We Agreed on 50-50 Copyright Split for Movie; Now We're Splitsville!

Dear Rich: I emailed you sometime back regarding a documentary I'm producing and while I didn't hear back from you I thought I'd send you a note just the same with something else that just came up with the very same documentary. So I have a contract, also known as a "documentary film deal point memo' of my client's devising, that states that we both share 50% copyright of the finished documentary DVD. Now that we've reached a bit of an impasse, shall we say, they are claiming said 50% copyright extends to the source tapes (mini-dv tapes I actually shot all the footage on). My belief is no but they are threatening a lawsuit to make me turn them over. Furthermore, my question is does the copyright extend to my work files in Final Cut Pro, the digitized footage? I'm trying to negotiate my way out of this project but I have some serious concerns. We know we never answered your first email (actually emails). You had a lot of interesting questions, at least four or five and we wanted to answer, we really did. But you know that overwhelming feeling you get sometimes like when you didn't to do the dishes for a few days and it seems so overwhelming that you decide to switch to paper plates - at least until your mood changes? That's the way we felt sometimes when we looked at all your questions. Sometimes when we get letters and they have a few questions, we remember that lawyer joke where a new client comes to see a big shot lawyer and says, "Can you tell me how much you charge?" and the lawyer says "I charge $200 to answer three questions!" And the client says, "Well that's a bit steep, isn't it?" And the lawyer goes, "I suppose so. What's your third question?" ... Anyway, we can imagine what you're thinking. If the staff has enough time to sit around telling stale lawyer jokes, why can't they answer your email.

Right, you had a question. No matter what you agreed upon in your deal memo, splitting copyright ownershiprequires that you conform to copyright law's principles of ownership. Under those rules, ownership is always derived (at least initially) from authorship. A 50-50 copyright split would occur if: (1) you and the client are joint authors of the film (unlikely, unless the client participated in the creation/making of the film with you); (2) you are the sole author, and under the agreement you assigned 50% to the client; or (3) you are making the film as awork made for hire for the client, and the client (as the owner), assigned you 50% of the copyright. If it's not a work made for hire and the co-ownership is not based on one of the other scenarios, there could be a problem for the client trying to claim copyright. That doesn't mean that the client gets nothing -- a court would likely imply a 50-50% revenue split -- but it does mean that the client may have trouble gaining control over work product like the Final Cut files or mini DV tapes. So our first suggestion is that you have the agreement reviewed by a lawyer to be sure that the 50-50 copyright split is effective. (Here's a case where the client thought it had created a work made for hire but couldn't control later sales of stock footage.)

Let's assume you have a 50-50% copyright split. Okay, if we assume that you split the copyright ownership 50-50 somehow, then you need to review the deal memo to see what that copyright refers to. If, as you claim, it refers to the finished film, the client probably couldn't claim dibs on work product; they could only go after the edited result. But if you assigned half the copyright to everything created during the filmmaking process (or if it's a work made for hire arrangement), then the client could probably claim rights to the work product that is on the mini DV tapes. (That's probably true for the Final Cut conversions and files, too.) So our second suggestion is a lot like our first one -- you'll probably need an attorney to review the agreement. 

Separating the physical from the copyright. A final thought ... It's possible that if the client has been paying for everything, then the client owns the physical goods -- the mini DVs, the hard drives, etc. So even if the client can't do anything with the copyrighted materials, the client can retain ownership of the raw materials on which they're stored. That could lead to a Mexican standoff in which the client possesses the physical storage devices and you control the right to copy and edit the enclosed files.

Bottom line. We feel like we've provided a long-winded, but unhelpful answer. That's frustrating for us and for you, as well, but it's often the case when copyright ownership is disputed and the details are buried in an agreement. And what was your third question?