Artistic License: Contracting IP to Media Producers

Artistic License: Contracting IP to Media Producers

Artistic License: Contracting IP to Media Producers

1000 648 Yusuke Hisashi

Intellectual property licensing is a complex but lucrative process for creators and rights holders. When a TV show, movie, or video game is adapted from an existing work like a novel or comic book, or when the production wants to use a person’s artwork, music, fashion designs, or computer code, the original IP owner can license their work and earn fees and royalties. However, the legal implications surrounding these deals require careful consideration.

An experienced IP attorney can provide invaluable guidance during licensing negotiations. They help creators and producers understand the legal terrain and advocate for favorable contract terms for their clients. 

With thousands and even millions of dollars potentially at stake, hiring an attorney experienced in entertainment law is essential. They function as legal and business advisors, adding value through shrewd negotiation and preventing costly mistakes by the IP rights holder. An attorney can ensure a creative property license agreement addresses your rights in several key areas:

  • Scope of Rights Granted – The contract specifies exactly what is being licensed (characters, storyline, images, etc.) and any rights being retained by the IP holder. An attorney ensures their client does not inadvertently sign away too many rights.
  • Payment Structure – Royalty attorneys negotiate rates, upfront payments, and bonus structures to get their clients the best monetary value from the deal. Complex formulas for calculating royalties and payment schedules are common and require legal expertise.
  • Credit and Approvals – IP holders want proper attribution and may require pre-approval of licensed adaptations. Attorneys negotiate appropriate credit, approvals over sequels/spinoffs, and protections if the owner is unhappy with the adaptation.
  • Length & Exclusivity – Licenses may be for a limited time, in specific regions, or worldwide. Attorneys ensure the deal’s exclusivity favors their client.
  • Termination Rights – Allowing the IP owner to terminate the deal if the producer does not sufficiently exploit the licensed work.

IP refers to creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images used in commerce. Depending on the type, nature, and use of these creations, they are protected by a variety of measures:

Patents protect new, useful, and non-obvious inventions. A patent gives its owner the right to exclude others from making, using, or selling the invention for a limited period. Patents apply to functional products and processes in fields like technology, chemistry, and biotechnology.

Trademarks are words, names, symbols, or designs that distinguish the goods and services of one company from others in the marketplace. Trademark protection applies to brand names and logos. Companies register trademarks to get exclusive rights to use their marks in commerce.

Copyright protects original creative works like books, movies, music, paintings, photographs, software code, and more. Copyright does not protect facts or ideas, only the expression or specific form of a work. Authors automatically get copyright protection for their works, though registration provides additional benefits.

Trade secrets apply to valuable proprietary information like customer data, methods, technologies, or formulas that companies keep confidential to maintain a competitive edge. As long as trade secrets remain secret, the protection does not expire.

It is easy to see where each of these protections could come into play in the media and entertainment industry. Patents protect special effects technologies, production equipment, and hardware like cameras and consoles. Trademarks cover the names, logos, and catchphrases of shows, studios, characters, and brands. Copyright protects the stories, scripts, music, code, and audiovisual content itself.

Artists, musicians, technicians, and hobbyists, as well as television producers, movie studios, and video game developers invest heavily in creating and marketing original IP. Protecting it allows them to fully benefit financially from their creations by controlling distribution and earning revenue through box office sales, subscriptions, broadcasts, streaming, licensing, merchandising, sequels, and spinoffs. Strong IP protection also prevents harmful counterfeiting and piracy which undercut profits.

Licensing these creative outputs also benefits end users by (when the licensing agreement allows) securing exclusive use, enabling the creation of derivative works, and capitalizing on existing publicity. Licensing music could give shows access to a popular performer’s social media followers. Product placement deals lend realism to video games. Art appearing across multiple media under licensing agreements enables coordinated marketing campaigns. 

The Seller’s Market

Media companies are eager to license established IP that comes with a built-in fanbase. This existing audience increases the chances of commercial success and mitigates risks. Licensed books, comics, or toys (witness the recent frenzy over the Barbie movie and the Avengers franchise) adapted into movies have ready-made markets of devoted followers.

Seeking co-marketing opportunities allows both parties to capitalize on each other’s customer base. A video game releasing a movie tie-in around the same time benefits from the film’s promotion and brand awareness. In return, the game amplifies publicity and acts as another revenue stream. Cross-promotions are win-win but require extensive licensing deals an attorney can negotiate.

An IP attorney can craft the optimal strategy for monetizing creative properties. Firms experienced in entertainment transactions understand industry marketing practices, valuations, and viable partnerships. They identify suitable media partners and avenues to reach customers cost-effectively. Lawyers negotiate favorable licenses, rates, and contract terms based on precedents and norms.

Most importantly, attorneys can research fair market valuations and pricing given current demand. They research rates for comparable IPs that sold licenses to studios or networks recently. The lawyer analyzes the property’s distinct qualities and metrics to estimate appropriate fees. Established valuation models examine factors like audience size, ratings, box office revenue, and merchandising potential.

Key inputs in standard industry models include the age and current popularity of the IP. Contemporary properties capitalizing on the latest trends command higher prices. Longstanding classic brands have proven staying power but may not attract modern audiences. The total potential reach of the IP also sways valuations, including projections like sequel prospects and multimedia opportunities. For instance, a successful book series has additional licensing potential for TV, film, and gaming adaptations.

Enforcing Your IP Rights

Copyright infringement happens when substantial protected elements are reproduced without permission. Examples include distributing pirated copies of films or games and sampling copyrighted music without a license. Trademark infringement occurs when a company uses a protected trademark or similar mark improperly to imply endorsement or affiliation. Unauthorized patent use arises when products utilizing a protected invention are created, used, or sold without the patent holder’s consent.

Breach of contract is another issue that occurs when license or assignment agreements are violated. For instance, adaptational rights may be exceeded if a film takes too many liberties with a licensed novel’s story. Or merchandise rights could be overstepped if a video game producer starts selling unapproved toys using patented game characters.

Hiring an experienced intellectual property attorney is advisable to assess potential claims and navigate options. The lawyer can draft the licensing agreement to include language outlining the IP holder’s rights in the event of infringement or breach of contract. The lawyer can send cease and desist letters asserting rights and demanding the infringement stop. If ignored, they can file complaints and sue for injunctive relief, lost royalties, damages, and attorney’s fees.

Litigation compels defendants to remove infringing content and pay monetary compensation. Powerful media companies often settle cases to satisfy rights holders while avoiding negative publicity and drawn-out lawsuits. Attorneys may also be able to negotiate out-of-court settlements for timely resolution.

Additionally, lawyers can assist with submitting takedown notices under the Digital Millennium Copyright Act to remove infringing online content. On platforms like YouTube or TikTok, the content will be taken down unless the poster formally contests the complaint.

Infringement destroys creative incentives and incomes. With an attorney’s counsel, IP holders can firmly protect their rights.


Gamma Law is a San Francisco-based Web3 firm supporting select clients in complex and cutting-edge business sectors. We provide our clients with the legal counsel and representation they need to succeed in dynamic business environments, push the boundaries of innovation, and achieve their business objectives, both in the U.S. and internationally. Contact us today to discuss your business needs.

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Yusuke Hisashi

All stories by: Yusuke Hisashi

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