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How many entertainment attorneys have encountered the following scenario: a producer, director or writer for an independent or low budget film asks for help with deal, but says, “Keep it simple. I don’t want to lawyer it up. A lot of legalese will scare away the other side.” Frequently, the client then tries to assure the attorney that the parties are on good terms and that no disputes will arise: “Don’t worry, we trust each other. We can work out any problems.”  This urge to save money on transactional legal fees at the outset of production can easily lead to headaches if the relationship starts to unravel.
In these situations, the client often seeks a short, simple deal memo or asks for the lawyer’s comments on an agreement the client drafted and sent to the other party before consulting counsel. While this approach may save some money up front, the failure to address all of the essential rights and responsibilities involved in producing and distributing a film, including ownership and copyright, can lead to costly disputes. If litigation ensues, the legal fees will be exponentially higher than any upfront savings.

Two recent cases involving documentary films illustrate the problems that arise when the parties fail to use agreements that address all of the essential elements of film production and distribution. In the first case, Baker v. Robert I. Lappin Charitable Foundation, 415 F.Supp.2d 473 (S.D.N.Y. 2006), the producers and director had no written contract. In the second, Richard Berman, Maura Flynn and Speakeasy Video, LLC v. Curt Johnson and Indie Genius Productions, (U.S.D.C. E.D.Va, Case No. 1:07cv39), the director, producer and investor entered into a one-page deal memo drafted by the director that did not mention copyright and was silent or vague on other key issues. While there are few reported decisions applying the joint authorship test to documentary films, both of these cases prove the old saw that an ounce of prevention prevents a pound (or, more accurately in these cases, a ton) of cure.

Joint Authors in a Film
In a dramatic work (film, television show or play), there is a screenplay or script, whose author would be entitled to a copyright interest, although he usually assigns some or all of that right to the producer, production entity or studio that finances the work. The dramatic film’s director would also be an author for copyright purposes, although again, in most cases he would assign his rights as part of his written agreement to direct. In contrast, a documentary film does not follow a rigid test as to who owns the copyright.
Under copyright law, a joint work is “one prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” 17 U.S.C.  Section 101. Each author of a joint work acquires an undivided ownership in the entire work, entitling each to distribute the work without the consent of any other co-author. In the absence of a written agreement to the contrary, each such joint author has the right to license or otherwise exploit the work has she or he chooses, subject only to the obligation to account for any profits to the other joint authors.
While an employer will typically own the copyright in works created by its employee in the course of his employment as a”work made for hire‚” the entertainment industry relies heavily on relationships between independent contractors. Where a work is “specially ordered or commissioned‚” such as one created by an independent contractor, the hiring party owns the copyright only if “the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.‚” 17 U.S.C. Section 101. Otherwise, the creator will, at a minimum, be the joint author of the work.
It is even more imperative that documentarians carefully delineate copyright ownership, as mounting litigation costs can quickly dwarf the budgets of the films themselves. In each of the cases discussed here the courts found, in the absence of a writing delineating who owned the copyright in the film, that the producer of the film who obtained the funding for the project and who had made creative contributions to the film was a joint author of the movie at issue. In Baker this finding defeated the plaintiff’s copyright infringement claim, while in Berman, the finding gave the producer an interest in the film’s profits, which the director had previously denied.

Joint Work Found Where There Was No Contract Between The Parties
In Baker v. Robert I. Lappin Charitable Foundation, 415 F.Supp.2d 473 (S.D.N.Y. 2006), the defendants Robert Lappin and his eponymous foundation hired documentarian Gil Baker to create an educational film titled “Great Jewish Achievers”. The film spotlighted the works of famous Jewish figures, and the foundation subsequently distributed it to over 2000 educational and religious organizations in the United States. Baker claimed that he agreed to produce GJA in exchange for Lappin’s promise to provide $500,000 in funding for a feature length film that Baker was planning to make in the future. Baker’s planned feature-length film had no other relation to the educational film, and the parties had no written contract addressing either GJA or Baker’s other film. When Lappin failed to provide the desired funding, Baker sued for breach of contract, unjust enrichment, quantum meruit and copyright infringement.

In dismissing Baker’s breach of contract claim for Lappin’s refusal to fund the second film, the court found that there was no enforceable agreement between them, as the parties did not mention, let alone agree, on many key aspects of the project, including “the nature of the investment (whether loan or equity or otherwise); the time of performance (when Lappin was to provide the $500,000); the manner of performance (whether the funds would be paid in a lump sum or installments); the terms of repayment (if the monies were to be repaid at all); whether interest would be paid and if so at what rate; whether Lappin would share in profits and if so in what manner and to what extent; whether and to what extent Lappin would have any control over content, casting or other creative issues; and who would own the copyrights.” 415 F.Supp.2d at 484.

In granting the defendant’ motion for summary judgment on the copyright claim, Judge Chin found that both Lappin and Deborah Coltin, the executive director of the foundation and associate producer of GJA, had contributed significant “creative input” into the film, and Baker himself admitted that the idea of the film “was Bob’s [Lappin’s] brainchild.” Specifically, the court found (1) that the “idea” and “concept” of the film was Lappin’s, (2) that Lappin and Coltin had made many changes to the script, as well as other creative changes, and (3) that they made many revisions to the actual film. 415 F.Supp.2d at 480. Baker also admitted at deposition that the film was “the product of joint work.” Id. at 481. In finding that Lappin and Coltin were co-authors of the film, the court found that Lappin’s idea for the film, their suggestions regarding “the script and to individuals to include or omit,” and their comments and suggestions qualified as independently copyrightable contributions. Id. at 487. Even though Baker directed the film and did most of the work, for joint authorship “equality in contribution is not required, and a reasonable jury could only find that Lapping and Coltin were true collaborators in the creative process. . . Similarly, even assuming Lappin and Coltin were not present in the editing room when the film was edited, as Baker alleges, the law does not require that joint authors work together or in the same place or contribute to every aspect of a project.” Id. at 487-88 (citations omitted, including Childress v. Taylor, 945 F.2d 500, 504 (2d Cir. 1991)).
Thus, the court found Baker’s failure to have a written agreement undermined his claims against Lappin for both copyright infringement claim and Lappin’s refusal to fund Baker’s feature film.

Joint Work Found Where Contract Was Silent on Copyright

In the second dispute, the United States District Court for the Eastern District of Virginia recently ruled that, in the absence of a contract provision, a producer of a documentary film was a joint author under copyright law based on the parties’ intent and her contributions to the project both as it was envisioned and as it was released. Richard Berman, Maura Flynn and Speakeasy Video, LLC v. Curt Johnson and Indie Genius Productions, (U.S.D.C. E.D.Va, Case No. 1:07cv39, October 19, 2006). After a trial in Virginia’s “Rocket Docket”, Judge T.S. Ellis, III relied on the jury’s findings that Maura Flynn, a producer of the film “Your Mommy Kills Animals‚” (“YMKA”), made independently copyrightable contributions to the film and that she and Curt Johnson, the director and co-producer, had intended to be co-authors of the documentary.

In the summer of 2005, Johnson approached Flynn with a book treatment he had received for an insider’s expose of People for the Ethical Treatment of Animals (PETA). Flynn took the book treatment and wrote an eleven-page film treatment, or outline, for a documentary film designed to expose excesses of the animal rights movement, including PETA, the Humane Society of the United States (HSUS) and Stop Huntington Animal Cruelty (SHAC). Flynn’s treatment included descriptions of specific topics and suggested specific footage to include and certain individuals to interview for the film. Trial testimony revealed that Johnson and Flynn agreed to co-produce the film, to exercise joint control over its making and to divide profits evenly, but they never put their agreement in writing. Flynn and Johnson then used the treatment to solicit a $300,000 investment in the film from Richard Berman, a Washington lobbyist who represents the restaurant and food industries. Berman and Flynn signed a deal memo wherein Johnson and Flynn agreed that the documentary would have the same viewpoint as the treatment, namely exposing the poor record of PETA and other animal rights organizations in protecting animals and some of the crimes their members have committed or supported, with a heavy anti-PETA emphasis. The deal memo, however, was silent as to who owned the physical film or the copyright therein. The only reference to distribution stated “Any contracts for promotion of said film in addition to theater/dvd/home video promotion will be contracted through Berman & Company, Washington, DC.”

During production of the film, Flynn conducted several interviews, provided questions for other interviews and that she provided substantial information about groups and individuals featured in YMKA, including those individuals and topics listed in the treatment. As filming progressed, Johnson instructed Flynn not to travel with the documentary film crew because he allegedly thought interview subjects might associate Flynn with Berman, as her husband worked for Berman’s public relations firm. During the summer of 2006 the parties began to disagree over the content of the film, with Berman contending that the documentary diverged significantly from the emphasis set forth in the treatment and adopted by the deal memo. Johnson incorporated some editorial suggestions made by Flynn, but rejected others. The completed version of YMKA focused heavily on SHAC and its leadership, who were indicted and convicted of federal terrorism charges, portraying them sympathetically as misguided free speech champions prosecuted by an overzealous government. Johnson eventually ceased communication with Flynn and Berman and began screening the film publicly, including at legal defense fundraisers for the SHAC defendants.

In January 2007, Berman and Flynn sued Johnson and his production company for breach of contract, fraud, constructive fraud and a declaration that Flynn owned the copyright in the film. Johnson filed several counterclaims against the plaintiffs for interfering with the production and distribution of the film. All of Johnson’s counterclaims were dismissed except for a defamation claim against Flynn. At trial, the jury found for Berman and Flynn on their breach of contract and constructive fraud claims, and for Berman on his fraud claim, awarding Berman a total of $370,000 and nominal damages to Flynn. The jury also rejected Johnson’s defamation claim.

On Flynn’s copyright claim, Judge Ellis submitted interrogatories to the jury asking if they found (1) that Flynn and Johnson intended that they be joint authors of the film, and (2) that Flynn’s contributions to YMKA were independently copyrightable. The jury answered both questions affirmatively.
In post-trial motions, Johnson argued that Flynn was not an ‚”author” of YMKA under the Copyright Act, relying on the Ninth Circuit’s decision in Aalmuhammed v. Lee, 202 F.3d 1227 (2000). Aalmuhammed held that a party claiming joint authorship must (1) make an independently copyrightable contribution and (2) establish “authorship” by showing “(a) control over the work, (b) objective manifestations of a shared intent to be coauthors, ” and (c) audience appeal based on each contributor’s contribution.” 202 F.3d at 1232. Judge Ellis rejected the Ninth Circuit test, holding instead that a simpler test set forth by the Second and Seventh Circuits should apply, where an author must establish only (1) that she made independently copyrightable contributions to the work, and (2) that the parties fully intended to be co-authors. Thompson v. Larson, 147 F.3d 195, 200 (2nd Circ. 1998); Erickson v. Trinity Theater, Inc., 13 F.3d 1061, 1068-71 (7th Cir. 1994). The Court found that the Second and Seventh Circuit test is the better rule because, in cases like this one, an unscrupulous actor can manipulate the Ninth Circuit test. Where, as here, a party prevents his putative co-author from exercising control “even where she was contractually entitled to such control” that party could claim sole authorship of the work just by wrongfully preventing the other author from exercising her rights.

The Fourth Circuit has not weighed in on the test for joint authorship, and Berman appears to be a case of first impression in the Eastern District of Virginia. Berman the court’s ruling that his rights to promote and distribute YMKA were extinguished by the jury’s verdict, and Berman’s appeal rested on the deal memo’s references to promotion of the film cited above. Despite Berman’s claim, YMKA was released on home video.  The Fourth Circuit denied Berman’s appeal.

Lessons Learned: Get It In Writing

Both Lappin and Berman demonstrate the perils of failing to address copyright and other ownership interests in writing when there are multiple collaborators in the film. The cases show that, absent a written agreement, a contributor to a film may be found to be a joint author, giving her an undivided interest in the copyright film. Likewise, an independent contractor who creates a work commissioned by another party may still own the entire copyright in the work if the parties do not agree otherwise in writing.

Given the potential for expensive and time-consuming litigation resulting from any film deal gone awry, the entertainment practitioner should counsel her client to use development, financing, production and distribution agreements that clearly delineate the rights (or lack thereof) of all parties involved. Likewise, even an experienced producer, writer or director should make sure that their contracts, including forms that they have used for years, have been drafted or reviewed by counsel. This warning is all the more important for an investor who is unfamiliar with the terminology of film investment deals. Careful drafting and review of the agreements setting forth the rights involved in creation of a film can save all of the parties significant time and money, while preventing the type of dispute that can disrupt the production and distribution of the movie. After all, what good is a film if no one can see it?

Michael D. Steger is a solo practitioner in New York City, where he focuses on entertainment litigation and transactional work. He represented Maura Flynn and Speakeasy Video in the trial over “Your Mommy Kills Animals.” His email is msteger@steger-law.com.

This article originally appeared in the American Bar Association’s “Entertainment and Sports Lawyer.” © 2008 by Michael D. Steger and the American Bar Association. All rights reserved.