10/5/2016 20% DISCOUNT AT WWW.ROUTLEDGE.COM Enter the code FLR40 at checkout FROM PANEL TO PUBLISHER: AN IN-DEPTH LOOK AT TRANSACTIONAL LAW FOR COMIC BOOK CREATOR CLIENTS 1 10/5/2016 Thomas A. Crowell, Esq. www.lanesash.com www.thomascrowell.com @Law_crow Matthew Tynan, Esq. www.pwes.com @matthewptynan Presenters Jeff Trexler, Esq. [email protected] David Gallaher www.davidgallaher.com @davidgallaher Overview of Presentation T 2 10/5/2016 THE COMIC BOOK CREATOR AS CLIENT 3 10/5/2016 COMIC OWNERSHIP Creator Publisher- Creator- Owned & Owned Driven Distributed D 4 10/5/2016 IP is the beating heart of the client’s property. INTELLECTUAL PROPERTY FOUNDATIONS T 5 10/5/2016 IP rights in a comic property can be parsed and licensed according to… 6 10/5/2016 Keep track of how the IP is created Protect the IP “Engine” with registrations License the IP “streams” Revenue flows back 7 10/5/2016 INTELLECTUAL PROPERTY Copyrights are the KEY Rights WWW.COPYRIGHT.GOV Author 8 10/5/2016 Copyrights are KEY Rights Copy Distribute Public Performance Public Display Derivative Works The Right to Make Derivative Works The EXCLUSIVE right to create other copyrighted works based upon the original work. Comic Book Movie & TV Video Game Toy 9 10/5/2016 A Few Copyright Danger Zones The copyright in a Work For Hire is owned by the hiring party. 10 10/5/2016 A Notable Comic Book Case Termination of Transfer One seemingly odd wrinkle in copyright law is the termination of transfer provision, which allows a valid and otherwise irrevocable copyright assignment or license to be revoked after 35 years by the copyrighted work’s author or her heirs. Superman, Captain America, Fantastic Four, X-Men, Iron Man, Spider-Man, The Incredible Hulk, Thor, The Avengers, Nick Fury, and Ant-Man have all seen the inside of a courtroom as their creators and owners battled over copyright’s termination of transfer provisions. 17 USC §203 - licenses and transfers of copyright which happened after January 1, 1978 17 USC §304(c) - licenses and transfers of copyright that occurred prior to January 1, 1978 11 10/5/2016 Termination of Transfer Example Xander assigns the copyright to his patriotic comic book property “Captain Constitution and Bill O’Rights” to Mumble Publishing, which over a 35-year period makes a movie and a television series based on Xander’s work. Even though the comic book acquisition agreement between Xander and Mumble Pub. explicitly states that the copyright transfer is irrevocable and lasts for the duration of the copyright, Xander can still revoke the copyright starting at the end of 35 years from when it was transferred! Mumble can still exploit any comic book, movie, or television series it had made prior to the termination, in accordance with the terms of the comic book acquisition agreement. However, once Xander revokes the copyright, Mumble Pub. can’t make any more derivative works from the comic book (additional comics, spin-offs, video games, books, merchandise, etc.) without relicensing the copyright from Xander. However, unlike assigned copyrights, the copyright created as a work for hire is not subject to the termination-of-transfer provisions. A Notable Comic Book Case 12 10/5/2016 Creating Together: Joint Author Copyright Without a When two law DOES written NOT favor or more contract the author authors between the who did the work creators, most work; together to copyright nor does it law will create a favor the control how comic book author who the they may came up copyright is with the be joint owned. idea. authors M When two or more authors work together to create a screenplay or film, copyright law may consider them to be joint authors. Cf. Gaiman v Expressive contribution McFarlane (7th Cir.) Without a contract between the creators, copyright law will Inseparably or control how the copyright is interdependently merged owned. Copyright law does not favor the No contract to the contrary author who did the most work; nor does it favor the author who came up with the idea. Each author has some control over creation of work 13 10/5/2016 Writing Together: Joint Authors EQUAL RIGHT TO GRANT BUT EQUAL NON- EQUAL PAY- YOU OWNERSHIP- EXCLUSIVE NO RIGHT not more for CAN not more for LICENSE; ALL to sue other JA the person the person JA’S MUST for MODIFY with the who did the AGREE TO infringement idea(s) most work GRANT WITH EXCLUSIVE A LICENSES WRITTEN, SIGNED CONTRACT Default Joint Authorship Rights ! A Notable Comic Book Case 14 10/5/2016 J Trademark The title of a single work, such as a book, is not considered a trademark, and therefore is unregistrable. Herbko Int’l Inc. v. Kappa Books, Inc. 15 10/5/2016 Patent 16 10/5/2016 17 10/5/2016 18 10/5/2016 Tax Issues 19 10/5/2016 COLLABORATION AGREEMENTS M D Undiscovered General Partnerships Two or more people working together on a project without a General Partners contract or company with expectancy of profit Must share profits equally General Partners are liable for each other's partnership debts Liable for torts committed to further the partnership 20 10/5/2016 Identify the Relationship Independent Contractor? CHECKLIST: Collaboration Agreement Partnership? LLC? IP Ownership? Approvals? Expenses? Profits? Credits Who can license? Work schedule? Carve outs for unilateral exploitation? Can collaborators create derivative works? What happens if it doesn’t work out? 21 10/5/2016 Founded in 2007, Bottled Lightning has worked with DC, Image, Marvel & more. We’ve been collaborating for ten years. Here are some of our tips for a successful collaborator: Talk frequently and often; don’t be afraid to talk about the tough stuff, especially things like money. DAVID GALLAHER: Founder of Bottled Lightning Write down the important stuff! bottled-lightning.com After meetings, recap the major points in an e-mail. Have a collaboration agreement in place: Ownership. Royalties. Deadlines. What is the plan if things go south? (death, leaving the project, illness) ENGAGING THE SERVICES OF OTHER ARTISTS 22 10/5/2016 * IF YOU’RE ENGAGING AN ARTIST, YOU WILL NEED A WRITTEN CONTRACT WHICH ESTABLISHES: THE SCOPE OF WORK SHE WILL BE PERFORMING EMPLOYEE OR INDEPENDENT CONTRACTOR? THE FORMAT/SCHEDULE FOR WORK DELIVERY THE COPYRIGHT OWNERSHIP OF THAT WORK/DISCLAIM JOINT AUTHORSHIP! HOW MUCH AND WHEN YOU WILL BE PAYING HER––PAGE RATE AND A ROYALITY WHETHER OR NOT THAT ARTIST IS EXCLUSIVE TO YOU DURING THE ENGAGEMENT SUSPENSION AND TERMINATION: HOW AND WHEN ARTIST’S LIKNESS AND BIO APPROVALS MUST BE IN WRITING AND SIGNED BY THE ARTIST! CONFIDENTIALITY AND PUBLICITY RESTRICTIONS REPS & WARRANTIES RESTRICTIONS ON THE ARTIST’S ABILITY TO HIRE OTHERS THE SCOPE OF WORK ARTIST WILL BE PERFORMING Both Parties should fully understand WORK FOR HIRE: Ideas, what will be required before any work Storylines, Dialogue, Character begins. Don’t assume that an Artist who Designs, Gags and Concepts. pencils can also color, ink or letter as well. DELIVERABLES DELIVERY, REVIEW, WHO OWNS FORMAT AND REVISION PHYSICAL RESOLUTION SCHEDULE ARTWORK? 23 10/5/2016 Compensation: Page Rate • Rates vary on experience, pub co., & Page Rate: market Writing: • $25-$220 Penciling: • $100-$250 Inking: • $75-$200 Coloring: • $35-$150 Lettering: • $10-$50 Covers: • $200-$750 Flatting: • $8- $20 Compensation: Royalty Pool Royalty payments to the artist kick in only when the comic book has sold a certain number of copies, often referred to as the “minimum threshold.” In a publisher-owned This is the minimum comic book services number that needs to be agreement an artist sold before the might receive 3-5% of illustrator starts cover price from shared receiving any royalties at royalty pool all. Royalty 24 10/5/2016 Royalty Pool = A Comic’s Royalties Shared JOB % LAYOUT/PENCILLER 35% SCRIPT 35% COLORIST 15% INKER 15% Letterers: Unfortunately, Letterers often don't share in royalties, despite MT the tremendous work they do in comic books. Other Royalty Models Not always a royalty pool (not always a royalty at all…) • Illustrator may get a higher rate but based on “net revenue” not “cover price”. • For pencils, inks, and colors each artist might receive 5%-10% of net revenue or higher with smaller publishers. • Larger publishers often stick with the “royalty pool” model. Net revenue definitions vary: • E.g. cover price, less distributor fees, trade discounts and retailer incentives multiplied by net sales. Could be as low as 10% of cover price. • For digital works, net revenues may be net sales less digital conversion costs, third party platform, hosting or distributor fees. • Minimum thresholds still apply. • Issue: how to incorporate digital sales into the royalty model 25 10/5/2016 “Boilerplate” Keeps the Boiler for Exploding No Partnership Notice and Cure Indemnification No Obligation to Use Option for Future Services Entire Agreement Waiver of injunctive relief Forum PRE-PUBLICATION CLEARANCE VET, LICENSE, OPTION, PURCHASE 26 10/5/2016 Chain of Title “Unbroken Record of Ownership” Collaboration Cert. of WFH Contracts Agreements Authorship Registration & Assignments/ Options Recordation Licenses Publishers need to know that the creator can grant EXCLUSIVE rights! Clearance Steps ISSUE SPOT POTENTIAL CLAIMS ANALYZE (Strength of Claim + Defense + Likelihood of Litigation) DISCUSS WITH CLIENT & OBLIGEES LICENSE NECESSARY RIGHTS & OBTAIN WAIVERS REVIEW !!! 27 10/5/2016 GETTING THE WORD OUT AND LANDING DTC A PUBLISHER Landing a Publisher 28 10/5/2016 T M D J If you’re licensing a work to a publisher, you will need an agreement that, at a minimum, clearly