Legal counsel, Cherie Song, wrote this post originally for indieWire and we thought it was so good (especially the title!), we’ll repost it here.
Full disclosure: There’s no end to the legal rigamarole that accompanies any film’s distribution and this article will not make it any shorter. However, the only thing that’s worse than paying legal fees is wishing that you had. So with that in mind, here are four items that could be overlooked on your legal checklist and absolutely should not be.
The Porno Clause
Otherwise known as section 2257 of Title 18 of the U.S. Code, this is the law that was enacted not long after the Traci Lords scandal in 1986, which very nearly took down the adult industry altogether. And while odds are none of your actors actually have sex on camera, your film might contain a simulated sex scene. And if it does, you may be subject to the record keeping and labeling requirements of Section 2257A.
Section 2257A is an extension of the enforcement guidelines for the Child Protection and Obscenity Enforcement Act of 1988. In short, that law requires producers of visual depictions of actual sexually explicit conduct to 1) maintain records to ensure that actors are not minors and 2) to label materials containing such depictions with the location of the records. In 2006, it was broadened to include depictions of simulated sexually explicit conduct with the addition of Section 2257A. Either way, failure to comply is a criminal offense.
There’s an exception if you’ve filed what’s called a “safe harbor” exemption letter with the U.S. Attorney General certifying, among other things, that you collect and maintain IDs of all performers. As “secondary producers,” distributors also may be required to maintain records that identify the filmmaker for any depiction and that verify the filmmaker checked the legal age of performers prior to the date of original production, so a growing number of distributors are requiring safe harbor letters from filmmakers to minimize liability.
The Out Clause
You’re sick and tired of waiting for the company to live up to its promises. You’ve had it and want out. Where do you go from here?
In the context of a distribution deal, you want your contract to contain a clearly written default/termination provision that allows you an “out” if the distributor fails to do something material—say, pay you overages or send you statements. In addition, you should have an “out” if the distributor files for bankruptcy or assigns the contract to an unaffiliated third party who may or may not be able to live up to the promises made by the original distributor.
Make sure your rights automatically revert to you upon termination, subject to any presold territories. Then you can take your film and try to monetize it in any unsold territories. That’s not an easy task, but it’s better than the alternative of being stuck in a bad relationship.
The Trigger Clause
If you’re getting a minimum guarantee (usually paid out in installments), your contract should contain clearly defined triggering events for payments and a time period within which they should be made. If distributor fails to pay the full minimum guarantee within a certain time period, you should have the right to terminate the agreement, get any materials in distributor’s possession returned to you and all rights granted to the distributor should revert to you so you can take your film elsewhere.
The Clause Clause
Otherwise known as defining your terms. Oddly enough, it’s normal (as in ordinary) for distribution contracts to contain terms that are undefined or defined only “in accordance with industry standards.” Some filmmakers prefer Independent Film and Television Alliance definitions because they’re believed to be more “fair” than those contained in some distributors’ contracts.
In a way, it doesn’t matter what your preference is—only that you have one. Identifying terms that demand definition, and understanding them to your satisfaction, can make the difference between legal protection and giving your rights away.
For example (and this is only one of many), if you want to stream your film on your website or social networking pages, make sure the definition of “Digital Rights” in your contract excludes this right. A reservation clause might read: “Notwithstanding anything to the contrary contained herein, Licensor shall retain the right to [list reserved rights].” In all cases, you should have a qualified distribution attorney review the contract to make sure it reflects the deal you made.
Cherie Y. Song is an entertainment attorney and legal counsel for The Film Collaborative.
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