history of motion picture & tv segment - LSA McGill

1. History of Motion Picture & TV segment 7
(Jan8 2002) 7
Horizontal v. Vertical Integration 7
Paramount & Corporate Takeover Law 7
Litigation over hostile takeovers 8 2. Fundamental Building Blocks 8 Film compared to Real Estate 8
Film 8
Real Estate 8
Guild Agreements 8
Jurisdiction: 9
Status of the Artist Act of Qc 9
Copyright Issues 9
Subjects of Copyright 10
The owner of the copyright 10
USA 10
Canada 10
Rule: 11
Ownership & Licensing: 11
Definitions from Writer's Guild of Canada Independent Production Agreement
("IPA")(2000-2002) 11
A202 "Bible" 11
A219 "Feature Film Script (Screenplay)" 11
A254: "Treatment" 11
Vol I, p. 325: Art Buchwald et al. v. Paramount Pictures
Corporation 11
A232 "Outline" 13
A207: "Concept" 13
Key Participants: 13
American Analysis 14
The Producer's Contracts 14
Assignment 14
Option Agreement 15
A closer look at option agreements... 16
Grant of Rights 16
Pay or Play 17
Reversion of Rights: 17
Right to Equitable relief 17
Exercise of Option& Consideration 17
Exercise of Option: 17
Consideration : 17
Further Instruments 17
Final Agreement 17
Certificate of Authorship 18
Independent Production Agreement(Writer's Agreement) (305 YCB) 18
Agreement and Intervention 18
Director's Letter Agreement (340 YCB) 18
Acting Services Deal Memo (340) 19 3. Exploitation 19 Jan 24, 29 19
Costing out a film: 19
Distributor's Role 19
Distributors are secretive about their profits 19
Art Buchwald v. Paramount 19
Vol I, p.412: Strategies for Litigating Net-profits Accounting
Suits 20
Vol. I, p.413: S. Moore, "Accounting for Profits in the Movie
Business" 18:8 Entertainment Law Reporter (January 1997) at 4. 20
Motion Picture Distribution Agreement (in detail) (see 367ff YCB ) 20
Describes the film carefully (367 YCB, item 1.) 20
Lists Essential & Non -Essential Elements & Provides for their
replacement: (368) 21
Acknowledges & delineates Producer's Creative Control 21
Lists the rights that Distributor is passing over: (369 YCB 4(a)) 21
Provides Distributor will pay: page (371 YCB) 21
Provides for Delivery, and ties Payment to it. 21
Provides financial structure 22
Sample Calculation 22
Provides Security 22
Sales Agency Agreement (393 YCB) *[check w prof] 23 4. Financing 23 Jan 29, 31; Feb 5 23
Bank: 23
Distributor: 24
Completion Guarantor: 24
Gap Guarantor 24
Producer 24
Right of retention & prior claims 24
"right of retention": 24
"prior claims" 25
Jurisdiction over secured property - PIL 25
Copyright and multi-jurisdiction 25
screenplay 25
Copyright in the film 25
Hypothec 26
2 types of hypothecs (2710 CCQ): 26
Hypothec on contract receivable 26
Leflore v. Grass Harp Productions 26
Vol. II, p.10: R. Weiss & A. Benjamin, "Feature Film Secured
Financing: A Transactional Approach" 27
Interparty Agreement Objectives 29
*1) Notice of security 29
*2) Rank of Bank/Distributors security 29
*3) Approvals given/waived 29
Essential Elements 29
*4) Delivery only pre-condition to payment of advance (items/date) 30
*5) Distributor's rights subject to payment of advance 30
6) No set-offs/defences 30
*7) Arbitration mechanism(binding/expedited) 30
8) Interparty prevails over distribution agreement. 30 5. Guaranteeing Completion of Productions: 30 02/07, 02/12, 02/14 30
Vol II, p.21: Legal Considerations for Banks Lending to Motion
Picture Productions 30
Vol II, p.70: J. Lifshitz, "Garanties d'achèvement: Completion
Guarantees" 32
Acceptance of Delivery (p.32 PCB, s.16 "Delivery Dispute") 33
Deemed Delivery: 34
If Delivery Disputed: cure period & arbitration 34
"Delivery date" must include inspection & cure period 34
If Arbitrator says mandatory delivery has not been made: guarantor 34
Letter of credit 34
The Completion Guarantee 34
1) Completion & Delivery: should include a proper ID of the film &
physical materials 34
Film 35
Physical materials 35
Delivery Date 35
2) Payment of Financier 35
3) Defrayal of Cost Over-Runs 35
Conditions of Guarantee: 35
Strike price must have been made available 36
Other conditions: things GC won't guarantee 36
Dispute Resolution Mechanism (15b, p.81, PBC) 36
Loss Payee Endorsement (LPE) 36
Completion Agreement/Security Agreement (82 PCB) 37
(Not same as Completion Guarantee) 37
Cinégarantie Lté v. Habitat Distribution (1996 Arbitration) 37
Nicole 38
Mayfair v. Film Finances Canada (1984 Arbitration) (p 108 PCB) 38 6. Preventing Lawsuits 39 (Feb 14-15) 39
E&O insurance: errors and omissions insurance. 39
Vol II, p.145: D. Hodgson, "A Producer's Guide to Obtaining E & O
Insurance and Preventing Lawsuits" 39
E&O Protects against: 40
Procedures for clearing the E&O 40
Image Release Form (Hand Out) 41
Simulated Interparty Agreement Negotiation 41
(Feb 19-21) 41
Roles of the Parties 41
Analysis of the K 42 7. Culture & Canadian Content 43 (03/05-03/07) 43
Definition of Culture: Culture & Communications: the
Constitutional Setting (43 YCB) 44
Rant on Canadian Culture... 44
At bottom, it has to do with our sovreignty, with how we define
ourselves. 44
Free Trade Agreements & Culture 44
NAFTA &FTA 44
Vol I, p.87: "Cultural Industries and Other Exceptions," The North
American Free Trade Agreement - A Comprehensive Guide 45
Protectionistic Legislation 45
Constitutional basis for Jurisdiction over Culture 45
Vol I, p.43: M. Dunsmuir, "Culture and Communications: The
Constitutional Setting 46
Bilateral agreements: 46
LEGISLATION 46
Investment Canada Act (R.S. 1985, c.28 (1st Supp) 46
The process of review 47
Net Benefit for Canada: (104 YCB, s.20) 47
Definition of Canadian in Investment Canada Act (99 YCB) 47
Broadcasting Act, 1991 (p.52 YCB) 47
What is Canadian programming? 48
Canadian TV fund: essential requirements pertaining to 'Visibly
Canadian' rules 48
Other sources of protection 48
Criteria used in various pieces of legislation & 48
programs to protect culture 48
"Canadian Film or Video Production": 48
"Canadian Program" 49
"Quebec Film" 49
"Production" 49 8. Tax Credits 50 (Mar 7, 12, 14, 19) 50
INCOME TAX ACT, "Tax Credit" (p218) 50
Do You & Your Production Qualify for a Tax Credit? 50
Canadian Film or Video Production Tax Credit (Income Tax Draft
Regulations) 50
Canadian Film or Video Production for purposes of Tax Credit:
(defined): 50
> Production Co has to be prescribed Taxable Canadian Co: 50
Re: Canadian Controlled Corporation 50
> have to have met production cost requirement & 6 point requirement
51
Can't be an "excluded production" ("excluded production", p 222 YCB)
51
Producer must be Canadian (cf Producer Control Guidelines) 52
Point System for purposes of S. 3 (need 6/10 points) 52
Rule 5 - definitions for Rule 4 (225 YCB) 53
Draft regulation 1106(1) (p. 222): defines Canadian for Tax Credit 53
CAVCO Producer Control Guidelines (129 YCB) *** most important aspect of
CAVCO guidelines - not binding, but generally, have to do what CAVCO says.
53
( How do distributor's approval rights affect Producer Control 54
Reasonable & customary approvals 54
Requirements & Indicators -- these are CAVCO's guidelines for when
CAVCO will exercise its discretion (re: whether producer has control).
54
SODEC: doesn't have producer control guidelines 55
REGLEMENT SUR LA RECONNAISSANCE D'UN FILM COMME FILM QUEBECOIS (USE FOR
SODEC) (153 YCB) (equivalent of Canadian Film or Video Productiion @
Fed level for Que, but tie into Que) 55
Information Bulletin 2000-4 p243YCB 56 9. Canadian Television Fund: 57 1.3 Essential requirements: 57
4.2 Additional Eligibility Requirements 57
1. equity investment program. 58
2. License Fee Program 58
s.6.2: general rules for license fee program: calculating top-up 58
6.3 Equity Investment Program 59
s. 7 . Project Assessment 59
7.2.3: Creative 60
Licence Fee Thresholds (C. Drama Programming Module of CTF
Guidelines) 60
E. Levels of CTF Participation 61
F. Project assessment. 61 Canadian Programming Rules: Public Notice CRTC 2000-42 (135 YCB) 61 Appendix1 to Public Notice (137 YCB) 62
These are the guidelines that show whether you are Canadian Program or
not. 62
Criteria: certification for Canadian Programs 62
II. Series (page 139) 62
VII Co-ventures 63 10. International and Inter-Provincial co-Productions 63 History 63
Benefits Available to Treaty Co-Productions 63
International Co-Productions (Official Co-Productions Hand-Out - From
Telefilm Canada) 64
Division