Lets face it. Creating a web series is just as much about casting and writing scripts as it is about building a business. We’ve been scouring the world for an attorney that knows both the entertainment and the startup side of things. We finally found him. In the first installment of his new bi-monthly ‘Ask the New Media Attorney’ column on Tubefilter News, James C. Roberts III of Global Capital Law Group (email him) will be answering your questions about the ins and outs of entertainment, startup and intellectual law. So, what are you waiting for, ask away!
Remember: Your mileage may vary, or to put it another way, these answers are not legal advice. How the law applies to you will depend upon the facts of the situation. Talk with a lawyer about those facts. In some cases, talk also with an accountant.
Question: Two of my friends and I have come up with a great idea for a Web TV show. One of those friends now wants to leave and he claims that the show idea is his. Is it?
Answer: The short answer is: Yikes!! And the basic answer is: In the absence of a written agreement clarifying ownership you will spend a lot of time and money in court trying to prove the claims to the rights.
No written agreement means that each person could claim equal rights to the idea. There’s not a lot that could stop the departing person (we won’t get into the option of registering a script). Conversely, each of the other two of you could claim rights in whatever he creates from the program (because you have claims equal to his).
Suppose one of the three wrote down the idea. Arguably, that person could have a stronger claim on ownership but it’s still pretty cold comfort. The others could still make a claim that the program idea included their contributions.
In some situations (especially in the entertainment world), one could claim an oral agreement was created, but you have to prove its existence in court. Do you have the money and time to do that?
In the future, start with an NDA. Then, have a written and signed agreement that says “Jane owns all rights in the idea “X” and she gave each of us a peppercorn in exchange for whatever rights we might claim.” Then everyone sign it. OK, OK, it’s true: The agreements have to be more complete than that, but just get it straight that life is a lot better with a written and signed agreement. And, there must be consideration, i.e., the peppercorn. This means that when an agreement has someone giving something then he or she must get something in return—the “consideration.” Without it the agreement could be said not to be valid. So: Write it down.Give consideration. Get it signed.
Another solution: Each person can contribute his or her claims in the program ideas to a company in exchange, say, for equity. If the equity has already been given, then the company can pay each person some nominal amount (that would be the consideration) for assignment or even a quitclaim (don’t ask). The contribution would be better.
There are many alternatives to reach the same goal (clear ownership), but they are complicated. Just remember: Have a written and signed agreement with consideration whenever IP rights are involved.
And if you are still not sure, then search the Web for stories about the origin of Facebook and the fight (and purported settlement) with the original dorm-mates.
Question: My company paid a web developer who created a website for our web television network, which is now live. Do we own the website?
Answer: Here’s the basic rule: The person who creates something owns it unless there is a valid written assignment. (“Create” goes beyond just thinking it up; that person made it.)
If there is no written and signed agreement that says “You make it and we pay you and you assign us all rights in it” then, as the creator, the web developer probably owns the website.
Most web developers don’t want to own someone else’s website, so your company and the web developer could sign an assignment agreement. Additional consideration beyond the previous payment will probably be necessary, though “consideration” does not need to be money. Also, make sure also that your company has been granted a license in anything in the website that is part of the developer’s “toolkit.”
Many people think that a “work made for hire” provision in an independent contractor’s agreement will transfer all rights. Technically, this can be true, if certain conditions are met—e.g., the work in question fits within one of the specified categories and the agreement is in place prior to the work being started.
If the web developer is an individual and one or both of the parties is in California, be very careful about such provisions. The company will be subject to onerous provisions of California statutes governing employment. These provisions could result in stiff penalties and even criminal convictions.
James C. Roberts III is the Managing Principal of Global Capital Law Group and CEO of the strategic consulting firm, Global Capital Strategic Group. Between the two groups there are offices in California, Colorado, the East Coast, Shanghai and Milan. He heads the international, mergers & acquisitions and transactional practices and the industry practices concentrating on digital, media, mobile and cleantech technologies. Mr. Roberts speaks English and French and, with any luck, Italian in the distant future. He received his JD from the University of Chicago Law School, his MA from Stanford University and his BS from the University of California Berkeley. Have a question? Email James
This ‘Ask the New Media Attorney’ post discusses general legal issues, but it does not constitute legal advice in any respect. No reader should act or refrain from acting on the basis of any information presented without seeking the advice of counsel in the relevant jurisdiction. Tubefilter, the author and the author’s firm expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this post.