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By Steven Beer and Neil J. Rosini
Warning: producing documentaries can be hazardous to professional relationships. In the course of a typical production, collaborators may squabble over a variety of creative and business matters. Disputes could possibly involve project finance, editorial direction, distribution options, credits and, when reconciliation isn’t in the cards, the terms of a breakup.
Making a documentary film entails dozens of important decisions. When the film has two or more producers, the parties sometimes enter into a collaboration agreement requiring mutual approval over material decisions. But what happens when collaborators are at an impasse and there is no designated procedure to break a deadlock? Such disputes can derail a project, seriously strain relationships, drain emotions and waste precious time and money.
Courtroom litigation, the traditional way to adjudicate differences, is rarely a constructive or satisfying means to resolve these disputes. It’s not only expensive and time-intensive, but usually is focused on money damages rather than practical remedies. And too often the party with deeper pockets will prevail regardless of the legal merits.
A common means of resolving disputes outside of litigation is arbitration, where a retired judge or senior attorney conducts a formal hearing and renders a final and binding decision (subject only to a limited court review). The Federal Arbitration Act and state arbitration laws govern the process. Private administrative organizations, such as JAMS and the American Arbitration Association, will propose an impartial arbitrator who reviews briefs and evidence and hears testimony before issuing an award. As with litigation, the arbitration process is formal, adversarial, time-consuming and expensive.
Mediation of disputes is a practical alternative to litigation and arbitration. Instead of preparing pleadings, submitting motions, taking depositions or producing documents under subpoena, the parties, together with the mediator, self-manage the process and try to forge a settlement in which both parties’ needs are addressed. Often there’s more overlap of interests than the parties initially recognize and a mediator helps them discover it.
Unlike a trial or arbitration, where a judge or arbitrator renders a binding decision following an adversarial proceeding, mediation involves a neutral, mutually approved industry professional with an understanding of film production and distribution. This special awareness can help the mediator diffuse antagonism, find common ground and motivate the parties to come to an amicable settlement while preserving relationships. This is not a binding process, however, and the parties don’t need to accept where mediation has taken them.
A typical mediation begins with an informal discussion by each party summarizing their version of the facts and the proposed outcome. The mediator may initially meet with the parties together and then individually, first to frame the issues and then to move the parties closer to a resolution. The setting is private and informal (usually a conference room), which helps to reduce stress levels and encourages the parties to clear the air. Outcomes are often practical and tailored to address the specific issues under review. For example, in a dispute involving distribution options, the mediator can help facilitate a decision that best comports with the parties’ common objectives. Furthermore, unlike litigation, a mediation is completely confidential. The materials involved and proposals submitted cannot be revealed without joint agreement in subsequent proceedings should mediation fail and the dispute proceeds to arbitration or litigation.
Also among the advantages to mediating disputes are the relatively brief duration and modest cost of a successful procedure when compared to litigation and most arbitrations. In many instances the mediation procedure will last less than one day, so the cost is limited to the mediator’s fee and the fee of the coordinating organization. Most mediations involve the parties only. If they decide to work with legal counsel, that of course will be an additional expense.
Since mediation is voluntary, it is recommended that producers include a mediation clause in their collaboration agreements with language similar to this:
“Any claim, dispute, misunderstanding or controversy arising under, in connection with, or from this agreement, or breach thereof, shall be submitted initially to mediation conducted under the rules and procedures of [insert here: a mutually approved administrative organization].”
Some law firms have attorneys who have been trained as mediators and offer their services. Some mediators act independently of law firms. Two arts-related legal organizations that can help guide you to a skilled mediator are Volunteer Lawyers for the Arts and California Lawyers for the Arts.
A “work for hire” clause in many instances gives ownership of a creator’s work to the creator’s employer as if the employer were the author from the moment of inception. This contradicts the general rule that the creator of a work owns the copyright. Knowing when you’re creating a work for hire, where your employer will own the copyright, or having one made for you, where you will own the copyright as employer, is important.
Under copyright law, works for hire come about in one of two ways: Either they’re prepared by “regular” employees within the scope of their employment or they’re created by independent contractors if a pair of conditions are met.
To determine whether or not employment is “regular,” factors like these are taken into account: Are services provided on the employer’s premises? Does the employer provide benefits and take withholding from the employee’s paycheck? Is there a salary rather than payment by project? Does the employer have the right to assign additional projects? Affirmative answers point toward regular employment. To determine whether or not employees are acting within the scope of their employment when they create something depends on factors such as how the workday is defined (are the hours fixed or fluid?) and the nature of the creation (is it in the same category as day-to-day work effort?). For example, if an employee is hired full-time to provide a documentary script and makes a scripted fictional film when not working on the documentary, that film is not a work for hire for her regular employer.
Creators whose work is ordered or commissioned by an employer but who are not regular employees are independent contractors, but not everything an independent contractor creates is a work for hire. Two conditions must be satisfied for work-for-hire status. First, the works must fit into one of nine specified categories, the most notable of which are audiovisual works and supplementary works (a broad category that includes musical arrangements); and second, both the creator and the commissioning party must sign a written agreement—generally before the work is created—characterizing the work as a work for hire. If either of these conditions is not met, then the copyright in the creator’s work belongs to the creator, at least in the first instance.
I say in the first instance because a typical work-for-hire clause in a production services agreement or other employment contract has two parts. The first part says that everything the creative professional creates within the scope of his employment is a work for hire. The second part says that to the extent the creative professional’s work is not a work for hire, then she assigns all rights to the employer. In other words, if it’s not a work for hire, the employer still owns all rights—but through a written assignment rather than from inception. (Copyrights can only be assigned in writing.) From the employer’s point of view, this belt-and-suspenders approach is critical to securing a clean chain of title ending with the employer. Without this two-pronged approach, there may be uncertainty about who owns the finished film, making it difficult to sell or license rights in it. But employers should still favor work-for-hire status over ownership-by-assignment because grants of rights under copyright in the US can be terminated, usually 35-40 years after the grant. An employer’s rights in a work for hire made for that employer, either by a “regular” employee or by an independent contractor with both conditions satisfied, can never be terminated.
Can a work that doesn’t satisfy the criteria for work-for-hire status become one by agreement of the parties, say in a contractual clause? The answer is negative: an employer cannot convert a work that doesn’t satisfy work-for-hire criteria into a work for hire simply by having the individual creator agree to it. A work either originates as a work for hire or it doesn’t, and that status is permanent.
In summary, if you are a filmmaker hiring a sound person, or a cinematographer, editor, producer, researcher or script writer, or most anyone else, and you intend that you or your company own the copyright in the finished film, then you should hire that person with a written contract that includes a work-for-hire clause accompanied by an assignment in the alternative. If you are a creative professional being hired to work on a film and you don’t want to transfer the copyright to an employer—perhaps because you intend to be a co-owner, or you wish to license an independently copyrightable contribution like a story rather than assign it—then you should avoid signing a contract with an assignment. That is, unless you are a regular employee acting within the scope of your employment, in which case your work product is automatically a work for hire without anyone signing anything.
—Neil J. Rosini