Monday, July 21, 2014

Weak Link in your Chain of Title?

To begin, a “chain of title” means a group of documents that proves you have the rights and ownership in your film, TV show, webisode, etc.  You must prove you own your project in order to satisfy due diligence requirements by investors, distributors, financiers, banks, etc.  As the your project is being produced, it is very likely you are tempted to rely on email exchanges or make handshake deals, which you believe gives you the rights to produce, finance, own and sell your project.  However, this is what I term "the weak link" in any chain of title.  As a producer, you must be over cautious is making sure the rights you gain are properly documented.  In this way, you demonstrate your professional, organizational and technical skills as a producer at the onset rather than having to go back and retrace your steps to find the "weak link" in your chain of title.  Depending on the scope of your project, you may need only a few documents or as much as a few binders.  You should know that each document must lead to the next one in the chain so as to make sure there is no gap in the rights flowing from each person and eventually leading to you.   
If you can prove a proper chain of title, you will have satisfied one of the main requirements by any distributor, financier, bank, etc.  Why?  By securing a chain of title, you can legally prove you are the owner and, thereby, avoiding a lawsuit alleging that you did not have the proper rights.  Chain of title is, sometimes, an afterthought to some inexperienced producers.  These producers discover chain of title requirements at the time they enter into distribution discussions for their project.  Distributors will deliver to Producers what's known as a "Delivery Schedule", which lists, amongst other things, required legal documents to be delivered.  Here is a list of some examples of documents you may need to have in your chain of title:

1.  Copyright registration certificates for underlying material
2.  Life Rights
3.  Writer Agreements
4.  Work for Hire Agreements
5.  Producer agreements

6.  Option Agreements
7.  Extension Agreements
8.  Quitclaims
9.  Certificates of Authorship
10.  Life Rights
11.  Copyright search
12.  Script clearance

One of the main documents a Producer will need to deliver to a distributor is Errors & Omissions (E&O) insurance.  This is required prior to any distributor buying your film.  E&O insurance will require you, amongst other things, to list and provide copies of such things as like chain of title documents, title clearance, copyrights, and script clearance.  E&O will help to protect and indemnify you from lawsuits filed against you or the project for such claims as intellectual property infringement, defamation, libel, slander, name and likeness, etc. 

 I am often asked, while performing production legal services for my Producer and Production company clients, to provide a list of documents needed for chain of title.  The type and number of documents varies depending on numerous factors, which includes the source of materials (i.e. is it from a book or original screenplay) to deciphering whom contractually on the production holds approval rights over materials, production, concept and writing services.  The most basic premise is: remember get written permission for any and all rights from EVERYONE working on your project so you can claim 100% ownership in your project.  The chain of title has to start with the very first work where your project idea originated, then work down the chain from that point.   For example, say you want to have a screenplay written based on a book.  You must acquire rights or permission to create a film based on the book from the book's author.  Then, you will most likely engage a screenwriter to write the script.  You will need to obtain the rights for the screenplay as well.  So far, the document count in your chain of title is 2.  Next, say, you have a director who wishes to have one of his employee's perform a few changes to the script.  You need to obtain the rights from your director's employee as well.  That makes 3 documents in your chain... and so on.  Also, the screenplay must have documentation proving it has been registered with the U.S. Copyright Office.  Later, eventually, you will have to obtain documentation that your actual final project is also registered with the U.S. Copyright Office. 
So, as I said at the onset of this article, avoid weak links in your chain of title!  In order to preserve your chances of selling your project and protect against potential legal claims, then it is best and most important for Producers to engage a proper lawyer to navigate and manage your production legal and the chain of title. 

 COPYRIGHT & DISCLAIMER

Tifanie Jodeh is Partner at Entertainment Law Partners dedicated to corporate, business and entertainment affairs.  You may contact her at Asst@entlawpartners.com.
Tifanie Jodeh grants column recipients permission to copy and distribute this column and distribute it free of charge, provided that copies are distributed for educational and non-profit use, no changes or revisions are made, all copies clearly attribute the article to its author and include its copyright notice.

DISCLAIMER: Readers should consult with a lawyer before solely relying on any information contained herein.



No comments:

Post a Comment