Wednesday, June 28, 2006

The Importance of Securing Chain of Title

The Importance of Securing Chain of Title
The Director's Chair, April 28, 2006

Professionals in the film industry, especially writers and producers will hear about a concept called “chain of title”, if they have not already heard about it. Chain of title refers to the succession of title of ownership of copyright back to the original owner.

When an idea for a film is formulated in writing by an author who is not an employee or who has not by contract negotiated away his or her copyright in the respective work, that person is generally considered the original author and owner of the copyright in that work.

As the old adage goes, copyright does not exist in an idea itself. Rather, in Canada and the United States (and most other jurisdictions in the world), copyright protection exists for works in tangible form. It is the expression of the idea rather than the idea itself that is subject to copyright protection. In other words, the idea has to be “fixed” in material form. For a literary work such as a screenplay, copyright protects it or any substantial part of it in any material form from being, among other things, produced, reproduced, distributed, published, translated, adapted, made into a film, or communicated to public by telecommunication without the permission of the author.

Now, screenplays oftentimes start out with an idea and then a treatment or synopsis is derived from such treatment. Alternatively, some screenplays are derived from novels or stage plays. In cases where a screenplay is derived from a treatment, the first thing to note is that the screenplay is a derivative work of the treatment, and as such, the treatment is the first element in the chain of title. Without the permission of the author of the treatment to create a screenplay based on it, the chain of title would be broken, so to speak. Moreover, the screenplay is oftentimes a joint effort among more than one author, therefore, the producer who wishes to use the screenplay may likely have to obtain the appropriate rights from all those joint-authors who contributed to that screenplay. If there is a possibility that a producer believes that a specific third party may have some rights in the screenplay, then the producer may want to take precautions by having the third party execute a quitclaim or other similar document that effectively establishes that the third party has no interest in the screenplay.

To ensure that the producer fully owns the film, the producer will also have to secure all the necessary rights from everyone involved in the production so that chain of title of the film itself, is intact. Agreements with the director, actors, cinematographer and everyone else involved in the production will have to be executed.

The most significant reason why producers want to keep an eye on the chain of title is to ensure that they can secure distribution. Distributors will want the producer to ensure that all rights to the film have been secured, and they will require the producer to make certain representations and warranties in regards to the ownership of the film. For example, the distributor will likely require the producer to represent and warrant that the film does not violate or infringe, among other things, any agreement with any third party, trade-mark, trade name, copyright, moral right, patent, literary right, dramatic right, and rights of privacy and publicity. If any of these representations and warranties turns out to be untrue, the producer will usually have to indemnify and hold harmless the distributor for any breach of the respective representations, warranties and any covenants under the distribution agreement.

Prior to making a film, it would be prudent for a producer to make himself or herself aware of the kinds of agreements required to secure chain of title of the film, and a lawyer oftentimes can provide valuable assistance with these matters. Although there is an upfront cost and time to properly secure chain of title, the cost of not doing so can ultimately be much greater as the chances of entering into a distribution deal may be jeopardized.

The information in this article is not intended to be legal advice and is of a general nature. Consult a lawyer for advice for any specific situation.

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