INDIE LAW
MOVIEMAKER.COM SUMMER 2019 17
tion agreement when it comes
to the issue of how and when
you get your rights back. For
example, often there will be a
benchmark performance obli-
gation placed on a sales agent
who is given the right to sub-
license the distribution rights
to assorted territories around
the world. A sales agent could
have a seven-year term, during
which time she has the exclu-
sive rights to license the film to
other countries. A performance
obligation could be placed into
the contract that reads: “If the
Sales Agent has not engaged in
at least $500,000 in gross sales
by the end of Year One of this
Agreement, then the Producer
has the right to have the term
immediately end and all rights
revert back to the Producer
subject only to the sublicenses
lawfully sold to territories
prior to Producer providing no-
tice of their right to terminate
the Sales Agency Agreement.”
Or, you could tie the bench-
mark to how much money you
actually receive from the sales
agent, such as: “If the Producer
has not received a minimum
of $200,000 in money actually
paid by Sales Agent by the end
of Year Two of this Agreement,
then the Producer has the right
to have the term immediately
end and all rights revert back
to the Producer subject only to
the sublicenses lawfully sold
prior to the Producer giving
notice.”
It’s best when negotiating
distribution agreements to
try and negotiate the smallest
terms of years that you can
obtain. Another thing many
producers forget is that there
are actually two different time-
frames referenced in all Sales
Agency Agreements wherein
the sales agent is permitted
to sublicense the film to dis-
tributors in other territories.
First, there’s the term of years
that is in place for how long
your contract with the salesagent lasts, and then there’s
the term of years for which the
sublicenses can last.
For example, you could have
a seven-year term in which the
sales agent has the right to find
distributors around the world
and license your film to them.
When the sales agent in turn
licenses the film to a particular
territory, that license might be
for 10 or even 21 years.
Sales agents may also toy
with unknowing producers.
They may try to insist on hav-
ing a mortgage of copyright on
your film that allows them to
continue to collect revenues
long after the Sales Agent
Agreement has ended, and
continue until such time that
the sales agent has recouped
whatever money it claims to
have put into its distribution
efforts, plus interest.
There are countless ways
a producer can be taken
advantage of by even the
simplest of sales agent or
distributor agreements. Even
if you can’t get these provi-
sions changed, there’s value
in knowing what they mean,
so you can decide whether
the deal is worth it or if you
should continue to look for
a different sales agent.
Find more questions and
answers at MovieMaker.com,
and if you have a legal
question you don’t mind all
of MovieMaker’s readers
reading it (we omit identifying
names to protect both the
guilty and innocent), drop us
a line in our online comments
section. MMDavid Albert Pierce, Esq. is
MovieMaker’s resident legal
expert. He is the Managing
Partner of Pierce Law Group LLP,
a seven-attorney entertainment
law boutique which handles
all transaction and litigation
matters that may confront
independent producers.SANTA FE FILM INSTITUTE PRESENTS
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CALL FOR ENTRIES
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Proud to be a MovieMaker Top 50
winner for 7 years!CelebraTing a DeCaDe of iMPaCT