• Sergei Konnov

    Senior Partner,
    Konnov & Sozanovsky

Konnov & Sozanovsky

Address: 23 Shota Rustaveli Street, Suite 3 Kyiv, 01033, Ukraine

Tel.: +380 44 490 5400

E-mail: info@konnov.com

Web-site: www.konnov.com

Konnov & Sozanovsky was established in 1992, and has been among the leaders of the Ukrainian legal services market for many years now. The firm’s main office is located in Kyiv. The firm also has a regional office in Chernivtsy (Western Ukraine), an office in Moscow (Russia) and a representative office in Nicosia (Cyprus).

Konnov & Sozanovsky provides comprehensive legal assistance to national and foreign clients doing business in Ukraine. The firm’s clients represent various sectors of the economy, including telecommunications, IT, alternative energy, technologies, real estate and construction, agriculture, banking, financial services market, pharmaceuticals, trade and distribution.

Although Konnov & Sozanovsky is a full-service law firm, we focus in the main on the following key practices: commercial, corporate and M&A, investments, legal support of investments in Cyprus, intellectual property, copyright and media law, labor law, dispute resolution, tax, including international tax structuring, land, construction and real estate, IT, renewable energy and green tariff.

The firm’s vision is to combine high standards in legal services with an individual and result-oriented approach.

Konnov & Sozanovsky’s conformity to international standards of legal services quality has been repeatedly recognized by such reputable international and Ukrainian guides to the legal profession as The Legal 500 EMEA, Chambers Europe, IFLR1000, PLC Which Lawyer, Who is Who Legal, IP Stars, Best Lawyers, Ukrainian Law Firms. A Handbook for Foreign Clients, TOP 50 Leading Law Firms in Ukraine by Yuridicheskaya Practika, Client Choice. The Top 100 Best Lawyers in Ukraine and Leaders of the market by Yurydychna Gazeta. High appraisals are built on our client’s recommendations, favorable reviews by competitors as well as on the opinions of leaders of key industries.

Scriptwriter and Composer Copyright in the Ukrainian Film-Making Process

The year 2018 was a significant milestone in the history of Ukrainian cinema: almost every month saw Ukrainian films come to the silver screen. In total, 35 Ukrainian films produced by va­­rious studios and starring Uk­rainian, Hollywood and European actors were released. The output includes plays, short, documentary and animated films. This figure is a remarkable record for the Ukrainian film industry.

In 2018, Ukraine garnered fame at some of the most prestigious international film festivals. Compared to the previous year, the geography of festivals where Ukrainian films were presented has tripled. For the first time in history, two Ukrainian films came back with awards from the Cannes Festival, the most prestigious film festival in the world.

In 2018, the state allocated UAH 1 billion for film production. By comparison, UAH 500 million were allocated in 2017 for these purposes, and just UAH 95 million in 2011.

Almost UAH 480 million was spent on production. In total five Ukrainian films brought in over UAH 150 million at the domestic box office. Ukrainian films grossed a total of UAH 198.936 million, an increase of 8.63% on total Ukrainian box-office ­takings in 2018.

The leader in domestic ticket sales is the comedy Crazy Wedding, produced by the movie studio Film.ua. This film brought in USD 1.966 million (UAH 54.9 million) domestically with a reported budget of UAH 10.8 million.

The development of Ukrainian film-making poses practical questions to lawyers specializing in copyright law that were previously purely theoretical. Some legislative rules are at odds with the realities of this business.

For example, one of the essential to­pics is the co-authorship of an audio-visual work (film). By virtue of the law (Article 17 of the Law of Ukraine On Copyright and Related Rights) the following authors are considered to be co-authors of the work: (a) a production director; (b) the author of the script and (or) text, dialogues; (c) the composer; (d) art director; and (e) ­cameraman.

The law presents the film-making process as a joint creative work of five authors (however, the director can also be the author of the script), as a result of which an audio-visual work belonging to them on an equal footing is created.

At the same time, the law does not take into account that the screenwriter and the composer, although they are the authors of the respective works — the script and the music — do not actively participate in the production of the film (shooting, post-production, etc.), but by virtue of the law they act as equal co-authors of an audio-visual work on a par with the director. However, comparison of the significance of the author’s contribution to the creation of the film of each of co-authors is a thankless task. Nevertheless, it’s generally accepted that cinema is a director’s work; it is especially the director who ultimately forms the complex copyright object — an audio-visual work — using primary works (script, music, etc.).

Nevertheless, it is most important to note that when determining the co-authors of the film, the law does not take into account another important reality of the film-making activity. In practice, all of the aforementioned co-authors create a work at the order of the producer (production company), who not only pays for the work of the director, scriptwriter and other participants in the creative process, but also finances significant costs in film-making.

In other words, all the costs of creating the work are borne by one party (producer), while the law determines the other persons to be authors and owners of rights (which is logical, but does not take into account the peculiarities of audio-visual work, combining the creative part and a significant expenditure component).

At the same time, the possibility of applying the norm of the law on work made for hire (Article 16 of the Law), when the property rights to a work automatically belong to the employer, is seen as problematic: first, because of the formal competition between the norms of Article 16 and Article 17 of the Law, and secondly, due to the fact that often the screenwriter and composer are not hired employees of the producer.

At the same time, it is important for the producer to acquire all the rights to the audio-visual work that he has funded. In the case of the director, the operator and the art director, the question is solved with the help of a commissioned film agreement, according to which they transfer the rights to the producer. A slightly different approach should be applicable to the scriptwriter and the composer.

Thus, contracts with authors of the script and music provide for separate alienation of their rights to the script and the film (in the part of the share of the writer and composer as co-authors of the film).

Various wording is used in contracts in order to ensure the transfer of rights from the author of the script (author of music) to the producer. For example, the following ones are often encountered: “if a script is used to create any audio-visual work, the copyright holder should transfer (assign) all the exclusive property rights to such audio-visual works (in the part on the rights of the author of the script) to the buyer”.

Extended “versions” due to additional provisions contained in contracts are encountered. For example, “there is an understanding by the parties that the buyer becomes the owner of the exclusive rights to the audio-visual work (in the part on the rights of the author of the script) on the basis of the contract, and no additional documents are required to confirm that the transferrable rights do belong to the buyer. The rights holder understands that such audio-visual works will have the status of independent objects of intellectual property rights, and the person who owns exclusive intellectual property rights to audio-visual works has the right to use, the right to authorize the use, the right to hinder the unlawful use, including to prohibit the use of such audio-visual works, at its discretion in whatever form and by all possible means, as known at the time of ente­ring into an agreement, and those that may arise in the future, without restrictions on the territory and terms of use, without further obtainment of any additional permits from the rights holder and without payment to him of anyone, except for the remuneration stipulated by the contract. The rights holder undertakes not to restrict, prohibit or otherwise hinder the disclosure and use of audio-visual works”.

It is also worth mentioning that contracts with a scriptwriter to create a script may contain varying scopes of the scriptwriter’s obligations. As a rule, a sufficiently detailed specification of what the author should do is used, since simply creating a script is not enough.

Firstly, the very creation of a script for a movie (and especially a TV series) is not a one-time process. The author may first create pitches and then move onto scene planning. The producer may have comments on the script, which the scriptwriter will have to take into account and give the customer a revised script. After all, there are creative failures, so-called writer’s block, when the author is not able to write a work as the producer wants to see it. In order to avoid conflict situations, the parties to the contract are advised to describe in detail the order of creative collaboration between a scriptwriter and a producer.

It is also worth noting that given the specifics of the cinema industry, the contracts with the author of the script on assignment of copyrights should detail the assigned rights, otherwise, the producer, who had “all the rights to the script” may face objections from the writer against creating a “remake” or “sequel” of the movie by the producer.

For example, the following clarifying wording may be included in a contract:

“In this case, the processing of the script materials, the series, elements of the series, other objects means the creation of a derivative work (processing, adaptation, arrangement, staging, etc.), also processing means entering any changes and amendments to the script materials, series, elements of the series, other objects (including re-editing, reduction, division into parts, change of name, outtakes and changes necessary for a TV show and receiving permits for commercial use of the series in some territories, etc.), their clips (notably, shots) and elements (story, characters, titles, images, scenery, etc.)”.

The following provisions on the transfer of rights agreement would also be ­useful:

Transfer of the rights to create, on the basis of the script materials, a series, elements of series, other objects of any works and the use of such works in any form and way, including, but not limited, to:

a) a remake — production of audio-visual works on the basis of script materials, a series using the same story, characters, dialogues and other elements of the script materials, the series;

b) a sequel and prequel continue (develop) the story of the script materials by involving the same characters;

c) midquel, interquel, spin-off — production of audio-visual works involving any of elements taken from script materials, the series;

d) novelization — using the script materials for the creation and use of a screen novel or other literary work based on script materials, the series;

(e) any audio-visual works, dramatic, musical and other works.