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Todd Rubenstein, Esq., discusses the art and legalities of securing books rights.

Not infrequently, a client will call me and say, "I just read this really great book. How do I find out if the rights are available? And if they are, how do I get them?"

Although the specific answer to these questions differs in each case, there is a specific method for hunting down and securing literary rights. By heeding a few important "do’s-and-don’ts," filmmakers can often obtain the film rights to a property without spending a fortune, tipping off studio trackers or pissing off too many people along the way. For those prepared to do the legwork, here’s a primer on how to do it.

 

FINDING OUT IF THE RIGHTS ARE AVAILABLE

In most cases, at the time of publication, a book’s author retains the film rights to his or her book. Therefore, the first task is to contact the author (or if the author is dead, the author’s estate). There are two ways to do this.

The Easy Way

Call the publisher. The name of the book’s publisher is always found on the cover or within the first couple of pages of every book. Look up their phone number, call and ask for the Subsidiary Rights Department (the "sub rights," if you want to sound like you are "in the know"). Tell them you want to make a "rights availability inquiry." They will most likely ask you to submit your request in writing by fax. (Often this information will be on a recording, or you might simply be referred to a Web site with the author’s information.) Response time is usually about two to three weeks. About 10-15 percent of the time you will be told that the rights are unavailable. But in most cases they will send you the name and phone number of the author’s agent. At this point, you simply call the agent, ask the question and hope for the right answer.

The Clever Way

If possible, contact the author directly. For several reasons, humanizing yourself to the author can improve your chances of getting the rights if they are indeed available. Tracking down the author often requires no more creativity than reading the book jacket, which usually contains nifty personal information about the author (for example, she lives with her husband and two dogs in New York City; he is scheduled for release from the California Department of Corrections in 2010; or he teaches paleontology at Rutgers University). It usually takes only a little detective work from there to get a phone number or mailing address.

Public Domain

Before you try either of these approaches, you should first determine whether you need to obtain the rights at all. An author’s copyright interest, which includes his or her exclusive right to control and sell the film rights, is limited by law to a certain number of years. Once that time period has expired, the work passes into the public domain (commonly referred to as the "PD"), and everyone is free to use it without restriction. The framers of the Constitution believed that this protection for authors and creators of original works was necessary to encourage and reward innovation. As a result, we have the Federal statutory law extending copyright protection to authors.

As a general rule, all books published before 1923 are in the PD because the period of possible copyright protection for these works has expired. And all books published after 1963 are not in the PD. Things are a bit more complicated for books published between 1923 and 1963. These works received 28 years of copyright protection from their date of publication and, if their copyrights were renewed during the twenty-eighth year of their first copyright, they were eligible for an extension of that protection for an additional 47 to 67 years. If their copyrights were not renewed, the books have passed into the PD. The rules listed here generally hold true for works published in English in the U.S. and U.K. Examples of popular authors whose works are in the PD and have been adapted for film in the last few years are Robert Lewis Stevenson, William Shakespeare, Jane Austen, Oscar Wilde, Edgar Allen Poe and Charles Dickens.

A word of warning. For every rule relating to public domain works, there are exceptions and permutations of which you should be aware. For example, different rules may apply to foreign-born authors and works originating in foreign languages. For example, Dostoyevsky’s The Idiot may be in the PD, but the English version translated in the 1960s probably is not. Interesting rules also apply to posthumous publications. For example, the statutory term of years of copyright protection (which in many cases is now the life of the author plus 70 years) begins on the date of a book’s publication ("publication" in this context means the date the manuscript is first offered for sale in the marketplace). However, when a novel is published posthumously, the law protects the author’s heirs by extending continuous copyright protection to the unpublished manuscript from the date of its creation until it is published, at which point the normal term of copyright protection begins.

Not long ago, a writer whom I represent developed a screenplay idea based on a famous author’s book, which we assumed was in the PD because the author has been dead since before 1920. But the situation turned out to be not so simple. In 1909 the author wrote the first 109 pages of a new book, outlined the rest, set it aside unfinished in 1910 and never picked it up again before his death less than 10 years later. Around 1960, the author’s estate hired someone to complete the book based on the outline the author left behind. The book was published posthumously in 1963. In the late ’60s a major Hollywood studio optioned the film rights and made a movie based on the book, even using the same title. When we learned all this, our first thought was, "What a mess!" But, the question of whether the book was in the PD turned out to be not so complicated. As we know from the rules explained above, even though the author died pre-1920, copyright protection is continuous until publication, which was in 1963. For a book published in 1963, copyright protection is for 28 years, at which point it must be renewed to get additional years of protection. In this case, the renewal would have to have been sought before 1991. Neither the author’s estate nor the studio ever applied to extend the underlying copyright. Consequently, even though a studio made a movie based on the book, the book itself passed into the PD in 1991. As a result, others, including my client, are now free to make films based on the book without having to obtain the rights.

Although the above holds true today, on February 19, 2002, the U.S. Supreme Court agreed to hear the case of Eldred v. Ashcroft (01-618) to decide if the length of copyright protection allowed under the current law is constitutional. Most legal observers suspect the Court thinks the time period is too long. The Court should hear the case in the Fall 2002 session and issue a ruling by the end of the year. Although it is difficult to predict, many experts believe the Court will reduce the period of copyright protection for original works, thus putting more works in the PD sooner.

 

THE RIGHTS ARE AVAILABLE, SO WHAT NOW?

Obtaining Rights: The Option Agreement

If the book is not in the PD and the rights are available, the most common type of arrangement a prospective filmmaker has with a book author is an "Option to Purchase Rights Agreement" – or "option" for short. The way an option works is that you (the filmmaker/producer) will pay the author money, usually an amount that is a fraction of what it will cost to actually purchase the rights, in exchange for the exclusive right, for a period of time, to purchase the motion picture rights to the book. As part of the option, the parties will also decide what the purchase price for the rights will be. For example, Joe Director will give Jane Author $500 for a one-year option to purchase the motion picture rights to her book for $10,000. What that means is that during that one year, for a modest investment, Director – without worrying about competition from anyone else – can try to get the film made, by writing or having a screenplay written, attaching talent and/or raising financing. If Director is successful in getting the film through pre-production, he controls the rights and can purchase them for a set and known price. If unsuccessful, the option lapses but Director is only out the option money and the effort. Nothing ventured, nothing gained.

In most cases, options allow Joe Director to extend the length of the term if the movie takes longer to set up than expected. For example, if at the end of the one year, Director needs more time, Director can buy another year for an additional $250. As a practical matter, the filmmaker should always try to negotiate for the right to extend the option as many times and for as long as possible. It always takes longer than one expects. If your agreement does not provide for extensions, you will be at a major disadvantage when negotiating for more time because the author will know you have sunk time, effort and money into the project, and you can’t proceed unless she grants you a new option.

Put it in Writing!

The most important thing you should take away from this section is that in order to be valid, an option agreement must be in writing – U.S. Copyright law says so. Still, confusion arises in this area because many types of oral agreements that do not involve the transfer of copyright are enforceable. As in the Basinger "Boxing Helena" case, this is especially true in California, where handshakes, vaguely written and unsigned deals for services remain commonplace and often enforceable.

In addition to being in writing, it is generally accepted that to be enforceable, an option should contain specific provisions for the following material terms: the length of the term, the price of the option, the mechanism for exercising the option (for example, by written notice and payment of the purchase price), the purchase price, whether it is a set amount of a percentage of the budget, grant of rights language (what specific rights you are optioning/purchasing e.g. the right to make a motion picture based on the book) and the name of the book. With respect to these material terms, it is not enough to agree to agree at a later time; a court will not enforce an agreement that is not reasonably certain in its material terms. Additionally, for your protection, the option should, but does not legally have to, include representations and warranties from the author. Specifically, you want the author to "rep and warrant" that he or she is truly the author of the book, that the work is his or her original creation, that he or she has not previously transferred or encumbered the rights to anyone else, that the author has the right to enter into this deal and that the contents of the book do not infringe or violate the rights of any third party. These warranties protect you – the author is promising you what he or she is selling you is safe for your use.

Not to worry, most publishers, agents and all lawyers have standard form option agreements. Although these forms are usually adequate, as a rule, you should not accept wholesale the assurance that "this is the form we always use." Have it reviewed by your own lawyer. You want your lawyer to verify that the option is legally adequate and that it actually gives you the rights you have bargained for. If you’re lucky enough to get financing for your project, the financier or studio will demand to inspect the option agreement to make sure you really do control the rights.

Avoid the Agent

Agents generally do not have an emotional attachment to their client’s material and will treat your inquiry impersonally. To them, it’s a potential commercial transaction of which they get a percentage. They get dozens of these calls a week and are usually numb to a filmmaker’s passionate pleas. In their world, money talks. If you don’t have much of it, consider appealing to the author directly.

Contact the Author Directly

Authors, on the other hand, do have an emotional attachment to their own material. When talking directly to the author, you have an opportunity to appeal to that emotion as well as to the author’s ego. Most writers want their work to be appreciated. They like to hear how their books have changed reader’s lives. They can be especially receptive to thoughts of how their books would make good movies. But make no mistake – generally speaking, authors are not idiots and will not toss you the deed in exchange for your compliments. Authors hire agents to help them make money, and most are frustrated that they don’t make more of it. In fact, many authors see film rights as the possible "pearl in the oyster." Nonetheless, in the absence of higher dollar offers, it is not uncommon for authors to give free or very inexpensive options to filmmakers they like or with whom they are impressed. At the end of the day, the agent works for the author and will do as told. I can’t count the number of times I’ve heard agents grumble that, despite their protests, a client of theirs wants to give a young filmmaker a free option. Passion often prevails.

Janet Yang, who produced the film version of Amy Tan’s The Joy Luck Club, provides a good example. Early in her career, before Yang had ever produced a movie, she read the first three chapters of what would become Tan’s bestseller and was floored. She flew to San Francisco, called Tan, took her to lunch and a friendship was born. Based on Yang’s hustle and smarts, Tan let Yang represent the film rights for free. Despite the colossal success of the book, all the studios initially passed on this Asian-American family saga and it took Yang four years to get the movie made. Tan stuck with Yang during this period, and Yang wound up never paying a penny for the option to a book that spent eight months on the New York Times bestseller list.

But when trying this approach, don’t rely on passion alone. You must make a good impression on the author, instilling confidence that you can get the movie made. This is doubly true if you don’t have a lot of money and are asking for a free or inexpensive option. So when you contact the author, be knowledgeable about his or her works, previous history with motion picture rights, and be intelligent about your own creative and business qualifications, your connections and plan of action for getting this project on its feet.

Writing it on Spec

Filmmakers who cannot afford an option will nonetheless sometimes write a spec screenplay based upon a favorite book. This is dicey. The hope is either that the rights holder will be so knocked out by the passion, effort and quality of your work that he or she will cut you a discount, or that a financier will be so impressed with your script’s commercial potential that they will option both your script and the underlying rights. As an example, a few years ago, an unknown writer wrote a script based on Killer: A Journal of Murder, a published diary written by a man serving a life term in prison for multiple homicide. Based on the strength of the script, the author’s heirs optioned the book to a producer working with the writer and they succeeded in getting the movie made. Director Jesse Peretz (The Chateau) and writer David Ryan took the same approach when adapting Ian McEwan’s First Love, Last Rites. It took a year for the film’s producers to convince McEwan to read the script, but when he did, he granted the option. Although I know of these success stories, this is, to say the least, a very risky approach. To have any chance of success, you have to write a very good screenplay, which is time consuming and difficult. If the author and your financing sources are unimpressed with your screenplay or like it but still want more money than you have, your screenplay is worthless because you don’t have the underlying rights. Furthermore, you have no protection while you are writing. Someone else can come along and snap up the rights for themselves. Finally, you have no leverage. If the rights holder likes the script and wants a deal, you have to take what they give you or walk away with nothing. For these reasons, I would not advise this approach.

Have Patience

Most of the time, obtaining book rights is a time-consuming process. Tracking down the legal rights holder, establishing a relationship, building trust and raising the money can take months and, not uncommonly, years. I presently have a producer client who for over two years has been trying to obtain the rights to a book, a true story based on a woman’s harrowing life story. My client has an ongoing relationship with the author who, despite her interest in seeing a movie get made, for various reasons is still not prepared to transfer the rights. My client is determined to stick with it. Gumption, persistence and patience should be your credo.

The Burning Question of Cost

If pushed to give a number, I would say that as a very general rule, assuming there is no competitive interest in a book and the author does not have significant previous sales, books are usually optioned for between zero and $5,000 for anywhere from six months to two years. The cost of optioning a book or other literary material will likely depend on your own negotiating ability and the factors listed below.

1. Age and Interest Level: Common sense says that an option on a new bestseller will be more expensive than one on an obscure out-of-print 40-year-old title. The former may cost a million dollars, the latter you may get for free. The older, more obscure or unknown a book, the better your chances for a free option since you are attempting to bring notoriety and money to the author and his work. The alternative for the author is to risk letting his old book sit on the shelf, unnoticed for another 40 years. A few years back, a client of mine was interested in the book Faking it in America, a book about Barry Minkow, the Wall Street "whiz kid" scam artist who founded Z-Best Carpet, made millions on paper with phony financial information and later went to prison. My client tracked down the author, Joe Dominick, an investigative reporter for the L.A. Times. Dominick said the book had been collecting dust for almost a dozen years and any money he got for the book was "found money." My client got a good deal on the option, and Dominick is excited about the film project.

2. The Author’s Track Record and Previously Published Material: The author’s renown, or lack thereof, and prior options or sales of other works, if any, will effect cost. Agents and lawyers will introduce the author’s "precedent: or "quote" (the dollar amount garnered for previous options/sales) as a factor in the negotiation of cost. In theory, the more an author has sold, the more his books are worth. This cuts both ways – a lack of precedent supports an argument for an inexpensive option. Furthermore, if the book in which you are interested has previously been optioned, the author has a benchmark for the market value of the option. But there’s a flip side here too: if another producer has tried to adapt the book and failed, it follows that getting this movie made will be very difficult. Hopefully the author has some appreciation for this perspective and you can argue effectively for a lower price.

3. The Author’s Confidence in You: It is important to realize that the big payday and payoff for the rights holder is not in the option money but in the purchase price and recognition, which they will never see unless a film based on their work actually gets made. Their belief in your commitment and ability to get the movie made are important factors in determining cost. I have seen numerous examples of a proven producer, with studio deals and access to money, obtaining inexpensive or free options because authors realize this producer has a greater chance of getting the movie made. The value of your perceived competence, connections and game plan cannot be underestimated. If you are unknown, consider partnering with a proven producer to help bolster the rights holder’s confidence.

4. How Much Money (They Think) You Have: This is tricky. If at all possible, you want to create the impression that you are competent, connected and can convince others to invest in this movie, but that you yourself do not have any, or much, money to option these rights. Broke, but competent and capable is the ideal combo to wrangle a good option price. If you play it right, the rights holder will actually be impressed with your ability to negotiate and believe that this ability will be just the thing to get the picture made.

5. Type of Film You Intend to Make, Commercial Potentiality and Genre: The type of film a filmmaker intends to make – a student film, a short, an independent feature, a studio film – will effect the price of the option and purchase. Authors are more liberal granting free options and rights to students or young filmmakers making shorts or student films. Often, it is stipulated that distribution be limited to non-paying audiences and festivals or that the film be used for education purposes only. However, if the filmmaker’s goal is theatrical distribution, authors expect to get paid, and genre, budget level and commercial potentiality all come into play. For example, science fiction, action and period pieces require things like special effects, locations, costuming and pyrotechnics. Because of these elements, one usually cannot make such films for less than $15-20 million. Historically, these are the types of movies that are studio-financed and have generated the highest box-office returns. Consequently, an author is going to expect a greater amount of money for the option and purchase price (as well as a strong presentation of your studio/financier relationships). On the other hand, for a lot less money you can expect to option the rights to a book that is a character-driven story about a girl and her relationship with her boyfriend, father, dog, basketball coach, parole officer, and so on. These types of films, often made independently for a low budget, have limited commercial prospects.

6. Tying the Option to the Purchase Price: A big-budget movie or a big purchase price for a book does not necessarily mean a big option price. As discussed, when optioning a book, a filmmaker must set a purchase price. In many instances, it will be difficult to determine the appropriate amount. Often a book can be made into a movie that costs $1 million or $20 million, depending on the quality and scale of the production and its ability to attract well-known actors. A common way of dealing with this uncertainty is to make the purchase price a function of the budget. For example, it is legal and commonplace for an option agreement to list the purchase price as 2.5 percent of the final shooting budget with a floor of $25,000 and a cap of $150,000 (Where the cap and floor are set is often a function of the author’s precedent or lack thereof.) This means that the author will be paid $25,000 if the film is produced for $1 million or less, escalating to a maximum of $150,000 if the budget reaches $6 million or more. This approach tends to work well for everyone. The filmmaker is protected from overpaying and the author is protected from selling too low. But the filmmaker optioning the book must be mindful to keep the cap on the purchase price as low as possible, taking into account the author’s status and precedent. Even if you expect a third party financier to pay the purchase price, if that number is too high, it can be an obstacle to getting the movie made. But no matter how big the purchase price, the author can still negotiate a low option price.

7. Free Options: No matter who you are, if you are successful in negotiating a free option, expect the free portion of the option to be from 90 days to six months, but rarely longer. From the author’s perspective, a producer will be more diligent and less likely to abandon his interest in the project if he has a financial interest at stake. In many cases, the author will require some money for the option as a measure of the producer’s commitment. The last thing the author wants is to let someone tie up and sit on the film rights to their book for free.

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