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Talking about the movies, screenwriter William Goldman has famously said, “Nobody knows anything.” But on one point, I disagree. Here’s one thing I know about the movies. New technologies mean lawsuits. When motion pictures were first shown on TV, or sold in videocassette format, studios got sued — by movie producers and music publishers, orchestras and their conductors, authors and actors and athletes. More or less, all the claims were variations on one theme: Back when my contract was negotiated, nobody anticipated videos (or DVDs or whatever), so you couldn’t possibly have gotten the rights to that new medium. New technologies have always generated litigation, and there’s no reason to think that’s about to change. Which is why I read about Mike Myers’ new deal with DreamWorks Pictures with such interest. DreamWorks recently announced that it signed a deal with Myers for “several projects in which the studio will acquire the rights to existing motion picture hits and classics, write new storylines and — with the use of state-of-the-art digital technology — insert Myers and other actors into the film, thereby creating an entirely new piece of entertainment.” The idea isn’t entirely new. Back in 1966, in “What’s Up, Tiger Lily?” Woody Allen bought the rights to a Japanese spy flick, deleted the soundtrack and wrote a new, funny one — essentially creating an entirely new motion picture, albeit without changing the visuals. Then, in 1983, Allen was at it again in “Zelig.” Legendary cinematographer Gordon Willis (“The Godfather,” “Manhattan”) seamlessly inserted the fictional Leonard Zelig into vintage newsreel footage of Babe Ruth, Pope Pius, Adolf Hitler and other historical figures. But Allen and Willis worked their wizardry using celluloid film. Moviemakers today have digital, and all the range that comes with it. As DreamWorks says, “Today’s digital technology allows Myers to take it to the next level and create new and entirely original feature-length films.” From a creative standpoint, it sounds great. But what about legally? Potentially, it’s a little complicated. Maybe even a lot complicated. In fact, I blinked when I first read that “Myers and DreamWorks have dubbed the new form of filmmaking ‘film sampling,’ due to its similarity to music sampling in which an existing hit song is reworked by a new artist with new lyrics to find new success.” If you want to avoid legal hassles, music sampling isn’t the best role model. That practice has spawned a posse of lawsuits, in which rights holders claim that unauthorized use of the sampled work in a new recording is copyright infringement. Some courts have found infringement; others have found the sampling minimal, and so, “fair use.” Either way, calling the new technique “film sampling” seems to invite litigation. But DreamWorks knows about those music-sampling lawsuits, too. To avoid such claims, DreamWorks has a simple solution: to go to the source and buy the rights up front. The studio says it “will acquire the rights to” the old movies before inserting Myers and others to create “an entirely new piece of entertainment.” If you’ve made a deal with the copyright owner of the existing motion picture, where’s the risk? Keep your eye on the talent. In the music cases, most of the claimants own a copyright interest in the sampled sound recordings. But many of the lawsuits inspired by technological advances in the movies have focused on non-copyright contract claims, often brought by talent. So the question here is, what’s buried in the talent contracts for the movies Myers and DreamWorks want to sample? It may depend, in part, on the vintage of the movies. DreamWorks’ press release talks about “classics.” Reputedly, in the old “studio system” days, talent contracts were heavily one-sided, in the studios’ favor. Maybe those contracts are so clearly all-encompassing that even the most creative lawyer can’t dream up a claim about film sampling. But don’t count on it. First, talent already have filed lawsuits based on their studio-system contracts. Even when a studio fights a claim and wins, it does so at considerable cost and risk. And who knows how many such cases may have settled? If there’s a more sympathetic plaintiff than a beloved film icon, it’s an elderly, frail beloved film icon. What studio wants to take such a case to trial? Furthermore, the past cases have essentially been about re-packaging the original motion picture into different formats. By contrast, Myers and DreamWorks are talking about changing the underlying movies and creating new, derivative works. Don’t you bet that somebody won’t at least think up a claim to assert, even under those old contracts. OK, then, maybe the film samplers should work with newer movies. Granted, in recent years top talent have negotiated better deals for themselves — but surely the studios learned from all those early TV and video cases, and crafted airtight contracts when it comes to getting all rights from everybody concerned for any possible future uses. Right? Well, maybe. Today, a typical studio contract makes it clear that the artist’s services are a work for hire, and the studio owns all the rights, for any and all purposes. The contracts go even further, recognizing that in the future, new rights to the work and new exploitation methods may come into existence — and the studio gets all those rights too. Pretty good. Then again, maybe not. That same typical contract says that, for any part of the picture in which the artist recognizably appears, reuse of the photography requires the artist’s prior written approval. (Approval is not to be “unreasonably” withheld.) What about directors? Again, the standard contracts do a pretty terrific job of establishing that the picture is a work for hire and that the studio owns not just the picture, but all conceivable rights in all conceivable media, present and future. But then many contracts say that if the studio decides to make a sequel or prequel — or the initial theatrical remake of a picture — it may have to negotiate to rehire the original director, with a deal at least as good as for the first picture. Is film sampling reuse of the photography from the original movie? When is it “reasonable” for an artist to withhold approval to reuse part of his earlier performance? Does the new movie contemplated by Myers and DreamWorks constitute the initial theatrical remake of a sampled picture? The answers will lie, in part, in the specific contracts at issue. But they’ll also lie in the hands of individual judges, who may disagree about what even uniform contract language means. In the videocassette cases, eventually the courts reached a consensus that where a party granted unrestricted “motion picture rights,” that would encompass motion pictures on video. But it took many years, many cases and untold legal fees to reach that consensus. How can a studio avoid the cost, the years, the uncertainty and proceed with confidence today? Due diligence. Let’s step out of the entertainment context for a minute. If a big company wants to buy somebody else’s business for $100 million, the buyer won’t just hand over the money and assume that it got all the rights it needs. Instead, the buyer’s lawyers will find every major contract that affects the target company, put each one under a microscope and assess the legal risks and obligations before doing the deal. Now assume that $100 million is the cost of making an effects-laden movie with A-list stars and director, marketing that movie and opening it on 3,000-plus screens. Why should the ultimate owner of the business asset — the studio — be any less vigilant than if it were buying a factory? It shouldn’t. If the studio’s lawyers scrutinize those old contracts first, maybe they won’t find any troubling rights issues. And if they find somebody they think might have rights, the studio can buy those rights up front. If it can’t, or won’t, the filmmakers can choose to “sample” another, less encumbered work. Or they can go ahead — but at least they’ll be fully informed of the issues and the risks. In my experience, studio execs and creative talent don’t like lawyers telling them how they can, and can’t, make movies. But anybody who breaks new creative ground should recognize that they may be breaking new legal ground, as well — or, at least, someone will claim they are. Execs may complain that dealing with lawyers up front is costly, even painful. But not dealing with lawyers up front may prove more costly, and more painful. Because if some beloved old screen legend sues, and the case somehow survives everything the defense can muster and gets in front of a jury — well, who knows what might happen? It’s like William Goldman said. Nobody knows anything. Jay Handlin is a partner in the entertainment industry litigation group of Howrey Simon Arnold & White in its Century City offices.

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