Chain of title in film

A distributor does not simply sign a delivery agreement. A financier does not simply transfer the money. And an errors and omissions insurer does not issue a policy without proof. What they all want to see is the answer to the same question: how did you become the owner of the rights in this film?

The answer lies in the chain of title.

The chain of title is the paper trail showing how the rights in a film production were acquired and transferred step by step, from the first rightholder through to the producer now exploiting the film. Every link in that chain has to be sound. Has a step been skipped somewhere, poorly documented or legally defective? Then you have a gap. And a gap in the chain can bring a production to a halt, even one that has been in circulation for years.

What does a chain of title typically contain?

The exact composition differs from production to production, but the most common documents are:

• Option agreement and purchase agreement for the underlying work, being the book, article or true story the film is based on. The option reserves the right; the purchase agreement records the definitive transfer.
• Screenplay agreement, under which the screenwriter transfers or licenses their copyright in the script to the producer, including the adaptation right.
• Agreements with the director and cast, recording the transfer or licence of their contribution to the production.
• Music licences, for the composition as well as for the master recording, where existing music is used.
• Evidence of clearances for archive material, third-party footage and any trade mark use on screen.
• Co-production agreement in international collaborations, including arrangements on how rights are divided by territory.
• Evidence of transfer where the production company changes hands, if the producing entity has been acquired or merged in the meantime.

What legal requirements apply?

There are no statutory requirements for the chain of title as such, since there is no official register and no prescribed format. But that does not make it any easier. Whoever receives the chain forms their own view on whether they have confidence in it. And that assessment is strict.

In practice there are two variants. Sometimes a financier or distributor wants to receive all the underlying documents and form its own judgement. More often a chain of title opinion is requested: a written statement by a lawyer with the relevant expertise confirming that the chain is sound and that the producer does indeed hold the rights it claims to hold.

For each document in the chain it has to be assessed whether the applicable legal requirements are met: was the deed validly signed, was the signatory authorised to sign, does the transfer satisfy the formal requirements the law imposes? In the Netherlands, for instance, a transfer of copyright must be made in writing. Where that is missing, the transfer is void, and the producer legally holds nothing.

What are the risks of an incomplete chain?

A gap in the chain cuts both ways. On the one hand the actual rightholders, those whose rights were not properly acquired, can bring claims. On the other hand the parties that relied on you and on a sound chain can hold the producer liable. Think of financiers who invested on the assumption that the rights were in order, or distributors who can no longer exploit the film.

In my practice I regularly see problems in the chain surface only when the errors and omissions insurance is being arranged, or at the first act of delivery to a distributor. By that point there is little room left to resolve matters without delay or loss.

When should you have the chain reviewed?

The answer is: as early as possible, and in any event before the first act of delivery. Ideally the chain is built up during production and checked periodically. If you wait until a financier or distributor asks for it, you run the risk of discovering a problem you can no longer solve quickly.

In short, the chain of title is not merely paperwork. It is the legal foundation your production rests on.

Questions about your chain of title?

Whether you want the chain drawn up, reviewed, or you need a chain of title opinion, get in contact. We will look together at what is in place and what is still needed.