Intellectual Property

The previous post about script sale breakdowns was a little bleak, so let’s talk about a more positive topic today… all the things you can do with your writing once you’ve created something! This post will only provide an overview, because it’s a very large topic.

The umbrella term intellectual property (IP) covers most creative works and distinguishes it from other types of property such as real property (land, houses, buildings, etc.), and tangible personal property (physical objects like jewelry, clothes, vehicles, etc.). Intellectual property is a type of intangible personal property and, in the case of writing, is covered by copyright.

Copyright is a very large topic and I’m sure I’ll address it in many, many future posts, but I’ll do my best to keep it concise here. Essentially, copyright applies to works that fall into one of the following categories: literary, musical, dramatic, choreographic, pictorial, graphic, sculptural, motion picture or other audiovisual, sound recordings, or architectural. Screenplays and other writing are considered literary works; the movies and television and new media they turn into are motion picture or other audiovisual.

In general, copyright gives you the exclusive right to do the following things with your created intellectual property:

• Reproduce the work
• Prepare derivative works
• Distribute copies to the public
• Perform the work publicly
• Display the work publicly

So those five quick bullet points cover a lot of ground. After all, there are a lot of ways to exploit intellectual property.

Consider a simpler example for a minute: an image. If you paint, or draw, or photograph an image, you can exploit that image in a bunch of ways. You can reproduce the image, frame it, and sell it as art to hang on the wall. You can put the image on T-shirts, or coffee mugs, or hats and sell merchandise. You can license the image to a company to use as part of a logo that’ll be branded on their office supplies and promotional items. You can upload the image to stock photo websites and earn a commission every time someone purchases it for their own personal use.

With a piece of writing, there are even more ways to exploit that work, because you’ve got the actual written work itself, plus its other components like the story and characters. With a screenplay (or a book) you can sell copies of the material itself, make it into a movie, hold a live table read of the script for an audience… but you can also do things like license the characters for use in a game or as action figures or other merchandise, allow the format to be used as a basis for spinoffs, or even let a theme park create a whole new attraction based on the world you created.

All of these things, and more, are within the realm of what you can do with your intellectual property. If an exploitation involves reproduction, derivative works, or distribution, performance, or display of the work to the public, the copyright holder has exclusive control over those rights.

When someone offers to buy your script (or publish your book), they’re essentially purchasing your right to exploit the work in a particular medium. A book publisher will buy the rights to turn your manuscript into a print book (and/or possibly ebook) and sell it to the public. A movie studio will buy the right to turn your screenplay into a derivative motion picture based on that script.

These rights can be subdivided and assigned to as many different parties as you like. You can sell publishing rights in the United Kingdom to Hachette Livre, North American publishing rights to Penguin Random House, worldwide (except Europe) audiovisual rights to Disney, European audiovisual rights to StudioCanal, merchandising rights to Hasbro, video game rights to Activision-Blizzard, etc.

Make sure you fully understand exactly what you’re selling before you sign a contract. In screenwriting, most scenarios involve you selling the entire copyright to the production company or studio (that’s why screenwriting, on a per-project-basis, generally pays better than prose writing), whereas a publisher or other company with a more limited focus to their product might only want to purchase the rights to exploit the work in a particular format in a particular area, leaving you in control of the other rights in other areas that they have nothing to do with. The entertainment industry tends to collect more rights (and pay writers more) because the business interests of a company like Disney or Warner Bros. extend beyond just movies and into ancillary markets like publishing, games, toys, etc.

Some contracts also have what are called reserved rights which are rights that are specifically excluded from being acquired. Reserved rights are very common when a writer is successful in another medium (like as an author or playwright), or already has existing obligations due to previous agreements. For example, if a screenwriter is also an established theater writer/director, stage rights might be reserved so they can pursue a stage production on their own at some point.

A contract should clearly spell out which rights you are giving up in exchange for the money you agreed upon. Regardless of the amount of money being offered, make sure you understand just what is being handed over in exchange for that money. And if you decide to sell or license your rights piecemeal, keep meticulous records of what you’ve sold or licensed to whom. More than one person has found themselves in breach of an agreement and on the losing side of a lawsuit when they inadvertently sold rights to one entity that they previously sold to another.

If you only take away one thing from this blog post, let it be this… there should be a direct correlation between the rights you sell and the money you’re paid.

In other words, the more money you’re paid, the more rights you should expect to give up. The less money you’re paid, the fewer rights you should be giving up. If a publisher only wants to publish your book as hard copies in the United States, that advance should be a smaller amount than the advance for a publisher who wants to publish your book as hard copies and ebooks worldwide, as well as managing your subsidiary rights (merchandising, movies, etc.). If you produce a movie yourself, a distributor like Universal wanting the right to release the film worldwide should generally be paying you more than a distributor like Contantin Film if Constantin only wants the rights the Germany and Austria territory where they’re most firmly established.

As mentioned above, when it comes to screenplays and the entertainment industry, writers customarily assign their entire copyright to the production company or studio. In the case of an original screenplay, the Writers Guild of America sets aside something called separated rights for their members. Separated rights are basically a group of rights that the Guild has negotiated for their writers to keep despite assigning their copyright. Theatrical separated rights include:

• publication rights
• dramatic stage rights
• sequel payments
• mandatory rewrite
• meeting with a production executive
• reacquisition

Remakes and merchandising royalties are also included under the Minimum Basic Agreement (MBA). Television has a separate set of separated rights. I’ll do a future post specifically about separated rights, and you can read more information directly from the WGA’s website.

If you’re a screenwriter with a non-guild opportunity, separated rights are not guaranteed, but in many cases can be negotiated for. Selling the copyright to your screenplay is a big deal with a lot of potential revenue in success; if a non-signatory company wants to buy your original material and turn it into a movie without giving you separated rights, you should really strongly consider whether the opportunity is worth it on your end… writers deserve to share the spoils of a movie that’s successful enough to warrant exploiting in additional formats.

Lastly, it’s important to have realistic expectations about the value of your intellectual property in the marketplace. There are exceptional cases where a writer only licenses the movie rights to a studio instead of selling the copyright, or where a writer is able to get a large sum of money for comparatively few rights… but those rare situations are like the ones I mentioned in my post about quotes, where they should be treated as a black swan event rather than a reasonable expectation. Without a massive existing audience to weight the power dynamics of a negotiation strongly in your favor, or an established reason why you can’t (e.g., you’ve already sold specific rights to someone else), you shouldn’t anticipate a big payday in exchange for only a small segment of your rights.

Publishers, movie studios, merchandisers, etc. are big, smart businesses that aren’t typically in the habit of paying lots of money to create a product they then can’t profit from in as many ways as possible because they let another party hold them back. A great example of this comes from the publishing world where everyone (publishers and authors like) has recognized the increasing popularity of ebooks and the decline of brick-and-mortar bookstores. Hugh Howey, author of the Wool series, reportedly turned down a seven-figure publishing offer and instead settled for mid six figures and the retaining the rights to sell ebooks… which shows you just how valuable a component of the deal the publisher (and Howey) considered the ebooks alone!

The less you want to give away, the less you should expect to be paid.

Intellectual property is a very complicated issue and there are attorneys, executives, and administrators that spend their entire careers dealing with its intricacies. This post, hopefully, scratched the surface enough to give you a better sense of all the ways IP can be exploited, and what producers, companies, and distributors are paying for when they buy your original work.