Wednesday, May 5, 2004

Frequently Asked Questions: General Questions

Answers from Mark Litwak, Attorney At Law



DISCLAIMER: The information provided here is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Many of the legal principles mentioned might be subject to exceptions and qualifications, which are not necessarily noted in the answers. Furthermore, laws are subject to change and vary by jurisdiction.



Question: I work as a grip and electrician on many low budget features and music videos. Unfortunately, I do not have the luxury of always working with well-established and reputable companies and producers. Although I have not been burned yet, I have heard many horror stories from associates regarding fees not paid and damaged equipment not replaced. My questions: (1) What are some ways that I can protect myself, in terms of my fee and my equipment, without getting involved with huge contracts and lawyers? (2) Are there steps I can take that will protect me without scaring these small time producers?



Answer: First, try to check on the reputation and integrity of those who seek to employ you. Call some of the people they have worked with before. Most scoundrels act consistently. You can usually determine their reputation with minimal effort. Second, you should always insist on a written contract or deal memo covering the essential terms of the deal.



Sometimes, no matter how careful you are, you may find yourself in a position where another party owes you money and refuses to pay. If you are stiffed for a small sum ($5,000 or less), you have a fairly good remedy in those states that have small claims courts. Otherwise, you may need to retain an attorney. If you include in your agreements a provision for binding arbitration under the American Arbitration Association or AFMA, you could avoid litigation to resolve your dispute, and significantly reduce legal fees and costs.



Question: My foster mother, who cannot read or write well, wrote a song that has now been recorded. She had a "friend" write it out for her. This "friend" signed her own name to the song and submitted it to the person who has recorded it. Even though this person knows that my foster mother wrote the song (the "friend" admitted it), they say my foster mother cannot receive any of the royalties because her name was not on the original manuscript. We don't have money to hire lawyers. Is there anything she can do?



Answer: This is fraud. You can sue the person who misrepresented they were the author when in fact your foster mother was the author. If you can't hire a lawyer, perhaps you can represent yourself or negotiate a settlement. You could notify the publisher of the song of this claim. The publisher might decline to promote the work while its authorship is being contested.



Question: My previous agent submitted a screenplay to at least three major production companies before leaving the business (and the country) to teach. He has not responded to any of my letters—and it is my assumption that he would not be responding to any of those companies if they were trying to contact him. What is your best suggestion for me? Should I attempt to contact those companies myself? Should I hire an entertainment lawyer at this point? Or will my next agent be able to check on those scripts for me without any adverse legal ramifications. (Absolutely no contracts were signed with this first agent.)



Answer: Contact the production companies and inform them of who your new agent or lawyer is, and give them their address and phone number.



Question: I'm writing about Entertainment Lawyers in school. We have to try to convince someone to want to become an entertainment lawyer, what advice could you give me?



Answer: I think the best reason to become involved in entertainment law is if you like the area of intellectual property and enjoy the business aspects of filmmaking and television production. It seems to me you either have an interest in this or you don't.



Question: Do you feel that there is a need for legal reform in entertainment law/ intellectual property law? If so, is there anyone working towards this reform, thus far? When I say legal reform, I'm more or less looking at legal help for the starving artists who have little money and legal knowledge, yet who are taken advantage of by unscrupulous attorneys.



Answer: You may want to contact the State Bar if you are aware of unethical activities by attorneys. Attorneys can be disbarred if they violate the state's rules of professional conduct. As for helping starving artists, you may want to contact California Lawyers for the Arts at http://www.calawyersforthearts.org or (310) 998-5590.



Question: Would you clarify the term "moral rights" used in your books?



Answer: Moral rights have a limited application in the United States. Except in regard to fine art, American law doesn't expressly recognize the moral rights of authors. Moral rights are separate and distinct rights from the copyright or ownership of a particular work. Think of the various rights as a three-tiered scheme: (1) you could go into an art gallery and buy a painting, in which case you would own the actual painting, but not necessarily the copyright to the painting. (2) You could also negotiate to own the copyright to the painting in which case you would have the rights of the copyright owner, which would allow you to duplicate the image of the painting, on lithographs, T-shirts, posters, etc. (3) Authors of some works (in our example, the painter) may have what are called "moral rights" which prevent third parties (in this example, you, the art buyer) who may own the author's work, and the copyright to it, from making any changes in the work or removing the author's credit. Moral rights are generally comprised of the Right of Paternity, which is the right of the authors to be known as the author of a work, and the Right of Integrity, which is the right to prevent other people from desecrating or changing their work. Although the United States does not explicitly recognize moral rights (except for fine art), other legal doctrines, such as the law of unfair competition, have been used to protect similar rights for U.S. authors.



Question: I am a third year law student at St. John's Law School in New York. I'm considering taking a class in entertainment law during the fall semester. The grade is based on an independent research paper. I was wondering if you could give me a few ideas as to what some of the hot topics are in the area of protecting screenwriters' rights.



Answer: I don't know of any hot topics in regard to screenwriter's rights, but there are many topics that would merit attention in regard to telecommunications reform and how existing copyright and intellectual property laws will be applied as we increasingly rely on the Internet.



Question: My writing consultant agreed to represent me as my agent and sell my screenplay. My entertainment lawyer spent a lot of time with her over the phone and at meetings (at my expense) and drew up a contract for that purpose. At the last minute, and without a word to my entertainment lawyer or me, this so-called agent took a job at another company and left me with an unsigned contract. Meanwhile, I still have to pay my lawyer for services rendered. My lawyer says there isn't anything I can do. I think there is. Could I take the agent to small claims court? Or what? I am paying good money for hot air. Thanks for any reply.



Answer: Generally speaking, both parties to a negotiation bear the expense of their own attorney fees. Unless there was some agreement for this person to reimburse you for your attorney fees in the event the deal fell through, I don't see any basis for a claim.



Question: I don't think this is covered in your books, at least from what I've read in them so far: A friend of mine says deferred pay for film crews is illegal, even though everyone does it. I don't see why it would be illegal; so long as it is made clear that the pay is potential only, not guaranteed. Any comments?



Answer: Deferments are not illegal, however, if all pay is deferred, this may run afoul of various minimum wage laws, which require that a minimum payment must be made. As long as the minimum wage laws are met, there is no problem with additional compensation being deferred.



Question: I write screenplays under a pseudonym. I live in Florida and I have registered the pseudonym as a fictitious name in the state of Florida and I have obtained an occupational license in the county I live in to do business under that name. Questions: (1) When I correspond with potential agents or buyers (I am obviously a new writer), do I correspond with them under the fictitious name I write my screenplays under or under my legal name, informing them that I write as …? (2) I also know that you can list other names known as under your Social Security Number. Any advantages or disadvantages to doing that in my case? (3) Finally, I guess, the most to-the-point question: When your write under a pseudonym, how do you best handle that legally and professionally? I don't want to change my name legally, but I would like to be known in the business by my fictitious name. Any advice?



Answer: If you want to be known in the industry by your fictitious name, then you should use it. That is what should be listed on your screenplays and any place else where you received credit. However, even though you received credit pseudonymously, you may want your agent to know your real name. It's really up to you.



Question: Can you please point me to a resource that provides for standard net profit participation for producers, actors, and lawyers in a $30,000 independent film? Thanks.



Answer: No one sets a standard as to what a net profit definition should be, although many of the major studios have similar definitions. You can consult Matthew Bender's Law book series, Entertainment Industry Contracts, which should be available at most law libraries. You can also check my book, Contracts for the Film and Television Business, 2nd Ed. (Silman-James Press), which has a net profit definition in it.



Question: A client of mine is a painter. A movie producer who wants to use her painting in a movie has approached her. At this point I don't know whether the movie is studio-produced or independent, nor do I know the nature of the budget. In general, then, and assuming that the use of the painting will be significant, should we be asking for some money consideration for the use of the painting?



Answer: It would not be unreasonable for you to ask for some payment for the use of your picture, especially if it is featured in the film. Without knowing the prominence of the picture and context in which it will be used, it is hard to give an estimate of what kind of payment would be reasonable.



Question: What is an E&O Insurance policy, and why is this important in a screenplay contract negotiation?



Answer: E&O (Errors and Omissions) Insurance is akin to a malpractice insurance policy for writers and filmmakers. It protects them should they inadvertently infringe another party's copyright, defame a person, invade someone's privacy etc. etc. It does not cover a writer or filmmaker if they knowingly engage in wrongful behavior. In other words, if they are careless and infringe another's rights they are covered, but if they intentionally plagiarize a script, they would not be covered by insurance.



The insurance policy covers the named insured, and you can add additional named insureds to the policy for a nominal charge. If you are a member of the Writers Guild of America, then by virtue of their collective bargaining agreement, the writer is supposed to be included on the employer's policy. Even with E&O coverage, in the event of litigation the insured may be liable for the deductible, which can be $10,000 or more.



The policy covers both any damages assessed against the writer/filmmaker, and the legal fees incurred for defense.



E&O is often required by U.S. distributors before they will license a film for distribution. They want the right to distribute the film and do not want to buy a lawsuit.



A writer and filmmaker can be liable for copyright infringement even if they don't intend to infringe another's copyrighted material. For instance, if a filmmaker licensed a piece of music for his film, and it turned out that unbeknownst to the filmmaker the musician that sold him the music didn't own all the necessary rights to it, then the filmmaker could be liable even though the filmmaker was an innocent infringer.



Question: I recently started a corporation to be a production company; I plan on filing for an S-Class election in a few days. My question is about public record: this is an industry where people screw each other just because they can. Is there any way that "anyone who wants to" can access public records, such as my S-Class filing or my corporate tax returns? I filed in Delaware because I read somewhere that Delaware, like Nevada, does not disclose the names of the shareholders under any circumstance. Is there any way that the so-called corporate shield could be penetrated, and could I then be liable for personal assets? (Not counting illegal activity, I'm talking case example, I ticked off Disney and they want blood.)



Also, a second question: I understand that a production company needs a business license in the local city that they will film in. Is a business license, or an occupational permit, required for just working out of your home and dealmaking quietly, like pre-preproduction? If it's the law, I obviously can't afford to overlook this, but if it's possible to avoid, I'd like to: the city fees are high at the moment, at least for some things.



Answer: Certain information about your corporation is a matter of public record. For instance, you need to register with the Secretary of State the identity of an agent for service of process. This is the person who can accept papers if a lawsuit is filed against the corporation. Once a lawsuit is filed against a corporation, of course, other information, if relevant, could be revealed through discovery. Generally, corporate tax returns are not publicly available. However, in the course of a lawsuit, if it was relevant, the court might order this information produced. On the other hand, if you become a public company, much information about your company will need to be publicly disclosed.



You do not necessarily need a business license in every city that you film in, but you may need a film permit. A business license will typically be required where you have an office. The laws vary by locality. You will need to check with the city in which you are based.



Question: Last month at a film festival I won some screenwriting contest. The first prize was some $500 in cash and my script read by the panel of producers. When I was announced as the winner, the organizer of the contest told me that he hadn't brought cash money but gave me his business card and asked for mine, saying he would take care of it once back in his town. Since then I didn't hear from him anymore. No money and no one asking to read my script. I wrote him an E-mail message to remind him of what he promised, but he did not answer me. What would you do in my place?



Answer: If he doesn't live up to his promise, then you can bring suit against him. I am not sure what state you reside in, but $500 would put you in small claims court in California, and you don't need an attorney to represent yourself. Any source

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