Yimika (not her real name) is an extraordinary photographer. I know this because I have seen her works. Her pictures are so vivid and seem alive. It’s no surprise that she is quite busy, skipping from one client’s event to another. If being busy is an indication of success, Yimika definitely had a successful career before we met. The only problem was that her bank account did not corroborate this fact.
Preparatory to my first meeting with her, I had done a quick internet research on her and had seen some of the photography projects she had done for the who-is-who in Nigeria, state governments, celebrities, etc. “She must be balling”, I thought to myself. I am not sure why Yimika decided to seek out a lawyer but I suspect it was as a result of a chance meeting with one of my colleagues who might have left an impression on her. All I know is that one afternoon, she was sitting across from me and we were discussing her photography business. It turns out it was the first time she was discussing her business with a lawyer. (Afterall, who ever thinks a photographer needs a lawyer!) She opened up to me and shared with me her frustrations.
She had set up her photography business and had a small team working with her. Together they hustled through every day to cover clients’ events. Her frustration was that the fees which she was getting from clients – which are tidy sums by any standard – was barely enough to cover her salary costs and other business expenses. Yet, she needed the team in order to keep up with her work demands. Within five minutes of our discussion, I made my diagnosis. She had acute unawareness of her intellectual property rights, a condition which, if left untreated, would leave her perpetually living from hand-to-mouth.
When I began to tell her that she would have made a lot more money had she consulted the right lawyer before now, she looked at be blankly like I was blabbing. Then I began to introduce her to the money-side of law. She was shocked to learn that she owns the intellectual property rights to every picture that results from her clicks of the camera. Using practical examples, I showed her how she can create multiple streams of income from each picture she takes, if she has the right agreements in place. I also showed her the inherent risks of her business: since she had no proper agreements with her team members, each of them owns whatever pictures they took – not her.
That 45 minutes meeting was defining for Yimika. Today, she has restructured her business model to ensure that her clients understand that when she takes a picture, the intellectual property is hers, and the picture should therefore only be used for the pre-agreed purpose. Any other use of the picture is negotiated – at a fee, of course. By having appropriate agreements with book publishers, website developers, printers, etc., for the use of her pictures in exchange for a royalty arrangement or fixed fees, she has created a whole new line of business without a corresponding increase in her expense line.
Yimika’s story is living proof that lawyers are not just trouble busters; they are life and career savers too. It is troubling that the age-long stereotype about lawyers and trouble still lingers in the 21st century. People generally think lawyers are only relevant when there is problem. Many people believe that if they can manage to keep themselves out of trouble, then they do not need to care much about law or lawyers. In Nollywood, screenplay writers, talent managers, directors, producers, actors, actresses, etc. have managed to find a way of collaborating effectively to produce successful films without requiring legal services. So you would wonder why anyone would think that the law or indeed lawyers are of any value to the film industry?
The purpose of this article is to showcase the important role that the law plays in the film industry and how neglecting the law is more of a major loss than cost saving. Specifically, we would see how the law is a tool for making money in the film sector, as well as a shield from trouble.
NO LAW, NO FILM INDUSTRY
First, let me lay a basic foundation: without the law, there would be no film industry. Unlike other industries that can get by without particular reliance on the law, the film industry (and generally speaking, the entertainment industry) has no existence outside a set of laws called Intellectual Property law.
Intellectual Property law is the set of laws that recognizes and protects intellectual and creative activities as a category of property (just like land) for which the creators have exclusive rights of ownership. These intellectual and creative activities are called Intellectual Property and are typically protected as copyrights, trademarks, industrial designs, patents, trade secrets, etc. Unlike physical property (e.g. land, machines, etc) which exists without the interference of law (i.e. you can see and touch them), intellectual property is intangible and abstract and would never exist if the law did not specifically recognize it as property. Intellectual property is purely a creation of law.
Intellectual property is the lifeblood of the film industry and the creative process and business model of the industry is shaped by intellectual property law. Thus, if by some stroke of great misfortune, the Copyright Act is done away with, the Film industry would shrivel into nonexistence almost immediately. There will be no commercial justification for producing any film. The rationale for film production is the certainty that the film producer would have exclusive ownership of the film and can therefore commercialise the film. That certainty is based on intellectual property law. By granting each creator in the film production value chain (not just the producer) the exclusive rights to control the exploitation of their creative work, intellectual property provides a means through which each creative contributor to a film can negotiate a fee with anyone who wants to enjoy the benefit of his/her creative work. This is how film making has become an industry – by trading the exclusive rights conferred by intellectual property for commercial profit.
In the film industry, the most relevant intellectual property law is copyright law. The essence of copyright law is captured in the quote below:
“The law of copyright rests on a very clear principle: that anyone who by his or her own skill and labour creates an original work of whatever character shall, for a limited period, enjoy an exclusive right to copy that work. No one else may, for a season, reap what the copyright owner has sown.” – Lord Bingham of Cornhill in Designers Guild Ltd v Russell Williams (Textiles) Ltd (2001) 1 All ELR 700
Having established that the only way to make money from film production is to rely on intellectual property laws, would you not agree that there is some value in understanding how this law can be used to maximise the commercial value of every creative contributor to a film production?
INTELLECTUAL PROPERTY LAW AS A MONEY SPINNER
I was recently at the “Nollywood week in Paris” event and i saw lots of potentials for Nigerian filmmakers to use Intellectual property laws to their benefits. One of the things to note about intellectual property is that, because it is abstract, you can give it out to several people at the same time, and yet it would not diminish. For instance, through properly drafted contracts, a music artist can give separate music licenses to film producers, tv channels, radio stations, companies and brand owners, etc., and yet, he would still own the intellectual property. In fact, in most cases the more licenses he gives, the more valuable his intellectual property rights becomes because intellectual is enhanced by proliferation of authorized use. This is like eating your cake and still having it.
The benefits from intellectual property law is available to film producers and every other person whose intellectual property contribution is required in the film industry. From screenwriters to directors, there are significant commercial value that can be harnessed by using intellectual property rights creatively and strategically. For example, a screenwriter, puts in a lot of sweat to create an original story which she pens down as a screenplay in the hope of giving a film producer the right to use the screenplay for a film. Like most screenwriters, she would happily sell her entire rights in the screenplay to a film producer for a tidy sum and consider herself to have made a good bargain. Again, this simple transaction is made possible only because copyright law gives her the exclusive rights to the work, making it impossible for the film producer to lawfully use the work without first getting the rights from the screenplay writer. This is a simple model to show how intellectual property helps creatives to make money. But there is more.
A screenplay writer who has access to the right legal advice can make much more money from the same screenplay, merely by strategically using her intellectual property rights. For instance, the screenplay writer may create a short story or novel and then adapt it for a screenplay. The short story or novel vests separate intellectual rights from the screenplay. That way, even if she gives away her entire rights to the screenplay and the film makes such good success, she still retains her intellectual property rights to the book which she can publish and sell to make money. That is an even better deal that the first option. But there is more.
Our screenwriter friend can have a carefully drafted agreement with a film producer in which she only gives the film producer a license to produce the film from the screenplay, and nothing more. In this case, she can give a separate license (with separate fees) for any sequels that may be required for the film – particularly, if the first film does very well. She can also retain her merchandising rights to the fictional characters created in the book. The point is that with proper legal advice and smartly drafted contracts, each intellectual property works can become a stream of multiple income.
When J. K. Rowling set pen to paper for the Harry Potter story, her intention was simply create a literary work that would excite her readers. She did just that and was successful at it. She was also smart enough to realise that the success of her story meant that she could do much more with her intellectual property. Her journey to fortunes was accelerated when Warner Bros bought the film rights to her first books. Rather than give the entire rights to Warner Bros, she sliced off just enough license to enable Warner Bros create the movies and retained everything else for herself, including merchandising rights. By commercializing virtually every creative strand from the Harry Potter series (including selling branded broomsticks!) J.K. Rowlings has literarily built a multi-million-dollar enterprise from her literary creativity.
Whilst the J.K. Rowling’s success might seem like an outlier, the principles of law that she has applied to multiply her success is available to every intellectual property holder. The point I make is that intellectual property law is a tool for mining economic value from the creative activities, and intellectual property lawyers understand how to use this tool to achieve strategic objectives.
THE LAW AS A SHIELD
Here’s another reason why giving attention to legal issues is a brilliant idea – the law is a shield that keeps you protected from liability. A film is a collection of intellectual property rights owned by several persons. This means that for a film producer, his ownership of the film is contingent on the existence of a chain of documents that show that each contributor to the film production process has granted the film producer a right to use their intellectual property in the production of the film.
This documentation, called chain-of-title documentation, is not merely a matter of choice or commercial prudence; it is a strict requirement of law. Section 10(4) of the Copyrights Act makes it compulsory for film producers to “conclude, prior to the making of the work [i.e. the film] contracts in writing with all whose works are to be used in the making of the work.” This includes all members of the cast and crew whose creative contribution are necessary for the film. It also includes every person whose work, though created independent of the film project, would be incorporated into the film, e.g. music artists, visual arts, photographs, etc. It is therefore illegal to produce a film without having written (not oral) contracts with every creative participant (cast and crew).
To neglect to have in place proper written contracts with every member of the crew and cast or owners of independent works is to risk the commercial success of the film on account of a potential claim by even the least contributor to the film. The entire film project can be sabotaged by a one-minute clip of a song for which the producer has not obtained written license. While it may seem that the Nigerian movie producers are getting away with poor legal documentation with creative contributors, it is too early to assume that all is well. As people get more aware of their intellectual property rights (as is now the case), the risk of an eruption of disputes and litigation against erring film producers becomes imminent.
To make matters even worse, this risk is not limited to the Producer but extends to every person who is in the commercial distribution chain, including the broadcaster, the distributor, the cinema, the cable casters, the VOD company, etc. distributors, particularly foreign distributors, typically show keener interest in distributing films that have a proper chain of title than those that do not. The reason is simple: no one wants to get sued!
As I conclude, let me mention that intellectual property lawyers are professionally trained to help you identify your intellectual property rights, protect them, draft commercially smart contracts that would help you make the best of what you have. Do yourself a favour: speak to a lawyer about your intellectual property rights!
This piece is the first in a series of articles on intellectual property law and the film industry. Hopefully, it sets the tone for our next article (authored by colleague, Joy Azumara) on the intellectual property issues around fictional characters. Who owns the right to a fictional character? How do you create real business value from your characters? How do you make characters outlive the film? These questions would get answers in the next article. Please look out for it.
Ngozi is a lawyer with over ten years experience in intellectual property and commercial law. She heads the Commercial Intellectual Property practice and the Technology, Media & Entertainment sector of Jackson, Etti & Edu, one of Nigeria’s leading law firm.
Ngozi has acted for several entities and individuals in the creative industry, providing cutting edge advisory on protection and commercialisation of intellectual property rights. Her daily routine includes advising creatives on how to create wealth from their intellectual property assets. She is experienced in advising on intellectual property issues in commercial transactions and has been involved in providing strategic intellectual property advice in a number of high profile commercial transactions, including mergers and acquisition, equity financing, IP securitisation etc.
Ngozi is the Secretary of the Sports, Media & Entertainment Committee of the Section on Business Law of the Nigerian Bar Association.