Fair Use Is Not Fair Game:
Part 2 of a 3-part Series

by Jessica Rosner (Media Consultant) and Orly Ravid (Founder, The Film Collaborative and Attorney, Mitchell Silberberg & Knupp LLP)

This month’s blog is co-written by Jessica Rosner, who has been a film booker in the theatrical, nontheatrical and educational markets since the days of 16mm. Recent titles include Jafar Panahi’s THIS IS NOT A FILM and John Boorman’s QUEEN AND COUNTRY.

One area of film revenue that is both increasing exponentially but often neglected by rights holders is the educational streaming market, which basically allows institutions to stream films to students for classes. Old models of showing films during classes or having students watch copies in the library are being largely overtaken by instructors wanting students to watch films wherever they are from a dorm room to a Starbucks. Unfortunately, while tens of thousands of films, both feature and educational, are being legally streamed, there are others that are being illegally streamed and many thousands that rights holders are not making available. In both cases revenue is being lost. Major rights holders represented by the MPAA have been overreaching by attempting to prevent academic use of clips from DVDs. And, they are ineffectual by refusing to directly challenge claims by some academic institutions and organizations, including the American Library Association, that they can stream an entire film without a license.

Films ranging from shorts produced for the educational market to feature films from studios have been used in classes for decades, first largely in 16mm (rented or purchased from rights holders) and then in a variety of video and digital formats. When videos started in the 1970s a special provision of the copyright law known as the “face-to-face” teaching exemption was enacted that allowed any legally produced video (and later DVD) to be shown to students in physical classrooms supervised by an instructor. (U.S.C. § 110 “Limitations on exclusive rights: Exemption of certain performances and displays”). Few instructors now want to use class time to show films and few students want to go to the library to view or check out physical copy of a film so streaming has become the most popular way to use films for classes. There are many platforms and companies which are servicing this growing market, notably Swank, which handles many of the major studios, and a few that handle independent films, such as Kanopy, Alexander Street Press, Films Media Group, and, for documentaries, Docuseek2. While the vast majority of streaming films done legally through licensed platforms or contracts, there is a segment of the academic community including many influential institutions and organizations which have asserted that under “fair use” they can stream entire films without paying right holders. “Fair use”¹ is a long established part of American copyright law which allows portions of copyrighted works to be used in a variety of contexts including education, satire and creating new works. (U.S.C. § 107 “Limitations on exclusive rights: Fair use.”)

In 2010, UCLA (Regents of the University of California) was caught streaming thousands of films from studio features to documentaries, they used in classes without any payment or license to rights holders. When sued by Ambrose Video Publishing (an educational video producer) and the Association for Information Media and Equipment (a consortium of educational media companies) for unlawful copying and reformatting DVDs of BBC productions Shakespeare’s plays and putting them online for students (on UCLA’s own system), the case was initially dismissed due to issues involving lack of standing (Ambrose was not the rights holder) and sovereign immunity. UCLA’s claim that streaming an entire film was acceptable under “fair use” was never actually fully litigated. See Ass’n for Info. Media & Equip. v. Regents of the Univ. of California, No. CV 10-9378 CBM MANX, 2011 WL 7447148, at *1 (C.D. Cal. Oct. 3, 2011); Ass’n for Info. Media & Equip. v. Regents of the Univ. of California, No. 2:10-CV-09378-CBM, 2012 WL 7683452, at *11 (C.D. Cal. Nov. 20, 2012). UCLA also had streamed hundreds of major studio films not included in the lawsuit. The court noted in 2012 that “no Court has considered whether steaming videos only to students enrolled in classes constitutes fair use, which reinforces the ambiguity of the law in this area.” Although no precedent was set by this case because it was dismissed, the failure of other rights holders to challenge this has left their films vulnerable to the claim that streaming an entire feature film for a class is “fair use.”

However recent decisions involving publishers rejected the legal claim that putting an entire work online for a class is “fair use.” In both the Google Books and Georgia State cases, Federal courts ruled that only portions from “snippets” to chapters could be posted online for academic use not an entire book.²

On October 27 the Library of Congress issued an update to Digital Millennium Copyright Act which is the key law on copyrights of digital materials. It allowed far broader access by the academic and non-profit community to numerous digital formats for a variety of “fair use” activities over the strong of objections of the MPAA which had not wanted to allow the breaking up encryption even for legitimate “fair use” such as clips. However, the Library of Congress flatly and clearly rejected the request of representatives of the educational community to be allowed to access entire works stating it was “declined due to lack of legal and factual support for exemption. ”

Despite the recent court rulings and the new DMCA rules, various educational institutions and organizations continue to assert that entire films can be streamed without permission or payment to rights holders. One of the more novel claims is that since feature films were made for “entertainment” and they are now being solely used for “education,” thus transforming their use to qualify as “fair use.” The latter claim is without precedent and directly contradicts numerous precedents in copyright cases that creative works are given a higher level of fair use protection than factual works. E.g. Cambridge Univ. Press, supra, 769 F.3d at1268; Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 497, 104 S. Ct. 774, 816, 78 L. Ed. 2d 574 (1984). Moreover, such a claim would then justify scanning and streaming online a swath of modern fiction books used for courses.

It is crucial for distributors and filmmakers to engage the academic community to protect their rights. It is equally important that they make their films available for legal streaming. Many colleges are frustrated because they are trying to pay and legally license the material only to find that, while a title is available on DVD and some digital platforms, they can’t license that same title for use by students in classes via streaming. Most schools would prefer to license a title directly to ensure availability and not force students pay for Netflix, Amazon, and Hulu memberships even if film is available on those services. Some substantial libraries from Sony Pictures Classics, HBO and a variety of small distributors and individual filmmakers have not allowed their films to be available for streaming by universities. Not being able to access Leviathan, Still Alice, 4 Little Girls, etc. via direct streaming is a major problem for educational institutions. While the license for an individual film to one school might only be $100-$200, there thousands of potential institutions for a wide variety of films. Streaming of feature films for educational use is only going to keep growing.

The film community, from distributors to producers, needs to work with the academic community to make sure all films are directly available to students via their school in the highest quality streaming formats, while also ensuring that rights holders are fairly compensated.

Notes:

¹The U.S. Copyright Office has now launched its “fair use” index—a (free) searchable database of U.S. court opinions on copyright fair use dating back to Folsom v. Marsh (1841)…

Here is their description of the database:

Welcome to the U.S. Copyright Office Fair Use Index. This Fair Use Index is a project undertaken by the Office of the Register in support of the 2013 Joint Strategic Plan on Intellectual Property Enforcement of the Office of the Intellectual Property Enforcement Coordinator (IPEC). Fair use is a longstanding and vital aspect of American copyright law. The goal of the Index is to make the principles and application of fair use more accessible and understandable to the public by presenting a searchable database of court opinions, including by category and type of use (e.g., music, internet/digitization, parody).

Here is the link to the Fair Use Home Page.

And here is the actual link to the Searchable Case Database—you can filter it by federal circuits and/or by types of works (literary works, films etc.).

² See Authors Guild v. Google, Inc., No. 13-4829-CV, 2015 WL 6079426, at *20 (2d Cir. Oct. 16, 2015) (Second Circuit affirming the finding of fair use as to Google’s unauthorized digitizing of copyrighted works, creation of a search functionality and “display of snippets” because the “purpose of the copying is highly transformative, the public display of text is limited, and the revelations do not provide a significant market substitute for the protected aspects of the originals” and that Google is providing digitized copies to libraries that had the books with the understanding that the libraries will follow copyright law.) See also Cambridge Univ. Press v. Patton, 769 F.3d 1232, 1283 (11th Cir. 2014) (three publishers sued Georgia State University for scanning and posting portions of books and journals for students to access via the university’s e-reserves; Eleventh Circuit reversed and remanded, instructing the lower court to apply the fair use factors more holistically and give more weight to the threat of market substitution). The case (still partly on appeal) is important because it maintains that only a portion of a work may be digitized for fair use.

Orly Ravid June 1st, 2016

Posted In: Legal

8 Legal Tips for Documentary Filmmakers

This article was originally posted on Indiewire on July 6, 2015.

From life rights to fair use, here’s what you need to know about legal issues before you make your documentary.

Over the course of my career, as both the founder of The Film Collaborative and an attorney in private practice at Early Sullivan, I have noticed a lack of understanding by filmmakers regarding the law and documentary film distribution. I hope to provide some clarity in the following blog post. But keep in mind that this post does not replace legal advice tailored to a specific film, filmmaker and distribution options/deals. Feel free to contact me with specific inquiries (contact info at the end of this post).

1. Life rights

Recently at the Edinburgh Pitch / Film Festival a filmmaker asked me a very interesting question about “life rights.” He asked whether he could prevent a media outlet from covering a story about a person or persons in a way that competed with his forthcoming documentary. He wanted to know if his having life rights to a person’s or persons’ story would make a difference. The short answer is “no;” there really is no legal protection of “life rights.”
A life rights agreement obligates the subject selling his/her life rights to cooperate with the buyer. The subject/seller is committing to helping the buyer obtain information about the subject’s life and releasing the buyer from any claims by the subject against the eventual filmmaker, and ideally also to promoting the project. These agreements, however, cannot stop a third-party from taking an interest in the story facts and covering them.

Factual information is not copyrightable. That is not to say there are no copyright theories to protect a documentary from being overtly copied. But there is no legal way to prevent a third-party from using the same true facts and expressing those facts in another work. So, one might want to keep exposure of the story under wraps, if possible, until the documentary is out, and proceed with making an excellent documentary that demands to be seen and won’t be trumped by news segments or other content.

If this issue is coming up for you and you have a concern about being overtly copied beyond the facts, then you may want to discuss with an attorney. Chances are the other party will not copy too much beyond the non-copyrightable facts for there to be legal recourse. And many jurisdictions are not so copyright-friendly to begin with. This would be especially true for documentaries where the content is non-fiction and akin to journalism.

2. Worldwide rights deals

This issue combines legal and business issues I have encountered as both an executive and an attorney. These days, with platforms such as Netflix providing international opportunities to documentary filmmakers, one should be wary of committing to international sales agents to make the “worldwide” deal. An adept U.S. sales agent or lawyer could procure and handle a great worldwide Netflix or CNN deal. A U.S. agent or lawyer might have a better shot at the worldwide deal, hence it makes sense to exhaust that option before committing to an international sales strategy. This may be of interest because often the U.S. agents’ and lawyers’ commissions and recoupable expenses are sometimes lower than an international sales companies’ (and there is often good reason for that given the breadth of territories and markets to cover on the international front).

In my experience, many American documentaries do not do well overseas and, even when they sell, they sell small. Of course there are exceptions. Point being; evaluate the potential of one big U.S. deal with lower commissions versus using international sales agents, who typically charge more. Have an experienced lawyer or producer help you carve out rights based on these possibilities (if applicable) or perhaps to help you know if and when it is appropriate to bring an international sales agent on board. Being realistic about your film’s potential based on market conditions and appropriate comparisons is critical to effective distribution and the avoidance of mistakes.

3. Educational rights vs. digital distribution

At The Film Collaborative we often notice that the more successful a film is via educational distribution and festival/non-theatrical distribution the less successful it is via traditional television and digital distribution. In short, certain less-commercial content is appealing to film festival programmers, universities, museums and other educational/non-theatrical outlets. There are, of course, exceptions to that rule and some documentaries do well across all rights and categories of distribution. These days, educational distribution involves streaming (in addition to digital master exhibition or DVD sales) but for a higher price-point than retail streaming.

Some education institutions are savvy enough not to use commercial retail copies of your film for a classroom or campus exhibition, but some do, without realizing there is a potential legal issue. If your film could do especially well on the festival circuit and through educational distribution, then you might want to delay your regular home entertainment digital and television distribution. It is also true that many film festivals will not show your film if it’s commercially available via consumer-facing platforms such as iTunes and Netflix. Most all-rights distributors do not handle educational rights either at all or as well as certain specializing educational rights distributors. Therefore, you might want to save those rights for a company specializing in “exploiting” them. The key will then be coordinating rights and windows between distributors in any given territory. Note that splitting rights is generally not an option with the majors but it is with many others and I have personally done as many as seven deals in a single territory.

4. Rights for the future

Protecting your rights for the future while satisfying the licensee (buyer/distributor) for the term of an ongoing deal can be challenging. Most deals of the past didn’t anticipate the digital age, including the Internet and streaming. There have been scores of legal battles over contracts that didn’t explicitly address digital distribution, causing parties to a deal to fight over digital rights (for example squabbling over what is included in “all technologies now known or hereinafter invented,” home video or “videogram” rights). Another even more common battle would be over whether digital rights falls into the video (VHS and then DVD) royalty or TV/broadcast.

The reason for the fight was, of course, the fact that the royalty to licensor (producers/filmmakers) or distribution percentages to distributor differ based on rights category (classification of rights). I think the degree to which one raises this as an issue should be based on the overall potential of the film in the present and the degree to which it may be evergreen or experience an uptick based on cast name recognition or genre. I like to do deals that are not only rights class/category-oriented (e.g. broadcast rights, theatrical rights), but that are broken down by revenue, and anticipate the future. You may not always have leverage to do this but if you do, it’s worth analyzing so that you do not risk having a category of rights or type of distribution that you once took for granted all of a sudden emerges as very significant and the terms are simply not in your favor and now you are locked in for 20 years. Also, you would have other protections for such a long license term if it cannot be avoided.

5. Fair use

A quick note to enlighten filmmakers about the doctrine of Fair Use, which affords one an exception to copyright protection for content used that would otherwise be protected by copyright, but only if certain factors are met. Factors include an analysis of how much of the copyrighted content at issue is used in the work; the nature and purpose of the work (for e.g. is it educational); and the effect of the use of the copyrighted work on the marketplace (e.g. will its use likely effect the potential market for the copyrighted work). This comes into play in documentaries all the time. Documentaries use new footage, photography, movie clips, archival content, etc. Fair Use is a copyright principle that allows certain otherwise copyright protected content to be used for commentary, criticism and educational purposes.

Fair Use is a legal theory and an exception to copyright that one can use a defense. It is not a license. This means that the holder of the copyright may still sue you even if you have a fair use letter from the attorney who helped you to obtain E&O insurance. So, for example, you and your attorney may believe that your use of 15-minutes of “Magic Mike XXL” in your documentary about contemporary feminism in the least expected place is “fair use,” but Warner Brothers might think otherwise. Or, maybe they’ll love it and even offer you a distribution deal. But if the copyright owner of the content perceives they lost money because of your work or is offended by how your work portrayed their work, you may be more at risk.

Of course, my example is a tad silly but the point is that when you use someone else’s copyrighted content, the degree to which you can is not always crystal clear at the outset as a matter of law. All this to say, just remember that fair use opinions are just that, opinions. A copyright holder can still sue your distributor and/or the production company entity that made the film if they feel their content has been infringed. [This assumes that you know better than to make a film under your own personal name that could expose you to significant risk of legal liability risk.] Be sure to consult an attorney BEFORE you edit your film to final cut so that you can minimize your risk of including content that might trigger a lawsuit. Lawsuits are costly and can impede distribution.

6. Price lock for licensing rights not actually licensed ahead of premiering

Well before your premiere, resolve the price for any music, footage, etc. that you are not licensing for worldwide rights in perpetuity. For example, your production budget may not allow for worldwide licensing in all rights and you may never have good reason to pay for that. So at first you license more limitedly. But it is best practice to resolve the price for any remaining rights (and for any remaining territories) so you don’t have to worry about the price being higher once the film is finished and distribution is underway. The price most often would only go up based on any success you have, and it’s better to have your licensing details resolved before you show the film and prepare it for distribution, whether DIY or via distributors.

7. Contracts are for honest people

This one is for ALL filmmakers, not just documentaries. I have seen countless disputes between people who verbally agreed to or thought they agreed to something and then argued about the agreement. It is also much more difficult to enforce an agreement not on paper. Contracts help people clarify and establish on paper what they mean (note that I have seen many convoluted contracts seemingly designed to confuse). With proper thinking, planning and good lawyering, contracts can help clarify exactly what people intend and mean by certain terms or phrases.

Contracts help force parties to think things through. Unfortunately, people fear entering into a contract or bringing up the idea of a formal agreement because they think it’s insulting or offensive. “What, you don’t think I’m honest?” Yet if one establishes from the outset that contracts are for honest people, then the other party will likely not be offended. A clear and well-drafted contract will help avoid litigation, not create it. I have seen way too many people wronged by trusting things will work out. Friends turn to frenemies over credit, money and vision issues that weren’t explicitly laid out on paper. Someone worth having on your team will not object to having a formal, non-onerous agreement. If they do, you want to analyze why.

8. Lawyer who knows distribution

Do not have your uncle, friend or family attorney who knows nothing about distribution do your legal work for your film. That is irresponsible and will harm you in the long run. Handling distribution and film licensing contracts requires a strong knowledge of the business and supporting law. Even issues around how to enforce rights via international deals and whether or not to have an arbitration provision are specific and require industry knowledge, specifically distribution knowledge. Of course, this is especially true for rights issues.

I have been asked other questions pertaining to chain-of-title, project control, financing, etc. that are beyond the scope of this post. Please feel free to reach out if you would like me to address something specifically.

Disclaimer: This article does not constitute legal advice and you should consult a lawyer about your specific situation. Also note that the images which accompany the story represent examples of films that TFC is handling for festival distribution. They are not involved in the legal concerns mentioned in the article.

Orly Ravid July 9th, 2015

Posted In: Legal