Film rights are the rights under copyright law to make a derivative work—in this case, a film—derived from an item of intellectual property. Under U.S. law, these belong to the holder of the copyright, who may sell or option them to someone in the film industry (a producer or director or sometimes a specialist broker of such properties) who will then try to gather the other professionals and secure the financial backing needed to convert the property into a film. This is different from the right to exhibit a finished motion picture commercially to an audience; this is usually referred to as "exhibition rights" or "public performance rights".
In the United States, the need to secure film rights of previously published or produced source materials still under copyright stems from case law. In 1907, the Kalem Company produced a one-reel silent film version of General Lew Wallace's novel, Ben-Hur, without first securing film rights. Wallace's estate, and his American publisher, Harper & Brothers, sued for copyright infringement. The United States Supreme Court ruled in favor of the plaintiffs, establishing the precedent that all adaptations are subject to copyright.
When producers option a script, they are purchasing the right to buy certain rights to intellectual property. A typical option fee is 10% of the cost of the rights, should the producers manage to secure full financing for their project and have it "greenlit". Because few projects actually manage to be greenlit, options allow producers to reduce their loss in case a project does not come to fruition. Should the project be greenlit, an option provides a legally-binding guarantee to purchase the film rights.
The contract for an option will specify the length of time it is valid for. If the producer cannot have their project greenlit in the specified window of time (e.g. two years), the option will expire. The rights holder can then put the previously-optioned rights up for sale again. Or, the contract may allow the producer to renew the option for a certain price.
Chain of title
As it is common for scripts to be stuck in development hell, the options for a script may expire and be re-sold multiple times. As well, producers who purchase an option and re-work the script own the rights to their own derivative work- while the original rights holder owns the underlying rights. This lineage is referred to as the chain of title. This lineage can become cloudy if the underlying rights are divided. Producers may purchase the rights to specific territories (i.e. a country, the entire world, or the universe) and/or they may purchase ancillary rights such as merchandising rights.
In some cases, it may be uncertain as to the exact owners of a particular version of a script and to the exact set of rights. It is important for an entertainment lawyer to determine how 'clean' a chain of title is.
|This article does not cite any references or sources. (December 2009)|
- Google Book Search file on Harper & Brothers v. Kalem Company (1909), from the book Select Cases on the Law of Torts, by John Henry Wigmore.