All businesses created must be created with some form of legal protection in place. The film industry is one of the most litigious industries in America. Film companies face lawsuits daily as parties file claims of copyright and trademark infringement. Another film company maybe sued for violating child labor laws in regards to child actors. With all of these litigations happening, how does a new film company protect themselves? We are going to analyze actual litigations and determine what provisions are needed to protect our businesses from potential lawsuits.
In employing the use of minors in the entertainment industry, Sanchez v. Nickelodeon provides a good example of what a film company should give adherence to. Caitlin Sanchez was hired at the age of 12 by Nickelodeon to play the animated character Dora, the star of Dora the Explorer. Caitlin was paid $5000.00 per episode as well as some residuals from the Dora character. When Caitlin turned 14 years of age she went through puberty in which her voice changed. Nickelodeon fired Caitlin stating that her voice was no longer suitable to portray the Dora character. Caitlin’s parents filed a lawsuit for breach of contract and wrongful termination. In examining the plaintiff’s arguments there are a number of violations that Nickelodeon is accused of. 1) Nickelodeon failed to have an attorney present when she signed a contract with Nickelodeon. 2) Caitlin’s agent and Nickelodeon forced Caitlin to unconscionably sign the contract. 3) Nickelodeon violated state child labor law in New York in which all contracts involving hiring minors must be review by the courts first before the contracts is legally binding. I admonish all filmmakers to consult your attorney when you plan to hire a minor for your production. Be aware of the state laws concerning minors in which you are filming. Always make sure the minor has legal representation before initiating any contracts. The minor’s parents should be present at signing as well.
Famed filmmaker George Lucas created “Star Wars”. In 1977 Lucas employed the use of Andrew Ainsworth to create the helmets for the storm trooper characters. Ainsworth created his own original molds for the helmets. 27 Years later in 2004 Ainsworth setup a website to sell his molds for the weapons and helmets he created for the movie. Lucas filed a copyright lawsuit in the U.S. against Ainsworth who is a citizen of the United Kingdom. Lucas won a $20 million dollar default judgment against Ainsworth. In 2008, Lucas moves the case to the UK, Ainsworth files a counter lawsuit claiming that he owns the copyright and a portion of the $24 billion sold in merchandising. In 2010, the UK court dismisses Lucas claims. The protection of intellectual property is a must for any film company. In this case Lucas went into contract with a person who was not a United States citizen. A film company in the United States may not always have legal protection in an international setting. Having an attorney who specializes in International Law on your legal team is recommended. Note that a film can also create multiple sources of revenue in the form of toys, books, posters, clothing, etc. Consult your attorney to file the correct paper work to protect your intellectual properties.
The King’s Speech is a film produced in the United Kingdom that won best picture of the year. The American Human Association is threatening legal action based on the alleged use of a trademark certification. The British film uses the phrase “ No animals were harmed” in the making of this film. The phrase is trademarked by the AHA. The AHA has used this trademark power to demand certain rights of filmmakers who use animals on set. The AHA has no authority over the film while it is being distributed in the UK. However the Weinstein Co. is distributing the film in the U.S. The AHA is also threatening legal action against the Weinstein. Co if the words are not removed from the film in the U.S. This situation teaches a potential filmmaker to 1) thoroughly search out all clearances and permission for any use for copyrights and trademarks, 2) having ownership of copyrights and trademarks allow the owners to have certain privileges, 3) once infringement has been discovered you have a legal duty to mitigate, 4) Know the scope of your jurisdiction.
Structuring a film company to minimize litigation is a lot of work. The hiring of the right personnel is paramount. Having a legal team that can analyze all future work before production begins can save time and money. A filmmaker must know how to create additional revenue streams through the creation of intellectual properties. These litigations serve as a guideline for establishing a successful film company. While no company can avoid being sued, having adequate legal protection helps.
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