Legalities Of  Screenplaya strong, unique and creative screenplay can be an artistic challenge, but it also presents a number of legal issues that all production companies should be aware of.

A screenplay (or script) can be produced in several ways. The simplest way, in terms of legalities, is to write it entirely yourself; this makes you the sole author. You can also adapt the work of someone else (whether it is a screenplay, book, piece of art or any other piece of intellectual property); however, you need the creator’s express permission to do so.

Screenplays written by two or more people are referred to as either collaborations or joint authorship projects. As with any business undertaking involving more than one person, there are a number of legal implications inherent to collaborations.

If you plan to write your screenplay based on someone else’s life story, you will need to secure the rights to his or her story.

Rather than relying on your own creative talent, there is also the option of buying or optioning a screenplay.

Whichever option you choose to take, you should make sure you are aware of all of your legal obligations and ensure you protect your screenplay by copyrighting it.

Securing copyright

Once your screenplay has been written, it is essential that you register it with the U.S. Copyright Office. Do this as soon as possible following the completion of the script — simply assigning your name to the script, posting a copy of it to yourself or registering it with The Writers Guild of America will not ensure your rights. The only way to take full advantage of copyright is to register your work with the federal government.

Sole authorship

If you have written the screenplay completely by yourself, without a co-writer and without adapting anyone’s work, you are considered the sole author. This means that you automatically own the screenplay. However, you should still make sure you register the copyright of the screenplay.

Once you have found a production company interested in your screenplay, you will need to assign them the rights to your script — even if the production company is your own. If anyone wants to make a movie or a book based on your screenplay, they will need your permission.

Remember, though, that if you are hired by a production company to write the screenplay, the work you produce will be considered a work for hire, and the production company will be considered to own the copyright of the screenplay. In this scenario, the production company would be the only one authorized to license the screenplay for others to use.

But you’ve heard the saying “There’s no such thing as an original idea,” right? So how do you know if what you have written is original, and where does the law draw the line?

If the screenplay is not based on another work, such as a book, graphic novel or blog, it is original. If the actual idea, and only the idea, came from watching other films, you’re legally safe. But if your screenplay contains dialogue or scenes from another work, then it is an infringement of copyright.

The only time you can use material directly from another work without infringing copyright is if the copyright has expired and the work is now in the public domain.

Writing in collaboration

Working with another person on a screenplay can offer lots of advantages, whether you intend to produce it yourself or sell the rights to another production company. But just like any business relationship, working with a partner to write a screenplay creates a number of potential legal issues that should be managed prior to starting the collaboration.

Firstly, ensure that you choose your scriptwriting partner with great care. This person will be your business partner and will be involved in all of the risks and rewards associated with the project.

The most common legal problems that arise in collaborative works relate to ownership of the screenplay, the division of profits and expenses, and decisions related to offers to purchase the screenplay. It is best to deal with these issues before they become problems, by entering into a collaboration agreement that outlines each partner’s rights and responsibilities, as well as governing how the completed work will be sold.

Unless the agreement says otherwise, the U.S. copyright law assumes that authors who work together creating different sections of the same screenplay are joint authors. As a default, this law would assume that the joint authors receive an equal share in any profits from the sale of the screenplay. This is not always a fair assumption, as the two authors may have undertaken different amounts of work, and this is why you need a collaboration agreement outlining exactly how much of the profits each partner will receive.

Don’t assume that you will receive the majority of the profits because you have done the majority of the work — without a signed agreement between you and your partner, you can’t guarantee what the outcome will be.

Joint authors and the law

Unless the writers establish a collaboration agreement, they will be subject to arbitrary rights assigned by law.

In order to be considered a joint author, each writer must contribute copyrightable materials to the joint work and have the express intention of merging his or her contributions inseparably or interdependently with the contributions of other co-authors to form a whole work.

A novel or screenplay may involve inseparable contributions, which means that the work of each author does not stand alone — none of the authors would be able to point at a sentence as being specifically written by themselves, rather than one of the other writers. A motion picture, however, typically has interdependent contributions, which can stand alone but are intended to be merged to form a new whole.

What to include in your collaboration agreement

The collaboration agreement should cover the rights and responsibilities of each partner in regards to copyright ownership of the screenplay, allocations of expenses, distributions of work, the sale of the screenplay and licenses and the steps involved for the resolution of disagreements.

A writing collaboration is more than just a creative capital; if all writers agree that the intention is to sell the final screenplay, the collaboration is actually a business relationship.

Copyright ownership

Many of the problems surrounding ownership of the rights revolve around who had the initial idea for the project. To simplify matters, many writers decide to share the rights equally, disregarding the notion of ownership of the idea. Other ownership issues that should be addressed in the collaboration agreement include:

  1. Who will own the rights of the finished screenplay?
  2.  If you want to be considered joint authors, you need to state that, in the event that one of the author’s contributions are determined to be ineligible for copyright, the author with the copyrightable contribution can assign a copyright interest to the other partner.
  3.  How is the ownership of the project divided? Is it shared equally, or will ownership be based on who had the initial idea, or who writes the most words? Unless you specify this is the agreement, the law will assume that joint authors each own an equal 50 percent of the rights.
  4.  How will the rights for other options, such as a book adaption, be split? Will either of the authors retain the rights for an exclusive use of the screenplay, such as an adaption into a video game?
  5.  What happens if the writers can no longer work together — who will retain the rights for the idea, and can it be used to create another screenplay? Will the other writer receive any payment in this instance?
  6.  What will happen if the screenplay can’t be sold? It is a good idea to require each writer to seek permission from the others to use portions of the joint work in separately authored, non-joint works.
  7.  Can either of the partners assign their own portion of the copyright? You may want to restrict the transfer of copyright to the transfer of the right to receive money from the copyright, or restrict your joint author from allowing a third partner to make changes to the screenplay.
  8.  What will each of the authors contribute to the screenplay? Each author should also guarantee that he or she has created material added to the screenplay and should indemnify the other writer for a breach of this provision.

An effective working relationship

In order to work effectively in collaboration, there are a number of things to consider. These should all be covered in the collaboration agreement.

Decide right at the start how and when you are going to sell the screenplay. This includes establishing when the screenplay will be completed. One option is to establish a schedule for the work with milestone deadlines. You will also need to include measures to implement in the event that one of the authors does not meet a deadline. It is a good idea to allow a buffer that gives the author room to fix this issue before it becomes a breach of contract; for example, the writer may need to notify in advance if he or she will not be able to meet a deadline, or have 10 working days to rectify the situation without it being considered a breach of contract.

Your agreement should also outline the measures to deal with breaches of contract, such as arbitration, and establish a framework for making all business decisions.

It is also a good idea to ensure that both partners must agree to any offer to buy the screenplay — if one partner wants to sell, the other partner must agree that it is a good deal. You will also need to establish how any income from the sale of the screenplay will be distributed. Typically, the distribution mimics the ownership rights.

Make sure you are explicit about how any expenses will be paid for — will they be divided equally between each partner, or will each partner be required to pay for his or her own expenses? You will also need to outline the course of action to be followed if the actions or unpaid debt of one partner causes the writing team to be sued — the writer at fault should have signed an agreement to indemnify the other writer.

As with all agreements, your writing collaboration should be subject to a time limit. Generally this will be set at one or two years, with the option of extending the partnership through the agreement of everyone involved. It is important to distinguish between the duration of the writing relationship and the duration of the copyright and ownership of the screenplay (which should last for the life of the copyright).

Your agreement should outline a method of dealing with any changes to the writing collaboration, either through termination or withdrawal of either of the writers. You will need to determine what rights will remain with any author who exits the project, and how the rights of the other party will be affected. If you are unable to agree on a termination agreement, will you take the matter to arbitration or court?

Finally, you will need to agree on how each writer will be credited once the screenplay has been sold or is in production. Will you credit a writer who withdraws from the collaboration? The Writer’s Guild of America provides a structure for the formulation of writing credits, which is explained in further detail below.

Choosing the right business entity

As mentioned, writing a screenplay in collaboration effectively establishes a business relationship, so you will need to decide which business entity best suits the co-authors. While the writers’ collaboration agreement covers issues relating specifically to the screenplay, there are a number of other business and legal issues that it does not cover. For this reason, collaborative groups are also advised to establish a business entity.

The three most viable options are general partnerships, joint ventures and limited liability corporations.

A general partnership involves two or more people working together as owners of the business. Each partner in a general partnership must answer for the debts of the others. Writers working together on a screenplay may already be considered by law to have formed a general partnership.

A joint venture is formed for a single purpose, such as the production of one screenplay, while an LLC creates a member-managed limited liability company issuing membership to all co-writers.

Intellectual property

Unless a contract signed by all parties states otherwise, each joint author owns the whole copyright for the screenplay, jointly with the other co-writers. This means that each co-author can grant a non-exclusive license to the screenplay. For this reason, it is a good idea to have a clause in the collaboration agreement that covers how decisions are made accepting (or declining) offers to purchase the rights of a screenplay.

The Writers Guild of America

The Writers Guild of America is a union for professional writers of screenplays, television and news media. If you want to hire a writer or buy a screenplay from a writer who is a member of the guild, you may need to become a signatory with the union. This means that you will agree to abide by the collective bargaining of the WGA, known as the WGA Theatrical and Television Minimum Basic Agreement. If any of the terms in your agreement conflict with the MBA, the MBA terms will overwrite yours.

The MBA outlines the minimum terms surrounding payment for WGA writers, separation of rights, qualification for credits, reacquisition of the rights to the screenplay and rules governing new media projects.

The formulation of writing credits

The WGA rules relating to credits are divided into five categories.

Story-by credit is given to the writer who contributes literary material comprising the basic narrative, idea or theme.

Screen-story-by credit is used when the writer has based the script on source material.

Screenplay-by credit is given where there is a source material of a story nature or when the writer entitled to story-by credit is different than the writer entitled to screenplay-by credit.

Written-by credit is given when the writer is entitled to both the story-by and screenplay-by credits.

According to the MBA, the credit a writer is assigned impacts on the writer’s residual, separated and other rights. When the filming of the screenplay is nearing completion, the production company must send the WGA and each of the writers notice of the tentative writing credits, along with the final shooting script, the production company’s proposed credits and any source material for the screenplay.

Separation of rights

Separation of rights applies to writers who are members of the WGA. If a writer creates an original screenplay or contributes a substantially new story to already-existing material that they have been assigned, the writer may be entitled to separation of rights. These rights differ greatly but can include publication rights, sequel payments, dramatic-stage rights, TV-series rights and merchandising rights.

If a WGA writer is working for a WGA signatory company, the writer may receive separated rights for a motion picture if the writer is entitled to a story-by, screen-story-by or written-by credit. Television writers may receive separated rights if they are entitled to a story-by or written-by credit.

In summary

It is vital to choose your writing partner or partners with care, as they will also be your business partners. Before you start the writing process, the co-authors should decide whether to create a business entity and, if so, which one. Most importantly, before any writer begins work on the screenplay, establish a collaboration agreement that covers the issues of ownership of rights, deadlines, expenses, the sale (and profits from the sale) of the screenplay, dispute resolutions and terminations.

During the writing process, make sure the parties each keep meticulous records of their financial contributions and expenses. Work on a strategy for the sale of the screenplay, so that once it is completed you can move the project forward.

As soon as work on the screenplay has been completed, register the copyright with the U.S. Copyright Office. If you and your co-authors are operating as a business entity, make sure the copyright is assigned to your company. You are then ready to sell or begin production of the screenplay.