The 'Failed Producer' Syndrome


Periodical: The Business Of Film

Date: September 1997

A disgruntled producer who felt that a distributor was not living up to their agreement decided to let the world know about it by handing out leaflets to individuals attending a recent film market where the distributor was doing business.  It is unclear whether this tactic was more effective than the lawsuit which the producer had filed against the distributor, but it is indicative of a more aggressive attitude among producers who do not have the clout or the funds to take on studios and distributors.  Litigation has always been the weapon of choice for producers who have grievances with distributors.  However, the arsenal of claims that producers now advance has gone beyond simple breach of contract claims to assertions that producers have ownership rights in film material.

In acquiring new material, filmmakers generally do not concern themselves with the possibility that some forgotten producer who was involved in the project years before but who failed to get the material developed would appear out of nowhere to claim ownership of all or portions of it.  This is because film distributors and financiers generally rely on the customary practice of producers to simply let go of projects that they were unsuccessful in developing when a subsequent producer finds the right formula to get the project made.  However, some “failed” producers believe that their past involvement in the project, particularly where the failed producer had discussions on a creative level with the author of the script, entitles them to ownership interest in the film material or substantial compensation as a result of their past involvement, regardless of whether or not their activities had anything to do with getting the film made.  These claims generally do not appear in the chain of title until well after it appears that the film will actually be produced and, sometimes, immediately before the film is about to be released.

A failed producer can advance several different arguments to support his claim that he or she should be given credit and compensation on a film project because of his or her past relationship to the material or to the author of the script.  The availability and merit of these claims depends on the particular facts of each case.

EXPRESS CONTRACT

In the absence of any contrary writings, the failed producer may assert that the original owner of the material expressly agreed to compensate and give credit to the producer if the project went forward.  Rights holders often allow producers to present their material to people who are in positions to get it developed into films with the understanding that the producers will continue to be involved with the project -- and receive compensation and credit -- if the producer’s efforts are successful.  This understanding (in the nature of a free option) is usually unspoken and, thus, undocumented.

The defense to the failed producer’s claim of express contract is usually that the alleged agreement is too indefinite to enforce since the parties never actually agreed upon material terms of the contract (e.g., compensation and credit).  Under some circumstances, a court will supply a missing term to a contract if it finds that the parties have agreed to all of the other material terms.  In the case of the failed producer, a court would not likely decide to set the compensation and credit terms since they go to the heart of the contract.  Therefore, failed producers generally find it very difficult to prove this type of claim.

Even if the failed producer is successful in proving the terms of the contract with the rights holder, his or her claim will only involve the original rights owner, not the party who acquired the rights to the material, since the acquiring party is not bound by the contract between the rights holder and the failed producer.  While this may appear to take the distributor off the hook, the litigation of this claim may be perceived as a cloud on the title to the film rights.  A more significant impact on the distributor occurs if the failed producer names everyone involved in the film project in the lawsuit so as to maximize the havoc that a lawsuit can create.

INTERFERENCE WITH CONTRACT

If the failed producer can prove the existence of a contract with the former owner of the material, a claim against the subsequent purchaser of the material, the subsequent producer or distributor/studio, for wrongful interference may be alleged.  The theory is that the subsequent purchaser induced the original owner of the rights to breach the contract with the failed producer or performed other wrongful acts which were designed to disrupt their relationship.  The failed producer can also recover punitive damages if this claim is upheld. 

Intentional interference claims in this context are usually unsuccessful because the failed producer lacks evidence that the subsequent purchaser knew of the prior relationship and intended to disrupt it.  This is particularly true in instances where the failed producer’s relationship to the material was a fleeting one which ended years before the subsequent acquisition.  The primary reason for the failed producer to make this claim is to include the subsequent purchaser in the lawsuit, as well as to wield the hammer of a punitive damages claim. 

IMPLIED CONTRACT

Although ideas are generally not protectible and are considered “free as the air,” a court may find that someone who obtains and uses a valuable idea of another has impliedly agreed to pay reasonable compensation to the person who originated the idea if the circumstances surrounding the communication of the idea warrant it.  Unlike an express contract claim, there is no actual agreement between the parties; the courts merely imply one in light of the conduct of the parties.  For example, in one of the leading cases in the area, the court found credible a producer’s claim that he gave the agent for Richard Burton and Elizabeth Taylor the idea to make a film based on Shakespeare’s Taming of the Shrew in light of the producer’s past dealings with the actors’ agent, his meetings with the Mr. Burton, Ms. Taylor and their representatives to discuss the project, and the agent’s request to submit ideas and provide producer services on the project.  These circumstances were enough for the court to conclude that the producer had a viable claim for damages based on an implied agreement that he would get paid for his contributions to the film. 

The difficulty in defending against this type of claim is that the applicable legal standards are so vague that it is nearly impossible to defeat the claim in pre-trial motions.  Moreover, jury sentiments generally tilt toward the party making the implied contract claim since the there are often at least some -- although not always legally significant -- similarities between the purported idea and the film. 

COPYRIGHT INFRINGEMENT

In order to make a claim of ownership in the material, a failed producer can assert that he or she made substantive contributions to the script which are protectible under copyright law such as specific dialogue and plot changes.  The production of a film utilizing these contributions could infringe on that copyright.

This is a difficult claim for the producer to prove since it requires that the producer identify his or her specific contributions to the script, an almost impossible task without a detailed paper trail such as a marked up script or script notes.  Even with this evidence, the producer must be able to show that the comments correspond to changes in the content of the shooting script.  Given the informal manner in which producers communicate their creative suggestions to writers, it is unlikely that a producer could meet this requirement.

A more difficult obstacle for the producer is proving that the contributions were copyrightable.  In order to be copyrightable, the contributions must be recorded in some concrete way since copyright law only protects “fixed expression” as opposed to abstract ideas.  Producers’ creative contributions to scripts are usually too general to warrant copyright protection.  For instance, simply requesting the writer to make a scene funnier or a character more likeable will not be considered copyrightable expression.  Moreover, substantive comments communicated in script notes or at meetings are not usually translated word for word into revised scripts since the writer will generally place his or her interpretation on the comment in the process of expressing it on paper. 

Given the difficulties in proving this claim, one may wonder why a failed producer would even attempt to argue copyright infringement.  Unlike the other theories previously discussed in this article, a copyright infringement action gives the failed producer an opportunity to obtain a preliminary injunction stopping the production or distribution of the film, in addition to money damages.  The economic and public relations consequences that would result if the failed producer successfully tied up the project are often enough for some producers and distributors to pay a quick and substantial settlement in order to rid themselves of this risk.  In contrast, the only remedy available for the other theories that have been discussed thus far in this article is monetary compensation which can only be obtained after lengthy and expensive litigation. 

JOINT AUTHORSHIP OF THE WORK

A failed producer may assert that his or her creative contributions to the script give rise to joint authorship under copyright law.  A finding of joint authorship entitles the failed producer to an accounting and a share of the proceeds derived from the exploitation of the work by the other joint authors. 

Proving that one is a joint author of a work requires evidence that the joint authors intended at the time that they authored the work that their individual contributions would be merged into an indivisible whole.  Physical presence in the same room slaving over a computer is not required -- the important thing is that the parties believe that they are creating a joint work. 

In order to prevail on this claim, the failed producer must show that he or she participated in some significant degree in the writing of the script under circumstances demonstrating that all of the parties understood that the participation would make the producer a joint author.  Merely providing script notes, no matter how detailed, is insufficient since evidence of customary practice would refute any contention that the acceptance of such notes signifies the writer’s agreement to take on a new writing partner. 

An adjudication that the failed producer is a joint author would not bar the distributor from making or marketing the film and would not expose it to damages.  The primary legal impact is on the other joint authors who must account to the failed producer for the sums received as a result of the exploitation of the work.  Nevertheless, a finding of joint authorship would be worrisome to the distributor or studio since it means that the rights which they received are nonexclusive: the failed producer can convey or exploit them.

Whether any of the legal theories of liability discussed above are available in a particular case depends entirely on the specific set of facts presented.  For example, if the rights holder had properly documented the relationship with the failed producer or the failed producer lacks evidence of the extent of his or her contributions to the film, the producer could be barred from making some or all of these claims.  Failed producers should exercise caution in asserting ownership in film material for another significant reason -- the rights owner or distributor may be able to recover legal costs in defending against the failed producer’s assertions, and may also be liable to the studio or distributor for malicious prosecution damages.  Unless the failed producer has the proper evidence to pursue these claims, the only available remedy may be to distribute leaflets at film markets.

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