Chain of Title
by Kamal Moo, Esq.
What is a chain of title and why should it matter to you? In the motion picture business, a chain of title is the documentation that establishes proprietary rights in a film. Simply put, a clean chain of title can mean the difference between your movie getting made and having it fall into unproduced oblivion.
Imagine a screenwriter, we'll call him Joe Scribe, has just finished his newest script entitled "The Adventure" and a production company called A+ Films wants to option it. An "option" is where a company pays a writer a sum of money (say, $5,000) for the right to produce a script within a set amount of time (usually one year). If they make the movie, the writer will be paid the full purchase price for the screenplay (say, $100,000). I'd like to stress that, with an option, the film company is not actually buying the script, but rather paying for the right to try and produce it within a certain time frame. So, in our scenario, A+ Films pays Joe Scribe $5,000 for the option and during the option period Joe revises the script numerous times with A+'s development executives. But, unfortunately, A+ Films is unable to raise enough money to produce the film before the option expires, so the unproduced script gets thrown back into Joe's file drawer.
Years go by and another film company, we'll call them B- Productions, becomes interested in "The Adventure" and offers to buy it from Joe. The movie is shot and about to be released when A+ Films pops up and says they have an ownership interest in the script because they worked with Joe to re-write it and develop it into its current form. This situation can get sticky and cause a lot of headaches for everyone involved.
However, this is an extreme example, because before a studio buys a script they'll usually hire a company to investigate the ownership history of the screenplay (a.k.a. "chain of title") and see if there are any potential issues. This includes checking with the U.S. Copyright Office to see if any other companies have filed paperwork claiming an interest in the screenplay's copyright. Most of the time potential ownership problems will be discovered, and sometimes they won't.
What is the best way to avoid this situation from the beginning? If possible, Joe should have gotten what's known as a "quitclaim" from A+ Films once the option expired. A quitclaim is basically a document stating that the company is giving up any rights it may have in the script. If Joe had gotten a quitclaim, A+ Films would have had a very difficult time suing B- Productions in this case. So, the lesson here: if you have been developing your script with a production company and intend to take it to different company, it's always a good idea to try and get a quitclaim before moving on. As you can tell, a clean chain can prevent a lot of problems down the road.
Please contact us if you need have any legal needs regarding your screenplay.
Note: Kamal Moo is a California licensed attorney. The information contained in this article is not personalized legal advice. Reading this article does not create an attorney-client privilege. You should consult with an attorney if you need legal advice.