material before going forward. An option agreement states that the owner of the underlying work – a script, book, article or short story – agrees to grant to the producer, for a specified period, the right to produce a film.
If the film is made (and the option is exercised) then the copyright owner is paid an agreed fee for the ongoing right to use the work in the film. A rights purchase agreement is usually also negotiated at the same time outlining the terms for securing rights to the screenplay, TV rights and the right to release in ancillary markets such as home video and new media.
An experienced producer will seek to acquire as many rights as possible to optimize profitability and to have a free hand in making a sequel, for example. The original copyright owner, on the other hand, will endeavor to reserve certain rights such as publication rights, stage rights, radio rights, rights to characters (should he or she wish to write a sequel). Detailed rights purchase agreements help avoid unforeseen legal problems further down the road.
When it comes to securing the necessary funds to produce a film, these IP rights supported by clear chain of title documentation are by far the most valuable assets the producer holds. Without a clear chain of title, the sale of a film property can become very difficult, if not impossible. Having an agreement with a well-known screenwriter, actor or director can significantly enhance the chances of finding the backing to bankroll the film’s production and distribution.
It also falls to the producer to identify the right director for a film project and to negotiate a director’s agreement. Such agreements cover a range of issues and, depending on the jurisdiction, the director can be identified as an author and joint owner of a film with corresponding rights; as an employee and paid a salary; or as both. Directors also often receive royalties from film distribution and may in certain jurisdictions, such as in France, be in a position to negotiate a “final cut” provision – which allows the director to decide on the final version of a film shown in cinemas – as an integral part of their moral rights.
Protecting actors' rights
Similarly, the producer will negotiate agreements with actors and performers. These can be complex and sensitive as they blend IP-related issues – such as the transfer of rights to the producer – and conditions of employment.
The legal status of actors varies from one country to another. Some countries grant actors a comprehensive set of so-called related rights (see Understanding Copyright and Related Rights ). In many other countries, however, actors are hired to work on film sets as employees and have little or no bargaining power to negotiate favorable contractual terms of remuneration (see Managing performers' rights: the role of contracts).
After the film has been shot it goes to the editing room where the scenes are selected, usually by the film editor, director and composer, to make the best or final cut of the movie. Once the film is ready for public viewing, the importance of IP rights to the movie business is again prominent.
Only with a clear chain of title documentation (proving ownership of underlying rights in a work) can a producer have any success in securing deals with distributors. Producers enter into agreements with distributors against remuneration and the promise of the film’s distribution to key markets. There is no such thing as a standard distribution deal. A producer may be dealing with an integrated company that can release the film in local cinemas, in VCD or DVD formats, or license it to local TV stations or sell it to foreigner buyers at film festivals. Or, he may be dealing with different distributors operating in different market segments, e.g. cinema and video, and have to license rights separately.
Distribution agreements generally contain clauses that ensure the distributor has the legal right to make certain changes to the film for the purposes of distribution. These may include changes to the title, cuts designed to comply with film classification/censorship requirements, dubbing and sub-titling, etc.
Every distributor will incur marketing costs to give the film its best chance in the marketplace. The producer will endeavor to secure a sufficient level of commitment on the part of the distributor to promote the film. He or she may also seek to negotiate consultation rights over the shape and direction of the marketing campaign.
The number and type of IP-related agreements that can arise in the process of making a film are as varied as they are numerous. With so many elements to consider and rights to clear, film-makers often purchase errors and omissions (E&O) insurance in the event of any problems relating to the acquisition of rights.
Trademarks and merchandizing
Trademarks also feature prominently in films. Like other businesses, movie studios use trademarks to create a distinctive identity and to stand out in a crowded market place - from the broad appeal of 20th Century Fox and the more idiosyncratic approach of its sister company, Fox Searchlight, to animation icon, Pixar, and family-friendly Disney.
A movie title can also be protected as a trademark, e.g. Star Wars, as well as key characters and film elements such as James Bond, 007, Harry Potter and the Simpsons. Registering these film elements as trademarks can open the door to lucrative licensing and merchandizing agreements that can help defray costs of production and film promotion.
Walt Disney was perhaps the first to demonstrate the potential for generating ancillary income (i.e. beyond theatrical releases) from movies and their characters. Mickey Mouse, the most recognizable cartoon character in the world, was registered as a trademark back in 1928. By 2010, the iconic Disney mascot had clocked up global retail sales worth US$9 billion and continues to show strong growth potential.
Star Wars is another remarkable example of movie merchandizing. Following its original release in 1977, Star Wars was followed by another five blockbuster films spawning a highly lucrative market for Star Wars collectibles (from action figures to laser sabers, key chains and books) worth billions. Star Wars has become an enduring cult phenomenon, a trend that is set to continue with filming to begin on Star Wars VII later this year.
Another high value proposition for filmmakers and businesses is product placement – where branded products (bearing a trademark) are woven into the storyline of a movie. The earliest example of product placement dates from the movie Wings in 1929, which featured Hershey’s chocolate.
With the widespread uptake of digital technologies which enable viewers to zap adverts, many companies now see product placement as a more affordable and effective means of reaching consumers. For the movie industry, it is a useful means of off-setting production and promotional costs.
In their deal with Heineken - reported to be worth an estimated US$45 million - the producers of the latest Bond movie, Skyfall (2010) covered almost one-third of the film’s production costs. Product placement has been present in Bond movies, one of the world’s most successful movie franchises, since the 1960s. A report by Business Insider lists the full range of product placements featured in Bond movies over the years. The value of product tie-ins is such that some studios even write them into the script before the film actually goes into production.
A great deal of technical equipment is used to make a movie – the camera itself as well as equipment for lighting, editing, sound and special effects. Innovation is a hallmark of the industry. Throughout its history, ingenious minds have sought new, improved ways to push the boundaries of possibility. Many of these technological breakthroughs are protected by patents.
Since Thomas Edison and the Lumière Brothers brought movies to the masses, the industry has undergone huge technological shifts. The golden era of silent movies gave way to “talkies” which gave new importance to dialogue and acting and in turn spawned new film genres. The invention of Technicolor (invented in 1916 and perfected over several decades) gave movies a more realistic feel and the use of ever-more innovative, high performance sound systems, from Warner Brothers’ Vitaphone (used to make the first feature length talkie, The Jazz Singer in 1927) to Dolby Surround Sound (first introduced in 1982) has heightened the movie experience.
Digital technologies – shaping the future of film
The more recent move from celluloid to digital has had an enormous impact on the industry, improving quality while slashing production costs and time and lowering entry barriers for amateur and budget filmmakers.
Digital technologies have also opened up huge opportunities for special effects, fuelling the growth of science fiction and fantasy movies. With digital technology, film-makers now have the tools to the visually depict the imaginary worlds their characters explore.
The first movie to feature computer generated imagery (CGI), was the sci-fi film, Westerworld in 1973. Pixar produced the first feature-length, computer-animated film, Toy Story, in 1995; and in 2009 Slumdog Millionaire became the first film shot mostly in digital to win the Academy Award for Best Cinematography. That same year, James Cameron’s Avatar broke new ground; filmed in “stereoscopic 3D”, it created a stunning and seamless blend of live action and CGI imagery using revolutionary new motion-capture techniques.
The widespread use and application of digital technologies, including the Internet, are profoundly shaping the industry, in terms of how movies are being consumed and distributed (video streaming and downloading) and even made. The digital era is certainly fuelling our universal passion for movies.