Adventures in Fan Fiction - Lord of the Rings Edition

                Recently, a few decisions were issued involving an unauthorized sequel to The Lord of the Rings (“LOTR”). In one, a court found that Amazon and the Tolkien Estate did not infringe upon the author’s book. In the second, the court found that the author’s book infringed upon the rights of the Tolkien Estate.

                Demetrious Polychron filed a lawsuit in April against Amazon, the Tolkien Estate and many others. In the filing, Polychron claimed that he wrote a sequel to LOTR called The Fellowship of the King. He sent copies to Tolkien’s grandson asking for the work to be published, and he did not receive a response. He subsequently published the work himself, and he intended to publish a seven-book series. Polychron’s lawsuit claimed Amazon’s Rings of Power series copied elements from his works and constituted copyright infringement. He sought at least $250,000,000 from the parties involved for copyright infringement.

                In a summary judgment ruling, the court found that Amazon’s Rings of Power did not infringe upon Polychron’s book. In fact, the court found that because Polychron’s book was an unauthorized derivative work based on LOTR, he was precluded from bringing a copyright infringement claim.[1] In analyzing the work, the court reiterated the rule that copyright owners have the exclusive right to prepare or authorize derivate works based upon their preexisting work. Polychron’s work used characters from LOTR and was a direct continuation of the work. As such, it was a derivative work and not entitled to copyright protection[2].

In the second case, the Tolkien Estate filed a copyright infringement lawsuit against Polychron. The court recently issued an permanent injunction forbidding Polychron from making further derivative works based on LOTR and to destroy any existing copies of the current works.

This case continues a fairly strong line of cases showing that unauthorized derivative works will likely be found to infringe upon copyright. When a work utilizes characters, worlds, and plot elements from a previous work, it runs the risk of a copyright infringement claim. The risk significantly increases when the work is being sold for profit and directly competes with the market for the original work. The only derivative works that have been found to be fair use are those that tend to provide commentary on the original. A work that is just a continuation of the story in the original will likely not be a fair use.

If you want to write fan fiction, it is important to be aware of these cases, and if possible, structure your work in such a way as to avoid a copyright infringement claim.

Final notes about this case:

1)      Polychron received a copyright registration for his work. This is a reminder that the copyright office does not usually weigh the merits of whether a work is an infringement when processing registrations.

2)      Polychron sold his work. Selling your fan fiction for profit raises the chances of a lawsuit.

3)      Suing the original copyright owner for infringement of your unauthorized derivative work rarely turns out well.

---

[1] See page 10, Order Granting Defendants’ Motions to Dismiss the First Amendment Compaint, 2:23-cv-02831-SVW-E.

[2] Id. at page 12. 

Comic Book Recommendations - 2023

            It’s the end of another year, and it’s time to recommend some of the comic books I read this year. As I mentioned in previous years, I tend to primarily focus my recommendations on creator-owned titles, these will mostly be graphic novels/trade paperbacks, and they may not all have been released this year.

As always, I’ve provided links where I can. Links to Amazon will be affiliate links. Anywhere else is not. Even so, if you’re intrigued by these books, try to buy them from your local comic shop or book store. You can find previous years’ recommendation by clicking on the corresponding year: 2020, 2021, 2022.

Fairlady, vol. 1, by Brian Shirmer and Claudia Balboni

A fun fantasy comic with a detective bent. Each issue is self-contained with hints pointing to a larger narrative.

Love Everlasting, vol. 1, by Tom King and Elsa Charretier

An interesting riff on romance comics of yesteryear with a neat twist. I always look forward to picking up the next installment in this series.

Know Your Station, by Sarah Gaily and Liana Kangas

Set on a space station in the future, Know Your Station is a sci-fi/horror series with class-conscious bent.

Dead Eyes, vol. 1, by Gerry Duggan and John McCrea

Readers of the blog may remember my posts (here and here) about this book when it first came out and found itself in trademark trouble. After changing the title from Dead Rabbit to Dead Eyes, the series was released. It’s a gritty, mobster-inspired tale set in Boston following the exploits of an old criminal returning for one last score.

It’s Lonely at the Centre of the Earth, by Zoe Thorogood

One of the most original books I read this year, the art and layout push against the norms of stereotypical comic book, and the subject matter, the author’s mental health during a turbulent year, is compelling and challenging.

 

Dead Legends II, by James Maddox and Gavin Smith

A sequel that picks up after the first Dead Legends (a glaring omission from last year’s list), Dead Legends II is  a martial arts book that features excellent action-oriented art and a solid story of revenge, honor, and family.

 

Andre the Giant: Life and Legend, by Box Brown

This book chronicles the life of the wrestler Andre the Giant. The art may be deceptively simplistic-looking, but the story alternates between funny and heartbreaking. An excellent biographical comic.

Fables of the Public Domain - Part 2

 

This is the second post discussing Bill Willingham’s announcement that Fables is now in the public domain. You can find the first post here.

Previously, I discussed the problems surrounding the actual act of dedicating a work to the public domain before its copyright term has expired. Today, I will discuss some of the other problems arising from Willingham’s announcement.

The second problem we encounter when discussing Willingham’s statement is that you have to be the owner of the works in order to dedicate them to the public domain. Willingham claims that Fables is a creator-owned work, and that he is the sole owner of it.[1] The few records at the copyright office I skimmed are inconclusive, with the majority showing DC Comics and Willingham as co-owners and some registered solely in DC’s name.  In a response to Willingham’s declaration, DC stated that the works are still protected by copyright, and they are not in the public domain. 

Willingham claimed in his post that DC breached their agreement by claiming ownership in his works, and that he alone is the sole copyright owner. Without knowing the exact details of the agreement between Willingham and DC, it is impossible to know with certainty if Willingham owns all of the rights to Fables.

If he doesn’t, then it seems likely that he would not be able to dedicate Fables to the public domain. Comics are a joint work, and absent an agreement to the contrary, joint authors share rights equally in the work. I do not believe it is possible for one author to dedicate a work to the public domain without the other joint author’s consent. It is actually a tricky question that needs more research as to whether a joint author could dedicate their own part of the work to the public domain, for instance the scripts Willingham wrote.

Finally, even if he did have the right to dedicate his works to the public domain, he may be in breach of contract by doing so. If DC has the publishing rights, and he damages their ability to exploit them, then, depending on the contract language, he could be found to be in breach of the agreement. There are probably other types of legal claims, based in tort law, that DC may also be able assert against Willingham.

                In a follow up comment Willingham reportedly made on Twitter, he stated that the rights he has granted do not “include the right to reprint previously published Fables books and stories.”[2] A fundamental aspect of the public domain is that other people are free to do whatever they want with the work. If people are not free to exploit the work however they want, then it’s not really in the public domain. This comment suggests he is acknowledging DC may have some rights to the works, either via copyright or contract. It also suggests that what Willingham is doing is not really dedicating Fables to the public domain, but an attempt to encourage others to make derivative works.

Willingham’s attempt to dedicate his work to the public domain during a dispute with his publisher is actually quite fascinating. Whether he can do so, and whether he will be successful, may take some time to play out. Either way, I am following this closely.

---

[1] https://billwillingham.substack.com/p/our-amazing-sunday-afternoon-update

[2] https://www.comicsbeat.com/dc-comics-fables-not-in-the-public-domain/

Fables of the Public Domain - Part 1

 

                Bill Willingham threw a curveball at the comic book industry when he recently announced that he was dedicating his Fables comics to the public domain.   In his blog post, he stated that he was doing so because of disputes with DC Comics, the publisher of the Fables comics. This announcement has brought up numerous interesting issues, and I will try to address them below.

The first issue that comes up is whether he can dedicate his works to the public domain. This is a tricky question for a few reasons.

First, there is no firmly established mechanism to prematurely donate works to the public domain. Works usually only enter the public domain once their term of copyright protection has expired. The term of protection can vary, but the general rule is life of the author plus 70 years.

 The legal community seems split on whether someone can truly put their works into the public domain before the end of copyright protection, with many viewing any early dedications to the public domain being more akin to an agreement not to sue for what would otherwise be copyright infringement. Mostly, this is because there is nothing preventing someone from later recanting it.

Nevertheless, there are ways someone can attempt to dedicate their works to the public domain. A public statement declaring a work to be in the public domain is one method.  Another would be to place a statement on the work at the time of publication. There are licenses that work similarly, such as Creative Commons 0. Others have put their works into trusts, which can function according to the artist’s wishes. This is the approach Tom Lehrer took when released his songs into the public domain.

Even though some question whether a work can be dedicated to the public domain early, statements that works are in the public domain can be held against the creator. For instance, a few years ago photographer Carol Highsmith, who has dedicated her photos to the public domain,[1] sued Getty Images after receiving an invoice from a monitoring service working on behalf of the photo agency. Highsmith’s images had been uploaded into Getty’s for-profit licensing program, either by Getty or by users,  and the monitoring service claimed Highsmith’s use of her own photo violated their licensing rights. . Highsmith sued Getty after discovering that thousands of her photos had been uploaded into their program, and Getty was continuing to charge users a licensing fee. The court dismissed many of her claims, and it appears likely that it was due to the fact her works were dedicated to the public domain.[2] Unfortunately, there was not a written decision in the case explaining the rationale for the decision; so, it is an assumption that the photos’ status as being in the public domain played a part in the decision to dismiss. It’s also worth noting that she dedicated a certain amount of her works to the Library of Congress via a document titled “Instrument of Gift”, which stated, “I hereby dedicate to the public all rights, including copyrights throughout the world, that I possess in this collection.” You can see more of her collection here along with the rights and restrictions language. 

Next week, I will post about some of the other issues involved with Willingham’s pronouncement.

---

[1] There is some confusion in the reporting as to whether she donated them for public use, and retained copyright, or to the public domain. Unfortunately, we never received a ruling in the case on this point.

[2] See case files of Highsmith v. Getty Images, Inc., 1:16-cv-05924 (SDNY 2016). See also https://petapixel.com/2016/11/22/1-billion-getty-images-lawsuit-ends-not-bang-whimper/.

Who owns the copyright in AI-generated works? - Part 2

 

                A federal court recently issued a ruling stating that works created by AI are not eligible for copyright protection. There was much rejoicing. Unfortunately, this question is far from being settled, and there are still ways for AI-generated works to receive protection.

                The case[1] involved a piece of art generated by an AI program. The plaintiff, Stephen Thaler, argued that the AI program should be listed as the author of the work, and Thaler should be the owner of the copyright because he owns the program. The court found that copyright law only grants protection to works created by humans. This is the first court ruling on whether an AI-generated work can be subject to copyright protection, and, if it is not appealed, could be influential. It should be noted, however, that the decision is not binding on other courts.

                While this is a good first step, the court did leave open areas that are sure to be fought over later. In its discussion, the court said that human involvement in creating a work could entitle the work to copyright protection. Currently, based on Copyright Office guidance, this is limited to selection and arrangement. So far, there is no bright line regarding how much involvement will be necessary to make an AI-generated work copyrightable. The courts, or Congress, will eventually have to set forth the framework for how much human involvement is needed to enable copyright protection for an AI-generated work. So far, entering prompts into a keyboard and allowing the computer to create something is not enough human involvement.

                The Copyright Office is going to have a lot of trouble with this in the future. The two major instances that addressed AI works so far have voluntarily identified use of the AI in the work. If people do not declare use of an AI program in the work, then the Copyright Office will be unlikely to catch it and refuse the application. This will likely create lots of problems going forward. For instance, you could have people attempting to enforce their copyright for a work that shouldn’t be entitled to copyright protection. Also, if someone believes a registration was improperly issued, people will challenge the copyright registration to try and invalidate them.

                As I mentioned in my previous post on copyright ownership in AI-generated works, and above, only time will settle these issues. We are getting closer to having some guidelines around copyright ownership for these works, but there will likely be some more twists and turns before we know where it stands.

---

[1] Thaler v. Perlmutter, No. 22-1564 (D.C. Dist. 2023).

Book Review: How to Self-Publish Comics: Not Just Create Them

                Josh Blaylock’s How to Self-publish Comics is a practical, informative book. It offers great insights into the nitty gritty details of running a publisher.  The copy I read was the fifth edition, and it was released in 2019. A lot has changed since then. Nevertheless, any reader looking for more detailed insights on how to run a publisher will find it interesting.

                The book consists of two parts. The first, written by Blaylock, primarily focuses on the ins-and-outs of running a comic publishing business. Blaylock walks people through the steps of creation, printing, distribution, invoicing, and sales/marketing. Along the way, he provides interesting commentary and insights, and he offers practical tips for aspiring publishers. It even provides access to forms, examples, and access to templates/form generators. The second part is written by Tim Seeley and discusses the realities of being a comic book artist.

                Both Blaylock and Seeley have written in engaging styles, and the book is a quick read. At times, Blaylock will opine and prognosticate on the history of the industry and its future. Some of these topics will be familiar to those who follow the comic book industry, and many of them have remained the same for some time, but some have already proven wrong. Then again, Blaylock couldn’t have predicted the turmoil of the pandemic and how it shook up the industry, and the current economic headwinds facing the industry.

                The only area where Blaylock stumbles is when discussing some legal topics. His discussion of copyright and trademark law is sometimes inaccurate, and in one instance regarding federal trademark registration and the ® symbol wrong. Hopefully, if another edition is released, this will be updated and corrected.

              Overall, How to Self-publish Comics is and enjoyable and informative read, and anyone considering self-publishing comics should read it.

Affiliate Link:

A few thoughts on #comicsbrokeme

 

                A few weeks ago the #comicsbrokeme hashtag was trending on social media. I, like so many others, was both saddened and unsurprised by the stories I read. The comics industry is notorious for low pay, bad hours, and poor treatment, and the stories shared recently only show that things have not improved.

                As an attorney who works with comic book creators, seeing these stories frustrates me and, to some extent, breaks me too. I have seen firsthand some of the deals publishers, studios, and others offer comic book creators, and too often they are terrible. Flippantly, it is easy to say that the only way to avoid a bad deal in comics publishing is to not sign any deals. Creators can get screwed over at every stop along the creative process: by other creators, by agents, by publishers, and by producers/studios. If only the bad deals were just work-made-for-hire deals, it might be easier to handle, but they have even pervaded “creator-owned” comics. Even with lawyers, agents, and other advisors counseling them on the strengths and weaknesses of deals, creators still often accept bad deals—mostly because they feel they have to in order to advance their careers and because they don’t feel like they have other options.

I wish I had answers, but the only answer I have is to say no, which I have discussed on this blog previously. And I know that saying no can be incredibly hard for many creators. Perhaps the best way to protect yourself, at least in the creator-owned space, is to know what matters the most to you and not compromise on it. Do you want to make sure you retain ownership and control over your work]? Don’t compromise. Don’t give publishers an interest in your copyright. Don’t let others make decisions about your work without your permission. Is it fair pay? Figure out ways to structure the deal so that you are a more even footing with other creators, publishers, etc. Do you just want to make sure you get paid? Then make sure you get paid upfront, or on a fixed schedule, at a rate you can live with. These are not certain solutions, but they tend to avoid some of the worst heartbreak I see—at least in creator-owned.

For work-made-for-hire comics, things won’t improve until publishers are forced to improve working conditions. It may happen from guilt; it may happen due to a change in the law. Like I said above, I don’t have great answers—other than saying no. Say no to poor pay. Say no to unrealistic deadlines. Say no to terrible treatment.

Unless something changes, the only way to protect yourself is to stand up for yourself, and hopefully, by standing up for yourself, you may inspire change.

Will Warhol Foundation v. Goldsmith impact comics?

 

Editor’s Note: The full text of the case can be found here. I will not be providing citations in my discussion below.

                The U.S. Supreme Court recently issued its decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. The case concerned a screen print of Prince by Andy Warhol, which was based upon a photograph taken by Goldsmith. In the case, which the Court expressly limited to the Warhol Foundation’s licensing of the work to a magazine following Prince’s death, the Court found that the use was not transformative and that it did not qualify for fair use protection.

                Vanity Fair licensed from Goldsmith the right to have an artist—Warhol—use the photo as a reference to create a piece for the magazine (the “Purple Prince”). The license was for a one-time use. Warhol created the work for Vanity Fair, and he also created 15 other similar works that were all based on the same photograph taken by Goldsmith. After Prince’s death, Condé Nast licensed from the Warhol Foundation the rights to use one of these other Prince works (the “Orange Prince”). Upon the discovery of Orange Prince, Goldsmith informed the Warhol Foundation that the she believed the work infringed her copyright. The Warhol Foundation filed a declaratory judgment action in an effort to have the work declared a fair use. The district court granted summary judgment ruling it a fair use, and the Second Circuit reversed the decision. As stated above, the Supreme Court found:

…the sole question presented is whether the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes,” §107(1), weighs in favor of AWF’s recent commercial licensing to Condé Nast. On that narrow issue, and limited to the challenged use, the Court agrees with the Second Circuit: The first factor favors Goldsmith, not AWF.

                The Court did not address whether any of the other Warhol Prince Works would qualify as a fair use. Instead, it focused solely on the licensing of the Orange Prince to a magazine, which it deemed as a commercial purpose, and the impact that license would have on the market for Goldsmith’s original photo because they “share substantially the same purpose.”

It is still too early to determine how this case will impact fair use going forward. Some commentators think that the limited ruling, as described in the quote, lessens the impact. Others, including those justices in the minority opinion, fear that this could lead to a major shift in copyright law and curtailing of fair use.

Nevertheless, comic book creators, particularly artists, should take note of the decision.

First, the Purple Prince Warhol created used Goldsmith’s photo as a reference. When it was originally created, Vanity Fair paid Goldsmith for its use as a reference and credited her. The Court also notes that Warhol regularly paid artists for the use of their works as reference. In comics, it is common for creators to use photographs as reference. This decision could encourage photographers, or those who acquire the rights to their works, to pursue litigation against those who use photos as reference.[1] Will using a photo as reference without a license be enough to justify infringement, particularly if the photo primarily exists to be licensed? The claim seems stronger today than before this case.

Second, in Goldsmith, the Court found that licensing the art was commercial use, and thus, when weighed with the other fair use factors, did not constitute fair use. The Court left open the question of how commercial does the use of the art have to be in order to weigh against fair use. To some extent all art is commercial. If you sell your art, it could be found commercial.  The Court didn’t address typical artistic commerce, and suggested a different analysis might result from typical art sales versus what occurred Goldsmith. Will use in a comic book be commercial use? I would hope that it would not be, as comics are a unique art form entitled to First Amendment and fair use protection, but comics are also a commercial art form. Using photo reference in your comic could increase the risk of potential lawsuits.

Third, if you utilize the art from your comics in other ways, you will want to be more careful with the images you choose. Will using photo referenced art on other materials, such as merchandise, prints, or posters be a commercial use? Based upon the Court’s decision, this is likely a yes.

Finally, if you are an artist, and you are using a photo referenced piece of art in your comic, you may be in violation of your contract. Most publishing contracts have the artist state that the art is original to them and will not infringe on a third-party’s rights. If your publisher gets sued because of the art you provided to them, you could be forced to pay for all of the damages and legal fees they incur because of it. This is why the representation and warranties and the indemnification sections of contracts are so important.

Hopefully, the impact of the Goldsmith decision will not be severely felt in the comic book industry, but, depending on how it is interpreted, there is the possibility of increased litigation in the future over photo referenced artist works.

---

[1] This is something Jeff Trexler at the CBLDF has been mentioning as a problem for a while.

Book Review: Fandom and the Law

 

            When I saw that Marc Greenberg was writing a book discussing the legal issues surrounding fan fiction, fan art, fan films, cosplay, etc., I was intrigued. First, I was interested in seeing how Greenberg discussed these issues. These topics are difficult to tackle because the law is always changing, and the guidance attorneys look to—namely court decisions—can be sparse in this area. Second, the opinions of attorney can vary in regards to this topic. Some believe fan-created works should always be found to be acceptable under the law, some believe fan-created works should almost always be found to be unacceptable under the law, and some believe the question of whether-or-not a fan-created work is acceptable under the law depends on the circumstances. Finally, I was looking forward to reading this book because I’ve had the pleasure of meeting Marc a few times at Comic-Con. I find him to a very knowledgeable lawyer, and I was intrigued to read more about his insights on these topics.

Overall, Greenberg’s Fandom and the Law walks a fine line between trying to appeal to both attorneys and creators and occasionally stumbles while doing so. It falls short in providing a thorough evaluation of the risks fan creators may face. Nevertheless, Fandom and the Law provides a great overview of some of the legal issues surrounding fan-created works.

                In Fandom and the Law, Greenberg utilizes a mix of legal and practical advice, along with examples, throughout the book. He attempts to provide enough background knowledge in the law to educate creators on the risks they face, both from content owners and from those who might exploit their works. He also dives into some topics and areas of the law that are not relevant to creators and would only be beneficial to attorneys, such as evaluating case strategy and motion practice. This can make for uneven reading. At times, it felt like I was back in law school listening to a law professor, which makes sense considering Greenberg has been teaching law for decades.[1]

                When discussing the law, the book primarily draws from case law or disputes that involved pop culture intellectual property. Some examples Greenberg discusses, such as ComicMix and the Star Trek Axanar case, I have covered previously in my blog. While it is a nice way to narrow down the scope of the book, it does leave some case law out that can be relevant to discussions involving commercial sales of art, copyright, rights of publicity, and trademarks. Failing to do so might give readers the impression that intellectual property laws are more favorable to fan-created works than they actually are. Greenberg appears to be in favor of fan-created works, and occasionally, the book seems to minimize the legal risks fan-creators might actually face.

                The law surrounding fan-created works continues to evolve, and, as mentioned above, attorneys have differing opinions on the legality of such works and the levels of legal risk these fan-created works face. Some of the cases Greenberg discussed in his book resolved differently than anticipated after the book was published, and there are currently pending cases before the U.S. Supreme Court that may alter the law going forward. In my opinion, it is important for creators to understand that any time they are using something that they did not create in their work (such is the case in most fan-created works) they are at some risk. As whole, Greenberg’s book can be read to impart this advice, but it would have been nice to have it more explicitly laid out for aspiring creators.

                Overall, Fandom and the Law is an accessible read that will be beneficial for creators or attorneys looking for a better understanding of legal issues surrounding fan-created works.

Affiliate link below:

---

[1] Sorry Marc, but it’s true.

Who owns the copyright in A.I.-generated works?

 

A.I.-generated works have been in the news for some time, and they are currently generating a lot of interest—both positive and negative. There are a lot of complicated issues with A.I.-generated works, and I am not going to discuss them all here at the moment, partially because the law is still evolving around them. However, there is one topic I briefly want to discuss: authorship and copyright protection.

In most instances, ownership of a copyrighted work initially belongs to the author of the work, and it is the owner of the copyright who can enforce those rights against others. If a work is not eligible for copyright protection, such as if it lacks creativity, is functional, or is in the public domain, then there is no copyright, and others cannot be prevented from using the work via copyright law.  

                In my opinion, one of the biggest issues that will determine how A.I.-generated works will impact creators is if copyright protection applies to these works. If an A.I.-generated work cannot be protected by copyright, then it will lack value for many companies. Without copyright protection, it would be incredibly difficult, if not impossible, to protect the work from use by others.

                When asked about this previously, my response has been that, based on the law as it stands, A.I.-generated works are not protected by copyright. Recently, the Copyright Office has issued two notices that provide further insight into how A.I.-generated works will be viewed.

                In the first memo, the Copyright Office clarified how copyright ownership would be applied to a graphic novel, Zarya of the Dawn, created using images from Midjourney.[1] The Copyright Office stated that Kristina Kashtanova would receive copyright protection in the text she wrote and the “selection, coordination, and arrangement of the Work’s written and visual elements.” The images generated by Midjourney, however, would not be protected by copyright because they were not created by a human. Essentially, Kashtanova owns the rights to the text and the overall appearance of the graphic novel, but not to the underlying images.

                In the second, the Copyright Office is proposing how it would treat applications for copyright protection of works created using A.I. The Copyright Office has stated that the determination of copyright protection will vary on a case-by-case basis. However, works generated purely by A.I. without addition or revision by a human author will not be entitled to copyright protection, and for works where a human author has used A.I.-generated work to create something else, the human author would receive copyright protection for the “human-authored aspects of the work…” or for the entire work if it is sufficiently creative enough to constitute “an original work of authorship.”[2]

                These two pieces appear to be in line with the current state of U.S. copyright law. A copyrighted work must be created by a human, but the amount of creativity needed to obtain a thin amount of copyright protection can be minimal. For instance, I can take a selection of public domain works, compile them into a book, and I would likely receive copyright protection for the book based upon the selection and arrangement of the works. Others are free to use the works independently, but using the same public domain works in the same arrangement as I selected could be a violation of my copyright.

                Fighting over authorship and copyright ownership is likely to be a major topic going forward. In order for A.I.-generated works to have true value, akin to traditionally human-authored works, then some form of copyright protection will be needed. The current state of the law affords A.I.-generated work minimal or no protection. The only way this will change is through litigation, and I find it hard to believe courts will diverge too far from the Copyright Office’s current interpretation of the law, or through lobbying to change the law.

                Personally, I would prefer a bright line rule of law prohibiting protection for A.I.-generated works. The primary reason for my view is because this technology will likely result in the loss of jobs for countless artists, writers, and other creatives. Second, I just don’t see the benefit of rewarding these types of works with copyright protection as they don’t really have artistic merit, and finally, because if A.I.-generated works are entitled to protection, the amount of litigation or threatened litigation that would ensue would be astronomical due to the ease with which A.I.-generated works are created and the amount of works that will be generated.

                Only time will tell how these issues will resolve, but I will be closely following the law as applied to A.I.-generated works very closely.  

---

[1] https://copyright.gov/docs/zarya-of-the-dawn.pdf

[2] https://www.federalregister.gov/documents/2023/03/16/2023-05321/copyright-registration-guidance-works-containing-material-generated-by-artificial-intelligence

The Basics of Option Agreements - Part 4

 

Editor’s Note: This is part 4 on my series discussing option agreements. You can find parts 1, 2, and 3 at the links.

            In order to wrap up my series on option agreements, I want to discuss compensation other than the initial option fee and purchase price, and I want to briefly discuss shopping agreements.

When negotiating an option agreement, the initial focus will be on the option fee and the purchase price. These are important, but additional forms of compensation should be offered by the studios, and if not, then should be requested. If you are lucky enough to have a work that is optioned before it has been released, then you should request bonuses if the book is on any best seller lists or wins any awards. For a TV series, creators typically receive a royalty for each episode. It is also common to receive a bonus if the series is sold or runs for a set number of episodes. Creators also receive a small percentage of the overall minimum adjusted gross revenue of the work and a percentage of merchandise sales as well. These are just a few of the other forms of compensation creators can receive when a property is optioned and produced, and creators should make sure they are included.

Another form of compensation is consultant or producer roles. This tends to be a stickier point for studios than other forms of compensation, but creators should seek them out. As I mentioned in a previous post on executive producer credits, they can be prestigious, and they can be a nice source of additional income. Depending on your role, you can receive additional payments and bonuses based  on the success of the adaptation and contributions you provide.    

Finally, I want to briefly talk about shopping agreements. Shopping agreements are most often used when a third-party has interest in adapting your property and wants to see if they can drum up interest in it. If they are successful, then they will have the ability to either adapt the work or participate in the adaptation. Often, these will include a small fee, or no fee, paid to you. These are also typically shorter than option agreements. I tend to be wary of these types of agreements, particularly if there is no fee paid to the creator, but they can be useful in developing a project that might not have gone anywhere otherwise.

The ins-and-outs of option agreements and, to a lesser extent, shopping agreements, can be overwhelming. However, having a basic idea of what to expect, and knowing what you might want out of the deal, will go a long way toward making the process easier for you, and it will hopefully allow you find a deal that will satisfy you.

The Basics of Option Agreements - Part 3

 

Editor’s Note: This is part 3 on my series discussing option agreements. You can find part 1 and part 2 at the links.

                Previously in my series on option agreements, I discussed the basics of what an option entails, rudimentary numbers, and some of the intricacies around the rights being granted. This post will discuss termination and reversion. Simply put, termination is when the agreement ends or is terminated  and reversion is when the rights being granted revert back to you. Sometimes these terms may be used interchangeably, but there is a meaningful difference.

As I mentioned in my first post, an option is usually granted for 12-18 months with the ability to extend. This would be the Term of the agreement, and if the option is not exercised, the agreement would terminate. There may also be language allowing either party to terminate an agreement early if certain things occur, usually involving a breach of one of the party’s obligations.

A reversion is when rights that have been granted to a third party revert back to you, which would only occur if the option had been exercised which means the third party has acquired the rights to adapt your work. It is usually viewed differently than an early termination because no party is in breach of the agreement or has otherwise violated the agreement. Often, it means that time has run out to develop the work, or the work has stopped being exploited.

Key elements of a reversion are when it takes place, what is included and how much money is the third party entitled to for the reversion.

It is common for reversion to take place if development has not occurred within a set amount of time, or if production has not started on a project within two years from the exercise of the option. It can also revert if a pilot is produced but not picked up, and if a series was started and then cancelled.  

It is also important to address what is included. Sometimes it is a complete reversion, and you now own everything the studio worked on. Sometimes, it is just a reversion of underlying rights, and the materials the studio developed will be frozen, with neither party able to use them. This latter part is more common with developmental materials if the option is not exercised than if it is. However, it’s still important to be aware of it.

If the property is subject to reversion, then it is common for the third party who exercised the option to request to be repaid all money it has spent on the property plus interest, a royalty payment, and a future percentage of backend. This can vary depending on who is requesting it, but you will see it in most option agreements. The figure can also vary depending on how much time has passed.

My next post will wrap up this series and will address other types of consideration and a brief mention of shopping agreements.