Sheafe B. Walker, Attorney At Law
COMMON LEGAL QUESTIONS

Agreements 
 
-Option and Purchase Agreement
   
Q: What is an Option and Purchase Agreement? What are some key points to remember about an Option and Purchase Agreement?

A:  An option and purchase agreement is actually two agreements in one. The first agreement has specific conditions to trigger the other agreement. The creator receives a sum of money, usually a small amount for the first option, but later more money, if additional options are part of the agreement to extend the decision-making period.

An option gives a producer or entertainment company the right, usually exclusively––meaning that this right is not available to anyone else for the agreed upon option period––to purchase or acquire some or all the rights to a literary property from the creator during an agreed upon period of time.  The literary property could be a book, a play, a graphic novel, or other original work. The duration of the option period is negotiable. Generally, the creator wants the shortest time for the producer, or entertainment company to make a decision. And the producer, or entertainment company wants the longest time to make a decision whether to purchase the literary property.

The producer or entertainment company must decide to purchase the literary property from the creator or to “exercise the option” before the duration of the option period ends or expires. If the producer or entertainment company decides to purchase the literary property before the option expires, the purchase terms and provisions of the agreement are triggered.
 
Key points to remember about an Option and Purchase Agreement:
  • A producer or entertainment company will generally try to purchase all the rights to the literary property. This is known as an All Rights Agreement.
  • Any rights a creator does not want to sell must be clearly stated in the agreement. These are called Reserved Rights, and the creator can option or sell them later to another producer or entertainment company.
  • The purchase price is usually negotiated at the same time as the terms of the option part of the agreement. If it is not, a producer or entertainment company could be, in a new, more difficult negotiation with the creator, who could leverage a higher purchase price for the literary property.
  • Generally, the purchase price can be any combination of: a lump sum, a percentage of the budget of a future movie or television show, a percentage of the all the money that a producer or entertainment company earns from the movies, television shows, and the other rights it purchased from the creator.
  • A creator must always have an experienced entertainment attorney review and revise an Option and Purchase Agreement to clearly express all the terms before the creator signs the agreement.
  • A producer or entertainment company must always have an experienced entertainment attorney review and revise an Option and Purchase Agreement to clearly express all the terms, and to make sure that they are able to purchase all the rights that they need to finance and produce their movies, television shows, etc.
 

 
-Work Made For Hire Agreement:

Q: Do I own my work or does someone else own it?
If I hire someone to work for me, how do I make sure that I keep the copyright to the work?
 
A: Generally speaking, if you signed a work made for hire agreement, the company or person who hired you owns the copyright to the work you created. So, it follows that if you wish to own the copyright to a work that you are paying someone else to create, you must have the creative individual sign a work made for hire agreement drafted by an attorney before they create the work.

There is an exception to this general rule. If the creative individual is an employee of the employer or company who is paying for the creative work, the employer or company automatically owns the copyright to the work, if the employee creates the work during the scope of her employment. However, the question of who is an employee, and what the scope of employment means is not a simple one, and requires a thorough fact specific legal analysis to make that determination. I strongly encourage you to seek legal advice before paying a creative individual to create a work for you, so you can protect your rights and avoid a misunderstanding that may result in costly litigation.
 


-  Joint Author / Collaboration Agreement:

Q: We’ve been friends for years, and we trust each other, do we really need a joint author / collaboration agreement?
 
A: Yes. Under the US Copyright Act, the default percentage of ownership of two or more parties who intend to create a single work, is equal parts regardless of who did more work. So, if you wish any other arrangement of copyright ownership, you need a well drafted joint author agreement. With everything spelled out clearly in an agreement you can create works, and still remain friends.


Copyright

Q: Why should I register my work with the US Copyright Office?
A: You should register your work. One of the many benefits registering your work will provide is a remedy for copyright infringement. You must show that your work is registered with the US Copyright Office, to sue anyone who may be infringing your work in federal court. 

Q: What works can I register?

A: For a complete discussion and current information about what type of works you can register see: http://copyright.gov/

Q: I have this great idea for a book, play, movie, television show, comic book. Can I register my idea to prevent someone from stealing it?
 
A: No. You cannot register an idea (no matter how great it is). You can only register the copyright to the expression of an idea. So, take that great idea and create a comic, novel, screenplay, stage play, opera, musical, painting, sculpture etc. Then you can protect your expression of the idea.


Licensing

Q: I've been asked to license my work for print, film or television. What does this mean?
 
A: Congratulations, someone wants your permission to use your work in their work and may even be willing to pay you. It means you need a well drafted license agreement that clearly states the terms of how, where, and when your work can be used by the other party to the agreement. 

Q: Do I still own my work if I do license it?
 
A: Yes. Generally speaking, when you license your work you are granting permission to use your work for an agreed upon time, place and form. You are not selling it to the other party to the agreement.

Q: I've been asked to sign a release or a waiver for my work to appear in print, a film, or television. What does this mean?
 
A: A release usually means you are being asked to permit someone to use your work for free and to promise not to sue them for infringement for using your work. I believe that no one should sign a release or a waiver without consulting an attorney. You must fully understand what rights and benefits you are releasing or waiving before you sign the release or waiver.

Q: Will I get paid more money if the book, film or television show is a hit?

A: No. If you sign a release or waiver, you are signing away any future rights to your work's participation in the book, movie or television show.
 
This information is provided for general educational purposes only and is not intended to be legal advice.

Your specific answers to all of these questions are best addressed during a consultation with an experienced attorney, who can discuss your specific facts, and can provide legal advice.
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