This article is written by Uzma Naureen, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.

Introduction

“CREATE YOUR OWN VISUAL STYLE… LET IT BE UNIQUE FOR YOURSELF AND YET IDENTIFIABLE TO OTHERS.” – Orson Welles

A filmmaker is someone who is in charge of producing, directing, and developing movies. Films are highly personal to the filmmakers as they are the creative manifestation of their thoughts and ideas. They spend hours making the film to fit the time constraint while also delivering entertainment and knowledge to the viewers and highlighting the talents of the artists and performers featured in the film. India has one of the oldest and largest film industries in the world. Every year, it releases around 1000 films, which are well-received by people all over the world. Doesn’t it make you wonder how these filmmakers protect their creative works like films and movies from people who try to copy their works and creations and call them their own? This is where copyright contracts come to play.

What is copyright and what part does it play in the Indian film industry?

The movies initially appeared in India in 1896, and the subject of piracy began to gain legal attention in 1928 and began to reach the courts. Prior to the Brussels Act, films lacked independent copyrights and could not file for copyright protection due to their components, such as scripts, songs, and so on. Cinematograph films were recognized as independent copyrights after the 1950s, when India had evolved into one of the world’s largest film production nations, as a result of the Brussels Act of 1948, which revised the Berne Convention. For many years, contracts in the film industry were handled solely by oral agreements. This had to alter due to the necessity for Intellectual Property (IP) laws, which were enacted in response to the litigation that arose as a result of disputes, copyright violations, and breach of contract, etc.

What are copyrights?

• Copyrights are a form of Intellectual property law. 
• Copyright, in simple terms, prohibits the right to copy the original works of the creator. 
• Copyright law protects the original works of authorship for a limited time period before it is available to the public domain. 
• The author’s copyright is generally valid for the duration of his life plus 60 years after his death. 
• There are two important legal requirements for obtaining copyright for your work. Firstly, the creative work should be original and secondly, it should be in a tangible medium. Such works include literature, music, dramas, plays, choreography, pictorial work, graphics, sculptures, computer software, motion pictures, sound recordings, and architectural work. Copyright cannot be granted for live events. In India, it is governed by the Copyright Act of 1957.

Role of copyrights laws specifically in the Indian film industry

Copyrights mostly cover literary and artistic works and thus play a very important role in the Indian film industry, which contributes significantly to India’s economic growth. When artists register for copyright they get ownership rights over their creative works. For example, a filmmaker entering into a copyright contract registered under the Copyright Act 1957 gets ownership rights over their films and movies. Various rights are granted to a copyright holder under Section 14 of the Copyright Act 1957, by the registrar of copyrights.

The filmmakers who have copyright for their films possess the exclusive legal right to reproduce, publicly display, distribute copies of, publicly perform, and make ‘derivative works of their films. In this way, they protect their creativity from being duplicated or stolen. But, it is not as simple as it sounds. 

Suppose, a filmmaker wants to make a film based on a novel. He can’t just go ahead and start manifesting his ideas. He needs to find out if that novel is in the public domain or copyrighted. If the novel is copyrighted then he’ll have to go take permission from the owner of that copyright, that is, the author. If the novel is popular then he might have to pay a lot of money to get the license to write that screenplay, which will give him some rights over that novel for a certain period of time. He will need to write the screenplay within that time period. It is advisable to get the permission of the author before expending your time and energy in writing the screenplay and adapting it.

What all can be copyrighted in a cinematograph film 

It is interesting to note that every item of copyrighted content in a film, from music to acting performances, to a painting in the backdrop of a scene, and even some structures or other architectural works that may appear in a shot, is subject to a similar concept. In the same manner, if another individual wants to use the film or a part of it in his creative works then he will have to take permission from the filmmaker. Such permissions can be taken by entering into a copyright license contract which is discussed later in this article.  

For the purpose of copyright law, a cinematograph film is viewed in a broader perspective including the script and dialogues, which fall under the category of literary works; the lyrics of the songs, which fall under the category of musical works; the complete songs, which fall under the category of sound recordings; posters and advertisements, which fall under the category of artistic works, and so on. 

While each of these underlying works is entitled to separate copyright protection under the Copyright Act of 1957, a cinematograph film as a whole is also entitled to be protected under the Act. It is important to remember that copyright does not protect ideas but the particular expression of that idea by the artist. A copyright owner must prove that the person who infringed their copyright copied protected material. Ideas and historical facts are non-copyrightable but themes, characters, dialogues, plots, etc are copyrightable.

Let us discuss a few cases

• Take the case of Yash Raj Films Pvt Ltd vs Sri Sai Ganesh Productions &Ors. In the year 2010, Yash Raj Films released the film ‘Band Baaja Baaraat,’ starring Ranveer Singh and Anushka Sharma. Sri Sai Ganesh Productions, the Telugu version’s producers, released the film in 2013, following which the Delhi High Court issued an interim injunction prohibiting its release in any format. The Court recently issued a final judgment prohibiting the Telugu film from being released in any media, including DVDs, VCDs, Blu-ray discs, and television, for brazenly duplicating the plaintiff’s film’s essential characteristics and forms on purpose.
• But in the case of R.G. Anand vs Deluxe Films & Ors. R. G. Anand, an architect by profession and a playwright, dramatist and producer wrote and produced a play called ‘Hum Hindustani’ in 1953 which was a tremendous success and was re-staged several times. With the play’s growing popularity, Mr. Mohan Sehgal got in touch with Anand, and Anand recounted the whole play “Hum Hindustani” to him. In the month of May 1955, Sehgal began filming the film “New Delhi” which Anand felt was based on his play despite Sehgal assuring him that the film bore no similarity to his play and was unrelated to it. However, after seeing the film in September 1956, Anand concluded that it was a copy of his play and sought a permanent injunction against Sehgal for infringing on his copyright in the play “Hum Hindustani.” The Supreme Court held that the movie, although based on the same concept, was not a copy of the play. Therefore there was no copyright infringement in this case.

In the above case, it was held that there exists no copyright in relation to an idea, subject matter, themes, plots, or historical or legendary facts. Infringement is restricted only to the form, manner, arrangement, and expression of the idea by the author of the copyrighted work. When the author develops and acts upon the same idea it is bound to have a common source and similarities. There is no issue of copyright violation if the theme is the same but is presented and treated differently, resulting in an entirely new work. Infringement occurs when a substantial or fundamental portion of the work has been copied.

What are copyright contracts and how does it work for Indian filmmakers?

A copyright contract is an agreement that grants a person exclusive rights to utilize the copyright holder’s creative works for a certain period of time in exchange for a consideration or in some cases, transfers the whole ownership of the copyright to the person. 

• A copyright holder can allow some of his or her exclusive rights to be exercised by another individual through a copyright license agreement 
• Basically, it permits the owner of the copyright to decide how, when, and where the material can be used by others. 

It should not be confused with copyright assignment where there is a transfer of ownership and the title of the copyright to another person. In the assignment, once the copyright holder sells his ownership rights, he cannot control how the other party uses those rights. Therefore, there are two types of Copyright contracts in order to enable the exploitation of copyright by third parties – 

(i) Copyright license agreement and, 

(ii) Copyright assignment agreement.

Copyright assignment agreement

Parties involved

In the case of a copyright assignment agreement, the person assigning the copyright is called the assigner, and the person receiving such copyright is known as the assignee. The owner of the copyright has the option of assigning all of his rights or only some of them. In the case of the latter, there is the only partial assignment. The assignee will be the owner of the assigned copyright, while the assigner will be the owner of the remaining rights. 

Duration

The assignment could last for the entire copyright period or only a few months. If no duration or period is specified then it is considered to be 5 years. When there is a full assignment, the assignee receives full ownership of the copyright and its intellectual properties. 

How does this agreement work?

Copyright assignment is more expensive than copyright license because here, the assignee has full and complete ownership of the work and can further license or resell it themselves. 

• After assignment, the assignor has no control or right over the use of the copyrighted work by the assignee. 
• A copyright assignment is valid only when it is in writing and signed by or on behalf of the assigner. 
• The subject of the assignment must specify which work’s copyright is being assigned. 
• It must specify the rights assigned, the period of the assignment, the territorial extent of the assignment, and the amount of royalty payable to the author/owner. 
• If no territorial extent is mentioned, it is presumed and considered to extend within India. 
• Unless otherwise stated and specified in the contract, if the assignee fails to exercise his rights within a year from the date of the assignment then the assignment is considered to have lapsed.  
• In the case of an assignment in a work that has not yet been created, the assignment will not take effect until the work has been created and completed.

A problem could arise when the legislature grants new rights on existing works owing to technological advancements. The question then pops as to who owns the new rights: the assignor, who has already assigned all of the existing rights on the work, or the assignee, who has already been assigned all of the existing rights on the copyrighted work.

Copyright license agreement

Parties involved

In the case of a copyright license agreement, the person licensing the copyright or some exclusive rights of his copyright is called the licensor, and the person receiving the copyright or such exclusive rights is called the licensee. 

Exclusive or non-exclusive

The copyright license agreement can either be exclusive or non-exclusive. In the case of a copyright license, the licensee receives only a specified interest in the intellectual property, not ownership. Section 30 of the Copyright Act, 1957 says that a copyright license given to a person in any future work will only take effect when that work comes into existence. If the licensee in such cases dies before the work comes into existence then his/her legal representatives are entitled to such works, in the absence of any provisions to the contrary. 

In exclusive copyright license agreements, the licensee gets substantial rights against the licensor, including the right to sue the licensor. The licensee cannot take action against a third party unless he joins the owner of the copyrights as a party to the infringement action. Except where the copyright licensing agreement clearly or impliedly restricts the right, a licensee has the right to make changes and alterations. The licensor is entitled to royalties when their copyrighted creative works are used by others. Royalties are payments made to the creator and owner of the copyright whose work is being licensed in exchange for using their copyright. The licensor can revoke the license if the licensee fails to pay the royalties. A copyright license does not have to be written or signed. A license can be oral or implied when all of the facts and circumstances surrounding the transaction between the copyright owner and the alleged licensee are considered.

Role of licensing in the film industry 

In Indian cinema, the film producers are usually the copyright owners. Directors, actors, authors, and other important people part of the production of a work typically sign contracts by giving up their copyrights and demanding royalty terms as a part of their agreement. The actors and cine artists are not protected by copyright law for their actions. Instead, they have special rights called performers’ rights under Section 38 of the Copyright Act, 1957. Therefore, a filmmaker is the first owner of the copyright on his film. The copyright on cinematographic works lasts for 60 years after they are released to the public, while for photographic works it lasts for 25 years after they are created.

• As held in, Indian Performing Rights Society Limited (IPRS) vs. Eastern Indian Motion Pictures Association, the rights of a film’s music composer or lyricist might be overruled by the film’s producer, who becomes the first owner of the copyright unless there is an express agreement or a contract signed between the parties which allow the music composer or lyricist to retain their copyrights in their songs and recordings used in that film. The author of a lyrical or musical piece cannot later claim infringement of his rights if he transfers the copyright of his work to the film producer.

A filmmaker can thus license their films and movies to a third party through a copyright license agreement and in turn, receive royalties for the same. One of the biggest examples of copyright licensing is Netflix. A lot of movies on Netflix are not their own, instead, they are licensed. Netflix pays royalties to the owner of the movies in exchange for streaming them on their platform. Royalties are valued based on the amount of time spent on production, the type of output, and the market in which the product appears.

• In M/s Lyca Productions & Anr. Vs. J. Manimaran, it was held that the titles of the films cannot be protected under the Copyright Act 1957 because they are too short to be considered an independent work. Apart from copyright contracts, filmmakers can enter into a lot of different agreements while making their movies starting from the production stage till post-production stage. Such agreements include rights purchase agreement for purchasing the script if allowed, life rights purchase agreement if a filmmaker decides to make a biography on a person’s life, option agreement, writer agreement, director’s employment agreement which provides compensation for development and production in case the director is hired, etc. 

What are the important clauses in a copyright contract?

In a properly drafted copyright contract, the subject matter should be clear. The rights that are being transferred or licensed should be stated clearly and specifically to avoid future disputes. Carrying out due diligence before negotiating a copyright agreement is necessary, such as conducting thorough research on technology, goodwill, and reputation, market share, possible future developments, and profits, etc.

Some of the important clauses that a copyright assignment should include

Object and scope

As mentioned earlier it is very important to clearly state the object as well as the scope or extent of the contract. It plays an important part in determining the right compensation and the goal of the contract.

Sample clauses 

“The Assignor hereby assigns, transfers and conveys to the Assignee, and the Assignee accepts the assignment by the Assignor, of all the Assignor’s rights, title, and interest, in and to the Assigned Copyright, to be held and enjoyed by the Assignee for its own use and benefit, and for the use and benefit of its successors, assigns, or other legal representatives, as fully and entirely as it would have been held and enjoyed by Assignor if this assignment and sale had not been made”

“The Assignor hereby irrevocably transfers and assigns to the Assignee, her/his/their/its successors, heirs, and assigns, in perpetuity, all Rights, Title, and Interest in the Copyright, throughout the world, including any renewals or extensions thereto, in the Work, for good and valuable consideration, receipt of which is hereby acknowledged.(Copyright reg. no. _________)” 

Term

The duration of the term for which the assignment is made should be specified clearly. The assignment can either be for a defined term or for a perpetual term. The rights are assigned for the remainder of their lawful term as of the date of the contract.

The term of the agreement needs to be fixed. In case of absence of term, the assignment will automatically be considered for the period of five (5) years under the Copyright Act.

Sample clause 

“This Agreement shall be deemed to have come into effect on the Effective Date and shall remain in full force for a period of five 15 years unless earlier terminated in accordance with the provisions of the Agreement”

Warranty

Both the licensor and the licensee make warranties or assurances about their ability to enter into this Agreement, ownership of the copyright, and compliance with the terms of this Agreement and the laws. Such additional warranties can be mentioned under this section if necessary. This clause ensures that the assignor holds title to the rights it is assigning, that the assignment is legal, and that it does not violate any statutory or contractual obligations or requirements.

Sample clause 

“The Assignor represents and warrants to the Assignee that the Assignor: 

(a)  is the sole owner of all rights, title, and interest in and to the Intellectual Property Rights;

(b)  has not assigned, transferred, licensed, pledged, or otherwise encumbered any Intellectual Property Rights or agreed to do so to any other party except the Assignee in any manner that conflicts with and/or hampers the execution of this Agreement;

(c)   has full power and authority to enter into this Agreement and to make the assignment provided in Clause 2, and perform all other terms of this Agreement;

(d)  is not aware of any violation, infringement, or misappropriation of any third party’s rights (or any claim thereof) by the Copyright;

(e)  is not aware of an infringement of Moral Rights of any third party;

(f) Is not aware of any questions or challenges with respect to the validity of any claims of any existing copyright or copyright applications relating to the Intellectual Property Rights;

(g)  If the Assignor engaged the services of any third party to develop any of the Intellectual Property, it has obtained legal and beneficial title to that Intellectual Property from that third party so as to be able to assign it to the Assignor as contemplated by this Agreement;

(h)  has signed and executed written agreements with all its current and past employees, founders, directors, consultants, and advisors assigning the Copyright to the Company.”

Further assurances

In this clause, the assignor promises to assist the assignee in obtaining any additional procedural clearances or regulatory permissions, such as document registration, defense of any judicial opposition, or any other proceedings necessary to effectuate and fully complete the ownership of his/her rights for their full use and enjoyment. This provision also helps the assignee to finish the transfer procedure and make appropriate use of the rights without being embroiled in legal or procedural snags. This provision is not always included in a contract. A party may be required to extend its assistance to another party in order for the latter’s responsibility to be completed. The second party will be unable to complete its task without such cooperation. We don’t want the first party to claim that the second party is in default due to its own lack of cooperation. As a result, in order to add clarity to the contract, it is critical to clarify the issues on which collaboration will be required.

Sample clause 

“The Assignor shall perform all further acts and things, as well as execute and deliver all further documents required by law or requested by the Assignee, in order to vest in the Assignee the full benefit of the right, title, and interest assigned to the Assignee under this agreement, including:

a) Registration of the Assignee as applicant or (as applicable) proprietor of the Assigned Rights; and

b) aiding the Assignee in acquiring, defending, and enforcing the Assigned Rights, as well as assisting in any other proceedings taken by or against the Assignee against or by any third party pertaining to the Assigned Rights.”

Confidentiality

This clause talks about whom the terms of the agreement can be shared and under what circumstances, the measures that should be taken to keep its contents confidential, and exceptions. If necessary, the parties can execute a separate non-disclosure agreement.

Sample clause 

“The Assignee shall not disclose or use the confidential information communicated orally or in writing, directly or indirectly, in violation of the terms of the agreement or for the benefit of any third party without permission and shall retain copies of the Assignor’s confidential information except as permitted under the agreement. The assignee shall use the confidential information only for the purposes for which it is provided and must safeguard the integrity of the shared confidential information to prevent any unauthorized disclosure.” 

Assignment of rights

This is a substantive clause that contractually assigns the copyright to the assignee. It is important to specify what rights are being assigned and the region/area of assignment. the assignment clause further specifies how ownership of the right is transferred from the assignor to the assignee.

Sample clause 

“The Assignor hereby assigns to the Assignee absolutely with full title guarantee any and all his rights, title and interest in the territory of __________ and to the Assigned rights including:

a) The absolute entitlement to any registrations granted pursuant to any of the applications comprised in the copyright;

b) Any and all goodwill attached to the copyright; and

c) The right to bring, make, oppose, defend, appeal proceedings, claims or actions and obtain relief (and to retain any damages recovered) in respect of any infringement, or any other cause of action arising from the ownership, any of the Assigned Rights whether occurring before, on or after the date of this Agreement.

The  Assignor hereby grants or will cause to be granted to the Assignee a non-exclusive, royalty-free, irrevocable, perpetual, transferable, worldwide license (with the right to sublicense) to make, have made, use, offer to sell, sell, import, copy, modify, create derivative works based upon, distribute, sublicense, display, perform and transmit any products, software, hardware, methods or materials of any kind that are covered, to the extent necessary to enable the Assignee to exercise all of the rights assigned to the Company under this Agreement.” 

Transfer of rights

It is important that the parties state and define their intentions regarding the transfer of future rights to any third party in writing.

Sample clause –

“Without the Assignor’s prior written consent, Assignee shall not transfer or assign any right, title, or interest in the Intellectual Property, or any ancillary rights arising from it to any other person. Any alleged transfer or assignment that is made in violation of this Clause is void.”

Payment of the assignment fee

This clause is very important and controls the financial obligations. It depends on the parties whether they want to have payment in one go or want to pay in installments. This clause specifies the assignment fee to be paid by the assignee to the assignor for the Assignment of the copyright. As tax clauses are also required to be taken care of in the agreement, a clause pertaining to GST or any other tax clauses should also be added in the agreement.

Sample clause 

“Assignee will pay INR._______(Indian Rupees to be filled in words) to Assignor on _____ (Time and date to be decided by the parties). GST will be calculated above the amount. Payment may be made subject to applicable tax deductions at source.”

Indemnity

This clause is included in the contract to protect the assignee from any misrepresentation in the copyright agreement. The Indemnification Clause shields the assignee from any expense, judgments, penalties, claims, or demands forced on him through no fault of his own, and thus provides protection against fraud or breach.

Sample clause 

“The Assignor represents and warrants that it has and will have appropriate rights over all the Copyright contributed or created in connection with this Agreement. It shall hold the Assignee indemnified against all claims in connection with Intellectual Property violations, or allegations of such violations from third parties or any other violations related to the Confidential Information as per this Agreement.”

Termination

This clause states when the agreement can be terminated. One of the most essential rights of the parties is the power to terminate the agreement. As a result, properly drafting a termination clause is important. The clause will be negotiated based on the nature of the party, that is, the assignee or assignor.

Sample clause 

“Either Party may terminate this Agreement at any time, by written notice and with immediate effect for any of the following reasons:                    

a) If a competent legal, regulatory, statutory, or supervisory authority issues directives, orders, or notices alleging malpractice or fraud, or if required by applicable laws;

b) In the event that the Party violates any law or regulation that may be in effect from time to time in the performance of this Agreement,

c) any infringement of the copyright of any third party;

d) breach or non-performance of any obligations envisaged in this Agreement.”

Dispute resolution

This provision specifies how a dispute between the two parties will be resolved if one arises in the future. This clause is pre-determined and agrees to handle the dispute amicably with the help of an arbitrator rather than going to court. Arbitration is a cost-effective method of Alternative Dispute Resolution (ADR) that is used for the resolution of commercial disputes. The jurisdiction clause and governing law should be mentioned under this clause.

Sample clause 

“Any disputes and claims arising out of or in connection with this agreement or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the provisions of procedure of the Indian Arbitration & Conciliation Act,1996. This agreement shall be governed in accordance with the laws of India. This agreement shall be subject to the jurisdiction of the courts at Pune, Maharashtra.”

Some of the important clauses that a copyright license should include 

Object and scope

Sample clause 

“The licensor hereby grants the licensee a (non)exclusive, non-transferable license to use the Copyrighted work in the course of its business and to otherwise copy, create, use, and sell the Work, subject to the terms and conditions of this Agreement. The licensee may copy and sell the Work for general advertising materials including advertising, and other promotional materials for the Copyrighted work in line with the terms set forth below.”

Term

The duration of the term for which the copyright is licensed should be specified clearly. It should be stated as either a specific date or a period of time following the license‘s effective date.

Sample clause 

“This Agreement will come into effect on ________ and will continue to remain in effect until ____________ unless terminated in accordance with the provisions thereof. After the termination of this Agreement, the licensor will acquire exclusive ownership to all the rights licensed to the licensee under this Agreement.”

Renewal

This clause specifies whether the License can be renewed and if yes, when can it be renewed. Sometimes the renewal of a license is automatic. The details of the renewal are mentioned in this clause.

Sample clause 

“Licensee may renew this Agreement for a Second License Period from [date] to [date], provided that the licensee has faithfully fulfilled its obligations stated under this Agreement. Notice of desire to renew this Agreement for the second time shall be given by the licensee no later than [date].  The licensee hereby acknowledges and agrees that the licensee has no right to extend or renew this Agreement beyond the term and renewal options as stated under this Agreement.”

Modifications

This clause specifies whether the licensee is permitted to make any changes to the copyright rights granted to him, and if so, who will have the rights to and ownership of any derivatives of those modifications.

Sample clause 

“Licensee shall not make or use any modification to any of the rights licensed to him without the prior express written approval of the licensor, whose approval may not be unreasonably delayed or withheld.”

Description of licensed property

The details about the licensed property can be mentioned under this clause of the Agreement. It should be stated herein details about what copyright or copyright rights are being licensed to the licensee. If required, a detailed description can be mentioned under a Schedule to the agreement.

Grant of rights

This clause defines the scope of rights and limitations of a licensed property. This includes the geographical area to which the use of the copyright is restricted and the purpose of issuing the License to the licensee.

Sample clauses 

“Licensor hereby grants to licensee, subject to the terms and conditions of this Agreement, a non-exclusive, non-transferable license to use the Work in the course of its business throughout the [country] and its territories, for its own internal business purposes, and for no other purpose whatsoever without the express written permission of the licensor.

 Licensee shall not sell or distribute the Work in any way. Licensee may copy the Work in accordance with the terms of this Agreement, for general advertising materials and point of sale displays, advertising, and other promotional materials for the Work, and for its own internal business purposes.

Any other use made by the licensee shall only occur upon the receipt of prior written approval from the licensor.”

“During the Term of this Agreement, licensor grants licensee a non-exclusive, worldwide license to use the rights licensed under this Agreement, including, without limitation, certain copyrighted works, solely in connection with the promotion of licensee’s relationship with licensor in connection with advertising or promoting licensee’s products and services, and for use in Regulatory Filings (as deemed appropriate by licensor (as herein defined).”

Sub-licensing rights

This clause specifies and clarifies whether the licensee is permitted to sublicense their rights and obligations granted to him/her under the agreement regarding the copyrighted work to any third parties and, if so, what restrictions or conditions apply to such sublicensing.

Sample clause 

“Licensee may not assign, pledge, encumber, or otherwise transfer any license granted in this Agreement, voluntarily or involuntarily, by operation of law or otherwise, without licensor’s prior written consent, which consent may be withheld in licensor’s sole discretion, and any attempt to do so in violation of this Agreement will be null and void. If any trade secrets are included in the IP Rights leased hereunder, licensee must not reveal, distribute, or otherwise expose the trade secrets to any other party.”

Consideration/royalty

This clause talks about a variable or fixed fee that a licensee must pay to the licensor to continue using the license. This fee is usually a percentage of net sales or gross revenue. It specifies the mechanism for calculating the licensee’s royalty, how it will be paid to the licensor, and who will pay the GST (Goods and Services Tax) on the transaction. It also includes a penalty for the late payment of the royalties.

Sample clause –

“The licensee agrees to pay the licensor a one-time royalty of Rupees _____ for the duration of this Agreement, as well as any renewals or extensions. Licensee shall pay to the licensor, a royalty of five percent of Gross Receipts from a profit of the copyrighted work. (The sale price less any rebate, discount, or return actually received is referred to as Gross Receipts). If the licensee fails to make any payment required under this Agreement when it is due, the licensor may, at its discretion, terminate this Agreement. The licensor will provide written notification to the licensee of termination of this Agreement if a required payment is not made within thirty (30) days of the payment’s due date.”

Ownership

This clause clarifies and states that the ownership of the copyrighted work belongs to the licensor and that licensee has no right to exploit it in any manner whatsoever.

Sample clause 

“Licensee acknowledges that licensor is the single and exclusive owner of the copyrighted work, as well as all associated federal intellectual property registrations and pending registrations if any, and that licensee will not act in any way that contradicts this ownership. Licensee further agrees not to claim ownership of the Work, or any derivative, compilation, sequel, or series of the copyrighted work, or any similar work owned or used by Licensor. licensee acknowledges that nothing in this Agreement grants licensee any right, title, or interest in the copyrighted work other than the right to use it in accordance with its terms. The licensee agrees not to create any derivatives of the copyrighted work that are comparable to the copyrighted work. Licensee recognizes that all copyrights for the Work and all associated intellectual property registrations are valid and that any and all rights acquired by licensee as a result of its use of the Work will inure solely to licensor’s benefit.”  

Revocability of license

This clause states when and under what circumstances a license can be revoked by the licensor.

Sample clause 

“In the event, the licensee does not commence in good faith and breaches the terms and obligations set forth under this agreement, the licensor in addition to all other remedies available to it shall have the option to terminate the License granted hereunder upon written notice of such termination to licensee.

In the event licensee files a petition in bankruptcy or is adjudicated as bankrupt, or if a petition in bankruptcy is filed against licensee or if licensee becomes insolvent, or makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy laws, or if licensee discontinues its business, or if a receiver is appointed for it or its business, all rights granted hereunder, without notice, shall terminate automatically upon the occurrence of any such event.”

Confidentiality

Sample clause 

“The licensee shall not disclose or use the confidential information communicated orally or in writing, directly or indirectly, in violation of the terms of the agreement or for the benefit of any third party without the permission of the licensor and shall retain copies of the licenser’s confidential information except as permitted under the Agreement. The licensee shall use the confidential information only for the purposes for which it is provided and must safeguard the integrity of the shared confidential information to prevent any unauthorized disclosure.” 

Conclusion

Thus, in the film industry, copyrights are crucial because they ensure that proper procedures and rules are followed both before and after the film is made and released. Copyrights safeguard a film’s creators and contributors, allowing the business to operate in a methodical and fair manner. Drafting a copyright contract is no easy job and involves a lot of complexities. Every stage of drafting a copyright contract is equally significant. If not correctly drafted, it may cause problems in the future. With new films releasing each year, the demand for copyright contracts rises dramatically and continues to give the filmmakers opportunities to safeguard and protect their creations.

References 

• https://www.filmdaily.tv/template/film-contracts-and-agreements-protect-your-film
• http://nopr.niscair.res.in/bitstream/123456789/39704/1/JIPR%2021(5-6)%20283-287.pdf

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