Lawyer's Guide to E&O Insurance PDF

## A Production Lawyer's Guide to Obtaining E & O Insurance and Preventing Litigation By Debra Hodgson* - Today's producers are generally required to obtain errors and omissions insurance (also known as "E & O" or producers liability insurance) before they can sell their projects to distributors....

## A Production Lawyer's Guide to Obtaining E & O Insurance and Preventing Litigation By Debra Hodgson* - Today's producers are generally required to obtain errors and omissions insurance (also known as "E & O" or producers liability insurance) before they can sell their projects to distributors. - This is true of virtually all productions distributed in the United States, and it is an increasingly common requirement for sales in Canada and the rest of the world. - Distributors require this insurance because of their frequent involvement in expensive copyright defamation, and related claims that have been brought against films and television shows. - Litigation costs, especially in the U.S., can be astronomical, even when the claim is not valid. - Obtaining E & O insurance, therefore, has become a crucial part of the film and television production process, for both the production company, and its lawyer. **The goal of this article is to acquaint lawyers who represent producers with the “clearance procedures” that have been developed by other producers and insurance companies over many years of expensive mistakes. Many of the procedures are clearly common sense, but the need for a few of them may be less obvious at first glance. Nonetheless, every one of these procedures has developed because it has been shown to prevent claims and litigation.** - Other than the fact that distributors require E & O insurance and in turn, E & O insurers require producers to comply with these clearance procedures, Canadians should not assume that “it will never happen to me”. - There have been quite a few of these claims in Canada, and they will continue to occur. - The article will discuss what is and is not covered by E & O insurance. - It will then give an overview of clearance issues. - It will also provide some general problems to avoid. - After that, it will focus on some of the special issues raised by docudramas, documentaries, and satires or parodies. - Finally, it will suggest ways of lowering the risk of copyright and related submissions claims. **What is Covered by an E & O Policy?** There are many misunderstandings about what is covered by errors and omissions policies. Producers and their lawyers should look at their policies to make sure they understand at least the basic coverage and exclusion provisions, even if they do not have any claims looming on the horizon. (They should also acquaint themselves with requirements for matters such as giving notice to the insurance company once a claim comes in, and limitations on their communications with claimants.) The following is a general discussion of claims that are normally covered by E & O insurance. Always consult your client's policy for specific coverage. (E & O policies are fairly similar from one company to another, but each one is unique.) For the sake of clarity I have oversimplified many of the legal issues, and I have described these issues with a slant toward American law. (However, Canadian and American laws in these areas are fairly similar.) - Many E & O claims involve allegations of defamation (also known as libel or slander). - Defamation is a false statement about, or portrayal of, a person that damages that person’s reputation. - These claims arise when a production intentionally describes a real person (as in a docudrama), or when a show accidentally defames an actual person through unintentional similarities between a fictional character and the claimant (such as the person’s name, job, or involvement in real events). - Invasion of privacy claims arise when the film or TV show discusses matters that are true, but that are private facts that society has decided should remain private. - For example, portraying sexual relations between a couple would be an invasion of privacy in almost all cases. In general however, public figures are entitled to a lesser range of “private facts” because we believe that the public has a right to know about those personal matters that are relevant to their public positions. (For example, a politician’s drinking habits will be fair game to the extent that the drinking affects his ability to perform his job.) - A claim for false light privacy may arise when the film or show states something false, but not necessarily insulting, about a real person. - A good example of this was a US case that involved a biographical piece about a famous baseball player in which it was falsely stated that he had been a war hero. - The player, Warren Spahn, was greatly embarrassed by this misinformation, and sued the publisher. - These claims are rare, but producers should keep in mind that outright fictionalization about actual people, even if complimentary, can still cause trouble. - One of the most important categories of E & O claims is *copyright infringement*. - This involves the assertion that the producer has taken protectable portions of someone else's screenplay, book, or other work. - The most obvious cases of copyright infringement involve verbatim copying or close scene-by-scene parallels in fictional stories. - (Copyright infringement of nonfiction works is trickier because the actual facts themselves are not copyrightable; only the claimant's particular arrangement and expression of those facts is protected.) - There are rarely cases of blatant copyright infringement. - Much more common is the situation where the claimant contends that there are notable similarities between his book or screenplay and the film or television show in question, and he also contends that the producer (or someone else connected to the production, like the writer, director, or star) has had access to his work. - Both of these contentions are often difficult to prove or disprove, so these cases are expensive and time-consuming. - Their defense makes up a large percentage of dollars spent by insurers for E & O claims today. - This it not to suggest that producers regularly steal other people’s works; in fact I believe this rarely happens. - Unfortunately, many claimants have inflated ideas of the uniqueness and merit of their works and the scope of the similarities between their and the producers’ projects, especially if the production is very profitable. - Another major field of E & O litigation is the related area of the *implied-in-fact contract* claim, also referred to as a “submissions” claim. - As in copyright infringement suits, the plaintiff believes that the producer (or someone connected to the film or TV project) had access to his or her project because it was allegedly submitted to that person. - However, in a submissions case, the plaintiff’s project needn’t be a fully developed book, script, etc. It can be as simple as a one or two sentence presentation of a story idea, and it can be oral or written. - Implied-in-fact contract law allows the plaintiff to recover if the producer must have understood that the plaintiff offered the story idea with the belief that he would receive reasonable compensation for use of the idea, and the producer went ahead and read or listened to the idea, and then later used it. - (Sometimes courts and plaintiffs will rely on other legal theories to handle these claims, but they basically all involve the submission of an idea to producer who then allegedly uses that idea without paying for it.) - *Right of publicity* claims are also part of E & O coverage. - People with well-known public personas have a right to control use of their names or faces in advertising and merchandising. - The more common right of publicity problems are those where someone falsely suggests that a famous person endorses a product or a show. - For example, you can make a biographical movie about an actress (within certain limits that will be discussed later), but you may not falsely imply that she authorized that film. - (When dealing with right of publicity issues involving dead celebrities, you should generally assume that the right can be, and has been, inherited by that person’s heirs.) - Finally, *unfair competition* claims concerning the film's contents or title are part of E & O. - These claims often involve the assertion that the producer is trying to take advantage of the popularity of another film, book, etc. by causing the public to believe that this new project is connected to or endorsed by the older one or its makers. - This most often occurs through advertising (using similar slogans or visual images to suggest a connection with, say, a previous popular horror film) or through a title (such as calling a TV series “Gone With the Wind” without authorization). **What is Not Covered by an E & O Policy** Sometimes producers wishfully assume that any error or omission that they make will be covered by the E & O policy. However, this policy is designed only for a very limited set of claims. If the claim is not of the type discussed above, then it probably is not covered. The producer’s lawyer should always review the policy if there are any questions about coverage. However, certain matters that are not covered deserve specific mention here. - Claims against the production company by partners, independent contractors, employees, and the like are not covered by these policies. - *Furthermore, contract-related claims against the producer are not covered.* - (The implied-in-fact contract claims mentioned earlier are the only contract cases that are covered, but this is a narrow exception to the rule of non-insurability of contract disputes.) - Thus, if a writer sues because the producer supposedly breached some aspect of the contract, the E & O policy will not help. - E & O policies will not cover a claim where a producer knowingly violated the rights of another. - *Also, they do not cover fraudulent acts against others.* - Keep in mind that E & O policies are designed to cover damages that the producer causes to others and the costs of defending against claims by others. - *They are not meant to cover the production’s own losses.* - Thus, if someone gets an injunction against a film, the film's policy will not cover lost profits or production costs. - (Some policies may cover advertising and related promotional costs, however.) - *The policy will also not cover any punitive (exemplary) damages awarded to the plaintiff.* - It is important that the producer understand that when he fills out an application for E & O insurance, he is making representations to the insurer that form the basis for its agreeing to insure the project. - If the producer does not respond to the application's questions and instructions accurately, he jeopardizes his ability to depend on that policy if a claim does arise. - The insurer may have the right to deny coverage for claims if there are misrepresentations on the policy application. **Overview of Clearance Procedures** Many of the clearance procedures that this article will discuss are fairly detailed points that require a line-by-line look at the script. However, there are a number of more general points that the producer and lawyer should consider from the beginning of development of a project. - First, keep around a copy of an E & O application for review. - Both the individual questions and the “clearance procedures” sections of these applications make very good checklists for many of the steps that a production company and its counsel should take - Think about when to put the E & O policy into effect. - Claims frequently come in before a production has been released because publicity about the project often stirs up potential plaintiffs. - If the policy is not already in place, that claim cannot be covered. - Contacting the insurer early to discuss E & O can also be important in helping head off problems before it is too late. - While the majority of productions obtain their insurance without any real difficulties, some projects need considerable review by the insurer and its counsel before they can be accepted. - This review sometimes leads to script changes, or the need for new releases, or contract revisions. - The producer may need to budget for additional legal fees, the costs of getting new releases, extra premiums, and so on. - Also, many changes are quite simple if made before shooting begins (such as changing the name of a character), but they’re much more difficult, if the need for the change is discovered later. - The lawyer should read the script early in development, especially if the project involves real people or events, or if it includes parodies, or if it may otherwise be controversial. - He or she can help spot problems before the producer has spent too much money. - (In my experience, early involvement of a lawyer on E & O issues is an excellent application the old adage, “An ounce of prevention is worth a pound of cure.”) - Get a *copyright report* on any book, play, etc., for which the producer is buying rights, or any script that was not written as a work for hire by the production company’s own employees. - A “copyright report” (or “copyright search”) lists all copyright registrations, assignments, and so on that recorded in the copyright office of the country in question. - These reports can generally be obtained from the copyright office itself, but in the US it is better to use an outside company, which will do the job faster and probably better. - For US copyrights, a Washington D.C. company called Thomson and Thomson (202-546-8046) is used by most producers. - Some also use a New York lawyer, Dennis Angel (914-472-0820) - *If the work is by, say, a Canadian or British writer, but you have reason to believe that the writer has offered it to US companies, then you will want to have copyright searches done in the copyright offices of both the US and the country of origin.* (*Please refer to attached update on research companies.*) - These copyright reports are important because they tell producers about any conflicting assignments that hinder, or destroy their right to use the underlying work. - Not too many owners will deliberately try to defraud a producer, but many of them may not have fully understood previous option agreements or other contracts. - Or co-owners of the rights may already have assigned film and TV rights to someone else. - Sometimes the rights history is so complicated that the opinion of a copyright expert is needed. - In the US, the best option is to ask Thomson and Thomson to forward the report to an affiliated law firm, *Brylawski, Cleary & Komen*, which specializes in these issues. - (Or you can request a legal opinion from Dennis Angel along with his research report.) - A smart producer ought to get a copyright report before he or she buys film rights, but he or she must get the report before obtaining E & O insurance. - Also, once the assignment of film/TV rights to the underlying work is obtained, the producer or lawyer should register that assignment with the copyright office of the applicable country. - The registration process is cheap and easy, and it prevents someone who obtains conflicting rights (even if obtained later) from establishing a priority of rights by beating the producer to the recording procedure. - Get a *title report* once the project’s title is chosen. - Title reports list all previous uses of the same or similar titles. - They are obtained to avoid a claim of unfair competition (“passing off”) from a prior user of that same title, who will allege that the public associates this title with his film, book, etc., and that your client misleading the public as to the origins of its project. - American firms really the only sources of these reports (even for non-US projects), and *Thomson and Thomson* is the most commonly used source. - (Again, *Dennis Angel* is an alternative source.) - *When requesting the report, you should generally also request a legal opinion from the Brylawski law firm (or Dennis Angel) since interpreting legal rights in relation to others’ use of the title is a specialized skill.* - Keep in mind that E & O policies do not cover title claims unless the insurer has received and approved a title report, and has endorsed coverage for that title onto the policy. - (If you have obtained a positive opinion from a law firm such as Brylawski, the insurance company will probably agree to cover the title. However, there are times where it will not agree with that opinion, so you should submit the title report to the insurer as soon as you can.) - Ask the producer, production staff, co-producers, directors, writers and even the major stars whether any of them has ever received any story ideas or scripts that are similar to the project being developed. - These kinds of submissions are what create copyright and implied-in-fact contract claims. - If you can spot a potential problem, you may be able to fix it before it becomes a serious problem. - Look carefully at the origins of the story in the film or television production. - Is it based on real events? - Even indirectly? - Talk to the author of the screenplay, or the story idea creator. - Talk to the author of the underlying work, if there is one. - Virtually every creative work draws upon the personal experiences of its author or actual events that interested him. - If the story openly involves real-life events, then it is a docudrama, with all of the legal issues that will be discussed later in this article. - If the parallels to real events are less open, are there nonetheless certain characters who would be recognizable to friends or acquaintances by their physical characteristics, personality traits, or connection to real events? - Are these portrayals possibly insulting? - What changes can you make to prevent problems? - Strongly urge your client to use a research service to handle many of the standard detailed clearance procedures that are discussed in the next section. - Most producers, lawyers and their staffs are not equipped to handle these procedures efficiently. - (For example, it can be difficult and time-consuming to make sure that a real company doesn’t have the same name that your fictional film is using for an evil chemical manufacturer.) - It is much more convenient, and ultimately less expensive, to pay a research service that specializes in these matters. - (These services also provide extra information to help with authenticity and other matters in a script.) - The oldest and best known of these services is the de Forest Research Company in Hollywood (213-469-2271) - There is at least one other competitor, *Marshall/Plumb Research Associates*, which is in Burbank, California (818-848-7071). - (*Please refer to the attached update on research companies.*) **Standard Film and TV Clearance Procedures** Each film or television production is unique in terms of the particular clearance issues that are most important or most problematic. However, all shows, whether fiction or nonfiction, comedy or drama, theatrical film or weekly TV series, need to be checked and cleared for a number of small clearance details. The following clearance procedures should be used in all productions, but this list is not all-encompassing. Keep an eye out for potential problem areas that are unique to a particular project, and add them to this list. The lawyer’s role in these standard clearance procedures is generally to look for these issues while reading the script, then make sure someone in the production company successfully checks each item. 1. **Avoid the accidental use of real names of people and organizations. Check the names of all characters, companies, and organizations, in at least the phone books, for the locale where the story is set (or where the character or company is from).** - If a character is identified by a particular occupation or company, also check the character's name with the appropriate national organization. - *Examples of those needing further name checks include lawyers, doctors, army officers, people associated with charitable or fraternal organizations, and employees of an identified company or government agency.* - You might call the organization, or check directories listing people in that profession. - *A doctor's name, for example, might be checked by contacting the Canadian or American Medical Association, depending on the show’s setting, and by checking the directories that list doctors in certain specialties.* - *Names of corporations and other organizations should be checked nationally. There are directories, industry organizations, and government indexes that can be consulted to avoid accidental use of real names.* - *When checking names of persons or entities, watch out for 1) similar names, 2) alternate spellings, and 3) last names (even if the first name is different from the character’s) if the character is also identified by something else that is distinctive, such as his profession or part of town.* 2. **Always go the extra step on checking names of characters and organizations that are portrayed negatively. The unflattering portrayals cause most (but not all) claims of this sort. Think of the issue of accidentally identifying a real person or company mainly in terms of the impact on the person or entity inadvertently portrayed: Could it harm the public’s perception of a business? Cause a person be ridiculed? Or make others think that the person has criminal associations?** 3. **Avoid identifying someone by a totally fictional job or his/her involvement in actual events, even if the name is totally fictional. ** - *If you've labelled a character as the Dean of the Harvard Law School, or as the *Canadian who won a gold medal in track and field in the 1988 Olympics*, you have gone a long way toward identifying a real person, regardless of the name given your character.* 4. **Likewise, if one of the characters is the CEO of a large, unnamed Detroit auto manufacturer, you have already suggested one of about five people. Other characteristics may complete the impression that you’re talking about a certain real person; for example, if your CEO character has an Italian last name, people may assume you’re talking about *Lee Iacocca*.** - *Assuming that people may believe that you have identified a real person, think about how the character is portrayed. Is he a minor, innocuous character? (If so, it may not be a serious problem that some might think this is a real person.) Or is he the primary villain of the film? In general, the larger and/or less positive the role, the more important it is to avoid such accidental parallels to real people. However, even if the character is likeable, consider whether other people or organizations are also identified because of their connection to the person whom you have accidentally suggested. In the lacocca example, is the character’s company (which people might assume to be Chrysler) portrayed as covering up defective brakes in its cars, or cheating on installation of safety systems? Is the character’s son portrayed as a drug addict?* 5. **Get creative if your script has one of these kinds of problems built into it. Some times simply removing one or two lines of potentially defamatory dialogue will fix the situation. Or if the actual dean of Harvard Law School is a white male from Georgia, consider casting your dean as a black woman from New York. In some situations, even these kinds of changes won’t be enough, but they’ll be a good start.** 6. **Avoid using real addresses. Depending on the context, use of the actual address of a home or business might be defamatory to a person or company. Watch out for lines like: “You know that nice couple at the corner of Maple and Smith Road? Theyre actually alcoholics.” (If your story is set in a certain city, make sure there is no such intersection there.)** 7. **Of course, you will need location releases to film on someone’s property. In addition, though, be aware of problems that can be caused by shooting a scene that has a distinctive building or statue in the shot. There is an argument for copyright infringement as to the statue, and there are s stronger problems of possible libel of people or businesses identified by that building (e.g., the script describes a travel agency in the building as one that employs inept or dishonest people, and the building is identifiable.)** 8. **Don’t use real phone numbers (with or without area codes), credit card numbers, social security numbers and the like. If you need a number, clear it with the appropriate organization or consider using your own.** 9. **(Note: Some of the clearance procedures discussed might result in problems that are not covered by E & O. For example, if someone starts getting charges on his or her credit card because your client that number on TV, the insurance will not cover that claim.)** 10. **Get permission for most uses of trademarks and logos, and avoid many references to companies and products in dialogue. (Examples: cereal boxes, magazine covers, beer cans, close-ups or credit cards, games, trademarks on computers.)** - Showing a logo in a non-defamatory context is probably not in and of itself a violation of the owner's rights, but: - 1) Networks and other broadcasters may not allow them because they can be free advertising that their paying advertisers may object to; - 2) Many of these uses will involve copyrighted artwork in addition to the logo (e.g., magazine covers or cereal boxes), and owners may argue that this constitutes copyright infringement; and - 3) Most importantly, some trademark owners will object anyway, especially if the product is disparaged (trade libel) or if the context is otherwise negative. 11. **Remember that it is possible to get in trouble for just talking about a company and its trademark. Especially avoid product or company references that are even arguably negative.** 12. **Don’t use identifiable props that are protected by copyright, unless you get permission from the copyright holder. (Examples: photographs, posters, paintings, sculptures, record covers, magazines, and baseball cards.)** - Reproducing a copyrighted work on film or tape is generally copyright infringement. - If you don’t want to get permission, either create your own props, or shoot the scene in such a way that even the creators of those real props would be hard-pressed to recognize them. 13. **The most crucial props to clear are those that are specifically focused on by the camera or by dialogue. However, watch out for artwork in a room, or statues in an art gallery, or book, magazine, and record covers in a store. All, if identifiable, can be subject to litigation. Be especially careful about using high profile toys and merchandise like Mickey Mouse toys or artwork.** 14. **Keep in mind that copyright may not be the only right pertinent to props such as posters and photographs. For example, if a model or rock star has posed for a poster, that person generally has a “right of publicity” that allows her to control the kinds of uses for that poster. This celebrity may have placed contractual restrictions on the poster’s use before agreeing to pose. (This is not an issue if the photo was a candid shot taken in a public place.) Thus, not only would you need to get a release from the copyright holder of the poster or photo, but also to assure yourself that the model’s rights are not violated by the photo’s use in your client’s production. This assurance might be a warranty from the poster’s copyright owner (if reputable) that it has all necessary rights from the poster’s subject for this kind of release, or access to the model’s contract to verify for yourself that this use is permissible, or a separate release from the model or star herself. 15. **As is generally true in clearance work, you will want to be most cautious when the stakes are highest: take extra care when the prop is most prominent, or its use is possibly insulting to its subject or owner, or when the prop or its subject (like a celebrity) is particularly valuable or “important.”** 16. **(As an aside, some Canadian lawyers and producers have responded to some of these warnings by saying that no one would ever bring a claim in this kind of matter because the damages are generally so small. In some cases, this may well be true. It is certainly true that Canadians are often, but not always, less litigious than Americans. However, many props are owned by American companies or individuals, who may well take action against your client’s “infringement”. Also, please remember that intentional violation of the rights of another is not covered by E & O policies. Additionally, the one whose copyright has been violated, whether Canadian or American, can sue for an injunction against the release of a production that contains that violation, no matter how seemingly small. Courts do not often grant the injunction, but the threat of it can lead the producer to make an expensive settlement rather than hold up payments from distributors or the release of the production.)** 17. **Watch out for miscellaneous copyright problems. For example, get permission for quotes from copyrighted sources;** if a classroom teacher in the film is reading a passage from *“Anne of Green Gables”* or a stanza from a poem by a recent poet, this is probably not “fair use” under copyright law, so your client will need permission from the copyright owner. 18. **One problem area involves the incorporation of public domain works in a film or television production. “Public domain” describes a work, whose copyright has expired, so that it can be used freely by the public. Whether a work has in fact gone into the public domain can be a tricky legal issue. For example, the length of copyright protection varies from country to country.** In some countries, especially the US, the year a work was first published will make a considerable difference in the length of the copyright protection it has. If there is any possible question about whether a work is in the public domain, it is crucial to get the opinion of a copyright expert. 19. **Another particularly tricky area involves accidental copyright violation by using a copyrighted version of a public domain work.** For example, many translations of public domain books are protected by copyright (Only the original contributions of the translations are protected, though.) - Also, some public domain books (especially those for children) have been published with later illustrations that are still copyrighted. 20. **A potentially very dangerous situation is one where a producer wants to do a new version of a public domain story, when someone else has already done another film or cartoon version. The producer must take great care to use just the elements found in the public domain version, and not those that were original to the other version. Our perception of a public domain story (such as “Alice in Wonderland”) is affected by others’ versions (like the Disney cartoon).** - Unless we examine the original public domain work carefully, we may wrongly assume that some visual images, lines, or plot points, are public domain elements when they are actually copyrighted elements from the other, more recent version. 21. **Watch out for material that, if used in ads or publicity, could create unfair competition, right of publicity, or defamation problems.** - This material might be acceptable within the context of the show as a whole, but might be misinterpreted when seen out of context. - For example, a reference to a movie star (either by words or a picture) might be humorous or innocuous when seen as part of a comedy show, but in ads it might seem defamatory, or it might falsely suggest that this star endorsed or participated in the show. - Also, if the show is a documentary or docudrama, it will undoubtedly include lines that seem defamatory if taken out of context. If those lines are used in ads, they may be inviting a defamation suit. In more sensitive projects, the lawyer may need to have input into advertising plans. - *In some cases, the producer’s contracts with distributors should grant the producer advertising approval rights.* 22. **Also related to advertising is the legal issue of unfair competition, which is also referred to as passing off or misappropriation.** - Ads and publicity must not mislead the public into wrongly believing that a production is related to or based upon another show, book, etc., or that it is endorsed by a person or company. - Producers may well want to capitalize on the success of a previous film, say, by suggesting that the public will see more of the same in their new film. - Sometimes this is done by direct references to the earlier project, but more often it accomplished by using similar slogans, visual images, titles, etc. - Such deliberate attempts should always be avoided. 23. **Clear your music.** - *This is an obvious point, but often people start the process later than they should, or they don't realize how many rights they may need to obtain.* 24. **Watch out for those songs that are included when a scene is being shot; for example, a song is performed by a band in a scene filmed at a dance, or the lead actor hums or whistles a part of a tune during an important scene. The song that is already part of a key scene will inevitably be the one you cannot license or only for an exorbitant price.** - *Since producers normally negotiate music rights in postproduction, they find out too late that the song is unclearable. Suggest that they shoot the scene with and without the song, or start clearing the music early.* 25. **Do not let your clients rely on myth that they can use a certain number of bars of a song for free because it is “fair use.”** - If the song is recognizable, the use may well be copyright infringement. - In fact, there is no magic line between the number of notes that can be used as “fair use” and the number that constitutes copyright infringement. - It is an expensive roll of the dice to go to court to find out where a judge would draw that line in your client’s case 26. **Please do not assume that certain songs are in the public domain.** - Some songs (like *“Happy Birthday”*) seem like they must be public domain, but they are not. - Also, a popular arrangement of a public domain song may actually be copyrighted. 27. **The E & O application asks, if the producer has obtained both synchronization and performance licenses, on all music. Make sure you have taken care of both.** - If you use pre-existing music, you will have to negotiate synchronization licenses with the publishers of each piece. - Performing rights are normally handled through blanket licenses between networks, etc., and the music performing rights societies (ASCAP, et al.), but watch out for certain issues: - 1) There are no blanket licenses for movie theaters in the US, so those performing rights have to be obtained by you from the publishers. - 2) The blanket performing licenses will not cover any of your music that is not handled by one of those societies, so you will have to take care of performing rights on that music separately. - 3) Your contract with distributors should make it explicit that they are responsible for performing rights, if that is what you expect. 28. **If you use pre-recorded music, you need to obtain not only a license from the publisher of the composition, but also one from the copyright owner of the “master recording.”** - You will also have to obtain permission from each artist or musician on the recording (unless you can get a worthwhile indemnity from the master recording owner that the owner’s contracts with the musicians and performers on the album give him authority to grant this kind of license on their behalf). 29. **If you use original music get full warranties and representations of originality from your composer. Even then, watch out for problematic similarities with other music.** - A producer may request that the composer provide a song that sounds like some other piece of music that they both know. - Be careful that what the composer gives you is not too much like that other piece. 30. **Think twice before using film clips.** - The time and expense involved in clearing all needed rights for even a few second clip from another movie or television show is frequently beyond its value in your client’s production. 31. **This is not to say that all clips are too troublesome.** - For example, getting rights to stock shots of wildlife or news footage of heads of state meeting in Toronto is fairly straightforward. - Still, make sure that you have decent representations and warranties from the source of your clips. - There are operations that are a little careless about where they get their footage. - Remember that you are the one who will get sued for copyright infringement. - Your source’s ownership of a print of some footage is not the same as ownership in the copyright to that footage, so make sure you are dealing with a reliable vendor. 32. **Watch out, though, for clips such as news footage that includes commentary by a reporter or anchor.** - Depending on that person’s contract with the network or station, you may need the permission of that person himself. - (At a minimum get warranties from the provider of the clip.) 33. **Your real nightmares can begin if you decide to use clips from other television or film productions. Certain lawyers experienced in clip clearances have wryly, but accurately commented that a producer who wants to use film clips must have “an unlimited budget and an iron stomach.”** 34. **The use of clips ranges from doing an entire show of them, such as “That’s Entertainment” to more common situation where a character has a television on, and is watching a few seconds of, say, “Happy Days” as another character comes into the room. (Or the TV is simply on during a scene, and we only hear the “Happy Days” dialogue in the background.)** - The following is a list of rights that will generally have to be obtained for each clip (especially U.S. productions), regardless of its length or prominence in the scene. - *a) You will need a release from the copyright holder of the clip. This often requires a copyright search to determine who the owner is, especially for older or less successful films, whose ownership may well have changed several times. Regardless, you should obtain a warranty and indemnification that this owner has the necessary rights to grant you a license. (Remember, though, that an indemnity won’t do you much good if it is from a fly-by-night organization that has no assets or can’t be found problems arise.)* - *b) Watch out for the likely possibility that the film or television show is based on a separately copyrighted underlying work. Use of a clip from that production