Reply To: Movie Rights

#4293
Damocles
Moderator

    Dear Mortimer46

    It may feel right to think so, but the short answer is: No.

    I would encourage you to take professional advice on any investment decision. This is particularly true when considering an investment in an independent film project.

    To answer your question directly: IF the film project were structured as a Company, which held the contractual rights to produce, distribute and exhibit the film, then the shareholders of that Company should have a beneficial interest in the “profits” that result from commercially exploiting those rights.

    In this context (and in common parlance) “equity” generally means a percentage interest in the share capital of a company. So, if you were to acquire shares in the Company, you would own a percentage of the Company’s equity capital (implying an economic interest in the Company’s financial performance).

    Shares in a company do not imply any right to the assets of the company, or to manage those assets, only to its financial performance.

    In the context of most independent film projects, the term “equity” can be loosely applied to mean simply contract rights to share in the Net or Gross Profits (if any). So you (or better yet, your professional adviser) will want to clarify this with the Producer.

    Another aspect of your question involves what you (and the Producer) mean by the term “rights”.

    In the context of a film, “rights” should refer to the legal/contractual rights derived from the creator of an original literary work. This could mean a script. It could mean a treatment for a film or other medium of story-telling. I could mean a book.

    The creator of any original literary work is the automatic owner of Copyright. Copyright, generally, is the right to exploit your own original literary works, which can be sold and assigned to others by contract.

    The “writer” of a script for a film is not necessarily the Copyright owner unless that script is original. In that case, a professional producer will insist on the Copyright to the script being registered in some way as such.

    If the script is based on a book, or another literary work, and the rights to develop a script for a film have not been obtained by contract, then the original Copyright owner may take legal action for Copyright infringement.

    The Producer should be fully-transparent about the nature of the “rights” to the film. Professional advisers would encourage you to request a report on the full “chain of title” from the Producer. A professional Producer would have no issue in providing one.

    As in all situations like this, you are responsible for the level of due diligence you engage in and the professional advice you take.

    Film production is complex, and can be complicated.

    The risks are very real. Professional advice is highly recommended.

    D.