Indie Film Q & A Forum

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522 Question Posted On: Date: 09.01.2010 Time: 03:57:08 Posted By User From: Miami
Subject: Finding a way out
Question Posted:
I have an LLC with 6 films under contract, half of which are on their third drafts. The relationship with my partner has melted down and we're trying to negotiate an out. I've proposed a fee structure of $50K for any film that is produced or 4% of the budget upon commencement of principle, whichever is less. And a few thousand on signing of the amendment to the partnership agreement to cover my costs. My partner keeps fretting over the films, likely fairly low budget indie films, being encumbered and therefore unproducable. Legimate concern? Are the terms above reasonable and fair? Probhibitive to anyone thinking about shooting the film?
Greg Answered:

What is fair depends on what each of you think is fair, and that depends on what each of you think the films may bring in the future, as well as what each of you contributed, in money and sweat, to bring them to this point. Traditionally on a buyout, you value the assets as they exist today. The question is what are they worth now? What would someone realistically pay to acquire those assets now? I doubt each of these projects is really worth $100k (I assumed you are 50/50 partners). But assuming you and your partner feel the $50k a film or 4% of the budget, if and when it goes, is reasonable to compensate him for his time and investment, then the question is whether the budget could afford it or not, as your partner points out. Is the payment for the script, producing, what? In other words, what does the money replace in the budget that you wont have to spend money on, or is it an additional cost? For example, if you have to pay him $50k for his share of the rights, and you still want $50k for your half, that’s $100k for the script. If the budget is under $2 mil, that is a lot. If the budget is $10 mil, the $50k may not make any real difference. If you are not producing this film yourself, then this cost, “baggage”, will be a concern for anyone looking to acquire the rights, but such baggage is not uncommon to have to deal with. Sometimes it means a renegotiation of the terms, and your partner might agree rather than hold up the deal and see nothing. Or, you might give up something to make the deal happen, etc.

521 Question Posted On: Date: 08.20.2010 Time: 06:15:15 Posted By User From: Amsterdam
Subject: Car design
Question Posted:
Hi Greg,

Not sure if this has been answered yet, but the question keeps popping up on the internet.

For an upcoming short film production, we are making extensive use of dialogue scenes in car interiors - and various wide shots will show parts of car exteriors (roofs, front windows etc.).

We are altogether avoiding the showing of brand names and/or logos, and interiors are somewhat obscured by lighting. Is there, however, any licensing connected to showing cars in such a way, that they might only be partially identifiable by their shape/design?

Thank you in advance.
Greg Answered:

In general, if you avoid any logos or tradenames you are fine. Some exterior designs might be copyrighted on some classic cars (like say how Coca Cola trademarked the classic coke bottle design), but I general the fact you can tell its one model or another is not an infringement. Don’t forget any hanging tags or fuzzy dice as things in the car might be a problem.

520 Question Posted On: Date: 08.18.2010 Time: 18:35:51 Posted By User From: los angeles
Subject: production e&o
Question Posted:
is there any reason to get production e&o insurance or is it just for distribution?

what does production e&o cover?
Greg Answered:

E&O, which is short for Errors and Omissions, protects the film from claims others may have against the film for things like you used music you thought was public domain but is not, you defamed someone, or the title of the film violates someone else’s rights, etc. You made an error. The only reason to get it before you have a distributor , is if you are going to exhibit the film, or you are concerned about a possible claim (once someone makes a claim, its hard to get the insurance, or if you can, they may exclude that claim, and distributors generally wont take a film if the E&O has exclusions). Normal E&O policy btw that distributors want is $1mil/$3mil coverage, 3 years from delivery to the distributor, with a deductible of no more than $25,000. Some insist on smaller deductibles, and some are asking for greater coverage these days. I am not aware of anything called production E&O. its either E&O or its not. You might be referring to production insurance, which has a liability coverage component. That insures things during production like you damage some property during the shoot, or someone has an accident , etc.

519 Question Posted On: Date: 08.18.2010 Time: 18:33:34 Posted By User From: los angeles
Subject: mozart music
Question Posted:
hey greg -

i want to use a mozart song in a feature i'm producing. i'm assuming that the composition falls under fair use. if so, can i just have my composer create his own rendition of the composition and use the newly scored song royalty free in my film?

thanks
Greg Answered:

No, the composition does NOT fall under fair use. BUT, you can use it because its public domain! Generally, you cannot use a recording of the music, as most recordings would still be copyright protected. (for music, there is the owner of the composition, and the owner of the recording. A current recording of a public domain (old) song is protected, even though the underlying composition is not.) Yes, you could have someone modify the composition and then you can record it and use it (assuming you had an agreement with the new composer as whatever changes he made he would own…just the changes, not the whole work, and with whoever does the recording).

518 Question Posted On: Date: 08.14.2010 Time: 06:04:14 Posted By User From: Toronto
Subject: Artwork based on people
Question Posted:
I'm prepping for a documentary about an artist who has a lot of work (drawings/paintings) based on real people(for example: stylized versions of famous actors). I think I need to get him to sign something saying his work can be shown in the movie, but if I show his painting of, say, Jack Nicholson, in a shot, do I need to get permission from Nicholson?
Greg Answered:

Whether you can use something in a documentary that you would normally need a license (such as artwork, copyrighted material, trademark, or a person’s image) depends on something called “fair use”. If something is fair use, then you can use it without a license (permission). Whether something qualifies for fair use depends on legal analysis and review of the actual footage. In general, if what you are showing is integral to the documentary (as opposed to entertainment value), then its ok. For example, you say your documentary is about this artist and his works. Showing his works would be a natural and integral part of your documentary. However, if the actor posed for the painting, maybe he put restrictions on the use? In either event, whether or not it qualifies as fair use or not depends on many factors that a lawyer has to look at.

517 Question Posted On: Date: 08.07.2010 Time: 12:04:18 Posted By User From: Washington, D.C.
Subject: FInders Agreement
Question Posted:
Hello. I received a finders agreement from a "finder" who wants to present my pilot to investors and a network, with me being listed as the producer. Of course, a finders fee is listed at 10%. however, the finder is requesting a 25% royalty fee on all gross income made throught the duration of the series, including DVD and promotional sales. How common and legitimity is it to demand the royalty fee, especially, at such a high rate? Is this such a fee that you would advice a client to agree to break into the industry?
Greg Answered:

Honestly I handle films not tv so I am not sure about what is proper in TV. However, I can tell you that its unlikely that any so called finder can place at TV show unless they themselves are in fact a TV producer. A TV producer would want very significant terms (although no one gets a royalty based on the gross income of the show. Maybe on the net but not the gross). So if all this guy is doing is putting you in together with a TV producer, then it seems awfully rich to him .

516 Question Posted On: Date: 07.17.2010 Time: 11:08:26 Posted By User From: LA
Subject: film rights
Question Posted:
So a quick question....

In 2007 my partner and I signed a single page deal memo with two addl producers who were going to help us get our movie made. The deal memo stated how the production would move fwd and how profit points would be spilt up if we made the movie. It said that if we got the $ we would all form an LLC. and transfer the rights from the screenplay to the LLC., then make the film. At the time they told me with was basically a LOI to move forward.
(There is no expiration date on the deal memo)

Now it's 2010 and I have a different production company that wants to make the movie and we're about to sign a long form contract. I just want to make sure that the deal memo from forever ago won't burn me down the road. I never singed any other documents with the previous producers and I still own the right to the screenplay through the Copyright office & WGA.


Here is what it says:

DEAL MEMO

The following list of deal points are agreed to by all parties and will constitute the basis for ongoing production of the film – MOVIE123, and any subsequent formal agreement.

1. The film will be produced and main title "presented by" COMPANY A and BOB and GARY individually recognized as "Producers".
2. TINA will also be credited as a "Producer."
3. MATT will be Director and Writer – additional writing credit to be given to TINA. Title credit shall be "a MATT film"
4. Producer Points (Pool) are to be split 50% to MATT / TINA and 50% to BOB / GARY. Each party may subdivide their points but must make the other Parties aware in order to comply with any profit distribution requirements. Ownership of all the film rights shall be 50% to Investor Pool and 50% to Producer Pool.
5. All parties are to be compensated from budget for production, directing or writing services. Said compensation to be reasonable and customary.
6. All agreements are to be processed through GARY, all accounting to be processed through BOB.
7. All 4 parties are to be "managing members" of the LLC formed to produce the film. GARY shall be designated "authorizing managing member" for signatory purposes.
8. The production shall be governed by the "Operating Agreement" that will be available to all Parties once established and venture is funded.
9. All rights to the script entitled "MOVIE123" shall be transferred into the LLC once formed.
10. MATT and TINA are to continue pursuing investors in the LLC, GARY will execute all investment documents on behalf of the LLC.

This document may be used to draft a more formal agreement between the Parties, until such time it shall be the governing terms under which production shall proceed on MOVIE123. By signing below, all Parties agree to the above "deal points."
Greg Answered:

Your message starts out “quick question” but then you have a pretty detailed, and complicated, question about some difficult legal issues specific to your situation. This Q&A is intended for general questions that might appeal to all, not specific legal issues. For that you need legal advice since a lawyer needs to look at the document you describe and apply the law and facts to come to conclusions. So I suggest you contact a lawyer to analyze the facts as applied to the contract. That said, here are some general answers to the situation. Contracts can be oral or written. And they are just as binding. The benefit of a written contract is that it leaves less to memory and is easier to enforce since the words are right there. The deal memo in this case may or may not be a binding agreement depending upon words in the document. If it says this is not a binding agreement, then its not. If it has words about “agreeing” or such then it may be binding. The wording you describe that the parties all “agree to the above deal points” sounds like it’s a binding agreement. If so, then all the parts about credits, and who does what, etc.would apply. And if it does apply, then if you did the film elsewhere there could be consequences. Whether your “partners” can just sue for damages, or stop the film from being made elsewhere depends on other terms of the deal memo and other facts (for example , you mention that the deal memo says rights to the script will be transferred later. So ownership of the script remained with whoever wrote it. So whoever owns the script might be able to go make the film elsewhere, but the other partners would sue for damages (they probably cannot get the film rights back ,but instead they can only sue for their losses and potential losses).

515 Question Posted On: Date: 07.13.2010 Time: 13:50:07 Posted By User From: New York
Subject: Retroactive License - Missing Language
Question Posted:
If a retroactive license is granted to a party to avoid litigation for a photograph to be used as a prop and set decoration and the licensee fails to include language granting the right to modify and alter the image - should this license be amended to include this language if the image has been altered, modified, etc. to protect the interest of all parties? Most of the licenses I have seen usually contain alteration and modification rights.
Greg Answered:

Whether the license is retroactive or not is irrelevant. The retroactivity just means the license is valid going back to whenever. But the license is to use the trademark or copyrighted material. To modify or alter the license must specifically state you have that right. Usually the license says you CANNOT modify or alter, but the fact is that unless is says you can modify you cannot. The right to modify is a separate right.

514 Question Posted On: Date: 06.22.2010 Time: 10:25:25 Posted By User From: Vancouver
Subject: Follow Up- Copyright
Question Posted:
Even if the movie was posted to a free site, such as youtube?
Greg Answered:

Ultimately its an infringement, regardless of whether you post it to a free site, sell DVD’s or whatever. Whether they enforce it is another question. As with some unlicensed music that people have included in their Youtube videos, the owners still have the right to sue.

513 Question Posted On: Date: 06.21.2010 Time: 15:28:31 Posted By User From: Vancouver
Subject: Dvds
Question Posted:
Hey Greg,

You've been a great help to me in the past, sir, and I was hoping to pick your brain again. I've recently completed an independent film, which I inadvertently got logos in, (such as a clothing label and a vehicle name). I was hoping to give out free dvds to people who want them, and a friend of mine suggested setting up a donation button on my website, for people to donate money to our film if they wanted to. Is this violating any copyright laws?

Thank you!
Greg Answered:

You are really asking two different questions. First, you need licenses to show logos and labels in your film (assuming its not a documentary about those companies). Most companies give free licenses to movies for this. You just have to contact them to ask. If not, then you have to blur out the names/logos, otherwise you will violate their trademark and can get sued. As for giving away DVD’s, if its your film, and you own all the rights, then you can do whatever you want with the film. Regarding donations, I am not an expert in this aspect but it sounds like you are saying watch my film and if you want to support us send money, which is usually not a problem.



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