Literary Acquisition Agreement

If your script is based on a book, magazine article or other published book, this involves optioning or purchasing the rights to the film from the author (or publisher or other owner, if it is a loan work). If it is based on a life story, you must acquire the life history rights of the subject person. If your story is based on a story reported in the news or on a person`s public life, you may not need to acquire the rights to the story as long as you use your own research to create the script. But even in a book context, acquiring the rights to history can be a way to get the cooperation of the author of a published work or the person whose life history you want to use. Such agreements can also help to avoid defamation and data protection rights in certain situations. However, many agreements are not subject to WGA conditions. A general rule that seems to accept the practice of the entertainment industry is that all literary rights that must be acquired to make a film should range from 2% to 5% of the film`s budget. In many cases, LPo`s are negotiated to provide that the purchase price is within that percentage of the film`s budget. The budget is generally defined as the actual final production budget of the film`s image minus interest, financing, closing borrowing costs and overhead. At least the projected budget of the film`s image serves as an effective starting point for determining the purchase price. Much of the confusion associated with the use of the option is due to the fact that a purchase price is negotiated but is not paid when the contract is executed and there is no obligation yet to pay the purchase price, unless the option is actually exercised. What is usually exchanged when executing an option contract is a small fraction of the negotiated purchase price. The other question is when will the option begin: is it from the moment everyone starts negotiations or is it from the moment the parties reach an oral or written agreement? Although there is no quick simple rule, it is wise to start with the time when the parties have drawn up the agreement, and in the contract to indicate the beginning of the option to avoid problems on the way as far as possible.

As a general rule, the owner reserves certain “reserved rights” that cannot be exploited by the buyer. These specific rights include a suite written by the author, non-series live television, interactive media, virtual reality, radio, publishing and live stage rights. Given the importance of sequel rights and deductibles, the buyer must scrupulously respect the extent of the reserves granted to the owner. As such, the purchaser may attempt to obtain provisions for (1) a right of first bargaining which gives the buyer the opportunity to enter into the first contract with the owner for the acquisition of the reserved rights and (2) a final right of refusal allowing the buyer to acquire one of the reserved rights under the same conditions that a third party offers to the owner.

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