Don’t Waiver!

Read this before signing contracts.

Virtually all contracts that we are asked to advise on by our members are innately unfair. They are constructed by producers and their legal representatives to obtain all rights to writer’s work at the lowest cost possible at the expense of the creator of the original work. Things have got worse since the introduction of the European Copyright Directive (ECD) which established the right of authors to share in the commercial success of the work they created. Producer’s contracts now seek to deny you those same rights you have just gained. The Writers Guild of Ireland advises you to strike out these waivers and refused to accept them.

It’s true that a production company (or its special purpose DAC) must own an intellectual property [your story bible, treatment or screenplay] in order to secure financing agreements and distribution deals; however, the terms being offered in these contracts are go far beyond that which is strictly necessary and are deeply injurious to the original creator’s interests. The WGI believes that writers are skilled artists and are entitled to make a viable living from their creativity yet our members know that they are being constantly pressured to give away significant aspects of their rights for nothing.

Here, then, are some practical points that help you evaluate on what terms you will be willing to sell your intellectual property.

What Are You Selling?

Usually a producer will offer two contracts. The first is an option agreement which creates the producer’s right to purchase the underlying intellectual property as it is expressed in a play script, a detailed treatment, story bible or screenplay provided by the writer. It provides for the transfer of rights at a particular point in time or when a condition has been met (The first day of principal photography or upon receipt of a second tranche of development loan from Screen Ireland are most common). It usually is for a term of 18 months with two further period of six months that may be exercised for a further fee in each extension.

We see contracts everyday that do not offer any further fee beyond the initial payment. Insist that you are paid for any contract extension is paid for. You have no obligation to offer further periods beyond that of your initial contract and you are not obliged to subsidize production.If you do, you are in effect becoming an investor, you’re just not getting equity in return.

The second type of contract you will be offered is a screenplay agreement which governs the new work that you will undertake to develop the project beyond that of the piece of work that has been optioned. It specifies the fee you will be paid in exchange for writing a draft and how many polishes (small re-writes -usually two) that will be required before the draft will be deemed to be accepted. This usually will be in staged payments (a) on signature) (b) in delivery of the first draft (c) on acceptance of the two polishes. The fee covers both compensation for the writing of the screenplay and also the copyright that has been created by the new material.

Moral Rights

The European legal tradition is that Moral Rights are indivisible from the author and therefore cannot be transferred. Somehow for two hundred odd years since, plays have been produced, books have been published and films distributed in continental Europe without the world exploding. British and Irish law differs. It is possible (and unavoidable) today that the authors in Ireland cede their moral rights in order to protect the producer from subsequent legal action if the final work differs from the manuscript supplied by the author. This should have attracted a substantial additional charge for conceding such a fundamental right but that battle was not won and it is now custom and practice.

That’s why it’s so essential that authors do not agree the clauses or conditions that undermine the rights they have gained by the transposition of the European Copyright Directive into Irish law. Screen Producers Ireland have been providing a template contract to its members that contains waivers to the major provisions of the legislation which are being adopted in more and more contracts. We encourage you to educate yourself and refuse to sign items that are not in your best interest.

You will be told that this is the company’s “standard contract” or that it is a “standard industry contract”. So what? If terms are unfair or unacceptable to you, strike them out. WGI has not agreed any “standard” contracts so why should you?

You will be told that a broadcaster or other funder “requires” that all the conditions are met. Screen Ireland doesn’t. RTE doesn’t. TG4 doesn’t. You should not accept this.

If a producer sticks their heels in and refuses to offer an alternative, you will have to be prepared to walk away. That’s never easy but the alternative is to allow yourself to be conned out of your rightful entitlement – an entitlement that costs the producer nothing (their profit share is not diluted) and will only be relevant if the work is exceptionally successful.

Fair, Appropriate and Proportionate Remuneration

Authors are entitled to the above, but contracts are being presented widely to our members that try to get around this by asking the writer to assert or agree that whatever fee – no matter how low -they are offered meets that test and is a full and final payment.

This, frankly, is boondoggle. The fee you are offered today might meet with the first two tests (fairness, appropriateness) but the last – proportionality – cannot be met because no-one -not least of all the author – can know at a fixed point in time before the work has been exploited whether fee received bears any relationship to revenues that might be generated by that work or its ancillary products.

Suggested response: I’m not in a position to assert or agree that the remuneration is proportionate because I cannot know how successful the project will be in the future.

Transparency Obligation/Adjustment Mechanism

Every year (at least), commencing on June 7th this year, producers must, upon request, furnish a statement of all income (including ancillary products such as merchandising) earned by a project that the author has contributed a screenplay for. If the author feels that they should receive more money as their work as been exceptionally successful, they can apply to the producer, or if necessary, an independent arbitrator (using the Guild or an agent) for further payment proportionate to the success of the work. Producers are trying to contract out of this obligation. How?

Watch out for this phrase:

“The Writer acknowledges that (i) the Project is being produced and exploited on a commercial basis and with a view to maximizing the revenues to be derived from the exploitation of the Project in any and all media (whether now known or hereafter invented) throughout the world for the full period of copyright in the Project and (ii) the Writer’s remuneration as aforesaid is proportionate, taking account of all such potential revenues.”

By inviting the writer to agree to the above phrase, it essentially says that no matter how much money the project earns in the market, there is no upper threshold after which the production is obligated to share any further revenue with the original author.

Suggested response: I reserve my right under the legislation to review the actual performance of the work derived on my screenplay and assess whether my remuneration meets the proportionality test.

Right Of Revocation

Most contracts today invite you to waive your right of revocation. Unlike the transparency obligation and the adjustment mechanism, it is possible for authors to waive this right but we suggest you don’t. Or at least don’t without getting something – anything- in exchange for it. That could be an additional payment or right to approve cast/director or some other dimension that is valuable to you. If writers keep giving away their rights for free, they will make earning a living from their writing even less viable than it is at the moment.

The right of revocation sounds awfully like a term well-established in contracts: the right of reversion. It is subtly different.

The reversion right defines a period of time (usually 5-7 years) after which the writer can buy back the rights to their script in exchange for the repayment of expenses the producer has incurred during the development phase.

The revocation right says that an author can unilaterally revoke the rights in their work if they believe that – “after a reasonable time” – the producer has failed to exploit it. From a writer’s perspective, that means that if the producer has not managed to get your a script made, you could – in theory – revoke your rights.

In practice, it is a bit more complicated. How long is a “reasonable time”? Does the author have to repay the development costs as in the reversion right? What happens if there is “a plurality of authors” and not all of them agree? What happens if the producer challenges your revocation in a legal action? What is the resolution mechanism – other than the courts? On all of these topics, the legislation is silent, thus exposing us all to years of wrangling. Nevertheless, don’t give up the right for nothing!

Work For Hire

Many contracts contain clauses which ask our members to assert and accept that for the purposes of US law their contract is a “work for hire”. This is a widely misunderstood term and is particularly dangerous for the authors of original content.In America, the WGA has agreements with the producers that allow them to enter into this clauses while retaining rights to credit and residuals. No such protections exist for Irish writers.

If you agree to this clause, you are renouncing your right to assert that you created or originated the intellectual property and that in fact you work for the producer and everything you create as a result is owned by the company. Any payments that would have gone to you from American sales will now flow to the producer. Again, you will be told that the producer has to have it in the event of an American sale.

The WGI says that any clause that distorts the truth and denies you your right to be identified as the creator of the work must be rejected.

Suggested response: Rewrite the clause to the effect of: “In the event of a North American sale of the work, the author agrees to transfer such permissions that are required for the sale to proceed without prejudice to the writer’s rights under the European Union (Copyright and Related Rights in The Digital Single Market) Regulations 2021 S.I. 587 in exchange for an additional fee of [€].”

As a general rule, ensure that the amounts of all payments provided for in the contract are defined and not subject to vague phrases like “a fee to be negotiated in good faith”. You need to know from the very start what the value to to you of each element of the contract will be. Any producer who is unwilling to define their offer is inexperienced or untrustworthy.

In Conclusion

Recognize the value of your work and do not give away rights granted to you under the ECD. Do not give away any other rights for free. “Owt for nowt” as the good people of Yorkshire say. If you’re confused, come to us and we will be happy to advise you.

Next article